<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 1995
REGISTRATION NO. 33-87482
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE TIMES MIRROR COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2711, 2721, 2731, 2741, 95-4481525
(STATE OR OTHER JURISDICTION 2752, 7383, 8741 (I.R.S. EMPLOYER
OF INCORPORATION OR (PRIMARY STANDARD INDUSTRIAL IDENTIFICATION NO.)
ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>
TIMES MIRROR SQUARE
LOS ANGELES, CALIFORNIA 90053
(213) 237-3700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT F. ERBURU
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
THE TIMES MIRROR COMPANY
TIMES MIRROR SQUARE
LOS ANGELES, CALIFORNIA 90053
(213) 237-3700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF PROCESS)
------------------------
COPIES TO:
PETER F. ZIEGLER, ESQ.
GIBSON, DUNN & CRUTCHER
333 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 229-7000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO EXCHANGE:
As soon as practicable after this Registration Statement becomes effective
and all other conditions to the exchange offer (the "Exchange Offer") described
in the enclosed Prospectus have been satisfied or waived.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
THE TIMES MIRROR COMPANY
------------------------
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
<TABLE>
<CAPTION>
S-4 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS
- -------------------------------------------------------- -------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus.................. Facing Page; Cross Reference Sheet;
Outside Front Cover Page of
Prospectus.
2. Inside Front and Outside Back Cover Pages of
Prospectus...................................... Available Information; Table of
Contents.
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information........................... Summary; Investment Considerations;
Business; Price Range and Dividend
Data.
4. Terms of the Transaction.......................... Summary; Investment Considerations;
The Pre-Exchange Offer
Transactions; The Exchange Offers;
Certain Federal Income Tax
Consequences.
5. Pro Forma Financial Information................... Unaudited Pro Forma Financial Data.
6. Material Contracts With the Company Being
Acquired........................................ Summary; The Pre-Exchange Offer
Transactions.
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters... Not Applicable.
8. Interests of Named Experts and Counsel............ Legal Matters; Experts.
9. Disclosure of Commission Position on
Indemnification For Securities Act
Liabilities..................................... Not Applicable.
10. Information with Respect to S-3 Registrants....... Not Applicable.
11. Incorporation of Certain Information by
Reference....................................... Not Applicable.
12. Information with Respect to S-2 or S-3
Registrants..................................... Not Applicable.
13. Incorporation of Certain Information by
Reference....................................... Not Applicable.
14. Information with Respect to Registrants Other than
S-2 or S-3 Registrants.......................... Summary; Price Range and Dividend
Data; Business; Selected
Consolidated Financial Data;
Management's Discussion and
Analysis of Financial Condition and
Results of Operations.
15. Information with Respect to S-3 Companies......... Not Applicable.
16. Information with Respect to S-2 or S-3
Companies....................................... Not Applicable.
17. Information with Respect to Companies Other than
S-2 or S-3 Companies............................ Not Applicable.
18. Information if Proxies, Consents or Authorizations
are to be Solicited............................. Not Applicable.
19. Information if Proxies, Consents or Authorizations
are not to be Solicited, or in an Exchange
Offer........................................... Summary; Business.
</TABLE>
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 14, 1995
PROSPECTUS
THE TIMES MIRROR COMPANY
OFFER TO EXCHANGE
UP TO 16,563,343 SHARES OF
ITS SERIES A COMMON STOCK, PAR VALUE $1.00 PER SHARE
AND
ITS SERIES C COMMON STOCK, PAR VALUE $1.00 PER SHARE
FOR SHARES OF
CONVERSION PREFERRED STOCK, SERIES B, PAR VALUE $1.00 PER SHARE
(PREFERRED EQUITY REDEMPTION CUMULATIVE STOCKTM -- PERCSTM)
(SUBJECT TO CONVERSION INTO SHARES OF SERIES A COMMON STOCK,
PAR VALUE $1.00 PER SHARE)
The Times Mirror Company, a Delaware corporation formerly named New TMC Inc.
(the "Company" or "New Times Mirror"), hereby offers its stockholders the
opportunity to exchange, upon the terms and subject to the conditions contained
in this Prospectus and the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer") up to 16,563,343 shares of its Series A Common
Stock, par value $1.00 per share ("Series A Common Stock"), and Series C Common
Stock, par value $1.00 per share ("Series C Common Stock" and collectively with
the Series A Common Stock, the "Common Stock"), for shares of the Company's
Conversion Preferred Stock, Series B, par value $1.00 per share ("Series B
Preferred Stock"), at the rate of one share of Series B Preferred Stock for each
share of Common Stock tendered and accepted. The Series B Preferred Stock will
be issued in an amount having an aggregate stated value of $350 million and each
share of Series B Preferred Stock will have a stated value of $21.131 (the
"Series B Price"). If more than 16,563,343 shares of Common Stock are validly
tendered and not withdrawn, the Company will accept such shares for exchange on
a pro rata basis. The procedures for tendering shares of Common Stock are
described in "The Exchange Offer -- Procedure for Tender."
On February 1, 1995, the Company's predecessor ("Old Times Mirror") merged
(the "Merger") with and into Cox Communications, Inc. ("Cox"). Certificates that
prior to the Merger evidenced shares of Old Times Mirror common stock are now
deemed to evidence shares of Cox common stock and shares of New Times Mirror
Common Stock that were issued in the Merger. However, it is necessary to
surrender those Old Times Mirror certificates to receive new certificates from
Cox and New Times Mirror. WHETHER OR NOT YOU INTEND TO PARTICIPATE IN THE
EXCHANGE OFFER, IF YOU HOLD OLD TIMES MIRROR STOCK CERTIFICATES, YOU MUST FOLLOW
THE PROCEDURES SET FORTH IN THIS PROSPECTUS AND THE ACCOMPANYING LETTERS OF
TRANSMITTAL TO SURRENDER YOUR OLD TIMES MIRROR STOCK CERTIFICATES AND RECEIVE
NEW STOCK CERTIFICATES FROM COX AND NEW TIMES MIRROR.
The Series B Preferred Stock, which is described more fully herein, (i)
provides for cumulative annual cash dividends at the rate of $1.374 per share
(6.5% of the Series B Price) until March 31, 1998, payable quarterly, (ii) has
one vote per share, subject to certain adjustments, on all matters to be
submitted to a vote of stockholders of the Company, voting together with the
outstanding shares of Common Stock and (iii) has a liquidation preference equal
to the Series B Price. The Series B Preferred Stock will mandatorily convert on
March 31, 1998, or upon the prior occurrence of certain mergers, consolidations
or similar extraordinary transactions involving the Series A Common Stock, into
one share of Series A Common Stock for each share of Series B Preferred Stock,
subject to certain adjustments, plus all accrued and unpaid dividends, and, if
conversion occurs upon the occurrence of any such extraordinary transaction, a
premium. The Series B Preferred Stock is redeemable at the option of the Company
at any time, and from time to time, prior to March 31, 1998, in whole or in
part, at a price (the "Call Price") (initially equal to $31.92885 per share and
thereafter declining at a rate of $ per day on each day following March
, 1995 to $ on January 30, 1998 and equal to $28.52685 thereafter)
payable in shares of Series A Common Stock plus cash equal to dividends accrued
and unpaid to the redemption date. Because the Company may redeem shares of
Series B Preferred Stock at any time at the Call Price, the opportunity for
equity appreciation afforded by an investment in shares of Series B Preferred
Stock is effectively limited. See "Description of Preferred Stock." The Series B
Preferred Stock has been approved for listing on the New York Stock Exchange
(the "NYSE") subject to satisfaction of the NYSE's requirements as to minimum
numbers of shares outstanding and record holders of the Series B Preferred Stock
following the Exchange Offer.
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN EVALUATING THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
THIS EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON , 1995, UNLESS EXTENDED (THE "EXPIRATION DATE").
SHARES OF COMMON STOCK TENDERED FOR EXCHANGE MAY BE WITHDRAWN
AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE> 4
No person is authorized to give any information or to make any
representation with respect to the matters described in this Prospectus other
than those contained herein and, if given or made, such information or
representation must not be relied upon as having been authorized. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares to be issued in
connection with the Exchange Offer. Pursuant to Rule 13e-4 of the General Rules
and Regulations under the Exchange Act of 1934, as amended (the "Exchange Act"),
the Company will file with the Commission an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4"), together with exhibits, furnishing
certain additional information with respect to the Exchange Offer. Such
registration statement, Schedule 13E-4 and the other reports and information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; and at its regional
offices located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the public
reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Securities of New Times Mirror are listed on the
NYSE and the Pacific Stock Exchange and reports and other information concerning
New Times Mirror can be inspected at such exchanges.
------------------------
Until all dealers effecting transactions in the registered
securities whether or not participating in this distribution, may be required to
deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................................................................. 2
</TABLE>
<TABLE>
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SUMMARY............................................................................... 3
INVESTMENT CONSIDERATIONS............................................................. 11
PRE-EXCHANGE OFFER TRANSACTIONS....................................................... 12
THE EXCHANGE OFFER.................................................................... 14
DESCRIPTION OF PREFERRED STOCK........................................................ 20
DESCRIPTION OF COMMON STOCK........................................................... 25
PRICE RANGE AND DIVIDEND DATA......................................................... 30
CERTAIN PROVISIONS IN THE RESTATED CERTIFICATE........................................ 31
BUSINESS.............................................................................. 33
CAPITALIZATION AND PRO FORMA CAPITALIZATION........................................... 38
SELECTED CONSOLIDATED FINANCIAL DATA.................................................. 39
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.......................................................................... 41
UNAUDITED PRO FORMA FINANCIAL DATA.................................................... 52
DIVIDEND POLICY....................................................................... 55
EXECUTIVE OFFICERS AND DIRECTORS...................................................... 56
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS............................................. 65
FEES AND EXPENSES..................................................................... 70
MISCELLANEOUS......................................................................... 70
LEGAL MATTERS......................................................................... 70
EXPERTS............................................................................... 70
INDEX TO FINANCIAL STATEMENTS......................................................... F-1
</TABLE>
"Preferred Equity Redemption Cumulative Stock" and "PERCS" are trademarks
of Morgan Stanley & Co. Incorporated.
2
<PAGE> 5
SUMMARY
The following is a summary of certain information included in this
Prospectus or in documents referred to herein. This summary is not intended to
be complete and is qualified in its entirety by reference to the more detailed
information found elsewhere in this Prospectus, all of which should be reviewed
carefully. All references herein to "Times Mirror" shall mean Old Times Mirror
and New Times Mirror, as the successor to Old Times Mirror, collectively.
THE COMPANY
The Company, as the successor to Old Times Mirror, is engaged principally
in the newspaper publishing, professional information and consumer media
businesses. The Company publishes the Los Angeles Times, Newsday and New York
Newsday, The Baltimore Sun newspapers, The Hartford Courant, The Morning Call,
The Advocate and the Greenwich Times. In addition, the Company publishes several
smaller newspapers. Prior to the consummation of the Merger and the other
transactions described below (collectively, the "Transactions"), these
businesses (the "Publishing Business") were conducted by Old Times Mirror, which
was also engaged in the ownership and operation of cable television systems. The
Company was incorporated in the State of Delaware in June 1994 for the purpose
of owning and operating the Publishing Business after the consummation of the
Transactions. Old Times Mirror's cable television systems were acquired by Cox
in the Merger on February 1, 1995. Old Times Mirror was incorporated in 1884 in
the State of California and was reincorporated in the State of Delaware in 1986.
The Company was originally incorporated under the name "New TMC Inc." but
changed its name to "The Times Mirror Company" immediately after the Merger.
The Company's principal executive offices are located at Times Mirror
Square, Los Angeles, California 90053 and its telephone number is (213)
237-3700.
PRE-EXCHANGE OFFER TRANSACTIONS
Old Times Mirror, New Times Mirror, Cox and Cox Enterprises, Inc. are
parties to that certain Agreement and Plan of Merger dated as of June 5, 1994,
as amended (the "Merger Agreement"), pursuant to which Cox acquired Old Times
Mirror's cable television business and the Company became the successor to Old
Times Mirror. This was accomplished through the Transactions, which consisted
of, among other things, (i) the contribution of the Publishing Business by Old
Times Mirror to the Company, (ii) the assumption by the Company of all of the
liabilities of Old Times Mirror other than those related to Old Times Mirror's
cable television business and certain other liabilities, (iii) the exchange (the
"Chandler Exchange") by Old Times Mirror's controlling stockholders, Chandler
Trust No. 1, Chandler Trust No. 2 and Chandis Securities Company (collectively,
the "Chandler Trusts"), of all of their Old Times Mirror Series A Common Stock,
par value $1.00 per share ("Old Times Mirror Series A Common Stock") and Old
Times Mirror Series C Common Stock, par value $1.00 per share ("Old Times Mirror
Series C Common Stock" and together with the Old Times Mirror Series A Common
Stock, the "Old Times Mirror Common Stock"), for the same number of shares of
Series A Common Stock and Series C Common Stock and the commitment by the
Company to issue to the Chandler Trust shares of the Company's Cumulative
Redeemable Preferred Stock, Series A, par value $1.00 per share (the "Series A
Preferred Stock"), and, under certain circumstances, additional shares of Series
A Common Stock (such shares of Series A Preferred Stock and additional shares of
Series A Common Stock, if any, are hereinafter referred to as the "Additional
Chandler Shares"), and (iv) the Merger, in which Old Times Mirror (then
consisting only of its cable television business) was merged with and into Cox.
Upon the effectiveness of the Merger on February 1, 1995, each share of Old
Times Mirror Series A Common Stock outstanding immediately prior to the Merger
was converted into one share of Series A Common Stock and a portion of a share
of Cox's Class A Common Stock, par value $1.00 per share ("Cox Class A Common
Stock"), and each share of Old Times Mirror Series C Common Stock outstanding
immediately prior to the Merger was converted into one share of Series C Common
Stock and a portion of a share of Cox Class A Common Stock. As a result of the
Chandler Exchange, the Chandler Trusts were not stockholders of Old Times Mirror
at the time the Merger was consummated and therefore did not receive any
3
<PAGE> 6
of the securities issued in the Merger. The Additional Chandler Shares will be
issued on an as yet undetermined date sometime between March 20, 1995 and May 3,
1995.
The value of the Cox Class A Common Stock issued to the stockholders of Old
Times Mirror other than the Chandler Trusts (the "Other Stockholders") (based on
the average of the closing prices of a share of Cox Class A Common Stock on the
NYSE for the five trading days ending on the Valuation Date (as defined below))
will be $932 million, or $10.45 per share of Old Times Mirror Common Stock held
by the Other Stockholders, provided that the average closing price of the Cox
Class A Common Stock during such five trading day period (the "Trading Value")
is not less than $15.624 or greater than $19.096. Based on this valuation, the
Additional Chandler Shares to be issued to the Chandler Trusts will have an
estimated value of $412 million, or $10.45 per share of Old Times Mirror Common
Stock held by the Chandler Trusts. There can be no assurance that prior to or
after the Valuation Date the Cox Class A Common Stock will have a Trading Value
within the range from $15.624 to $19.096 per share. If the Trading Value during
the five trading day period is less than $15.624, the value of the Cox Class A
Common Stock received by the Other Stockholders would be less than $932 million,
which would mean that an Other Stockholder would receive Cox Class A Common
Stock with a value of less than $10.45 per share of Old Times Mirror Common
Stock. If the value of the Other Stockholders' Cox Class A Common Stock is less
than $932 million, the number of Additional Chandler Shares to be issued would
be reduced so that the value of the Additional Chandler Shares to be issued with
respect to each share of Old Times Mirror Common Stock owned by the Chandler
Trusts would remain substantially equivalent to the value of the Cox Class A
Common Stock to be issued with respect to each share of Old Times Mirror Common
Stock owned by the Other Stockholders. The "Valuation Date" will be a date to be
selected by Cox that is no earlier than March 17, 1995 and no later than May 1,
1995.
SETTLEMENT OF STOCKHOLDERS' LITIGATION
Following Times Mirror's announcement of the Transactions, a series of
lawsuits were filed in Delaware Chancery Court, California Superior Court and
United States Federal District Court (the "Stockholders' Litigation")
challenging the terms of the Transactions and alleging that the defendants in
such lawsuits had engaged in certain improper conduct. As part of the settlement
of the Stockholders' Litigation, New Times Mirror has agreed to conduct the
Exchange Offer as soon as practicable after the Merger. The Chandler Trusts have
agreed that they will not participate in the Exchange Offer. As part of the
settlement of the Stockholders' Litigation, the Board of Directors of the
Company adopted an initial dividend policy for New Times Mirror (the "Initial
New Times Mirror Dividend Policy") that provides that the annual dividend on the
Common Stock, beginning in June 1995 and continuing for a period of three years,
will be set at no less than $.24 per share. The Initial New Times Mirror
Dividend Policy is subject to the exercise by the Company's Board of Directors
of its fiduciary obligations and the exercise of the Board's business judgment
in connection with, among other things, the declaration of future dividends, as
well as to any and all requirements of Delaware law or any other applicable law,
and to any and all covenants, restrictions or limitations in connection with any
financing. Following the expiration of the Initial New Times Mirror Dividend
Policy, any policy of the Company regarding the payment of common dividends will
depend on the Company's future earnings, capital requirements, financial
condition and other factors. For more information regarding the Stockholders'
Litigation and the settlement, see "Pre-Exchange Offer
Transactions -- Stockholders' Litigation."
THE EXCHANGE OFFER
EXPIRATION...................... 12:00 Midnight, New York City time, on
, 1995 unless extended (the
"Expiration Date").
TERMS OF EXCHANGE............... One share of Series B Preferred Stock for
each share of Common Stock properly tendered
and not withdrawn prior to the Expiration
Date. See "The Exchange Offer -- Terms of the
Exchange Offer." The Chandler Trusts have
agreed not to participate in the Exchange
Offer.
4
<PAGE> 7
SERIES B PREFERRED STOCK
GENERAL; RANKING......... The Series B Preferred Stock will be a new
series of Preferred Equity Redemption
Cumulative Stock(TM) of the Company and will
rank prior to the Common Stock and on parity
with the Series A Preferred Stock to be
issued to the Chandler Trusts with respect to
dividend rights and rights upon liquidation,
dissolution and winding up of the Company.
MANDATORY CONVERSION............ Shares of Series B Preferred Stock will
convert automatically into shares of Series A
Common Stock on March 31, 1998 (the
"Mandatory Conversion Date") or earlier upon
certain mergers, consolidations or similar
extraordinary transactions involving the
Series A Common Stock.
OPTIONAL REDEMPTION...... The Company will have the option to call the
Series B Preferred Stock for redemption, in
whole or in part, at any time or from time to
time prior to the Mandatory Conversion Date
at the Call Price payable in shares of Series
A Common Stock plus cash in an amount equal
to all accrued and unpaid dividends on the
Series B Preferred Stock to the date of
redemption. The Call Price will be $31.92885
per share initially and thereafter will
decline at a rate of $ per day on each day
following March , 1995 to $ on January
30, 1998 and equal to $28.52685 thereafter.
STATED VALUE............. Shares of Series B Preferred Stock will be
issued in an amount having an aggregate
stated value of up to $350 million and each
share of Series B Preferred Stock will have a
stated value of $21.131 (i.e., the Series B
Price). The Series B Price is equal to (i)
the average closing price of a share of Old
Times Mirror Series A Common Stock on the
NYSE during a designated 20 day period within
the 90 days preceding the Merger minus (ii)
$10.45.
DIVIDENDS................ The Series B Preferred Stock provides for
cumulative annual cash dividends at the rate
of $1.374 per share (6.5% of the Series B
Price) until March 31, 1998, payable
quarterly, commencing June 15, 1995.
NUMBER OF SHARES................ Subject to certain conditions, the Company
will accept up to 16,563,343 shares of Common
Stock validly tendered and not withdrawn
prior to the Expiration Date.
MARKET FOR SERIES B PREFERRED
STOCK........................... The shares of Series B Preferred Stock will
be newly issued. There is no current market
for shares of Series B Preferred Stock. The
Series B Preferred Stock has been approved
for listing on the NYSE subject to
satisfaction of the NYSE's requirements as to
minimum numbers of shares outstanding and
record holders of the Series B Preferred
Stock following the Exchange Offer. See
"Investment Considerations -- No Prior Public
Market for Series B Preferred Stock; Possible
Withdrawal of Listing on NYSE."
TENDER PROCEDURES............... Enclosed with this Prospectus are three
colored Letters of Transmittal to be used as
follows:
BLUE -- The BLUE Letter of Transmittal is to
be used by a stockholder ONLY if such
stockholder both (i) holds Old Times Mirror
stock certificates and (ii) intends to
participate in the Exchange Offer. The BLUE
Letter of Transmittal permits
5
<PAGE> 8
such a stockholder to surrender Old Times
Mirror stock certificates to receive New
Times Mirror and Cox stock certificates and
to designate how many of his or her shares of
Common Stock are being tendered in the
Exchange Offer.
YELLOW -- The YELLOW Letter of Transmittal is
to be used by a stockholder ONLY if such
stockholder intends to participate in the
Exchange Offer and does not hold Old Times
Mirror stock certificates (i.e., the
stockholder's shares of Common Stock are
either evidenced by New Times Mirror stock
certificates or are held in book-entry form).
If a stockholder intends to tender shares of
Common Stock evidenced by a New Times Mirror
stock certificate or held in book-entry form
and also intends to tender shares of Common
Stock deemed to be evidenced by an Old Times
Mirror stock certificate, such stockholder
must use a YELLOW Letter of Transmittal with
respect to the former and a BLUE Letter of
Transmittal with respect to the latter.
PINK -- The PINK Letter of Transmittal is to
be used by a stockholder ONLY if such
stockholder does not intend to participate in
the Exchange Offer but holds Old Times Mirror
stock certificates. The PINK Letter of
Transmittal permits a stockholder who elects
not to participate in the Exchange Offer to
surrender his or her Old Times Mirror stock
certificates to receive New Times Mirror and
Cox stock certificates.
WHETHER OR NOT YOU INTEND TO PARTICIPATE IN
THE EXCHANGE OFFER, IF YOU HOLD OLD TIMES
MIRROR STOCK CERTIFICATES, YOU MUST COMPLETE
AND SIGN EITHER THE BLUE LETTER OF
TRANSMITTAL (IF YOU ELECT TO PARTICIPATE) OR
THE PINK LETTER OF TRANSMITTAL (IF YOU ELECT
NOT TO PARTICIPATE) AND DELIVER SUCH LETTER
OF TRANSMITTAL, SUCH OLD TIMES MIRROR STOCK
CERTIFICATES AND ANY OTHER REQUIRED DOCUMENTS
TO THE EXCHANGE AGENT IN ORDER TO RECEIVE
CERTIFICATES EVIDENCING SHARES OF COMMON
STOCK AND/OR SERIES B PREFERRED STOCK AND
CERTIFICATES EVIDENCING SHARES OF COX CLASS A
COMMON STOCK.
A stockholder whose shares of Common Stock
are evidenced by New Times Mirror stock
certificates or are held in book-entry form
does not need to take any action if such
stockholder does not intend to participate in
the Exchange Offer.
STOCKHOLDERS ARE URGED TO TAKE SPECIAL CARE
TO ENSURE THAT THEY ARE USING THE CORRECT
FORM OF LETTER OF TRANSMITTAL.
If a stockholder holds shares of Common Stock
in book-entry form, such stockholder may
participate in the Exchange Offer by
complying with the procedures for book-entry
transfer set forth under "The Exchange
Offer -- Procedure for Tender." A stockholder
may also request his or her broker, dealer,
commercial bank, trust company or other
nominee to effect the transaction for him or
her. A stockholder having shares registered
in the name of a broker, dealer, commercial
bank, trust company or other nominee must
contact that broker, dealer, commercial bank,
trust company or other nominee if he tenders
shares.
Stockholders whose certificates are not
immediately available or who cannot deliver
the Letter of Transmittal or other documents
required to be delivered to the Exchange
Agent prior to the expiration of the Exchange
Offer may nevertheless tender shares
6
<PAGE> 9
of Common Stock in accordance with the
guaranteed delivery procedures described
herein. See "The Exchange Offer -- Procedure
for Tender."
PRORATION....................... If more than 16,563,343 shares of Common
Stock have been properly tendered and not
withdrawn prior to the Expiration Date, the
shares of Series B Preferred Stock to be
issued will be allotted on a pro rata basis.
See "The Exchange Offer -- Proration in Case
of Oversubscription."
TAX CONSEQUENCES................ Times Mirror has received a ruling from the
Internal Revenue Service to the effect that
the receipt of shares of Series B Preferred
Stock by tendering holders pursuant to the
Exchange Offer will be treated as part of a
tax-free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended
(the "Code"), so that holders tendering
shares of Common Stock generally will not
incur income tax liability in connection with
the Exchange Offer. See "Certain Federal
Income Tax Considerations."
WITHDRAWAL RIGHTS............... Tenders may be withdrawn prior to the
Expiration Date. To be effective, a written,
telegraphic or facsimile notice of withdrawal
must be received in a timely manner by the
Exchange Agent. See "The Exchange
Offer -- Withdrawal of Tendered Common
Shares."
EXCHANGE AGENT.................. First Interstate Bank of California is the
exchange agent (the "Exchange Agent") for the
Exchange Offer.
INFORMATION AGENT............... D.F. King & Co., Inc. is the information
agent (the "Information Agent") for the
Exchange Offer.
QUESTIONS....................... Any questions regarding the Exchange Offer,
including the procedure for tendering shares
in the Exchange Offer and/or surrendering Old
Times Mirror stock certificates, should be
directed to the Information Agent at (800)
207-2872.
NO RIGHTS OF DISSENTING
STOCKHOLDERS.................... Stockholders of the Company will not have the
right under the Delaware General Corporation
Law to seek an appraisal of their shares of
Common Stock in connection with the Exchange
Offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
THAT STOCKHOLDERS TENDER OR REFRAIN FROM TENDERING THEIR SHARES, AND NO ONE HAS
BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION ON BEHALF OF THE COMPANY. THIS
IS A MATTER FOR EACH STOCKHOLDER TO DETERMINE AFTER CONSULTATION WITH HIS OR HER
ADVISORS, INCLUDING TAX COUNSEL, ON THE BASIS OF HIS OR HER OWN FINANCIAL
POSITION AND REQUIREMENTS. SEE "INVESTMENT CONSIDERATIONS" AND "CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS."
7
<PAGE> 10
SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 ---------------------------
---------------------------------------------------- SEPTEMBER 26 SEPTEMBER 25
1989 1990 1991 1992 1993 1993 1994
-------- -------- -------- -------- -------- ------------ ------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIO)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA(A):
Revenues................ $3,082.3 $3,146.3 $3,117.2 $3,155.4 $3,243.7 $2,346.7 $2,400.1
Restructuring charges... -- -- 42.3 202.7 80.2 3.8 --
Operating profit........ 440.4 268.1 208.7 63.8 189.0 163.8 186.8
Nonrecurring gains
(charges)............. 9.2 -- (85.6) -- -- -- 22.1
Interest expense........ 53.9 74.8 76.7 74.3 84.1 64.8 51.8
Income (loss) from
continuing operations
before income taxes... 395.7 204.4 55.3 (7.1) 109.8 101.3 159.2
Income (loss) from
continuing
operations............ 235.0 112.2 14.3 (18.4) 51.7 47.3 79.4
Income (loss) per common
share from continuing
operations............ $1.82 $.87 $.11 $(.14) $.40 $.37 $.61
Ratio of earnings to
fixed charges(b)...... 4.6x 2.6x 1.3x (c) 2.0x 3.3x
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------- SEPTEMBER 25
1989 1990 1991 1992 1993 1994
-------- -------- -------- -------- -------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets(d)......... $3,874.3 $4,120.1 $4,006.1 $4,233.3 $4,499.9 $4,212.8
Long-term debt.......... 883.5 1,065.7 978.4 1,114.4 795.5 749.0
Shareholders' equity.... 1,877.2 1,917.4 1,884.0 1,700.6 1,899.3 1,919.0
</TABLE>
- ---------------
(a) Amounts have been restated from previously issued financial statements to
reclassify the cable television operations to discontinued operations.
(b) The ratio of earnings to fixed charges was computed by dividing earnings
(income from continuing operations before income taxes, adjusted for fixed
charges, equity income or loss from unconsolidated affiliates and
amortization of capitalized interest) by fixed charges for the years
indicated. Fixed charges include interest incurred on long-term debt and
other debt, the interest factor deemed to be included in rental expense, and
certain amortization.
(c) Earnings are approximately $7 million lower than the amount needed to cover
fixed charges in this year, as earnings in 1992 were impacted by over $200
million in restructuring charges.
(d) Includes amounts for the cable television operations as follows:
<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------- SEPTEMBER 25
1989 1990 1991 1992 1993 1994
-------- -------- -------- -------- -------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Net assets.... $439.2 $484.6 $509.9 $495.0 $606.7 $626.1
</TABLE>
8
<PAGE> 11
SUMMARY PRO FORMA FINANCIAL DATA
The following information has been derived from the unaudited pro forma
condensed consolidated balance sheet and statements of income included elsewhere
herein. The pro forma results are not necessarily indicative of the results of
operations that would have actually been obtained had the Transactions been
consummated as of the dates indicated in the pro forma balance sheet and
statements of income.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31 SEPTEMBER 25
1993 1994
------------ -------------
(IN MILLIONS, EXCEPT PER
SHARE AMOUNTS AND RATIO)
<S> <C> <C>
PRO FORMA INCOME STATEMENT DATA:
Revenues............................................................ $3,243.7 $ 2,400.1
Restructuring charges............................................... 80.2
Operating profit.................................................... 189.0 186.8
Interest expense.................................................... 34.0 17.8
Income from continuing operations before income taxes............... 159.8 193.1
Income from continuing operations................................... 81.2 99.4
Earnings per common share from continuing operations................ $.19 $.49
Pro forma ratio of earnings to combined fixed charges and
preferred stock dividends(a)...................................... 1.3x 1.9x
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 25
1994
--------------
(IN MILLIONS)
<S> <C>
PRO FORMA BALANCE SHEET DATA:
Total assets.................................................................... $4,279.9
Long-term debt.................................................................. 247.0
Shareholders' equity............................................................ 2,592.7
</TABLE>
- ---------------
(a) The pro forma ratio of earnings to combined fixed charges and preferred
stock dividends was computed by dividing pro forma earnings (income from
continuing operations before income taxes, adjusted for pro forma fixed
charges, distributed income and equity income or loss from unconsolidated
affiliates and amortization of capitalized interest) by pro forma fixed
charges combined with the assumed preferred stock dividends for the periods
indicated. Pro forma fixed charges include interest incurred on long-term
debt and other debt, the interest factor deemed to be included in rental
expense, and certain amortization. Preferred stock dividends assume that
shares of Series A Preferred Stock and Series B Preferred Stock were
outstanding during the periods.
9
<PAGE> 12
RECENT OPERATING RESULTS
Set forth below are Times Mirror's summary operating results for the three
months and year ended December 31, 1994 which were publicly released by Times
Mirror on February 2, 1995. For more information regarding Times Mirror's
operating results for the three months and year ended December 31, 1994, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Recent Operating Results." The income statement data for the year
ended December 31, 1993 has been derived from the audited consolidated financial
statements of Times Mirror. The income statement data for the year ended
December 31, 1994 and the three months ended December 31, 1993 and 1994 have
been derived from the unaudited consolidated financial statements of Times
Mirror which, in the opinion of management, include all adjustments (consisting
of normal recurring adjustments) necessary for a fair presentation of financial
position and results of operations for such periods.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31,
--------------------- -----------------
1993 1994 1993 1994
-------- -------- ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND
RATIO)
<S> <C> <C> <C> <C>
Revenues............................................. $3,243.7 $3,357.5 $897.1 $957.4
Restructuring charges................................ 80.2 76.4
Operating profit..................................... 189.0 294.3 25.3 107.6
Nonrecurring gains................................... 22.1
Interest expense..................................... 84.1 69.5 19.3 17.7
Income from continuing operations before income
taxes.............................................. 109.8 247.7 8.5 88.6
Income from continuing operations.................... 51.7 126.2 4.4 46.9
Income per share from continuing operations.......... $.40 $.98 $.04 $.36
Ratio of earnings to fixed charges(a)................ 2.0x 3.7x
</TABLE>
- ---------------
(a) The ratio of earnings to fixed charges was computed by dividing earnings
(income from continuing operations before income taxes, adjusted for fixed
charges, equity income or loss from unconsolidated affiliates and
amortization of capitalized interest) by fixed charges for the years
indicated. Fixed charges include interest incurred on long-term debt and
other debt, the interest factor deemed to be included in rental expense, and
certain amortization.
10
<PAGE> 13
INVESTMENT CONSIDERATIONS
SERIES B PRICING MECHANISM
The Series B Price of $21.131 is equal to (i) the average closing price of
a share of Old Times Mirror Series A Common Stock on the NYSE during a
designated 20 trading day period within the 90 days preceding the Merger minus
(ii) $10.45. This pricing mechanism is designed to estimate the trading value of
a share of Series B Preferred Stock after the Transactions. However, no
assurance can be given that the actual trading value of a share of Series B
Preferred Stock will equal the Series B Price. On February , 1995, the last
trading day before the commencement of the Exchange Offer, the closing price on
the NYSE for a share of Series A Common Stock was $ .
NO PRIOR PUBLIC MARKET FOR SERIES B PREFERRED STOCK; POSSIBLE WITHDRAWAL OF
LISTING ON NYSE
At the time of the Exchange Offer, there will be no public market for the
Series B Preferred Stock. The Series B Preferred Stock has been approved for
listing on the NYSE. However, such approval is conditioned on satisfaction of
the NYSE's requirements that following the consummation of the Exchange Offer
there be at least 100,000 shares of Series B Preferred Stock with a minimum
aggregate market value of $2 million issued and outstanding and held of record
by at least 100 stockholders. If any of these requirements are not satisfied,
the Series B Preferred Stock would not be eligible for listing on the NYSE and
the Company would be required to withdraw the listing. Withdrawal of the listing
of the Series B Preferred Stock on the NYSE could have a material adverse effect
on the liquidity of the Series B Preferred Stock. No assurance can be given that
the NYSE's listing requirements will be satisfied upon consummation of the
Exchange Offer. If the Series B Preferred Stock could not be listed on the NYSE,
the Company would use its best efforts to cause the Series B Preferred Stock to
be listed on another securities exchange or included in the National Association
of Securities Dealers Automated Quotation System, although no assurance can be
given that the Company would be successful in these efforts.
POSSIBLE VOLATILITY OF COMMON STOCK PRICE
Upon conversion or redemption of the shares of Series B Preferred Stock,
the holder thereof will receive shares of Series A Common Stock. Prices for the
Series A Common Stock will be determined in the marketplace and may be
influenced by many factors, including the operating performance of the Company,
the depth and liquidity of the market for the Series A Common Stock, investor
perception of the Company and general economic and market conditions. The Series
A Common Stock is listed on the NYSE and the Pacific Stock Exchange.
POTENTIAL CONSOLIDATION OF VOTING POWER
If holders of shares of Series C Common Stock, which are entitled to ten
votes per share, elect to participate in the Exchange Offer, the voting power of
the Other Stockholders will be reduced and the voting power of the Chandler
Trusts, who will not participate in the Exchange Offer, will be correspondingly
increased. Upon the conversion or redemption of the Series B Preferred Stock, a
stockholder will receive shares of Series A Common Stock even though such
stockholder may have tendered Series C Common Stock for such Series B Preferred
Stock in the Exchange Offer.
FEDERAL INCOME TAX CONSIDERATIONS
It is possible that the Series B Preferred Stock will be "Section 306
stock" for federal income tax purposes, with the result that all or a portion of
the proceeds received by a stockholder from the disposition or redemption of
such shares will be taxable as ordinary income, and a stockholder may not
recognize any loss from such disposition or redemption. See "Certain Federal
Income Tax Considerations."
11
<PAGE> 14
REDUCTION IN COMMON STOCK DIVIDEND PAYMENT; DIVIDEND PREFERENCE OF SERIES A AND
SERIES B PREFERRED STOCK
On March 10, 1995, the Company will pay a cash dividend of $.27 per share
of Common Stock to holders of record as of February 22, 1995. However, the
Company expects that thereafter it will pay quarterly dividends on its Common
Stock at a rate below the rate previously paid with respect to Old Times Mirror
Common Stock. Although the future dividend rate for the Common Stock has not yet
been established, management's review of factors being considered in
recommending a new dividend level to the Board of Directors would suggest that
it would be appropriate to reduce the dividend level by between 66 2/3% and 80%
from the dividend paid on Old Times Mirror Common Stock to an annual dividend of
between $.22 and $.36 per share compared to the $1.08 paid by Old Times Mirror.
The dividend reduction is intended to bring the dividend policy more in line
with the policy of other publicly traded publishing companies and to provide
additional funds for investment in new business opportunities. As part of the
settlement of the Stockholders' Litigation, the Board of Directors of the
Company adopted the Initial New Times Mirror Dividend Policy, which provides
that the annual dividend on the Common Stock, beginning in June 1995 and
continuing for a period of three years, will be set at no less than $.24 per
share. The Initial New Times Mirror Dividend Policy is subject to the exercise
by the Company's Board of Directors of its fiduciary obligations and the
exercise of the Board's business judgment in connection with, among other
things, the declaration of future dividends, as well as to any and all
requirements of Delaware law or any other applicable law, and to any and all
covenants, restrictions or limitations in connection with any financing.
Following the expiration of the Initial New Times Mirror Dividend Policy, any
policy of the Company regarding the payment of common dividends will depend on
the Company's future earnings, capital requirements, financial condition and
other factors.
The shares of Series A Preferred Stock, all of which will be held by the
Chandler Trusts, will be entitled to quarterly dividends at a rate which will be
established at the time of issuance such that shares of Series A Preferred Stock
would trade at par on that date on a fully distributed basis. The holders of
Series B Preferred Stock will be entitled to cumulative quarterly dividends at
an annual rate per share equal to 6.5% of the Series B Price. See "Description
of Preferred Stock."
DILUTION OF COMMON EQUITY UPON CONVERSION OR REDEMPTION OF SERIES B PREFERRED
STOCK
Each share of the Series B Preferred Stock will mandatorily convert on
March 31, 1998, or upon the prior occurrence of certain extraordinary
transactions, into one share of Series A Common Stock (subject to certain
adjustments) plus accrued but unpaid dividends plus, if the conversion occurs
early due to the occurrence of certain extraordinary transactions, a premium. In
the case of an early conversion, the Company may elect to pay the accrued but
unpaid dividends and the premium by issuing additional shares of Series A Common
Stock. In addition, the Series B Preferred Stock may be called for redemption
prior to March 31, 1998 at the Call Price then in effect plus accrued but unpaid
dividends, with the Call Price to be paid in shares of Series A Common Stock.
Therefore, the conversion or redemption of the Series B Preferred Stock will
result in the dilution of the percentage common equity interest of all common
stockholders.
PRE-EXCHANGE OFFER TRANSACTIONS
TRANSACTIONS
Old Times Mirror, New Times Mirror, Cox and Cox Enterprises, Inc. are
parties to the Merger Agreement, pursuant to which Cox acquired Old Times
Mirror's cable television business and the Company became the successor to Old
Times Mirror. This was accomplished through the Transactions, which consisted
of, among other things, (i) the contribution of the Publishing Business by Old
Times Mirror to the Company, (ii) the assumption by the Company of all of the
liabilities of Old Times Mirror other than those related to Old Times Mirror's
cable television business and certain other liabilities, (iii) the Chandler
Exchange, in which the Chandler Trusts exchanged all of their Old Times Mirror
Series A Common Stock and Old Times Mirror Series C Common Stock for the same
number of shares of Series A Common Stock and Series C Common Stock and the
commitment by the Company to issue to the Chandler Trust shares of the Series A
12
<PAGE> 15
Preferred Stock and, under certain circumstances, additional shares of Series A
Common Stock, and (iv) the Merger, in which Old Times Mirror (then consisting
only of its cable television business) was merged with and into Cox. Upon the
effectiveness of the Merger on February 1, 1995, each share of Old Times Mirror
Series A Common Stock outstanding immediately prior to the Merger was converted
into one share of Series A Common Stock and a portion of a share of Cox Class A
Common Stock, and each share of Old Times Mirror Series C Common Stock
outstanding immediately prior to the Merger was converted into one share of
Series C Common Stock and a portion of a share of Cox Class A Common Stock. As a
result of the Chandler Exchange, the Chandler Trusts were not stockholders of
Old Times Mirror at the time the Merger was consummated and therefore did not
receive any of the securities issued in the Merger. The Additional Chandler
Shares will be issued on an as yet undetermined date sometime between March 20,
1995 and May 3, 1995.
The value of the Cox Class A Common Stock issued to the Other Stockholders
(based on the average of the closing prices of a share of Cox Class A Common
Stock on the NYSE for the five trading days ending on the Valuation Date) will
be $932 million, or $10.45 per share of Old Times Mirror Common Stock held by
the Other Stockholders, provided that the Trading Value is not less than $15.624
or greater than $19.096. Based on this valuation, the Additional Chandler Shares
to be issued to the Chandler Trusts will have an estimated value of $412
million, or $10.45 per share of Old Times Mirror Common Stock held by the
Chandler Trusts. There can be no assurance that prior to or after the Valuation
Date the Cox Class A Common Stock will have a Trading Value within the range
from $15.624 to $19.096 per share. If the Trading Value during the five trading
day period is less than $15.624, the value of the Cox Class A Common Stock
received by the Other Stockholders would be less than $932 million, which would
mean that an Other Stockholder would receive Cox Class A Common Stock with a
value of less than $10.45 per share of Old Times Mirror Common Stock. If the
value of the Other Stockholders' Cox Class A Common Stock is less than $932
million, the number of Additional Chandler Shares to be issued would be reduced
so that the value of the Additional Chandler Shares to be issued with respect to
each share of Old Times Mirror Common Stock owned by the Chandler Trusts would
remain substantially equivalent to the value of the Cox Class A Common Stock to
be issued with respect to each share of Old Times Mirror Common Stock owned by
the Other Stockholders. The Valuation Date will be a date to be selected by Cox
that is no earlier than March 17, 1995 and no later than May 1, 1995.
STOCKHOLDERS' LITIGATION
Following Times Mirror's announcement of the Transactions, a series of
lawsuits were filed in Delaware Chancery Court, California Superior Court and
United States Federal District Court challenging the terms of the Transactions
and alleging that the defendants in such lawsuits had engaged in certain
improper conduct. The plaintiff class in the consolidated Delaware actions
consisted of all stockholders of Old Times Mirror (other than the defendants in
such actions and their affiliates) who owned shares of Old Times Mirror Common
Stock between June 3, 1994 and the date upon which a judgment in such actions as
to certain matters was to be entered and become final. The California litigation
purported to be a stockholders' derivative action on behalf of Old Times Mirror
and a class action on behalf of the same class as in the consolidated Delaware
actions.
Following a series of negotiations between representatives of Old Times
Mirror and counsel for the plaintiffs in the Stockholders' Litigation, on
October 10, 1994, the parties entered into a stipulation (the "Stipulation")
with respect to the Stockholders' Litigation. Pursuant to the Stipulation, (i)
New Times Mirror agreed to issue shares of Series B Preferred Stock in the
Exchange Offer, (ii) the Board of Directors of New Times Mirror approved the
initial New Times Mirror Dividend Policy and (iii) New Times Mirror paid (on
behalf of Times Mirror as well as each of the other defendants in the
Stockholders' Litigation who are past or present officers or directors of Old
Times Mirror) the attorneys' fees and expenses of counsel for the plaintiffs in
an aggregate amount of $6 million. The Stipulation was approved by the Delaware
Chancery Court and the California Superior Court. The litigation in the United
States Federal District Court was dismissed.
13
<PAGE> 16
The orders and final judgments entered by the Delaware Chancery Court and
California Superior Court, among other things, (i) dismissed the complaints in
each respective action with prejudice as to all defendants and (ii) on behalf of
the plaintiffs and all class members, released and discharged all defendants and
certain other parties from all claims in each respective action. In addition,
the order and judgment entered by the California Superior Court, on behalf of
the plaintiffs in the California litigation, Old Times Mirror and all
then-current holders of Old Times Mirror Common Stock, released and discharged
certain defendants from any cause of action or claim by Old Times Mirror or
derivatively by Old Times Mirror that has been or could have been asserted in
the California litigation. As a result, stockholders may not challenge the
Transactions in litigation.
As part of the settlement of the Stockholders' Litigation, New Times Mirror
has agreed to conduct the Exchange Offer as soon as practicable after the
Merger. The Chandler Trusts have agreed that they will not participate in the
Series B Exchange Offer.
As part of the settlement of the Stockholders' Litigation, the Board of
Directors of the Company adopted the Initial New Times Mirror Dividend Policy,
which provides that the annual dividend on the Common Stock, beginning in June
1995 and continuing for a period of three years, will be set at no less than
$.24 per share. The Initial New Times Mirror Dividend Policy is subject to the
exercise by the Company's Board of Directors of its fiduciary obligations and
the exercise of the Board's business judgment in connection with, among other
things, the declaration of future dividends, as well as to any and all
requirements of Delaware law or any other applicable law, and to any and all
covenants, restrictions or limitations in connection with any financing.
Following the expiration of the Initial New Times Mirror Dividend Policy, any
policy of the Company regarding the payment of common dividends will depend on
the Company's future earnings, capital requirements, financial condition and
other factors.
THE EXCHANGE OFFER
Upon the terms and subject to the conditions described herein and in the
Letters of Transmittal, the Company hereby offers to exchange one share of
Series B Preferred Stock for one share of Common Stock, up to a maximum of
16,563,343 shares of Common Stock. The Company reserves the right, in its sole
discretion, to increase the number of shares of Series B Preferred Stock offered
in the Exchange Offer, subject to compliance with applicable securities
regulations.
THIS EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON , 1995, UNLESS EXTENDED. SHARES OF COMMON STOCK TENDERED FOR
EXCHANGE MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Any questions regarding the Exchange Offer, including the procedure for
tendering shares in the Exchange Offer and/or surrendering Old Times Mirror
stock certificates, should be directed to the Information Agent at (800)
207-2872.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
As part of the settlement of the Stockholders' Litigation, the Company has
agreed to make an offer to the holders of shares of Common Stock (including
stockholders who are officers, directors or affiliates) as soon as practicable
after the Merger. The Chandler Trusts have agreed not to participate in the
Exchange Offer. The Exchange Offer provides holders of shares of Common Stock
with the opportunity to exchange their shares for shares of Series B Preferred
Stock, which will receive a higher dividend than the dividend expected to be
paid on shares of Common Stock. However, because the Company may redeem shares
of Series B Preferred Stock at any time at the Call Price then in effect
(payable in shares of Series A Common Stock), which may, at the time of such
redemption, be less than the then existing market price of shares of Series A
Common Stock, an investment in shares of Series B Preferred Stock does not
provide the holder with the same opportunity for equity appreciation afforded by
an investment in shares of Common Stock. The Call Price will initially equal
$31.92885 per share and will decline by $ per day on each day following
March , 1995 to $ on January 30, 1998 and thereafter will equal
$28.52685.
14
<PAGE> 17
If 16,563,343 shares of Common Stock are exchanged, the number of
outstanding shares of Common Stock will be reduced by approximately 12.9% from
approximately 128,659,000 to approximately 112,096,000 shares. This change would
result in a proportionally greater interest in the common equity of the Company
for each then outstanding share of Common Stock. If holders of shares of Series
C Common Stock elect to participate in the Exchange Offer, the voting power of
the Other Stockholders will be reduced and the voting power of the Chandler
Trusts will be correspondingly increased. All shares of Common Stock accepted
under the Exchange Offer will, in the Company's discretion, be retired or held
by the Company as treasury shares. In either case, shares accepted for exchange
could subsequently be reissued by the Company.
There were 97,899,095 shares of Series A Common Stock issued and
outstanding as of the start of business on February 1, 1995, of which 18,668,546
shares were owned by the Chandler Trusts. There were 30,759,971 shares of Series
C Common Stock issued and outstanding as of the start of business on February 1,
1995, of which 20,757,246 shares were owned by the Chandler Trusts.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
THAT STOCKHOLDERS TENDER OR REFRAIN FROM TENDERING THEIR SHARES, AND NO ONE HAS
BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION ON BEHALF OF THE COMPANY. THIS
IS A MATTER FOR EACH STOCKHOLDER TO DETERMINE AFTER CONSULTATION WITH HIS OR HER
ADVISORS, INCLUDING TAX COUNSEL, ON THE BASIS OF HIS OR HER OWN FINANCIAL
POSITION AND REQUIREMENTS. SEE "INVESTMENT CONSIDERATIONS" AND "CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS."
For further information on the Series B Preferred Stock and the Common
Stock, see "Description of Preferred Stock" and "Description of Common Stock."
TERMS OF THE EXCHANGE OFFER
The Company is offering to exchange up to 16,563,343 shares of its Common
Stock upon the terms and subject to the conditions set forth herein and in the
related Letters of Transmittal (which together constitute the Exchange Offer)
for shares of Series B Preferred Stock at a rate of one share of Series B
Preferred Stock for each share of Common Stock validly tendered prior to the
Expiration Date and not withdrawn as described under the caption, "Withdrawal of
Tendered Common Stock" below. The term "Expiration Date" shall mean 12:00
Midnight, New York City time, on , 1995, unless and until the Company shall
have extended the period of time for which the Exchange Offer is open, in which
event "Expiration Date" shall mean the latest time and date on which the
Exchange Offer, as so extended by the Company, shall expire.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the instructions to the Letters of Transmittal,
stock transfer taxes on the exchange of shares of Common Stock by the Company
pursuant to the Exchange Offer. The Company will pay all charges and expenses of
the Exchange Agent and the Information Agent in connection with the Exchange
Offer. The Company will not pay any commission or other remuneration to any
broker, dealer, salesman or other person for soliciting tenders of Common Stock.
The Company shall not be obligated to accept for exchange more than
16,563,343 shares of Common Stock. In the case of oversubscription, shares of
Common Stock properly tendered and not withdrawn will be accepted on a pro rata
basis, after accepting tenders from holders of 99 or fewer shares of Common
Stock who tender all their shares, in conformity with Rule 13e-4 of the rules of
the Commission promulgated under the Exchange Act. Any shares of Common Stock
acquired by the Company pursuant to the Exchange Offer will be held as treasury
shares or retired.
The Company expressly reserves the right in its sole discretion at any time
or from time to time, to extend the period of time during which the Exchange
Offer is open, and thereby delay acceptance for exchange of, or exchange of any
shares of Common Stock, by giving oral or written notice of such extension to
the Exchange Agent.
The Exchange Offer, the Letters of Transmittal and other relevant materials
are being mailed to record holders of shares of Common Stock and furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable,
15
<PAGE> 18
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of shares of Common Stock.
If the Company makes a material change in the terms of the Exchange Offer
or the information concerning the Exchange Offer, or if it waives a material
condition of the Exchange Offer, the Company will extend the Exchange Offer
consistent with Rule 13e-4 under the Exchange Act. The Commission has taken the
position that the minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer (other than a change in price or a change of more than two percent in
percentage of securities sought, for which an extension of ten business days is
required) will depend upon the facts and circumstances, including the relative
materiality of the terms or information. For purposes of the Exchange Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday,
and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York
City time.
The Company also expressly reserves the right (i) to delay acceptance for
exchange of or exchange for any shares of Common Stock to be exchanged by it
pursuant to the Exchange Offer, regardless of whether such shares of Common
Stock were theretofore accepted for exchange, and (ii) at any time, or from time
to time, to amend the Exchange Offer in any manner which would not adversely
affect the holders of the Common Stock. The Company's reservation of the right
to delay exchange of shares of Common Stock which it has accepted for payment is
limited by Rule 13e-4 under the Exchange Act, which requires that a bidder must
pay the consideration offered or return the securities deposited by or on behalf
of security holders promptly after the termination or withdrawal of any exchange
offer. Any extension, delay in payment, or amendment will be followed as
promptly as practicable by public announcement thereof, such announcement in the
case of an extension to be issued no later than 9:00 A.M., New York City time,
on the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Company may choose to make any public
announcement, the Company will have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by issuing a
release to the Dow Jones News Service.
PROCEDURE FOR TENDER
After the effective time of the Merger, each certificate that theretofore
represented shares of Old Times Mirror Common Stock is deemed for all purposes
to evidence ownership of the number of shares of Common Stock and full shares of
Cox Class A Common Stock into which such shares of Old Times Mirror Common Stock
were converted in the Merger. Such certificates must be surrendered to the
Exchange Agent and the Exchange Agent will deliver certificates issued by the
Company and Cox to evidence such shares of Common Stock and Cox Class A Common
Stock, respectively. However, because it will not be possible for this process
to be completed prior to the Expiration Date, the surrender of Old Times Mirror
Common Stock certificates and the tender of Common Stock in the Exchange Offer
will have to be effected at the same time. Enclosed with this Prospectus are
three colored Letters of Transmittal to be used as follows:
BLUE -- The BLUE Letter of Transmittal is to be used by a stockholder
ONLY if such stockholder both (i) holds Old Times Mirror stock certificates
and (ii) intends to participate in the Exchange Offer. The BLUE Letter of
Transmittal permits such a stockholder to surrender Old Times Mirror stock
certificates to receive New Times Mirror and Cox stock certificates and to
designate how many of his or her shares of Common Stock are being tendered
in the Exchange Offer.
YELLOW -- The YELLOW Letter of Transmittal is to be used by a
stockholder ONLY if such stockholder intends to participate in the Exchange
Offer and does not hold Old Times Mirror stock certificates (i.e., the
stockholder's shares of Common Stock are either evidenced by New Times
Mirror stock certificates or are held in book-entry form). If a stockholder
intends to tender shares of Common Stock evidenced by a New Times Mirror
stock certificate or held in book-entry form and also intends to tender
shares of Common Stock deemed to be evidenced by an Old Times Mirror stock
certificate, such stockholder must use a YELLOW Letter of Transmittal with
respect to the former and a BLUE Letter of Transmittal with respect to the
latter.
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<PAGE> 19
PINK -- The PINK Letter of Transmittal is to be used by a stockholder
ONLY if such stockholder does not intend to participate in the Exchange
Offer but holds Old Times Mirror stock certificates. The PINK Letter of
Transmittal permits a stockholder who elects not to participate in the
Exchange Offer to surrender his or her Old Times Mirror stock certificates
to receive New Times Mirror and Cox stock certificates.
WHETHER OR NOT YOU INTEND TO PARTICIPATE IN THE EXCHANGE OFFER, IF YOU HOLD
OLD TIMES MIRROR STOCK CERTIFICATES, YOU MUST COMPLETE AND SIGN EITHER THE BLUE
LETTER OF TRANSMITTAL (IF YOU ELECT TO PARTICIPATE) OR THE PINK LETTER OF
TRANSMITTAL (IF YOU ELECT NOT TO PARTICIPATE) AND DELIVER SUCH LETTER OF
TRANSMITTAL, SUCH OLD TIMES MIRROR STOCK CERTIFICATES AND ANY OTHER REQUIRED
DOCUMENTS TO THE EXCHANGE AGENT IN ORDER TO RECEIVE CERTIFICATES EVIDENCING
SHARES OF COMMON STOCK AND/OR SERIES B PREFERRED STOCK AND CERTIFICATES
EVIDENCING SHARES OF COX CLASS A COMMON STOCK.
A stockholder whose shares of Common Stock are evidenced by New Times
Mirror stock certificates or are held in book-entry form does not need to take
any action if such stockholder does not intend to participate in the Exchange
Offer.
STOCKHOLDERS ARE URGED TO TAKE SPECIAL CARE TO ENSURE THAT THEY ARE USING
THE CORRECT FORM OF LETTER OF TRANSMITTAL.
In order to participate in the Exchange Offer, stockholders should, prior
to the expiration of the Exchange Offer, promptly deliver to the Exchange Agent
at its address indicated elsewhere herein, the proper form of Letter of
Transmittal (or facsimile thereof) properly completed and duly executed with any
required signature guarantees and any other documents required in the Letter of
Transmittal in the prescribed form enclosed herewith and any other required
documents and either (i) (a) Old Times Mirror stock certificates or New Times
Mirror stock certificates must be received by the Exchange Agent at one of the
addresses set forth herein or (b) if shares of Common Stock are held in
book-entry form such shares must be tendered pursuant to the procedures for
book-entry transfer set forth below (and a book-entry confirmation of receipt
for such tender received), or (ii) the guaranteed delivery procedure set forth
below must be complied with. Delivery may be made by hand or by mail so as to be
received by the Exchange Agent on or before the date on which the Exchange Offer
terminates. Stockholders who wish to participate in the Exchange Offer should
clearly complete the proper form of Letter of Transmittal and indicate thereon
the number of shares of Common Stock that are being tendered pursuant to the
Exchange Offer.
The Exchange Agent will establish accounts with respect to the Common Stock
at The Depository Trust Company ("DTC") for purposes of the Exchange Offer
within two business days after the date of this Exchange Offer and any financial
institution that is a participant in DTC may make book-entry delivery of the
Common Stock by causing DTC to transfer such Common Stock into the Exchange
Agent's account in accordance with DTC's procedure for such transfer. However,
although delivery of Common Stock may be effected through book-entry transfer
into the Exchange Agent's account at DTC, the YELLOW Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received by the
Exchange Agent at its address set forth in this Exchange Offer prior to the
Expiration Date, or the guaranteed delivery procedure described below must be
complied with prior to the Expiration Date. Delivery of documents to DTC in
accordance with its procedures does not constitute delivery to the Exchange
Agent.
No signature guarantee is required (i) if the Letter of Transmittal is
signed by the registered holder of the shares of Common Stock tendered therewith
and the shares of Common Stock and/or Series B Preferred Stock are to be
delivered directly to such registered holder or (ii) if such shares of Common
Stock are tendered for the account of an Eligible Institution (as defined
below). In all other cases all signatures on Letters of Transmittal must be
guaranteed by an Eligible Institution. An "Eligible Institution" is a firm or
other entity identified in Rule 17Ad-15 under the Exchange Act, including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities dealer, municipal securities broker, governmental securities dealer
and governmental securities broker; (iii) a credit union; (iv) a national
securities exchange, a registered securities association or clearing agency; or
(v) a savings institution that is a participant in a Securities Transfer
Association recognized program. See the Instructions to the Letter of
Transmittal.
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<PAGE> 20
If a stockholder desires to tender shares of Common Stock pursuant to the
Exchange Offer and Old Times Mirror stock certificates deemed to evidence such
shares of Common Stock or New Times Mirror stock certificates evidencing such
shares of Common Stock are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the desired date
of tender, or the procedure for book-entry tender cannot be completed on a
timely basis, tender may be effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form provided by the Company is received by the Exchange Agent, as provided
below, prior to the desired date of tender, and (iii) Old Times Mirror stock
certificates or New Times Mirror stock certificates (or a confirmation of the
book-entry transfer of such shares of Common Stock into the Exchange Agent's
account at DTC as described above ("Book-Entry Confirmation")), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) in the proper form and any required signature guarantee and any other
documents required by the proper Letter of Transmittal, are received by the
Exchange Agent within five NYSE trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the Exchange
Agent or transmitted by telegram, telex, facsimile transmission or letter to the
Exchange Agent and must include a guarantee by an Eligible Institution in the
form set forth in such Notice and a representation that the stockholder on whose
behalf the tender is being made is deemed to own the shares of Common Stock
being tendered within the meaning of Rule 10b-4 under the Exchange Act.
Notwithstanding any other provision hereof, shares of Series B Preferred
Stock will be exchanged for shares of Common Stock tendered and accepted for
exchange pursuant to the Exchange Offer only after timely receipt by the
Exchange Agent of Old Times Mirror stock certificates deemed to evidence such
shares of Common Stock or New Times Mirror stock certificates evidencing such
shares of Common Stock (or a timely Book-Entry Confirmation), a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other required documents.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES
REPRESENTING SHARES OF COMMON STOCK, IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF
TRANSMITTAL, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED AND SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY.
The valid tender of shares of Common Stock pursuant to one of the
procedures described above will constitute an agreement between the tendering
stockholder and the Company upon the terms and subject to the conditions of the
Exchange Offer.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for exchange of any tender of shares of Common Stock and
all questions as to the interpretation of the terms and conditions of the
Exchange Offer will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any or all tenders not in proper form or the acceptance for exchange
of which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Exchange
Offer or any defect or irregularity in the tender of any shares of Common Stock.
None of the Company, the Exchange Agent, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
information.
Any questions regarding the Exchange Offer, including the procedure for
tendering shares in the Exchange Offer and/or surrendering Old Times Mirror
stock certificates, should be directed to the Information Agent at (800)
207-2872.
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<PAGE> 21
EXCHANGE AGENT
All correspondence in connection with the Exchange Offer and Letter of
Transmittal should be addressed to the Exchange Agent, as follows:
FIRST INTERSTATE BANK OF CALIFORNIA
<TABLE>
<S> <C> <C> <C>
By Hand: By Mail: By Facsimile By Telex (Information
Transmission: Only):
First Interstate Bank First Interstate Bank First Interstate Bank First Interstate Bank
Special Services Special Services (800) 522-6645 Fical/Trust
Department Department (818) 971-4745 ABA 122000218
Encino Terrace Center P.O. Box 4177 Attention: Times Mirror
Suite 670 Woodland Hills, Special Services
15821 Ventura Boulevard CA 91365-4177 Department
Encino, CA 91436-2946
</TABLE>
WITHDRAWAL OF TENDERED SHARES OF TIMES MIRROR COMMON STOCK
Shares of Common Stock tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date. For a withdrawal to be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Exchange Agent at its addresses set
forth above. Any such notice of withdrawal must specify the name of the person
who tendered the shares of Common Stock to be withdrawn, the number of shares of
Common Stock tendered, the number of shares of Common Stock to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such shares. If Old Times Mirror stock certificates or New Times Mirror
stock certificates have been delivered or otherwise identified to the Exchange
Agent, prior to the delivery of New Times Mirror stock certificates in place of
such Old Times Mirror stock certificates or the release of such New Times Mirror
stock certificates, the serial numbers of the particular certificates evidencing
the shares of Common Stock to be withdrawn and a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution, except in the case of
shares of Common Stock tendered for the account of an Eligible Institution, must
also be furnished to the Exchange Agent as described above. If shares of Common
Stock have been delivered pursuant to the procedures for book-entry transfer as
set forth under the caption, "Procedure for Tender," any notice of withdrawal
must also specify the name and number of the account at DTC to be credited with
the withdrawn shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company in its sole discretion,
which determination will be final and binding. None of the Company, the Exchange
Agent, the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification. Any shares of
Common Stock withdrawn will be deemed to be not validly tendered for purposes of
the Exchange Offer. However, tendered shares of Common Stock withdrawn pursuant
to the withdrawal rights described above may be retendered by again following
one of the procedures described under the caption, "Procedure for Tender" at any
time on or prior to the Expiration Date.
If the Company extends the Exchange Offer, is delayed in its acceptance of
shares of Common Stock for exchange or is unable to accept shares of Common
Stock for any reason, then, without prejudice to the Company's rights under the
Exchange Offer, tendered shares of Common Stock may be retained by the Exchange
Agent on behalf of the Company and may not be withdrawn except to the extent
that tendered stockholders are entitled to withdrawal rights as set forth in
this section.
PRORATION IN CASE OF OVERSUBSCRIPTION
If at the Expiration Date more than 16,563,343 shares of Common Stock have
been tendered for exchange pursuant to the Exchange Offer and not withdrawn,
then the Exchange Agent will allot the shares of Series B Preferred Stock to be
issued among the tendering stockholders on a pro rata basis, according to the
number of shares of Common Stock tendered for exchange in accordance with Rule
13e-4 of the rules promulgated under the Exchange Act.
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<PAGE> 22
Shares of Common Stock that are tendered for exchange pursuant to the
Exchange Offer but not accepted will be returned by the Exchange Agent as soon
as practicable following the expiration of the Exchange Offer. In the event of
proration, because of the difficulty of determining the precise number of shares
of Common Stock validly tendered and not withdrawn, the Company does not expect
to be able to announce the final results of such proration until five NYSE
trading days after the Expiration Date. Preliminary results of proration will be
announced by press release as promptly as possible.
DELIVERY OF CERTIFICATES REPRESENTING SHARES OF SERIES B PREFERRED STOCK
Delivery of certificates representing shares of Series B Preferred Stock to
exchanging holders of shares of Common Stock will be made promptly after the
Expiration Date. All deliveries will be made through the Exchange Agent. If any
tendered shares of Common Stock are not accepted for exchange pursuant to the
Exchange Offer for any reason, or if certificates representing more shares of
Common Stock than are tendered are delivered to the Exchange Agent, New Times
Mirror stock certificates representing such unaccepted or untendered shares of
Common Stock will be sent without expense to the tendering stockholder (or, in
the case of shares tendered by book-entry transfer with DTC as permitted by
"Procedure for Tender," such shares of Common Stock will be credited to an
account maintained with DTC) as promptly as practicable following the
expiration, termination or withdrawal of the Exchange Offer.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
The Exchange Offer is conditioned on no statute, rule, regulation,
injunction or court order having been enacted or imposed against the Company
that, in the sole judgment of the Company, would prohibit, restrict or delay
consummation of the Exchange Offer.
NO RIGHTS OF DISSENTING STOCKHOLDERS
Stockholders of the Company will not have the right under the Delaware
General Corporation Law to seek an appraisal of their shares of Common Stock in
connection with the Exchange Offer.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The Company is authorized to issue: (i) 500,000,000 shares of Series A
Common Stock, of which 97,899,095 shares were issued and outstanding upon
completion of the Transactions, subject to the issuance of the Additional
Chandler Shares as described under "Pre-Exchange Offer Transactions"; (ii)
100,000,000 shares of Series B Common Stock, none of which is issued and
outstanding; (iii) 300,000,000 shares of Series C Common Stock, of which
30,759,971 shares were issued and outstanding upon completion of the
Transactions; and (iv) 33,000,000 shares of Preferred Stock, of which (A)
900,000 shares will be designated as Series A Preferred Stock for issuance as
Additional Chandler Shares as described under "Pre-Exchange Offer Transactions"
and (B) 25,000,000 shares will be designated as Series B Preferred Stock for
issuance in the Exchange Offer.
The following description of the Series A Preferred Stock and Series B
Preferred Stock is summarized from, and is qualified in its entirety by
reference to, the Amended and Restated Certificate of Incorporation of the
Company (the "Restated Certificate"), the Certificate of Designation of the
Series A Preferred Stock (the "Series A Certificate of Designation") and the
Certificate of Designation of the Series B Preferred Stock, which are filed as
exhibits to the registration statement of which this Prospectus constitutes a
part.
RANKING
The Series B Preferred Stock will rank on a parity with the Series A
Preferred Stock, and will rank prior to the Common Stock, with respect to
dividend rights and rights on liquidation, winding up or dissolution of the
Company, and to all other classes and series of equity securities of the Company
hereafter issued, other than any class or series of equity securities of the
Company expressly designated as being on a parity with (the
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<PAGE> 23
"Parity Stock") or senior to (the "Senior Stock") the Series A Preferred Stock
and Series B Preferred Stock (the Series A Preferred Stock and Series B
Preferred Stock are collectively referred to herein as the "Series A and Series
B Preferred Stock"). Such other classes or series of equity securities of the
Company not expressly designated as being on a parity with or senior to the
Series A and Series B Preferred Stock are referred to hereinafter as "Junior
Stock." The rights of holders of shares of Series A and Series B Preferred Stock
will be subordinate to the rights of the Company's general creditors. The Series
A and Series B Preferred Stock will be subject to creation of Senior Stock,
Parity Stock and Junior Stock to the extent not expressly prohibited by the
Restated Certificate.
DIVIDEND RIGHTS
Holders of Series A Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors of the Company out of funds legally
available therefor, cumulative cash dividends at an annual rate (which will be
established at the time of the issuance of the Additional Chandler Shares) such
that the Series A Preferred Stock would trade at par on such issuance date on a
fully distributed basis. Interest on the Series A Preferred Stock will
effectively accrue from March 1, 1995 even though the Series A Preferred Stock
will not be issued to the Chandler Trusts until some time later.
Holders of Series B Preferred Stock will be entitled to receive, when, as
and if dividends on the Series B Preferred Stock are declared by the Board of
Directors of the Company out of funds legally available therefor, cumulative
cash dividends, accruing at the rate of $1.374 per share (6.5% of the Series B
Price) per annum. Interest on the Series B Preferred Stock will effectively
accrue from March 1, 1995 even though the Series B Preferred Stock will not be
issued until some time later. Dividends will cease to accrue in respect of the
Series B Preferred Stock on the earliest to occur of (i) the Mandatory
Conversion Date (i.e., March 31, 1998), (ii) the date of their redemption by the
Company or (iii) in the event of an automatic conversion due to a Fundamental
Transaction (as defined below), on the business day (the "Settlement Date")
immediately preceding the effective date of the Fundamental Transaction.
Dividends on the Series A and Series B Preferred Stock will be payable
quarterly following each quarterly dividend period (a "Dividend Period"), or, if
any such day is a non-business day, on the next business day (each a "Dividend
Payment Date"). Dividends payable for any period less than a full Dividend
Period shall be computed on the basis of a 360-day year with equal months of 30
days. Dividends shall be fully cumulative and shall accrue on a daily basis.
Dividends declared will be payable to holders of record as they appear on the
stock books of the Company as of the close of business on such record dates, not
more than 60 calendar days preceding the applicable Dividend Payment Date
therefor, as determined by the Board of Directors of the Company or a duly
authorized committee thereof. Dividends will be payable on March 15, June 15,
September 15 and December 15, commencing June 15, 1995.
Dividends on the Series A and Series B Preferred Stock will accrue whether
or not such dividends are declared and will accumulate to the extent they are
not paid on the dividend payment date for the quarter for which they accrue.
Accumulated unpaid dividends will not bear interest. Holders of the Series A and
Series B Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of full cumulative accrued dividends as
described herein.
No dividends in any form shall be declared or paid or set apart for payment
on any Parity Stock or Junior Stock for any Dividend Period unless full
dividends on the Series A and Series B Preferred Stock for the prior Dividend
Period shall have been paid or declared and set aside. No cash dividends shall
be declared or paid or set aside for payment on Parity Stock for any Divided
Period unless full cash dividends on the Series A and Series B Preferred Stock
for the prior Dividend Period shall have been paid or declared and set aside.
The Company shall not declare or pay any dividend or other distribution
(other than in Common Stock or other Junior Stock) with respect to any Junior
Stock or Parity Stock, including Common Stock, or redeem or set apart funds for
the purchase or redemption of any Junior Stock or Parity Stock through a sinking
fund or otherwise, or purchase any shares of its Common Stock, unless and until
(i) the Company shall have paid full cash dividends on the Series A and Series B
Preferred Stock for the most recent Dividend Period, or funds have been paid
over to the dividend disbursing agent for the Company for payment of such
dividends, and
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<PAGE> 24
(ii) the Company has declared a cash dividend on the Series A and Series B
Preferred Stock at the annual dividend rate for the current Dividend Period, and
sufficient funds have been paid over to the dividend disbursing agent of the
Company for the payment of a cash dividend at the end of such Dividend Period.
No dividend shall be paid or set aside for holders of the Series A and
Series B Preferred Stock for any Dividend Period unless full dividends have been
paid or set aside for the holders of each class or series of Senior Stock.
Therefore, the Company's ability to pay dividends on the Series A and Series B
Preferred Stock may be subject to prior and superior rights of holders of
another class or series of equity securities of the Company. The Company does
not currently have outstanding any class or series of Senior Stock.
LIQUIDATION PREFERENCE
Holders of shares of Series A and Series B Preferred Stock shall be
entitled to receive the liquidation preference of Preferred Stock, plus an
amount per share equal to any dividends accrued but unpaid, without interest, in
the event of any liquidation, dissolution or winding up of the Company whether
voluntary or involuntary, out of or to the extent of the net assets of the
Company legally available for such distribution, before any distributions are
made with respect to any Common Stock or any other Junior Stock. If the net
liquidation proceeds then available for distribution are insufficient to pay the
liquidation preferences of the Series A and Series B Preferred Stock and any
Parity Stock, such proceeds will be distributed on a pro rata basis to the
Series A and Series B Preferred Stock and Parity Stock. Following payment of
such liquidation preferences, the Series A and Series B Preferred Stock will not
share in any additional net liquidation proceeds. The liquidation preference of
the Series B Preferred Stock in the aggregate will be $350 million and the per
share liquidation preference will equal $21.131 (i.e., the Series B Price).
Upon any such liquidation, dissolution or winding up of the Company, such
preferential amounts with respect to the Series A and Series B Preferred Stock
and any class or series of Parity Stock if not paid in full shall be distributed
pro rata in accordance with the aggregate preferential amounts of the Series A
and Series B Preferred Stock and such other classes or series of stock, if any.
The liquidation preferences of the Series A and Series B Preferred Stock
are not indicative of the price at which the shares may actually trade at or
after the date of issuance.
VOTING RIGHTS OF NEW TIMES MIRROR SERIES A PREFERRED STOCK
The holders of shares of Series A Preferred Stock shall not be entitled to
any voting rights, except as required by applicable law and as summarized below.
So long as any shares of the Series A Preferred Stock are outstanding, New
Times Mirror will not, without the consent of the holders of at least a majority
of the outstanding shares of Series A Preferred Stock, voting together with
holders of shares of any Parity Stock upon which like voting votes have been
conferred and are exercisable other than the Series B Preferred Stock (the
"Voting Parity Stock"), voting together as a class, (i) amend, alter or repeal
or otherwise change any provision of the Restated Certificate or the Series A
Certificate of Designation so as to materially and adversely affect the rights,
preferences, power or privileges of the Series A Preferred Stock, or (ii)
authorize, create, issue or increase the authorized or issued amount of any
class or series of any equity securities of New Times Mirror, or any warrants,
options or other rights convertible or exchangeable into any class or series of
any Senior Stock or Parity Stock of New Times Mirror. See "Ranking" and
"Dividend Rights" above. The creation or issuance of Junior Stock with respect
to the payment of dividends, or the distribution of assets upon liquidation,
dissolution or winding-up of New Times Mirror, or a merger, consolidation,
reorganization or other business combination in which New Times Mirror is not
the surviving entity, or any amendment which increases the number of authorized
shares of Series A Preferred Stock or Junior Stock with respect to the payment
of dividends, or substitutes the surviving entity in a merger or consolidation
for New Times Mirror, shall not be considered to be a material and adverse
change requiring a separate vote of the holders of the Series A Preferred Stock
and Voting Parity Stock.
At any time that dividends in an amount equal to dividend payments for six
Dividend Periods have accrued and remain unpaid, holders of Series A Preferred
Stock will have the right to a separate class vote to
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<PAGE> 25
elect two directors to the Board of Directors of New Times Mirror (in addition
to the then authorized number of directors and any directors elected by the
holders of Series B Preferred Stock) at the next annual meeting of stockholders.
Upon payment of all dividend arrearages, holders of Series A Preferred Stock
will be divested of such voting rights until any future time when dividends in
an amount equal to dividend payments for six Dividend Periods have accrued and
remained unpaid. The terms of the special directors will thereupon terminate and
the authorized number of directors will be reduced by two.
VOTING RIGHTS OF SERIES B PREFERRED STOCK
The Series B Preferred Stock votes together with the Common Stock as a
single class with respect to all matters submitted to the stockholders of the
Company, except as otherwise required by law. Each share of Series B Preferred
Stock will be entitled to one vote, provided that the number of votes per share
will be adjusted in the event and to the extent that the Common Equivalent Rate
(as defined below) is adjusted in the future. See "Mandatory Conversion of
Series B Preferred Stock" below.
In addition, upon the failure of the Company to pay dividends on the Series
B Preferred Stock for six Dividend Periods, the holders of the Series B
Preferred Stock will be entitled to a separate class vote to elect two
additional directors to the Company's Board of Directors (in addition to the
then authorized number of directors and any directors elected by the holders of
Series A Preferred Stock) at the next annual meeting of stockholders. Upon
payment of all dividend arrearages, holders of Series B Preferred Stock will be
divested of such voting rights until any future time when dividends in an amount
equal to dividend payments for six Dividend Periods have accrued and remained
unpaid. The terms of the special directors will thereupon terminate and the
authorized number of directors will be reduced by two.
Any amendment of any of the provisions of the Restated Certificate or the
Series B Certificate of Designation that would either (i) authorize or create
any class of Senior Stock or (ii) alter or change the rights, preferences or
limitations of the Series B Preferred Stock so as to affect such rights,
preferences or limitations in any material respect prejudicial to the holders
thereof would require the affirmative vote or written consent of the holders of
at least two-thirds of the total number of outstanding shares of the Series B
Preferred Stock. Any amendment of any of the provisions of the Restated
Certificate that would either (A) increase the total number of authorized shares
of the Preferred Stock or (B) authorize or create any class of Parity Stock
would require the affirmative vote or written consent of the holders of a
majority of the total number of outstanding shares of the Series B Preferred
Stock; provided, however, that no such votes or affirmative consents of the
holders of the shares of Series B Preferred Stock shall be required if, at or
prior to the issuance of any Senior Stock or Parity Stock, provision is made for
the redemption of all of the Series B Preferred Stock then outstanding. Any
amendment that would authorize or create any series of Preferred Stock out of
the existing authorized shares of Preferred Stock, or that would authorize or
create any class of Junior Stock shall not be considered to affect adversely the
rights, preferences or limitations of the outstanding shares of Series B
Preferred Stock and will not require the consent of the holders of the Series B
Preferred Stock voting as a separate class.
Except as otherwise required by law, the Series A Preferred Stock and the
Series B Preferred Stock will not vote together as a single class.
OPTIONAL CONVERSION OF NEW TIMES MIRROR SERIES A PREFERRED STOCK
The Series A Preferred Stock may be converted into Common Stock by New
Times Mirror or by the holders thereof after the later to occur of (i) the date
on which the assets of either Chandler Trust No. 1 or Chandler Trust No. 2 are
distributed to the beneficiaries thereof or (ii) the 30th anniversary of the
effective date of the Merger (such later date being the "Redeemability Date") at
a conversion price measured by the average market value of Series A Common Stock
during the 20 trading days prior to the notice of the election to convert Series
A Preferred Stock. In lieu of such conversion, each of the Chandler Trusts may
elect to exchange shares of Series A Preferred Stock for shares of Series A
Common Stock and Series C Common Stock, in the same proportion as its relative
ownership of Series A Common Stock and Series C Common Stock immediately prior
to such redemption; provided, however, that if the total votes represented by
all
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<PAGE> 26
shares of Common Stock owned by such holder immediately after such exchange
(expressed as a percentage of the total voting power of New Times Mirror
outstanding immediately after such exchange) exceed the greater of (i) the total
votes represented by all Old Times Mirror Common Stock owned by such holder as
of June 5, 1994 (expressed as a percentage of the total voting power of Old
Times Mirror outstanding as of June 5, 1994) and (ii) the total votes
represented by all New Times Mirror Common Stock owned by such holder
immediately prior to such exchange (expressed as a percentage of the total
voting power of New Times Mirror outstanding immediately prior to such
exchange), then, with respect to all such excess votes, such holder has agreed
that, to the extent any of such excess votes are voted, it will cause such
excess votes to be cast on all matters proportionately on the same basis as the
other votes cast at a meeting of stockholders of New Times Mirror.
MANDATORY CONVERSION OF SERIES B PREFERRED STOCK
On the Mandatory Conversion Date (i.e., March 31, 1998), each outstanding
share of Series B Preferred Stock will convert automatically into (i) Series A
Common Stock at the Common Equivalent Rate and (ii) the right to receive an
amount in cash equal to all accrued and unpaid dividends on such Series B
Preferred Stock. The "Common Equivalent Rate" initially will be one share of
Series A Common Stock for each share of Series B Preferred Stock, subject to
adjustment in the event of certain stock dividends or distributions,
subdivisions, splits, combinations, issuances of certain rights or warrants or
distributions of certain assets with respect to the Series A Common Stock.
In addition, immediately prior to the effectiveness of a merger,
consolidation or similar extraordinary transaction involving the Company that
results in the conversion or exchange of Series A Common Stock into, or results
in the holders of Series A Common Stock having the right to receive, other
securities or other property (a "Fundamental Transaction"), each outstanding
share of Series B Preferred Stock will convert automatically into (i) Series A
Common Stock at the Common Equivalent Rate and (ii) the right to receive (A) an
amount in cash equal to the accrued and unpaid dividends on such Series B
Preferred Stock to and including the Settlement Date plus (B) an amount in cash
equal to the Dividend Premium (as defined below).
At the option of the Company, it may deliver on the Settlement Date, in
lieu of some or all of the cash consideration described in clause (ii) of the
preceding paragraph, a number of shares of Series A Common Stock to be
determined by dividing (i) the amount of cash consideration that the Company has
elected to pay in Series A Common Stock by (ii) the Current Market Price (as
defined below) as of the end of the second trading day immediately preceding the
date on which the Company gives notice regarding the Fundamental Transaction to
the holders of Series B Preferred Stock.
The term "Dividend Premium" with respect to a share of Series B Preferred
Stock shall mean an amount initially equal to $3.402. The amount constituting
the Dividend Premium shall be reduced following the issuance of the Series B
Preferred Stock by $ per day on each day following March , 1995 to
$ on January 30, 1998 and thereafter will be equal to zero.
The term "Current Market Price" on any date of determination means the
average closing price of a share of Series A Common Stock on the NYSE for the
five consecutive trading days ending on and including such date of
determination; provided, however, that if the closing price of the Series A
Common Stock on the NYSE on the trading day next following such five-day period
(the "next-day closing price") is less than 95% of such average closing price,
then the Current Market Price per share of Series A Common Stock on such date of
determination will be the next-day closing price; and provided further that,
with respect to any redemption or conversion of the Series B Preferred Stock, if
any event that results in an adjustment of the Common Equivalent Rate occurs
during the period beginning on the first day of such five-day period and ending
on the applicable redemption or conversion date, the Current Market Price as
determined pursuant to the foregoing will be appropriately adjusted to reflect
the occurrence of such event.
The holders of Series B Preferred Stock do not have the right to require
conversion of the Series B Preferred Stock.
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<PAGE> 27
OPTIONAL REDEMPTION OF SERIES B PREFERRED STOCK
At any time or from time to time prior to the Mandatory Conversion Date,
the Company shall have the right to call, in whole or in part, the outstanding
shares of Series B Preferred Stock for redemption. Upon any such redemption,
each holder of Series B Preferred Stock will receive in exchange for each share
of Series B Preferred Stock so called (i) a number of shares of Series A Common
Stock determined by dividing (A) the Call Price then in effect by (B) the
Current Market Price as of the end of the second trading day immediately
preceding the date on which the Company gives notice regarding the redemption to
the holders of the Series B Preferred Stock and (ii) an amount in cash equal to
accrued and unpaid dividends on such Series B Preferred Stock to and including
the date of redemption (the "Redemption Date"). Notice of a redemption must be
given to the holders of Series B Preferred Stock at least 30 but not more than
60 days prior to the Redemption Date.
The Call Price will initially be $31.92885 and thereafter will decline at a
rate of $ per day on each day following March , 1995 to $ on January
30, 1998 and thereafter will equal $28.52685. The Call Price in effect at any
time is equal to the sum of (i) 135% of the Series B Price plus (ii) the
Dividend Premium then in effect.
MARKET FOR SERIES B PREFERRED STOCK
At the time of this Exchange Offer, there will be no public market for the
Series B Preferred Stock. The Series B Preferred Stock has been approved for
listing on the NYSE. However, such approval is conditioned on satisfaction of
the NYSE's requirements that following the consummation of the Exchange Offer
there be at least 100,000 shares of Series B Preferred Stock with a minimum
aggregate market value of $2 million issued and outstanding and held of record
by at least 100 stockholders. If any of these requirements are not satisfied,
the Series B Preferred Stock would not be eligible for listing on the NYSE and
the Company would be required to withdraw the listing. Withdrawal of the listing
of the Series B Preferred Stock on the NYSE could have a material adverse effect
on the liquidity of the Series B Preferred Stock. No assurance can be given that
the NYSE's listing requirements will be satisfied upon consummation of the
Exchange Offer. If the Series B Preferred Stock could not be listed on the NYSE,
the Company would use its best efforts to cause the Series B Preferred Stock to
be listed on another securities exchange or included in the National Association
of Securities Dealers Automated Quotation System, although no assurance can be
given that the Company would be successful in these efforts.
The Transfer Agent and Registrar for the Series B Preferred Shares will be
First Interstate Bank of California.
DESCRIPTION OF COMMON STOCK
GENERAL
The following description of the Series A Common Stock and Series C Common
Stock is summarized from, and qualified in its entirety by reference to, the
Restated Certificate and the Certificate of Designation of the Series C Common
Stock, filed as exhibits to the registration statement of which this Prospectus
constitutes a part. Except with respect to transfer and voting, Series C Common
Stock is identical in all respects to Series A Common Stock. Series C Common
Stock is entitled to 10 votes per share and, as described below, will be subject
to significant transfer restrictions.
RIGHTS TO DESIGNATE SERIES B COMMON STOCK
Pursuant to the Restated Certificate, the Board of Directors of the Company
is entitled to designate certain rights, powers and preferences of a class of
Series B Common Stock, par value $1.00 per share ("Series B Common Stock"), in
addition to the outstanding Series A Common Stock and the Series C Common Stock,
as discussed below. First, the Board may determine the exact number of votes per
share of Series B Common Stock at not less than 1/10 nor more than 1. Second,
the Board may also make other changes in the rights, powers and preferences of
the Series B Common Stock, provided that in no such case
25
<PAGE> 28
may the rights, powers and preferences of any such series be greater than those
described herein. Subject to the foregoing, it is anticipated that Series B
Common Stock, if authorized by the Board of Directors, will be identical in all
respects to the Series A Common Stock currently outstanding, except with respect
to voting. Specifically, it is anticipated that each share of Series B Common
Stock will be entitled to one-tenth (1/10) vote rather than one vote per share.
The description herein of the rights, powers and preferences of the Series
B Common Stock is subject to the discretionary authority of the Board as
described above. The Board presently has no intention of issuing any shares of
Series B Common Stock or of utilizing such authority to vary the terms of the
Series B Common Stock from those described herein unless it determines that such
change is necessary in light of legal developments or in order to comply with,
or establish an exemption from, any applicable law, regulation or rule of any
governmental authority, national securities exchange or national market system.
VOTING
Except as set forth below, all actions submitted to a vote of the Company's
stockholders will be voted on by holders of Series A Common Stock, Series B
Common Stock, Series C Common Stock and Series B Preferred Stock voting together
as a single class. The affirmative vote of the holders of a majority of the
outstanding shares of Series A Common Stock, Series B Common Stock and/or Series
C Common Stock, voting separately as a class, is required (i) to approve any
amendment to the Restated Certificate that would alter or change the powers,
preferences or special rights of such series so as to affect it adversely and
(ii) to approve such other matters as may require class votes under the General
Corporation Law of the State of Delaware.
DIVIDENDS AND OTHER DISTRIBUTIONS (INCLUDING DISTRIBUTIONS UPON LIQUIDATION OR
SALE OF THE COMPANY)
Unless otherwise determined by the Board in the resolutions providing for
the issuance of Series B Common Stock, each share of Series A Common Stock,
Series B Common Stock and Series C Common Stock is equal in respect of dividends
and other distributions in cash, stock or property (including distributions upon
liquidation of the Company and consideration to be received upon a merger or
consolidation of the Company or a sale of all or substantially all of the
Company's assets), except that in the case of dividends or other distributions
payable on the Series A Common Stock, Series B Common Stock or Series C Common
Stock in shares of such stock, including distributions pursuant to stock splits
or dividends, only Series A Common Stock is to be distributed with respect to
Series A Common Stock; only Series B Common Stock is to be distributed with
respect to Series B Common Stock; and only Series C Common Stock is to be
distributed with respect to Series C Common Stock. In no event will either
Series A Common Stock, Series B Common Stock or Series C Common Stock be split,
divided or combined unless each other class is proportionately split, divided or
combined. The Series A and Series B Preferred Stock will rank prior to the
Common Stock. See "Description of Preferred Stock -- Ranking" above.
RESTRICTIONS ON TRANSFER OF SERIES C COMMON STOCK: CONVERTIBILITY OF SERIES C
COMMON STOCK INTO SERIES A COMMON STOCK
As more fully described below, the transferability of the Series C Common
Stock is significantly restricted. For example, in the case of holders of Series
C Common Stock who are individuals, permitted transferees include certain family
members of the holder and certain entities controlled by, or for the benefit of,
the holder and such family members.
As a result of such restrictions on transfer, no trading market will
develop in Series C Common Stock. The Series C Common Stock is, however,
convertible at all times and without cost to the holder (except any transfer
taxes which may be payable, as in the case of any transfer of Series A Common
Stock, if certificates are to be issued in a name other than that in which the
certificate surrendered is registered) into Series A Common Stock on a share for
share basis. To effect such a conversion, the Series C Common Stock holder must
deliver to the Company's transfer agent a certificate or certificates
representing Series C Common Stock to be converted and a written notice of the
election of such holder to convert such Series C Common Stock
26
<PAGE> 29
into Series A Common Stock indicating, among other things, the names and
addresses of persons to whom certificates representing Series A Common Stock
shall be issued. Stockholders desiring to sell their equity interest in the
Company represented by their shares of Series C Common Stock may convert those
shares into an equal number of shares of Series A Common Stock and sell the
shares of Series A Common Stock in the public market.
A stockholder who does not wish to complete the conversion process prior to
a sale may effect a sale of the Series A Common Stock into which such
stockholder's Series C Common Stock is convertible by delivering the certificate
or certificates for such shares of Series C Common Stock to a broker, properly
endorsed. The broker will then present the Series C Common Stock certificate or
certificates to the Company's transfer agent who will issue to the purchaser a
certificate for the number of shares of Series A Common Stock sold in settlement
of the transaction. (If the stockholder sells fewer than all of the shares of
Series A Common Stock into which such Series C Common Stock certificate or
certificates could be converted, the transfer agent will return to such
stockholder a certificate for Series C Common Stock representing the balance of
such shares unless the stockholder specifies that the transfer agent should
return a certificate for Series A Common Stock.) Accordingly, there should be no
delay or extra expense involved in selling the equity interest in the Company
represented by the Series C Common Stock. Series A Common Stock and Series B
Common Stock is not convertible by the holders thereof into any other class of
stock.
The Company does not believe that Series C Common Stock will be accepted as
security for the extension of credit by securities brokers or dealers. It is,
however, permissible to pledge Series C Common Stock to secure loans from banks
and other lenders, provided that such shares are not transferred to or
registered in the name or the pledgee and that upon a foreclosure of the pledge,
the pledgee may only convert such shares into Series A Common Stock or transfer
such shares only to a person to whom the pledging Series C Common Stock holder
could have transferred them.
Series C Common Stock issued in a stockholder's own name is not
transferable into "nominee" or "street" name. However, if on the Distribution
Record Date shares of Series C Common Stock are registered in nominee or street
name, the shares of Series C Common Stock issued in respect thereof will be
registered in the same nominee or street name. Such shares of Series C Common
Stock may be transferred out of the nominee or street name into the name of the
person who was the beneficial owner of the Series C Common Stock on the
Distribution Record Date (or a "Permitted Transferee," as hereinafter described,
of such person), and once so transferred, may not be transferred back into
nominee or street name. Series C Common Stock held in nominee or street name may
be converted into Series A Common Stock, and the Series A Common Stock received
will, depending on the nature of the transaction and the instructions of the
parties, be registered in the name of the original beneficial owner, a
transferee of such owner or a nominee for such owner or transferee. (If a
certificate for Series C Common Stock is to be returned in connection with a
partial conversion or sale of Series C Common Stock held in nominee name, such
returned certificate will be registered in the name of the nominee that
presented the original certificate or certificates to the transfer agent unless
contrary instructions are given.)
Other than pursuant to conversions into Series A Common Stock as described
above, a record or beneficial owner of shares of Series C Common Stock may
transfer such shares (whether by sale, assignment, gift, bequest, appointment or
otherwise) only to a "Permitted Transferee," as defined. A brief description of
permitted transfers is set forth below. The description is intended to be
illustrative only and is subject to the provisions set forth in the Restated
Certificate.
In the case of a holder of shares of Series C Common Stock of record who is
a natural person and the beneficial owner of the shares of Series C Common Stock
to be transferred, Permitted Transferees include:
(A) such holder of Series C Common Stock's spouse;
(B) any of the lineal descendants of a grandparent of such Series C
Holder, including adopted children, and their spouses (such persons and
their spouses, together with the Series C Holder's spouse, are hereinafter
referred to as "such holder of Series C Common Stock's family members");
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<PAGE> 30
(C) the guardian or conservator of a holder of Series C Common Stock
who has been adjudged disabled by a court of competent jurisdiction,
(D) the executor or administrator of the estate of a deceased holder
of Series C Common Stock;
(F) the trustee of a trust principally for the benefit of such holder
of Series C Common Stock or such holder of Series C Common Stock's family
members;
(G) certain charitable organizations established by such holder of
Series C Common Stock or such holder of Series C Common Stock's Family
members;
(H) a partnership, if, and only for so long as, all of the partners
are, and all of the partnership interests are owned by, such holder of
Series C Common Stock and/or one or more of the Permitted Transferees of
such holder of Series C Common Stock; and
(I) a corporation, if, and only for so long as, sufficient shares
entitled to elect at least a majority of the entire board of directors of
such corporation are beneficially owned by such holder of Series C Common
Stock and/or one or more of the Permitted Transferees of such holder of
Series C Common Stock.
Series C Common Stock held beneficially and of record by partnerships may
be transferred to a partner who was also a partner on the Distribution Record
Date, any person transferring Series C Common Stock to such partnership after
the Distribution Record Date (up to the amount of shares so transferred) and any
Permitted Transferee of any such partner or person. Stock held beneficially and
of record by corporations may be transferred (i) to any stockholder of such
corporation who was also a stockholder on the Distribution Record Date and who
is generally entitled to vote in the election of directors of such corporation,
provided that such corporation does not have more than 30 voting stockholders of
record on the Distribution Record Date (or such greater number of voting
stockholders as may be allowed under the applicable state law of such
corporation in order to qualify as a close corporation), (ii) to any stockholder
through a pro rata dividend or liquidation, (iii) to any person transferring
Series C Common Stock to such corporation after the Distribution Record Date (up
to the amount of shares so transferred) and (iv) to any Permitted Transferee of
any such stockholder or person. Series C Common Stock held of record by a
trustee of a trust that is irrevocable on the Distribution Record Date may be
transferred (i) to a successor trustee who is described in subparagraph (ii),
(iii) or (iv), below, or who is not and by becoming successor trustee will not
otherwise become, a Related Person, (ii) to any person to whom or for whose
benefit income may be distributed during the term of the trust, (iii) to any
person to whom or for whose benefit principal may be distributed either during
or at the end of the term of the trust, and (iv) to any lineal descendant of a
grandparent of the creator of such trust, the spouse of such creator and the
spouse of any such lineal descendant. Shares held by a trustee of any other
trust may be transferred to a successor trustee who is not and will not thereby
become a Related Person, to the person who established such trust and to such
person's Permitted Transferees.
Each certificate representing Series C Common Stock bears a legend stating
that the shares represented thereby are subject to restrictions on transfer and
the registration of transfer. Any transfer of Series C Common Stock not
permitted under Article V will result in the conversion of the transferee's
Series C Common Stock into Series A Common Stock, generally effective on the
date on which certificates representing such shares are presented for transfer
on the books of the Company; provided, however, that if the Company should
determine that such shares were not so presented for transfer within 20 days
after the date of such sale, transfer assignment or other disposition, the
transfer date shall be the actual date of such sale, transfer, assignment or
other disposition, as determined in good faith by the Board or its appointed
agent. As a condition to the transfer or registration of transfer of Series C
Common Stock, the Company may require the furnishing of such affidavits or other
proof as it deems necessary to establish that the transferee is a Permitted
Transferee. If no indication to the contrary is supplied at the time Series C
Common Stock are presented for transfer, the transfer shall be presumed by the
Company to be a transfer to a non-Permitted Transferee. Series C Common Stock
converted into Series A Common Stock by the holder or by the holder's transfer
to a person who is not a Permitted Transferee shall resume the status of
authorized but unissued shares of Series C Common Stock.
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<PAGE> 31
TERMINATION AND CONVERSION OF SERIES B AND/OR SERIES C COMMON STOCK
Either or both the Series B Common Stock and Series C Common Stock will
automatically be converted into Series A Common Stock on a share-for-share basis
(i) at any time the Board and the holders of a majority of the outstanding
shares of the Series approve the conversion of all of such Series into Series A
Common Stock, (ii) if, as a result of the existence of the Series, the Series A
Common Stock becomes excluded from trading on the NYSE, the American Stock
Exchange and all other national securities exchanges and is also excluded from
quotation on NASDAQ or any other national quotation system then in use, (iii) if
the Board, in its sole discretion, elects to effect a conversion of the Series
in connection with its approval of any sale or lease of all or any substantial
part of the Company's assets or any merger, consolidation, liquidation or
dissolution of the Company, or (iv) if the Board, in its sole discretion, elects
to effect a conversion of the Series after a determination that there has been a
material adverse change in the liquidity, marketability or market value of the
outstanding Series A Common Stock, considered in the aggregate (a) due to the
exclusion of the Series A Common Stock from trading on a national securities
exchange or the exclusion of the Series A Common Stock from quotation on NASDAQ,
or such other national quotation system then in use, or (b) due to requirements
of federal or state law, in any such case, as a result of the existence of the
Series. To the extent that the Board has discretion, the decision whether or not
to exercise its authority to effect a conversion of a Series would be made in
light of all the existing facts and circumstances affecting the interests of the
Company and its stockholders, including the effect such conversion could have on
the Company's vulnerability to an unsolicited hostile takeover attempt and any
of the other factors referred to herein.
In the event of any such termination of Series B Common Stock or Series C
Common Stock, certificates formerly representing outstanding shares of that
series shall thereafter be deemed to represent a like number of shares of Series
A Common Stock. If both Series B Common Stock and Series C Common Stock are
terminated, all outstanding shares of Common Stock shall again be denominated
Common Stock and all certificates representing outstanding shares of Series A
Common Stock shall thereafter be deemed to represent a like number of shares of
Common Stock.
PREEMPTIVE RIGHTS
Neither the Series A Common Stock, the Series B Common Stock nor the Series
C Common Stock carries any preemptive rights enabling a holder to subscribe for
or receive shares of stock of the Company of any class or any other securities
convertible into shares of stock of the Company. The Board will continue to
possess the power to issue shares of authorized but unissued Series A Common
Stock, Series B Common Stock, Series C Common Stock and preferred stock without
further stockholder action.
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<PAGE> 32
PRICE RANGE AND DIVIDEND DATA
Prior to the consummation of the Transactions, Old Times Mirror Series A
Common Stock was traded principally on the NYSE and was also listed on the
Pacific Stock Exchange. The Company's Series A Common Stock is traded
principally on the NYSE and is also listed on the Pacific Stock Exchange. Old
Times Mirror Series C Common Stock was not traded but was convertible into Times
Mirror Series A Common Stock. Likewise, the Company's Series C Common Stock is
not traded but is convertible into the Company's Series A Common Stock. The
price ranges for Old Times Mirror Series A Common Stock and the quarterly cash
dividend paid on all Old Times Mirror Common Stock in 1993 and 1994 are listed
below.
<TABLE>
<CAPTION>
STOCK
PRICE CASH DIVIDEND
---------- ---------------
HIGH LOW DECLARED PAID
---- --- -------- ----
<S> <C> <C> <C> <C>
1993
First Quarter.................................... 35 30 1/8 .27 .27
Second Quarter................................... 33 1/2 30 5/8 .27 .27
Third Quarter.................................... 32 5/8 28 1/4 .27 .27
Fourth Quarter................................... 35 1/8 28 1/2 .27 .27
1994
First Quarter.................................... 37 1/8 32 5/8 .27 .27
Second Quarter................................... 36 1/8 29 1/2 .27 .27
Third Quarter.................................... 33 1/4 28 3/4 .27 .27
Fourth Quarter................................... 33 3/8 29 7/8 .27 .27
</TABLE>
The high and low sales prices per share of Old Times Mirror Series A Common
Stock as reported on the NYSE on October 12, 1994, the last full trading day
prior to Old Times Mirror's announcement of the Exchange Offer, were $32 per
share and $31 5/8 per share, respectively. The high and low sales prices per
share of Old Times Mirror Series A Common Stock as reported on the NYSE on
January 31, 1995, the last trading day prior to the consummation of the Merger,
were $32 5/8 per share and $32 1/8 per share, respectively. The high and low
sales prices per share of New Times Mirror Series A Common Stock as reported on
the NYSE on February 1, 1995, the first trading day following the consummation
of the Merger, were $23 3/4 per share and $22 3/4 per share, respectively. The
high and low sales price per share of New Times Mirror Series A Common Stock as
reported on the NYSE on February , 1995, the last full trading day prior to
New Times Mirror's commencement of the Exchange Offer were $ per share
and $ per share, respectively.
New Times Mirror has declared a dividend on the Common Stock of $.27 per
share payable on March 10, 1995 to stockholders of record as of February 22,
1995. Following the payment of this dividend, it is anticipated that New Times
Mirror will pay quarterly dividends on its Common Stock at a rate below the rate
previously paid with respect to Old Times Mirror Common Stock. Management's
review of factors being considered in recommending a new dividend level would
suggest that it would be appropriate to reduce the dividend level by between
66 2/3% and 80% from that paid on Old Times Mirror Common Stock. This would
result in an annual dividend of between $.22 and $.36 per share compared to the
$1.08 previously paid. The dividend reduction is intended to bring the dividend
policy more in line with the policy of other publicly traded publishing
companies and to provide additional funds for investment in new business
opportunities.
As part of the settlement of the Stockholders' Litigation, the Board of
Directors of the Company adopted the Initial New Times Mirror Dividend Policy,
which provides that the annual dividend on New Times Mirror Common Stock,
beginning in June 1995 and continuing for a period of three years, will be no
less than $.24 per share. The Initial New Times Mirror Dividend Policy is
subject to the exercise by the New Times Mirror Board of Directors of its
fiduciary obligations and the exercise of the Board's business judgment in
connection with, among other things, the declaration of future dividends, as
well as to any and all requirements of Delaware law or any other applicable law,
and to any and all covenants, restrictions or limitations in connection with any
financing, now or in the future. Following the expiration of the Initial New
Times Mirror Dividend Policy, any policy of New Times Mirror regarding the
payment of dividends on the New Times Mirror Common Stock will depend on New
Times Mirror's future earnings, capital requirements, financial condition and
other factors.
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<PAGE> 33
CERTAIN PROVISIONS IN THE RESTATED CERTIFICATE
GENERAL
The Restated Certificate and the Company's Bylaws provide for
indemnification of directors and officers to the fullest extent permitted by
applicable law, and contain various antitakeover provisions intended to (i)
promote stability of the Company's stockholder base and (ii) render more
difficult certain unsolicited or hostile attempts to take over the Company which
could disrupt the Company, divert the attention of the Company's directors,
officers and employees and adversely affect the independence and integrity of
the Company's media operations. A summary of the principal antitakeover
provisions is set forth below.
CLASSIFIED BOARD OF DIRECTORS, REMOVAL OF DIRECTORS AND RELATED MATTERS
Pursuant to the Restated Certificate, the Board is divided into three
classes, each class consists as nearly as possible of one-third of the
directors. The term of office of each class of directors expires three years
from the year of election. The Restated Certificate also provides that directors
of the Company may be removed only for cause and only by a majority of the votes
entitled to be cast by the holders of all shares of capital stock entitled to
vote generally in the election of directors (the "Voting Interests").
Additionally, if the proposal to remove a director is made by or on behalf of a
Related Person (as defined in the Restated Certificate), removal will also
require the affirmative vote of a majority of the Voting Interests held by
persons other than such Related Person. Thus, a third party seeking to gain
control of the Board may be forced to await the expiration of the respective
terms of incumbent directors, unless there were cause and sufficient voting
strength to remove a particular director or directors.
INCREASED STOCKHOLDER VOTE REQUIRED IN CERTAIN BUSINESS COMBINATIONS AND OTHER
TRANSACTIONS
The Restated Certificate provides that, in addition to any vote ordinarily
required under Delaware law, the affirmative vote of (i) not less than 80% of
the Voting Interests (the "80% Vote Requirement") and (ii) a majority of the
Voting Interests held by the holders of Disinterested Shares (the "Disinterested
Vote Requirement") would be required to approve certain Business Combinations
involving a Related Person. "Disinterested Shares" means, as to any Related
Person, shares held by stockholders other than the Related Person.
There are exceptions to one or both of the requirements described above.
Briefly stated, when a proposal has the approval of a majority of the directors
who are not affiliated with any Related Person (the "Continuing Directors") or
when the terms of the Fair Price Provision are met relating to specific price
and form-of-consideration requirements, neither the 80% Vote Requirement nor the
Disinterested Vote Requirement is applicable.
ELIMINATION OF STOCKHOLDERS' POWER TO CALL SPECIAL STOCKHOLDERS MEETINGS AND
RIGHT TO ACT WITHOUT A MEETING
The Restated Certificate provides that a special meeting of stockholders
may be called only by the Board. Furthermore, if a proposal requiring
stockholder approval is made by or on behalf of a Related Person or a director
affiliated with a Related Person, the affirmative vote of a majority of the
Continuing Directors is also required to call a special meeting of stockholders.
The principal effect of this provision is to prevent stockholders from forcing a
special meeting to consider a proposal opposed by the Board.
The Restated Certificate provides that any action taken by the stockholders
of the Company must be effected at an annual or special meeting of stockholders
and may not be taken by written consent.
PROCEDURES FOR STOCKHOLDER NOMINATIONS AND PROPOSALS
The Restated Certificate provides that a stockholder must furnish written
notice to the Secretary of the Company of any nomination or business proposal to
be brought before a stockholders meeting not less than 30 nor more than 60 days
prior to the meeting as originally scheduled. In the event that less than 40
days public notice of a meeting date is given by the Company, a stockholder must
furnish notice of a nomination or
31
<PAGE> 34
business proposal not later than the close of business on the tenth day
following the mailing or the public disclosure of notice of the meeting date.
These procedures prohibit last-minute attempts by any stockholder to nominate a
director or present a business, proposal at an annual stockholders meeting, even
if such a nomination or proposal might be desired by a majority of the
stockholders.
RELEVANT FACTORS TO BE CONSIDERED BY THE BOARD
The Restated Certificate provides that, in evaluating certain proposed
business transactions and the best interests of the Company and its
stockholders, the Board shall consider all relevant factors, including but not
limited to freedom of the press, the independence and integrity of the Company's
media operations, the social and economic effects of the transactions on
stockholders, employees, customers, suppliers and other constituents of the
Company and its subsidiaries, as well as the effects on the communities in which
they operate.
In providing the Board with a broader basis for determining the
advisability or a proposed transaction, the Restated Certificate gives the Board
authority to reject, among other transactions, a proposed acquisition of the
Company notwithstanding the fact that the proposal may include favorable
economic benefits for the Company's stockholders.
AMENDMENT OF CERTAIN CHAPTER AND BYLAW PROVISIONS
The Restated Certificate provides that any alteration, amendment, repeal or
rescission (any "Change") of the provisions contained in the Restated
Certificate must be approved by a majority of the directors of the Company then
in office and by the affirmative vote of the holders of a majority of the Voting
Interests, provided however that if the proposed Change relates to certain
provisions specified in the Restated Certificate, then any such Change must also
be approved either (a) by a majority of the authorized number of directors and,
if one or more Related Persons exist, by a majority of the directors who are
Continuing Directors with respect to all Related Persons, or (b) by the
affirmative vote of the holders of not less than 80% of the Voting Interests
and, if the Change is proposed by or on behalf of a Related Person or a director
affiliated with a Related Person, by affirmative vote of a majority of the
Voting Interests represented by Disinterested Shares.
32
<PAGE> 35
BUSINESS
NEWSPAPER PUBLISHING
Times Mirror publishes the Los Angeles Times, Newsday and New York Newsday,
the Baltimore Sun newspapers, The Hartford Courant, The Morning Call, The
Advocate and the Greenwich Time. In addition, Times Mirror publishes several
weekly newspapers. Each daily newspaper operates independently in order to meet
most effectively the needs of the area it serves. Editorial policies and
business practices are established by local management. Each daily newspaper is
a member of Associated Press. The Los Angeles Times, Newsday and New York
Newsday also subscribe to other supplementary news services. Production of Times
Mirror's newspapers is performed on presses owned by Times Mirror.
The primary raw material used by the newspapers is newsprint. Times Mirror
centrally purchases newsprint for all of its newspapers in order to achieve
advantageous terms from its vendors. Most of the newsprint requirements for the
Los Angeles Times are met by a company in which Times Mirror owns a 20%
interest. The remaining requirements for the Los Angeles Times and the other
Times Mirror newspapers are obtained from United States and Canadian sources
unaffiliated with Times Mirror.
LOS ANGELES TIMES
The Los Angeles Times has been published continuously since 1881. It is
published every morning, and in 1993 ranked as the second largest metropolitan
newspaper in the United States in weekday circulation based on five-day
averages, and the second largest in Sunday circulation. In 1993, its annual
average unaudited circulation was 1,104,317 for Monday through Friday, 1,025,368
for Saturday and 1,504,115 for Sunday, compared with 1,158,377, 1,069,956, and
1,531,458, respectively, in 1992. Approximately 77% of the Monday through
Saturday circulation was home-delivered in 1993.
In 1993, the Los Angeles Times recorded full-run billed advertising volume
of 3,356,699 standard advertising unit inches (hereafter "inches"), part-run
volume of 3,419,709 inches, and preprinted inserts of 978.9 million pieces,
compared with 3,483,352 inches, 2,844,696 inches and 1,031.6 million pieces,
respectively, in 1992. In addition, the Los Angeles Times derived revenue from
advertising supplements distributed to non-subscribers equivalent to 695.4
million pieces in 1993, compared with 590.1 million pieces in 1992.
Net revenues of the Los Angeles Times were $991,997,000 in 1993,
$1,016,744,000 in 1992 and $1,051,387,000 in 1991, representing 50.1%, 52.3% and
53.3% of the revenues of the Publishing Business for such years.
The Los Angeles Times serves a six-county region in Southern California
that includes Los Angeles, Orange, Riverside, San Bernardino, San Diego and
Ventura counties. In addition to the daily edition covering the Los Angeles
metropolitan area, the Los Angeles Times publishes daily Orange County, San
Fernando Valley and Ventura County editions, as well as a South Bay edition on
Thursdays, Fridays and Sundays, and six weekly or twice-weekly regional news
sections directed to specific areas. The Los Angeles Times also publishes an
edition which is distributed Monday through Friday in the Washington, D.C./New
York City area.
In its primary markets of Los Angeles and Orange counties, the Los Angeles
Times competes with 15 local daily newspapers, which range in size up to
approximately 344,000 total average daily circulation, and three daily regional
editions of national newspapers. In addition, there are over 300 weekly,
semi-weekly and free distribution newspapers.
In conjunction with the Washington Post, the Los Angeles Times operates a
supplementary news service sold to newspapers in the United States and foreign
countries. The Los Angeles Times also sells syndicated features to other
newspapers throughout the world.
NEWSDAY AND NEW YORK NEWSDAY
Newsday, which is published daily, circulates primarily in Nassau and
Suffolk counties on Long Island, New York, while New York Newsday circulates in
New York City. In certain locations, Newsday is circulated
33
<PAGE> 36
in the morning, while in other locations, it is an afternoon newspaper. In 1993,
Newsday and New York Newsday combined ranked as the fifth largest local daily
newspaper in the country for Monday through Friday circulation, and as the
eighth largest for Sunday circulation. In 1993, Newsday's annual average
unaudited circulation, which includes New York Newsday, was 740,171 for Monday
through Friday, 624,707 for Saturday, and 823,595 for Sunday, compared with
756,096, 644,683 and 846,862, respectively, in 1992. In 1993, New York Newsday's
annual average unaudited circulation was 260,110 for Monday through Friday,
179,491 for Saturday, and 248,736 for Sunday, compared with 264,462, 189,313,
and 262,632, respectively, in 1992.
In 1993, Newsday and New York Newsday recorded full-run billed advertising
volume of 1,007,510 inches, part-run volume of 1,653,244 inches, and preprinted
inserts of 739.1 million pieces, compared with 915,378 inches, 1,748,174 inches,
and 688.4 million pieces, respectively, in 1992. In addition, Newsday and New
York Newsday, together with its alternate distribution company, derived revenue
from advertising supplements distributed to non-subscribers equivalent to 748.5
million pieces in 1993, compared with 424.9 million pieces in 1992.
Newsday and New York Newsday compete with three major metropolitan
newspapers, numerous daily and local newspapers, and daily regional editions of
national newspapers.
BALTIMORE SUN NEWSPAPERS
The Baltimore Sun newspapers primarily serve the Baltimore-Annapolis
metropolitan area, including Anne Arundel, Baltimore, Carroll, Harford and
Howard counties. The Baltimore Sun publishes several editions, including The
Sun, a morning newspaper published Monday through Saturday; The Evening Sun, an
afternoon paper published Monday through Friday; and The Sunday Sun, published
Sunday mornings. In 1993, The Sun had an annual average unaudited circulation of
238,822 for Monday through Friday, and 364,125 for Saturday, compared with
228,823 and 365,884, respectively, in 1992. In 1993, the Evening Sun had an
annual average unaudited circulation of 101,341 for Monday through Friday,
compared with 119,668 in 1992. In 1993, The Sunday Sun had an annual average
unaudited circulation of 484,250 compared with 488,527 in 1992.
In 1993, The Baltimore Sun newspapers recorded full-run billed advertising
volume of 2,694,149 inches, part-run volume of 401,520 inches, and preprinted
inserts of 499.7 million pieces, compared with 2,716,008 inches, 361,915 inches
and 485.1 million pieces, respectively in 1992. In addition, The Baltimore Sun
newspapers derived revenues from advertising supplements delivered to
non-subscribers equivalent to 705,000 inches in 1993 compared with 341,000
inches in 1992.
Weekly newspapers are also published by The Baltimore Sun, including The
Aegis and the Record which are distributed in Harford County, and four other
weeklies that serve the Aberdeen Proving Ground and certain zip codes in Harford
County. The Baltimore Sun newspapers compete with the Washington Post in Carroll
and Howard counties, and with the Annapolis Capital in Anne Arundel County. In
addition, there are other weekly and local daily newspapers in the distribution
area.
THE HARTFORD COURANT
The Hartford Courant, a morning daily and Sunday newspaper that was first
published in 1764, is the oldest continuously-published newspaper in the United
States. It is published in Hartford, Connecticut, and serves the state's
northern and central regions. The Hartford Courant publishes seven regional
editions on a daily basis, which provide local news and advertising. In 1993,
the annual average unaudited circulation was 231,899 for Monday through
Saturday, and 322,811 for Sunday, compared with 231,598 and 323,938,
respectively, in 1992.
In 1993, The Hartford Courant recorded full-run billed advertising volume
of 1,230,264 inches, part-run volume of 750,292 inches, and preprinted inserts
of 418.1 million pieces, compared with 1,251,853 inches, 760,716 inches and
387.5 million pieces, respectively, in 1992. In addition, The Hartford Courant
derived
34
<PAGE> 37
revenue from advertising supplements distributed to non-subscribers equivalent
to 1,339,031 inches in 1993, compared with 1,149,074 inches in 1992.
The Hartford Courant competes with several small daily and weekly
newspapers in communities adjacent or relatively close to Hartford, and with a
number of larger daily papers in metropolitan areas on the periphery of its
trade area.
THE MORNING CALL
The Morning Call in Allentown, Pennsylvania is published daily, and
primarily services Lehigh and Northampton counties in eastern Pennsylvania. In
1993, annual average unaudited circulation was 135,794 for Monday through
Friday, 147,816 for Saturday, and 188,127 for Sunday, compared with 135,167,
146,934 and 185,498, respectively, in 1992.
In 1993, The Morning Call recorded full-run billed advertising volume of
1,477,923 inches, part-run volume of 464,065 inches, and preprinted inserts of
204.8 million pieces, compared with 1,514,792 inches, 486,559 inches and 205.6
million pieces, respectively, in 1992. In addition, The Morning Call derived
revenues from advertising supplements distributed to non-subscribers equivalent
to 227,009 inches in 1993, compared with 110,345 inches in 1992.
THE ADVOCATE AND THE GREENWICH TIME
The Advocate and the Greenwich Time are published every morning, and serve
the southern part of Fairfield County, Connecticut. The Advocate circulates
primarily in Stamford, Connecticut and the Greenwich Time circulates in
Greenwich, Connecticut. In 1993, The Advocate had an annual average unaudited
circulation of 29,712 for Monday through Saturday, and 40,305 for Sunday,
compared with 30,549 and 41,140, respectively, in 1992. In 1993, the Greenwich
Time had an annual average unaudited circulation of 13,146 for Monday through
Saturday, and 14,265 for Sunday, compared with 13,158 and 14,205, respectively,
in 1992.
In 1993, The Advocate recorded full-run billed advertising volume of
798,920 inches, and preprinted inserts of 34.6 million pieces, compared with
804,229 inches and 32.4 million pieces in 1992. In 1993, the Greenwich Time
recorded full-run billed advertising volume of 729,103 inches and preprinted
inserts of 12.6 million pieces, compared with 699,775 inches and 12.5 million
pieces in 1992. In addition, the newspapers derived revenues from advertising
supplements distributed to non-subscribers equivalent to 99,504 inches in 1993
compared with 113,231 inches in 1992.
ELECTRONIC PUBLISHING
During 1993, Times Mirror's newspapers introduced several new electronic
products and services and announced that regional on-line interactive
information services will be available through the Prodigy network in Los
Angeles and New York in 1994 and in Baltimore and Southern Connecticut in 1995.
The Los Angeles Times, Newsday, New York Newsday, The Baltimore Sun newspapers,
The Advocate and the Greenwich Time will be sources of information available to
subscribers for these services.
On January 12, 1994, Times Mirror announced that the Los Angeles Times and
Pacific Telesis Electronic Publishing Services, a wholly owned subsidiary of
Pacific Telesis Group, have formed a joint venture that will offer electronic
shopping information and transaction services. Times Mirror expects that these
services will initially be offered in Southern California, but the joint venture
plans to seek partnership with other information providers and offer its
services throughout California.
PROFESSIONAL INFORMATION
Times Mirror publishes a variety of books and other media through its
subsidiaries, including legal publications by Matthew Bender & Company,
Incorporated; medical, dental, nursing and allied health books, journals and
college textbooks by Mosby-Year Book, Inc. and its subsidiaries; business and
economics textbooks and professional books by Richard D. Irwin, Inc.; science,
social science and mathematics textbooks
35
<PAGE> 38
by Wm. C. Brown Communications, Inc.; and scientific technical publications,
including environmental science books by CRC Press, Inc.
In addition, Times Mirror provides sales and management training programs
for professionals in business and industry through its subsidiaries, Kaset,
Inc., Learning International, Inc. and Zenger-Miller, Inc.
Times Mirror also publishes aeronautical charts, flight information, pilot
training material and navigational aids worldwide through Jeppesen Sanderson,
Inc. and Jeppesen Sanderson Inc.'s European sister company, Jeppesen & Co. GmbH,
as well as computerized flight plans and weather briefings through Jeppesen
DataPlan, Inc., a subsidiary of Jeppesen Sanderson, Inc.
Books, journals and other materials published by Times Mirror, many of
which are distributed worldwide, are sold through a variety of means, including
the use of Times Mirror sales forces, wholesalers, retailers, jobbers,
direct-to-the-customer selling and direct mail. Printing and binding are
performed primarily by outside suppliers in the United States and abroad. In
accordance with publishing industry practice, softcover and hardcover books are
generally sold on a returnable basis.
CONSUMER MEDIA
Times Mirror publishes a number of special interest and trade magazines
through its subsidiary, Times Mirror Magazines, Inc., as well as art books
through its subsidiary, Harry N. Abrams, Incorporated. The six-month average
unaudited circulation figures per issue for these magazines, for the year ended
December 31, 1993, were 2,007,901 for Field & Stream; 1,815,819 for Popular
Science; 1,502,676 for Outdoor Life; 1,025,071 for Home Mechanix; 1,221,554 for
Golf Magazine; 442,463 for Ski Magazine (published 8 times a year); 442,713 for
Skiing (published 7 times a year); 131,682 for Yachting; and 140,506 for Salt
Water Sportsman. Each of these magazines is published monthly unless otherwise
noted. Advertisers that increase their aggregate advertising pages in these
magazines may purchase advertising in other of these magazines at special rates.
In addition, Times Mirror publishes The Sporting News, a national sports
weekly; National Journal, a weekly magazine on politics and government;
Government Executive, a controlled-circulation trade magazine for government
business; Skiing Trade News, a controlled-circulation business magazine, The
Sporting Goods DEALER, a monthly controlled-circulation trade magazine; and
other related publications. These magazines are primarily intended for
specialized markets. Significant investment in product and market development is
planned in 1995 in the areas of consumer multimedia software and television
programming.
COMPETITION
Besides competing vigorously with similar media in their respective
markets, Times Mirror's newspapers and magazines compete with other local and
national advertising and sales promotion media. Keen competition is encountered
in all phases of Times Mirror's book and magazine publishing operations, as well
as in other areas of its business.
EMPLOYEES
At December 31, 1993, Times Mirror's Publishing Business had approximately
24,000 employees, approximately 18,200 of whom were full-time employees.
Approximately 3,853 employees were represented by collective bargaining agents.
Times Mirror believes that its employee relations are good. Employees receive
supplemental benefits ranging from various forms of group insurance coverage to
retirement income programs.
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<PAGE> 39
PROPERTIES
The general character, location, terms of occupancy and approximate size of
Times Mirror's materially important physical properties used in the Publishing
Business at December 31, 1993 are listed below.
<TABLE>
<CAPTION>
APPROXIMATE AREA
IN SQUARE FEET
------------------------
GENERAL CHARACTER OF PROPERTY OWNED LEASED (1)
- ---------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
NEWSPAPER PUBLISHING
Printing plants, business and editorial offices, garages and warehouse
space located in
Los Angeles...................................................... 2,371,000 291,000
Hartford, Connecticut............................................ 1,048,000 127,000
Baltimore, Maryland.............................................. 844,000 17,000
Melville, Long Island, New York.................................. 700,000 2,000
Other locations.................................................. 503,000 1,371,000
PROFESSIONAL INFORMATION
Business and editorial offices and warehouses in California, Colorado,
Illinois, Missouri, New York, Iowa and other locations.............. 1,285,000 1,291,000
CONSUMER MEDIA
Business and editorial offices and warehouses in New York, Missouri,
Massachusetts, California, Washington, D.C. and other locations..... 45,000 293,000
CORPORATE
Corporate offices and garages located in California, New York, New
Jersey and Washington, D.C.......................................... 349,000 29,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Times Mirror's material lease agreements expire at various dates through
2014.
Times Mirror also owns other business and editorial offices, warehouse
facilities and investment properties, aggregating 346,000 square feet in various
separate locations.
LEGAL PROCEEDINGS
Times Mirror and its subsidiaries are defendants in actions for libel and
other matters arising out of their Publishing Business operations. In addition,
from time to time, Times Mirror and its subsidiaries are involved as parties in
various governmental and administrative proceedings, including environmental
matters, relating to the Publishing Business. Times Mirror does not believe that
any such proceedings currently pending will have a material adverse effect on
its business or financial condition.
37
<PAGE> 40
CAPITALIZATION AND PRO FORMA CAPITALIZATION
The following table sets forth the capitalization of the Company, as the
successor to Old Times Mirror, at September 25, 1994 and the pro forma
capitalization of the Company at September 25, 1994 after giving effect to the
Merger and related transactions described in the Notes to the Pro Forma
Condensed Consolidated Balance Sheet and Statements of Income included elsewhere
in this Prospectus. This table should be read in conjunction with the Notes
referred to above and Times Mirror's historical consolidated financial
statements and related notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 25, 1994
-------------------------------
HISTORICAL PRO FORMA
------------ ----------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Debt, including short-term debt................................ $ 877,088 $ 271,514
Shareholders' equity:
Old Times Mirror Common Stock:
Series A, $1.00 par value, 300,000,000 shares authorized,
98,700,000 shares issued and outstanding(a)............. 98,700
Series B, $1.00 par value, 100,000,000 shares authorized,
no shares outstanding................................... --
Series C, $1.00 par value, 150,000,000 shares authorized,
31,259,000 shares issued and outstanding................ 31,259
New Times Mirror Common Stock, Pro Forma:
Series A, $1.00 par value, 500,000,000 shares authorized,
80,792,000 shares issued and outstanding................ 80,792
Series B, $1.00 par value, 100,000,000 shares authorized,
no shares outstanding................................... --
Series C, $1.00 par value, 300,000,000 shares authorized,
31,259,000 shares issued and outstanding................ 31,259
Old Times Mirror Preferred Stock:
Preferred Stock, $1.00 par value, 4,500,000 shares
authorized, no shares outstanding....................... --
New Times Mirror Preferred Stock, Pro Forma:
Preferred Stock, $1.00 par value, 7,100,000 shares
authorized, no shares outstanding....................... --
Series A Preferred Stock, $1.00 par value, 900,000 shares
authorized, 824,000 shares issued and outstanding,
stated at liquidation value............................. 412,000
Series B Preferred Stock $1.00 par value, 25,000,000
shares authorized, 16,563,000 shares issued and
outstanding, stated at liquidation value................ 350,000
Additional paid-in capital................................ 167,331 167,331
Retained earnings......................................... 1,707,446 1,575,488
Less treasury stock, at cost.............................. (61,543)
Less guaranteed debt of ESOP.............................. (24,200) (24,200)
------------ ----------------
Total shareholders' equity..................................... 1,918,993 2,592,670
------------ ----------------
Total capitalization........................................... $2,796,081 $2,864,184
========== ===============
</TABLE>
- ---------------
(a) Includes 1,345,000 shares of treasury stock, which were canceled in the
Merger without consideration.
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SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data has been derived from
the consolidated financial statements of Times Mirror. The data should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere herein and the consolidated
financial statements and notes thereto included elsewhere in this Prospectus.
The income statement data for the years ended December 31, 1989, 1990, 1991,
1992 and 1993 and the balance sheet data as of the same dates have been derived
from the audited consolidated financial statements of Times Mirror. The income
statement data for the nine months ended September 26, 1993 and September 25,
1994 and the balance sheet data as of September 25, 1994 have been derived from
the unaudited consolidated financial statements of Times Mirror, which, in the
opinion of management, include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of financial position and results
of operations for such periods. Operating results for the nine months ended
September 25, 1994 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 1994.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 -----------------------------
---------------------------------------------------- SEPTEMBER 26, SEPTEMBER 25,
1989 1990 1991 1992 1993 1993 1994
-------- -------- -------- -------- -------- ------------- -------------
(IN MILLIONS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(A):
Revenues................................... $3,082.3 $3,146.3 $3,117.2 $3,155.4 $3,243.7 $ 2,346.7 $ 2,400.1
Restructuring charges...................... -- -- 42.3 202.7 80.2 3.8 --
Operating profit........................... 440.4 268.1 208.7 63.8 189.0 163.8 186.8
Nonrecurring gains (charges)............... 9.2 -- (85.6) -- -- -- 22.1
Interest expense........................... 53.9 74.8 76.7 74.3 84.1 64.8 51.8
Income (loss) from continuing operations
before income taxes...................... 395.7 204.4 55.3 (7.1) 109.8 101.3 159.2
Income (loss) from continuing operations... 235.0 112.2 14.3 (18.4) 51.7 47.3 79.4
Income (loss) per common share from
continuing operations.................... $1.82 $ .87 $ .11 $(.14) $ .40 $.37 $.61
Cash dividends paid per common share(b).... 1.00 1.08 1.08 1.08 1.08 .81 .81
Ratio of earnings to fixed charges(c)...... 4.6x 2.6x 1.3x (d) 2.0x 3.3x
Pro forma ratio of earnings to fixed
charges(e)............................... 3.8x 6.4x
Pro forma ratio of earnings to combined
fixed charges and preferred stock
dividends(e)............................. 1.3x 1.9x
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------- SEPTEMBER 25,
1989 1990 1991 1992 1993 1994
-------- -------- -------- -------- -------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
$
Total assets(f)............................ $3,874.3 $4,120.1 $4,006.1 $4,233.3 4,499.9 $4,212.8
Long-term debt............................. 883.5 1,065.7 978.4 1,114.4 795.5 749.0
Shareholders' equity....................... 1,877.2 1,917.4 1,884.0 1,700.6 1,899.3 1,919.0
</TABLE>
- ---------------
(a) Amounts have been restated from previously issued financial statements to
reclassify the cable television operations to discontinued operations.
(b) Cash dividends paid by Times Mirror are funded by the operations of its
subsidiaries, including, prior to the Merger, the cable television
operations acquired by Cox in the Merger.
(c) The ratio of earnings to fixed charges was computed by dividing earnings
(income from continuing operations before income taxes adjusted for fixed
charges (net of capitalized interest), equity income or loss and distributed
income from unconsolidated affiliates and amortization of capitalized
interest) by fixed charges for the periods indicated. Fixed charges include
interest incurred on long-term debt and other debt, capitalized interest,
the interest factor deemed to be included in rental expense, and certain
amortization.
(d) Earnings are approximately $7 million lower than the amount needed to cover
fixed charges in this year, as earnings in 1992 were impacted by over $200
million in restructuring charges.
(e) The pro forma ratio of earnings to fixed charges and pro forma ratio of
earnings to combined fixed charges and preferred stock dividends was
computed as described in (c) above, except that earnings and interest
expense included in the pro forma calculation were based on the pro forma
earnings and pro forma interest expense as included in the pro forma
statements of income herein. In addition, preferred dividend requirements
were assumed based on issuances of $412 million of Series A Preferred Stock
and $350 million of Series B Preferred Stock.
(f) Includes amounts for the cable television operations as follows:
<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------- SEPTEMBER 25,
1989 1990 1991 1992 1993 1994
-------- -------- -------- -------- -------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Net assets........................ $439.2 $484.6 $509.9 $495.0 $606.7 $626.1
</TABLE>
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RECENT OPERATING RESULTS
Set forth below are Times Mirror's operating results for the three months
and year ended December 31, 1994, which were publicly released by Times Mirror
on February 2, 1995. For more information regarding Times Mirror's operating
results for the three months and year ended December 31, 1994, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Recent Operating Results." The income statement data for the year
ended December 31, 1993 has been derived from the audited consolidated financial
statements of Times Mirror. The income statement data for the year ended
December 31, 1994 and the three months ended December 31, 1993 and 1994 have
been derived from the unaudited consolidated financial statements of Times
Mirror which, in the opinion of management, include all adjustments (consisting
of normal recurring adjustments) necessary for a fair presentation of financial
position and results of operations for such periods.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31 DECEMBER 31
--------------------- -----------------
1993 1994 1993 1994
-------- -------- ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Consolidated:
Revenues........................................... $3,243.7 $3,357.5 $897.1 $957.4
Restructuring charges.............................. 80.2 76.4
Operating profit................................... 189.0 294.3 25.3 107.6
Nonrecurring gains................................. 22.1
Interest expense................................... 84.1 69.5 19.3 17.7
Income from continuing operations before income
taxes........................................... 109.8 247.7 8.5 88.6
Income from continuing operations.................. 51.7 126.2 4.4 46.9
Income per share from continuing operations........ $.40 $.98 $.04 $.36
Business Segments:
Revenues
Newspaper Publishing............................ $1,980.7 $2,063.0 $549.5 $581.3
Professional Information........................ 992.2 1,005.3 275.4 296.0
Consumer Media.................................. 271.2 289.9 72.3 80.3
Intersegment Revenues........................... (.4) (.7) (.1) (.2)
-------- -------- ------ ------
$3,243.7 $3,357.5 $897.1 $957.4
======= ======= ====== ======
Operating Profit (Loss)(a)
Newspaper Publishing............................ $ 107.3 $ 194.8 $ 29.1 $ 72.8
Professional Information........................ 174.9 173.9 36.0 60.2
Consumer Media.................................. (3.8) (4.9) 1.5 (3.6)
Corporate and Other............................. (89.4) (69.5) (41.3) (21.8)
-------- -------- ------ ------
$ 189.0 $ 294.3 $ 25.3 $107.6
======= ======= ====== ======
</TABLE>
- ------------------
(a) Includes restructuring charges in 1993 as follows (in millions):
<TABLE>
<CAPTION>
FULL THREE
YEAR MONTHS
----- ------
<S> <C> <C>
Newspaper Publishing................................ $33.1 $29.3
Professional Information............................ 25.3 25.3
Corporate and Other................................. 21.8 21.8
----- ------
$80.2 $76.4
===== ======
</TABLE>
40
<PAGE> 43
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
CABLE MERGER
On February 1, 1995, Times Mirror completed the Transactions related to the
merger of its cable television operations with Cox. The Transactions are
expected to have the following impact in 1995:
- A gain of approximately $1.6 billion on the cable television transaction
will be recorded in the first quarter of 1995;
- On a pretax basis, net interest income in 1995 is expected to be $10-$15
million as compared to net interest expense of $67 million in 1994; and
- Earnings per common share in 1995 will be negatively affected as a result
of approximately $50 million of preferred dividends on the Series A
Preferred Stock and Series B Preferred Stock. This amount represents 10
months of dividends on these securities.
OUTLOOK FOR 1995
Times Mirror believes that there are a variety of factors to consider
relating to its outlook for 1995. Assuming continued economic growth, Times
Mirror expects total revenues to grow faster in 1995 than in 1994, due to a
continuing recovery in Times Mirror's newspaper markets and sales expansion in
its international professional information businesses. However, much of this
revenue growth will be offset by sharply higher newsprint prices and increased
paper and postage costs overall.
The first quarter of the fiscal year is generally Times Mirror's least
profitable quarter. Times Mirror expects that, although it will report the
approximately $1.6 billion gain on the cable transaction in the first quarter,
continuing operations are expected to show a decline from 1994's low levels due
to deeper seasonal losses in the expanded higher education companies, cost
pressure in the newspaper group, and startup costs associated with new
initiatives.
In addition, Times Mirror has begun to develop new businesses and products
at a more rapid pace. A significant portion of these efforts are expected to be
reflected in operating results in 1995. These programs, and other initiatives
designed to reduce ongoing operating, administrative and financing expenses,
could reduce net income by as much as $40 million in 1995.
NEWSPAPER PUBLISHING OUTLOOK
Newspaper Publishing results are expected to be impacted by two critical
factors: the timing and extent of economic recovery in Times Mirror's local
newspaper markets, particularly Southern California, and the sharp increases in
newsprint prices anticipated throughout the industry at least through 1995. In
1994, newsprint expense represented approximately 15 percent of total segment
operating costs. The average newsprint price per ton is expected to rise more
than 30 percent in 1995. Rising newsprint consumption due to advertising volume
growth, coupled with significant price increases, could restrain profitability
improvement in 1995. In addition, advertising revenue growth over the long term
may be restrained by structural shifts in the retail marketplace, including
retailer consolidations, changing consumer buying habits and growth in discount
stores, which use little newspaper advertising. In addition, the 1995 startup
losses related to electronic online services of the Los Angeles Times and
Newsday/New York Newsday and electronic advertising and shopping joint ventures
with Pacific Telesis and Nynex are expected to impact net income by
approximately $7 million.
PROFESSIONAL INFORMATION OUTLOOK
The 1995 results are expected to reflect revenue strength in most of the
businesses, tempered, however, by costs associated with investments in new
product lines and business ventures throughout the segment. In
41
<PAGE> 44
addition, approximately $6 million in net income impact is expected in 1995 from
developing new electronic business activities in health care and legal
publishing.
CONSUMER MEDIA OUTLOOK
Times Mirror's magazines have historically represented the majority of the
revenues of this segment. Operating results in 1994 for the magazines have
improved due to strength in advertising, reflecting an industry-wide trend.
Although magazine advertising revenues are expected to show continued
improvement in 1995, anticipated increases in postage rates and paper prices may
significantly impair profit growth. In addition, significant expenditures for
product and market development are planned in 1995 in the new areas of consumer
multimedia software and television programming, which could impact net income by
as much as $18 million.
COST REDUCTION AND RESTRUCTURING EFFORTS
Over the past several years, Times Mirror has provided restructuring
reserves in order to streamline the operational and administrative functions of
its businesses. Times Mirror is continuing to pursue cost reduction and process
re-engineering opportunities. An approximately $9 million impact on 1995 net
income is expected from development and initial costs for a network to link
product, marketing and administrative data bases across the Company. This
network is designed to reduce ongoing operating, administrative and financing
expenses. Other opportunities to reduce costs could lead to additional
restructuring or other charges in 1995 and future periods.
POST-MERGER DIVIDEND POLICY
Following the issuance of the Additional Chandler Shares, Times Mirror
expects to have approximately $412 million in face amount of Series A Preferred
Stock outstanding. This series of preferred stock will have a perpetual
fixed-rate dividend which will be established within 90 days after the
completion of the Merger. Upon the completion of the Exchange Offer for the
Series B Preferred Stock, Times Mirror expects to have $350 million of Series B
Preferred Stock outstanding. The Series B Preferred Stock will convert into
Series A Common Stock in early 1998. The Series B Preferred Stock may, however,
be called for redemption earlier under certain circumstances, with the
redemption price payable in shares of Series A Common Stock. Earnings per common
share will be negatively affected as a result of the dividends on the Series A
Preferred Stock and Series B Preferred Stock. The dividends on these preferred
shares are expected to be approximately $50 million in 1995, $60 million in 1996
and 1997, $43 million in 1998 and $37 million thereafter as long as the Series A
Preferred Stock is outstanding. Beginning in June 1995 and continuing for a
period of three years, New Times Mirror has agreed to pay an annual dividend on
shares of Common Stock of no less than 24 cents per share, subject to the
fiduciary duties of New Times Mirror's Board of Directors. Thereafter, the
payment of dividends on Common Stock will depend on future earnings, capital
requirements, financial condition and other factors.
POST-MERGER CASH, FINANCINGS AND CAPITAL RESOURCES
As contemplated by the Merger Agreement, Times Mirror borrowed
approximately $1.306 billion prior to the Merger. This debt, along with
approximately $57.4 million of fixed rate debt which was not tendered or
exchanged, was assumed by Cox in the Merger. About one-third of the proceeds
from the $1.306 billion borrowing were used to retire the short-term borrowings
issued to finance the debt tender offer and to redeem the $100 million 8 7/8%
Notes which were called on February 1, 1995. Another $125 million of the
proceeds has already been, or will be, used to retire commercial paper
borrowings, which are being paid off as they mature. As of February 1, 1995,
Times Mirror had total debt of approximately $283 million, including $34.7
million of commercial paper and $248.3 million of long-term debt. The commercial
paper will be paid off by March 9, 1995. Cash of approximately $659 million as
of February 1, 1995, primarily representing the cash remaining after the
aforementioned debt payouts, is invested in short-term money markets with a
weighted average interest rate of 5.8%.
42
<PAGE> 45
On February 1, 1995, Times Mirror's commercial paper program and shelf
registration statements were terminated as a result of the Merger, since those
arrangements were established by Old Times Mirror, which was merged with Cox.
Effective February 9, 1995, Times Mirror terminated its $480 million of
unsecured domestic revolving lines of credit. Replacement domestic lines of
credit are expected to be available in the future if the need arises. Times
Mirror retained its $150 million in foreign unsecured revolving lines of credit.
Cash flow from continuing operations in 1995 is expected to contribute to
the Company's financial resources. Cash flow in 1995 and future years is
expected to benefit from lower interest expense, interest earned on cash
invested, and significantly reduced dividend and capital expenditure
requirements. As described above under the caption "General -- Outlook for
1995," Times Mirror expects to use some of its cash resources, including cash
flow from continuing operations, for a number of purposes, including developing
its existing businesses and investing in new information franchises such as
cable programming, multimedia software and electronic advertising and shopping
services. In addition, Times Mirror is investing in a company-wide digital
network of product, marketing and administrative databases.
At the time of the execution of the Merger Agreement to merge its cable
operations with those of Cox, Times Mirror committed up to $200 million to a
proposed joint venture with Cox. The joint venture is expected to develop and
purchase substantial investment interests in theme-based cable television
programming operations. The $200 million is expected to be contributed to the
venture as capital calls are made.
CONSOLIDATED RESULTS OF OPERATIONS -- FULL YEAR 1994
On February 2, 1995, Times Mirror publicly announced its operating results
for the quarter and year ended December 31, 1994.
Income from continuing operations in 1994 increased to $126.2 million, or
98 cents per share, compared with $51.7 million, or 40 cents per share, in 1993.
The 1994 results included nonrecurring gains related to asset sales of $22.1
million, or $10.6 million (8 cents per share) after taxes. The 1993 results
included restructuring charges of $80.2 million, or $47.7 million (37 cents per
share) after taxes. Excluding these nonrecurring gains and restructuring charges
in both years, 1994 income from continuing operations would have been $115.6
million, or 90 cents per share, compared with $99.4 million, or 77 cents per
share, in 1993. Revenues rose 3.5 percent to $3.36 billion in 1994 compared with
$3.24 billion in 1993.
Net income in 1994 was $173.1 million, or $1.35 per share, compared with
$317.2 million, or $2.46 per share, in the prior year. In addition to the gains
referred to above, 1994 results included a $12.2 million extraordinary loss in
the fourth quarter on the early retirement of debt. Net income in both years
also included the results of discontinued operations; the discontinued cable
operations were included in both years, while 1993 also included the
discontinued broadcast television operations and a gain of $131.7 million on the
sale of broadcast television. The merger of Times Mirror's cable television
business into Cox was completed on February 1, 1995, and the resulting gain will
be recorded in 1995.
Fourth-quarter 1994 income from continuing operations declined to $46.9
million, or 36 cents per share, from $50.2 million, or 39 cents per share in
1993, excluding 1993 restructuring charges of $76.4 million, or $45.8 million
(35 cents per share) after taxes. The fourth-quarter effective tax rate was 47
percent in 1994 and 41 percent in 1993, excluding the prior year restructuring
charges. The lower rate in the fourth quarter of 1993 reflected an adjustment to
the effective tax rate, which brought the full-year effective tax rate,
excluding restructuring charges, to 48 percent in 1993 compared with 49 percent
in 1994.
Fourth-quarter 1994 revenues increased 6.7 percent to $957.4 million
compared with $897.1 million in the prior year. Net income in the fourth quarter
was $52.7 million, or 41 cents per share, compared with $161.8 million, or $1.26
per share, in 1993, including discontinued operations in both years and the gain
on the sale of broadcast television in 1993.
The consolidated financial statements of Times Mirror for the year ended
December 31, 1994 are expected to be completed by the end of February 1995 and
will be included in the 1994 annual report to stockholders.
43
<PAGE> 46
BUSINESS SEGMENT INFORMATION
NEWSPAPER PUBLISHING
Operating profit for 1994 rose 38.7 percent to $194.8 million compared with
$140.4 million in 1993, excluding restructuring charges of $33.1 million in
1993. Full-year revenues increased 4.2 percent, topping the $2 billion mark for
the first time in four years.
Advertising revenues rose 5.1 percent in 1994 to $1.56 billion, with the
Los Angeles Times up 4.9 percent and Times Mirror's eastern newspapers up 5.2
percent.
In the 1994 fourth quarter, operating profit increased 24.4 percent to
$72.8 million, compared to $58.4 million in the prior year's fourth quarter,
excluding 1993 restructuring charges of $29.3 million. Revenues increased 5.8
percent to $581.3 million.
PROFESSIONAL INFORMATION
In Professional Information, 1994 operating profit declined 13.1 percent to
$173.9 million compared with $200.2 million in the prior year, excluding 1993
restructuring charges of $25.3 million, largely due to revenue declines at
Matthew Bender. Revenues for the year reached $1.01 billion compared with $992.2
million in 1993; excluding Bender, revenues for the rest of the segment rose 8.7
percent compared with 1993.
The group's fourth quarter operating profit of $60.2 million was slightly
lower than the $61.3 million reported in the prior year, excluding the 1993
restructuring charges, due primarily to lower profits in the training companies
and increased acquisition-related amortization. Fourth-quarter revenues rose 7.5
percent to $296.0 million compared with $275.4 million in the prior year,
reflecting continued strong sales increases in higher education and
international publishing.
CONSUMER MEDIA
Consumer Media, which consists of Times Mirror's magazine and art book
publishing companies as well as new consumer multimedia software and television
programming businesses, reported an operating loss for the year of $4.9 million
compared with a $3.8 million loss in 1993, as improvements in magazines and art
book publishing were more than offset by new business startup losses in consumer
multimedia and television programming of $5.7 million and $2.5 million,
respectively. Revenues for the year increased 6.9 percent to $289.9 million from
$271.2 million in the prior year.
In the fourth quarter the group reported an operating loss of $3.6 million
compared with operating profit of $1.5 million in 1993, due to the new business
startup costs. The 1994 fourth quarter revenues reached $80.3 million, an
increase of 11.0 percent from 1993, reflecting improved sales at the magazines
and art book publishing companies.
DISCONTINUED OPERATIONS
Income from discontinued operations for the full year was $59.1 million, or
46 cents per share, compared to $133.8 million, or $1.04 per share, in 1993.
Income from discontinued operations for the fourth quarter of 1994 was $18.1
million, or 14 cents per share, compared with $25.7 million, or 20 cents per
share, in the prior year period.
44
<PAGE> 47
CONSOLIDATED RESULTS OF OPERATIONS -- PRIOR YEARS AND 1994 INTERIM
The following table summarizes Times Mirror's financial results (in
millions, except per share amounts and tax rates):
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
------------------------------
SEPTEMBER 26, SEPTEMBER 25,
1991 1992 1993 1993 1994
-------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues............................ $3,117.2 $3,155.4 $3,243.7 $ 2,346.7 $ 2,400.1
Restructuring charges............... 42.3 202.7 80.2
Operating profit.................... 208.7 63.8 189.0 163.8 186.8
Interest expense.................... 76.7 74.3 84.1 64.8 51.8
Nonrecurring gains (charges)........ (85.6) 22.0
Income (loss) from continuing
operations........................ 14.3 (18.4) 51.7 47.3 79.4
Income from discontinued operations,
net of tax........................ 67.6 75.1 133.8 108.0 41.0
Gain on sale of discontinued
operations, net of tax............ 131.7
Income before changes in accounting
principles, net of tax............ 56.8
Cumulative effect of changes in
accounting principles, net of
tax............................... (123.4)
Net income (loss)................... 82.0 (66.6) 317.2 155.4 120.4
Earnings (loss) per share from
continuing operations............. $.11 $(.14) $.40 $.37 $.61
Effective tax rate.................. 52.3% N/A 52.9% 53.3% 49.8%
</TABLE>
RESTRUCTURING CHARGES
Efforts to streamline and restructure the operational and administrative
functions in Times Mirror's businesses were undertaken in 1991, 1992 and 1993 in
newspaper publishing, in 1992 at Matthew Bender, Times Mirror's legal
information publisher, and in 1993 at other professional publishing companies
and in corporate administration. The restructuring charges over this three-year
period have totaled $325.2 million, or $196.5 million after taxes, principally
for severance and payroll-related costs for staff reductions and for expected
losses on leased facilities. Approximately 20 percent of the restructuring
charges consisted of non-cash items, primarily for enhanced pension or
postretirement benefits with a smaller portion for asset write-offs. The
restructuring efforts have helped to improve operating results in newspaper
publishing and are expected to improve results at the professional publishing
companies over the longer-term. Times Mirror is continuing to pursue cost
reduction and process re-engineering opportunities. This work could lead to
additional restructuring or other charges in future periods.
DISCONTINUED OPERATIONS
Times Mirror's cable television business was acquired by Cox on February 1,
1995. Earnings from the Cable Television segment are therefore reported as
Income from Discontinued Operations.
Times Mirror sold its four broadcast television stations to Argyle
Television Holdings, Inc. These television stations formed Times Mirror's entire
business segment for Broadcast Television. This divestiture was completed near
year-end 1993. Earnings from this divested segment as well as the gain on the
sale are reported as Income from Discontinued Operations for 1993 and prior
years.
45
<PAGE> 48
Operating results of these discontinued operations were as follows (in
millions):
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
YEAR ENDED DECEMBER 31, -------------------------------
---------------------------- SEPTEMBER 26, SEPTEMBER 25,
1991 1992 1993 1993 1994
------ ------ ------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues...................... $496.9 $546.5 $565.2 $422.1 $368.9
====== ====== ====== ====== ======
Income before income taxes.... 110.6 126.7 227.3 188.5 75.6
Income taxes.................. 43.0 51.5 93.5 80.4 34.6
------ ------ ------ ------- ------
Net income.................... $ 67.6 $ 75.2 $133.8 $108.1 $ 41.0
====== ====== ====== ====== ======
</TABLE>
Gains on asset sales by the cable television business, aggregating $86.8
million in 1993, $8.7 million in 1992 and $14.1 million in 1991, are included in
discontinued operations.
NONRECURRING GAINS (CHARGES)
In 1991, Times Mirror sold Broadcasting Publications, Inc., a trade
magazine publisher, for a loss of $20.6 million and recorded a $65.0 million
write-down of the note and other assets outstanding from the 1987 sale of the
Denver Post.
In the third quarter of 1994, Times Mirror recognized a gain of $11.9
million on the divestiture of a small elementary-high school book publishing
operation. In the second quarter of 1994, a gain of $10.2 million was recognized
on the disposition of preferred stock and warrants to purchase common stock
obtained as part of the 1992 settlement of a note receivable related to the 1987
sale of the Denver Post.
ACQUISITIONS IN PROFESSIONAL INFORMATION
Strategic acquisitions of professional publishing companies, including the
1993 acquisition of three small medical publishers and a small specialty
education publisher, and the fourth quarter 1992 acquisition of Wm. C. Brown
Communications, Inc. contributed to the continued growth of professional
publishing. The Brown acquisition substantially increased Times Mirror's base of
higher education publishing operations that also includes the business and
economics publishing of Richard D. Irwin and the health science and technical
textbooks of Mosby-Year Book.
FIRST THREE QUARTERS 1994 COMPARED WITH FIRST THREE QUARTERS 1993
Times Mirror's revenues increased 2.3 percent for the first three quarters
of 1994 and operating profit was up 14.0 percent. Growth in newspaper and
magazine advertising revenues, combined with a strong third-quarter performance
in college and health science publishing, more than offset year-to-date revenue
and operating profit declines in legal publishing. The decline in legal
publishing was largely anticipated and was the result of a lower number of
subscriptions, year-over-year timing differences in product release schedules
and changes in its marketing and pricing strategies introduced in mid-1993.
These strategies aim to stabilize the number of subscriptions over the near term
and to provide a basis for unit volume growth over the long term.
For the first three quarters, income from continuing operations rose 67.8
percent, primarily on the strength of third-quarter results. In addition,
year-to-date interest expense declined in 1994, as the debt level was reduced
using proceeds received earlier in the year from the sale of the broadcast
television stations. Net income was down for the first three quarters due to the
absence of results from the discontinued broadcast television operations and the
1993 gains on asset sales at cable television.
46
<PAGE> 49
NEWSPAPER PUBLISHING
Newspaper Publishing segment revenues and operating profit were as follows
(in millions):
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
-------------------------------
SEPTEMBER 26, SEPTEMBER 25,
1993 1994
------------- -------------
<S> <C> <C>
Revenues
Advertising.................................... $1,064.1 $1,119.5
Circulation.................................... 336.5 333.1
Other.......................................... 30.7 29.0
-------- --------
$1,431.3 $1,481.6
======== ========
Operating Profit................................. $ 78.2 $ 122.0
======== ========
</TABLE>
Newspaper Publishing's advertising revenues rose 5.2 percent for the first
three quarters of 1994. Circulation revenues declined slightly due to the
planned reduction of circulation outside the newspapers' primary market areas.
Advertising volume and revenues increased at the segment's largest newspaper,
the Los Angeles Times, with continued gains in classified advertising volume,
particularly in the help-wanted category, as well as increases in retail
advertising volume.
Year-to-date operating profit rose significantly in 1994, benefiting
somewhat from a small severance-related charge at the Los Angeles Times in the
third quarter of 1993. This profitability improvement reflects the advertising
revenue growth as well as ongoing cost containment efforts over the past three
years. Newsprint expense for the first three quarters was slightly lower than
1993, as the impact of lower average per-ton cost in the first half of 1994 more
than offset a slight increase in consumption.
PROFESSIONAL INFORMATION
Professional Information segment revenues and operating profit were as
follows (in millions):
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
-------------------------------
SEPTEMBER 26, SEPTEMBER 25,
1993 1994
------------- -------------
<S> <C> <C>
Revenues......................................... $716.9 $709.3
====== ======
Operating Profit................................. $138.9 $113.8
====== ======
</TABLE>
Professional Information revenues in the third quarter of 1994 rose to a
record high for a single quarter. However, revenue declines in the first half at
Matthew Bender, due principally to the impact of changes in its pricing and
marketing strategies, resulted in a slight year-to-date decline for the segment
as compared to 1993.
Operating profit for the third quarter also reached a record high, up 19.8
percent over 1993 on the strength of the revenue gains. Results for the
year-to-date period, however, remained below 1993 levels, down 18.1 percent, due
largely to depressed results at Matthew Bender in the first half of 1994.
CONSUMER MEDIA
Consumer Media segment revenues and operating losses were as follows (in
millions):
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
-------------------------------
SEPTEMBER 26, SEPTEMBER 25,
1993 1994
------------- -------------
<S> <C> <C>
Revenues......................................... $198.9 $209.6
====== ======
Operating Loss................................... $ (5.3) $ (1.3)
====== ======
</TABLE>
Consumer Media segment revenues rose 5.4 percent in the first three
quarters of 1994, as consumer magazines showed improved advertising revenues.
The segment's year-to-date advertising revenues rose 5.8 percent. The segment
reduced its year-to-date operating loss over the prior year, as improvements at
the magazines were only partially offset by costs related to Times Mirror's new
multimedia and programming businesses.
47
<PAGE> 50
1993 COMPARED WITH 1992
Times Mirror's revenues and operating profit improved in 1993, but
continued to be impacted by recessionary conditions in key markets, as well as
by cost restructuring activities. Times Mirror's continuing operations consist
primarily of newspaper, book and magazine publishing, the publishing of
aeronautical charts and flight information and skills training and consulting
support for management development.
The economic weakness of Southern California, Times Mirror's largest
newspaper market, and the restructuring of Matthew Bender, Times Mirror's
largest professional information company, limited the growth of Times Mirror's
two business segments.
Year-to-year comparisons of income from continuing operations were
significantly affected by the following (in millions):
<TABLE>
<CAPTION>
1992 1993
------- ------
<S> <C> <C>
Restructuring charges:
Los Angeles Times................................................ $ 87.7 $ 28.5
Other Newspaper Publishing....................................... 19.0 4.6
Matthew Bender................................................... 96.0
Other Professional Publishing.................................... 25.3
Corporate........................................................ 21.8
------- ------
$ 202.7 $ 80.2
====== =====
</TABLE>
Revenues grew 2.8 percent between years, with acquisitions in late 1992 and
in 1993 contributing to the overall growth. Operating profit nearly tripled in
1993, reflecting significantly lower restructuring charges between years.
Financial results for 1993 were reduced by restructuring charges of $80.2
million, primarily for voluntary separation programs in the Newspaper Publishing
group, costs related to streamlining operations in the Professional Information
group, and costs associated with the planned consolidation of certain
administrative functions across all Times Mirror companies. Financial results
for 1992 were reduced by restructuring charges of $202.7 million for voluntary
early retirement and separation programs at the Los Angeles Times and Newsday,
costs for the shutdown of a regional edition of the Los Angeles Times, and costs
related to a restructuring program at Matthew Bender.
Times Mirror reported income from continuing operations in 1993 versus a
loss from continuing operations in 1992. The 1992 loss from continuing
operations was the result of $202.7 million in restructuring charges.
Cost containment across all business activities is an integral part of the
restructuring effort. Managed health care programs were established in 1993 for
current employees and substantial changes were made to the postretirement
medical and life insurance benefit programs. These actions lowered employee
health care costs in 1993 and significantly reduced Times Mirror's
postretirement benefit costs for 1993 and future years. Higher pension expense
in 1993, due to a decline in interest rates, offset the favorable impact of
these actions. Notes A and K to the consolidated financial statements describe
Times Mirror's pension and postretirement benefit plans.
Discontinued operations consist of the operating results of Cable
Television segment, which was acquired by Cox on February 1, 1995, and the
Broadcast Television segment, which was sold near year-end 1993 for an after-tax
gain of $131.7 million.
Net income in 1993 rose on the higher income from continuing operations as
well as the gain on the sale of the discontinued operations. The 1992 net loss
arose primarily as a result of the cumulative adjustment from the adoption of
the new accounting standard for postretirement benefits.
Interest expense in 1993 increased to $84.1 million, from $74.3 million
last year. Average daily debt levels in 1993 were approximately $100 million
higher than 1992. Lower interest rates between years partly offset this increase
in debt. Also contributing to the rise in interest expense during 1993 was a
$3.6 million decline in capitalized interest and interest related to subleases.
The 1993 effective tax rate reflects the new federal income tax rates
enacted in the third quarter of 1993. The high effective tax rates in 1992 and
1991 were primarily the result of state taxes and permanent state and
48
<PAGE> 51
federal tax differences related to the non-deductible amortization of goodwill
and other intangibles, which cause a higher effective tax rate when operating
income declines.
1992 COMPARED WITH 1991
Consolidated 1992 revenues were $3.16 billion compared with $3.12 billion
in 1991. A loss from continuing operations of $18.4 million was reported in
1992, compared with $14.3 million of income from continuing operations in 1991.
The 1992 results include restructuring charges of $202.7 million, while 1991
results were adversely impacted by $42.3 million for restructuring charges, as
well as nonrecurring charges totaling $85.6 million for a writedown of The
Denver Post note and other assets and a loss on asset sales. For 1992, a net
loss of $66.6 million, or 52 cents per share, compared with 1991 net income of
$82.0 million or 64 cents per share. The 1992 net loss primarily arose from the
$123.4 million net cumulative charge (96 cents per share) resulting from the
January 1, 1992 adoption of new accounting standards for postretirement benefits
and income taxes.
Excluding restructuring charges in both 1992 and 1991, operating profit of
$266.5 million in 1992 was up $15.5 million from the prior year due to the
acquisition of Wm. C. Brown Communications, Inc. and strong revenue gains in
college publishing and flight information.
Interest expense of $74.3 million in 1992 was lower than the $76.7 million
recorded in 1991, due to lower average debt levels and interest rates, although
these favorable factors were largely offset by a $9.6 million decrease in
interest capitalized for major construction activities between years.
ANALYSIS BY SEGMENT
NEWSPAPER PUBLISHING
Newspaper Publishing revenues and operating profit were as follows (in
millions):
<TABLE>
<CAPTION>
1991 1992 1993
-------- -------- --------
<S> <C> <C> <C>
Revenues
Advertising................................ $1,516.7 $1,469.2 $1,465.1
Circulation................................ 418.1 428.4 453.0
Other...................................... 39.6 45.6 62.6
-------- -------- --------
$1,974.4 $1,943.2 $1,980.7
======= ======= =======
Operating Profit............................. $ 93.1 $ 19.1 $ 107.3
======= ======= =======
</TABLE>
Recessionary conditions in Southern California continued to depress
advertising volume and revenue growth at the Los Angeles Times, offsetting the
impact of an improvement in the major markets of Times Mirror's eastern
newspapers.
Revenues for the group rose 1.9 percent in 1993 due primarily to an
increase in circulation revenues related to a change to dealer distribution
systems at Newsday and the Hartford Courant in 1992. Advertising revenues of
$1.47 billion in 1993 were essentially level with the prior year, as a third
consecutive year of declines at the Los Angeles Times offset growth at the
eastern newspapers. In 1993, advertising revenues at the Los Angeles Times
declined 3.3 percent to $775.7 million, compared with $802.1 million in 1992 and
$835.2 million in 1991. Times Mirror's eastern newspapers, led by a strong
performance at Newsday, reported advertising revenues of $689.4 million for
1993, compared to $667.1 million in 1992 and $681.5 million in 1991.
Circulation revenues rose 5.7 percent in 1993, primarily reflecting the
previously-mentioned dealer distribution systems change and modest circulation
price increases in some markets. Excluding the impact of the dealer distribution
change, circulation revenues would have declined 2.0 percent in 1993 as a result
of expected circulation volume declines with the elimination of the Los Angeles
Times' San Diego Edition in late 1992, the reduction of duplicate morning and
evening circulation at The Baltimore Sun newspapers, and lower single copy
sales.
Other newspaper group revenues rose 37.3 percent from the prior year, aided
by growth in alternative delivery services.
49
<PAGE> 52
Newspaper Publishing operating profit for 1993 was reduced by $33.1 million
primarily for voluntary separation programs at the Los Angeles Times, Newsday
and The Baltimore Sun, while 1992 operating profit was reduced by $106.7 million
for voluntary separation programs at the Los Angeles Times and Newsday, as well
as the costs of closing the San Diego Edition of the Los Angeles Times.
Excluding restructuring charges in both years, operating profit in 1993 would
have increased 11.6 percent to $140.4 million, from $125.8 million in 1992.
Operating costs rose slightly in 1993, due to the change in dealer distribution
systems. Excluding the change and restructuring charges, operating costs would
have declined on a year-over-year basis. Newsprint expense was virtually flat,
as lower consumption offset a one percent average price increase. The operating
profit margin for the group, excluding restructuring charges, would have been
7.1 percent in 1993 and 6.5 percent in 1992.
The Newspaper Publishing group's 1992 revenues were 1.6 percent below 1991,
while operating profit was off 79.5 percent from 1991. The 1992 results include
the impact of restructuring charges of $106.7 million but also reflect declines
in advertising volume. The 1991 operating profit was reduced by a $39.7 million
restructuring charge for voluntary early retirement and separation programs at
the Los Angeles Times and The Baltimore Sun. Excluding restructuring charges in
both years, operating profit would have declined 5.3 percent to $125.8 million
in 1992 from $132.8 million in 1991, as higher postretirement benefit expense
was only partly offset by lower newsprint expense between years.
PROFESSIONAL INFORMATION
Professional Information revenues and operating profit were as follows (in
millions):
<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Revenues......................................... $851.6 $935.4 $992.2
====== ====== ======
Operating Profit................................. $193.2 $114.3 $174.9
====== ====== ======
</TABLE>
Professional Information revenues increased 6.1 percent in 1993. Revenue
gains from the 1993 acquisition of three small health science publishing
companies and the fourth quarter 1992 acquisition of Wm. C. Brown
Communications, Inc., a major college publisher, more than offset an
approximately 15 percent decline in revenue at Matthew Bender, the company's
legal information publisher. Group revenues also benefited from the continued
growth of the Red Cross product line for Mosby-Year Book and market share gains
within college publishing.
The revenue decline at Matthew Bender is the result of the major
restructuring program initiated in 1992 to enhance future operations by
transforming product lines, re-engineering work processes, reducing staff by
more than 40 percent and sharply reducing facilities and related expenses. By
marketing combined practice sets in core areas, instituting service fee annual
subscription pricing and holding 1993 prices level with 1992 prices, Bender was
able to reduce subscriber attrition rates in key product lines. The continuation
of the price freeze in key areas and further marketing initiatives are expected
to further reduce Matthew Bender's revenues and operating profit in 1994. The
restructuring plan aims for a resumption of revenue and profit growth in 1995.
Operating profit for the group included restructuring charges in both
years, with a $25.3 million charge in 1993 for programs to streamline and
consolidate certain administrative functions within the training, college,
health science and technical publishing operations, and a $96 million charge in
1992 for the restructuring of Matthew Bender. Excluding these charges, the
group's operating profit would have been $200.2 million in 1993, down 4.8
percent from $210.3 million in 1992. The operating profit margin for the group,
excluding the restructuring charges in both years, would have been 20.2 percent
in 1993 and 22.5 percent in 1992.
In 1992, group revenues rose 9.8 percent on the strength of the legal and
flight information publishing companies. In 1992, operating profit declined to
$114.3 million from the $193.2 million reported in 1991. Excluding the impact of
the restructuring charge in 1992, group operating profit would have risen 8.9
percent to $210.3 million, reflecting strong revenue growth in flight
information, health sciences and technical publishing.
50
<PAGE> 53
CONSUMER MEDIA
Consumer Media revenues and operating losses were as follows (in millions):
<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Revenues......................................... $292.2 $277.8 $271.2
====== ====== ======
Operating Loss................................... $ (7.8) $ (3.5) $ (3.8)
====== ====== ======
</TABLE>
Revenue declines in 1993 were primarily attributable to consumer book
publishing, reflecting a drop in institutional sales. Consumer magazine revenues
also declined slightly as magazine advertising revenues remained weak
nationally. A revenue-driven decline in operating profit at consumer book
publishing was largely offset by improvements at consumer magazines stemming
from cost containment efforts.
Advertising revenues for the group improved slightly in 1992 as compared to
the prior year as the result of better pricing and special publications during
the Democratic and Republican conventions. Despite these gains, total revenues
for the group fell 4.9 percent due in part to the absence of revenues from
Broadcast Publications, Inc. which was sold in May 1991. In addition, an
accounting reclassification which netted outside agents commissions against the
related revenues reduced 1992 revenues by approximately $16.2 million. Lower
amortization of intangibles and the absence of operating losses generated by
Broadcast Publications, Inc. benefitted 1992 results.
LIQUIDITY
During 1993, Times Mirror generated $302.5 million in net cash from
continuing operations, compared with $304.0 million in 1992. Cash outlays in
1993 for restructuring activities were only partly offset by cash receipts from
newly-instituted annual service fees for certain legal information products.
During the first three quarters of 1994, Times Mirror generated $234.6 million
in net cash from continuing operations, compared with $212.0 million for the
same period in 1993. The increase primarily resulted from decreased cash outlays
for restructuring activities and interest offset by increased tax payments in
1994 as compared to 1993.
Net cash used in investing activities of continuing operations during 1993
totaled $195.3 million, as compared to $282.0 million used in 1992. Cash used in
acquisitions decreased $100.8 million in 1993. Net cash provided by investing
activities from continuing operations in the first three quarters of 1994
totaled $164.1 million compared to a use of $98.8 million, due mainly to cash
receipts of $334.8 million relating primarily to the sale of the broadcast
television properties, partially offset by a slight increase in capital
expenditures over the prior year. Total year spending on capital projects is
expected to be moderately higher in 1994 than 1993.
Net cash used in financing activities rose to $218.6 million in 1993 from
$9.7 million in the prior year, reflecting a net repayment of debt during 1993.
Times Mirror paid dividends to shareholders of $138.9 million and $138.8 million
in 1993 and 1992, respectively. During the first three quarters of 1994, cash
used in financing activities increased by $146.6 million over the comparable
prior period, which primarily reflected the repayment in early 1994 of $254.7
million of commercial paper using cash obtained from the sale of the broadcast
television properties. Dividends to shareholders of $104.2 million were paid
during the first three quarters of both years.
For further discussion, see "Post-Merger Dividend Policy" and "Post-Merger
Cash, Financings and Capital Resources" above.
51
<PAGE> 54
UNAUDITED PRO FORMA FINANCIAL DATA
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The unaudited pro forma condensed consolidated balance sheet of Times
Mirror has been derived from the historical consolidated balance sheet of Times
Mirror adjusted for certain costs and expenses to be incurred as a result of the
consummation of the Transactions. The pro forma condensed consolidated balance
sheet has been prepared assuming the Transactions occurred on September 25,
1994.
The pro forma condensed consolidated balance sheet should be read in
conjunction with the historical consolidated financial statements and the notes
thereto for the year ended December 31, 1993 included elsewhere in this
Prospectus. The pro forma condensed consolidated balance sheet is not
necessarily indicative of the financial position of Times Mirror that would have
actually been obtained had the Transactions been consummated on September 25,
1994.
ASSETS
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
--------------------------
HISTORICAL DEBIT CREDIT PRO FORMA
------------ ---------- ---------- ------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents................... $ 92,242 $1,306,000(a) $ 52,000(b)
12,232(c)
548,574(a) $ 785,436
Accounts receivable, less allowance for
doubtful accounts of $77,305.............. 524,549 524,549
Inventories................................. 148,472 148,472
Net assets of discontinued Cable
operations................................ 626,091 626,091(d)
Prepaid and other........................... 148,926 148,926
---------- ----------
Total Current Assets................... 1,540,280 1,607,383
Property, plant and equipment, at cost less
accumulated depreciation of $813,857........ 1,294,005 1,294,005
Goodwill...................................... 711,947 711,947
Other intangibles............................. 122,652 122,652
Deferred charges and other assets............. 543,956 543,956
---------- ----------
$4,212,840 $4,279,943
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable............................ $ 359,680 $ $ 359,680
Accrued liabilities......................... 45,768 45,768
Short-term debt............................. 128,044 103,574(a) 24,470
Other current liabilities................... 357,134 1,000(d) 356,134
---------- ----------
Total Current Liabilities.............. 890,626 786,052
Long-term debt................................ 749,044 1,363,000(d) $1,306,000(a)
445,000(a) 247,044
Other liabilities and deferrals............... 654,177 654,177
---------- ----------
Total Liabilities...................... 2,293,847 1,687,273
Cox Class A common stock...................... 932,000(d) 932,000(e)
Shareholders' Equity
Series A common stock....................... 98,700 1,345(f)
16,563(g) 80,792
Series B common stock.......................
Series C common stock, convertible.......... 31,259 31,259
Series A preferred stock.................... 412,000(h) 412,000
Series B preferred stock.................... 350,000(g) 350,000
Additional paid-in capital.................. 167,331 167,331
Retained earnings........................... 1,707,446 52,000(b) 1,669,909(d)
12,232(c)
932,000(e)
60,198(f)
333,437(g)
412,000(h) 1,575,488
---------- ----------
2,004,736 2,616,870
---------- ----------
Less treasury stock, at cost................ 61,543 61,543(f) 0
Less guaranteed debt of ESOP................ 24,200 24,200
---------- ----------
Total Shareholders' Equity............. 1,918,993 2,592,670
---------- ----------
$4,212,840 $4,279,943
========== ==========
</TABLE>
52
<PAGE> 55
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
The unaudited pro forma condensed consolidated statements of income of
Times Mirror have been derived from the historical consolidated statements of
income of Times Mirror adjusted for interest expense expected to be reduced as a
result of the Transactions. The pro forma condensed consolidated statements of
income have been prepared assuming that the transaction occurred on January 1,
1993.
The pro forma condensed consolidated statements of income should be read in
conjunction with the historical consolidated financial statements and the notes
thereto for the year ended December 31, 1993 included elsewhere in this
Prospectus. The pro forma condensed consolidated statements of income are not
necessarily indicative of the financial results of Times Mirror that would have
actually been obtained had the Transactions been consummated on January 1, 1993.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
---------------------------------------------
PRO FORMA
ADJUSTMENTS
-----------------
HISTORICAL DEBIT CREDIT PRO FORMA
---------- ------ ------ ----------
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Revenues........................................... $3,243,749 $3,243,749
Cost of sales...................................... 1,759,052 1,759,052
Selling, general and administrative................ 1,215,491 1,215,491
Restructuring charges.............................. 80,164 80,164
---------- ----------
Operating profit................................... 189,042 189,042
Interest expense................................... (84,054) 50,033(i) (34,021)
Other, net......................................... 4,797 4,797
---------- ----------
Income from continuing operations
before income taxes.............................. 109,785 159,818
Income taxes....................................... 58,116 20,514(i) 78,630
---------- ----------
Income from continuing operations.................. $ 51,669 $ 81,188
========= =========
Earnings per common share from continuing
operations....................................... $ .40 $ .19
===== =====
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 25, 1994
---------------------------------------------
PRO FORMA
ADJUSTMENTS
-----------------
HISTORICAL DEBIT CREDIT PRO FORMA
---------- ------ ------ ----------
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
Revenues........................................... $2,400,068 $2,400,068
Cost of sales...................................... 1,291,433 1,291,433
Selling, general and administrative................ 921,880 921,880
---------- ----------
Operating profit................................... 186,755 186,755
Interest expense................................... (51,757) 33,964(i) (17,793)
Nonrecurring gain.................................. 22,099 22,099
Other, net......................................... 2,062 2,062
---------- ----------
Income from continuing operations
before income taxes.............................. 159,159 193,123
Income taxes....................................... 79,774 13,925(i) 93,699
---------- ----------
Income from continuing operations.................. $ 79,385 $ 99,424
========= =========
Earnings per common share from continuing
operations....................................... $ .61 $ .49
===== =====
</TABLE>
53
<PAGE> 56
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENTS
OF INCOME
(a) To record $1.306 billion of new indebtedness incurred by Times Mirror
immediately prior to the Merger. Cash proceeds from this debt were or will
be used to purchase or redeem $100 million of fixed rate public notes, all
outstanding commercial paper and short-term borrowings related to the debt
tender offer. There was $103,574,000 of commercial paper outstanding at
September 25, 1994, however, additional short-term borrowings were incurred
in mid-December 1994 to fund the debt tender offer. The debt tender offer
ended on December 8, 1994 and resulted in the tender of approximately $345
million of debt. These interim borrowings were paid off at or prior to the
completion of the Transactions.
(b) Expenses incurred in connection with the Transactions are estimated at
approximately $52 million, consisting of legal, accounting, investment
banking fees, shareholder litigation costs and costs and expenses incurred
for the registration of the capital stock of New Times Mirror. These costs
have been reflected in the pro forma balance sheet as a reduction of
retained earnings, as these costs relate to the disposition of Times
Mirror's cable television business ("Times Mirror Cable") and the
redemption of stockholder interests.
(c) Times Mirror paid a premium to retire the approximately $345 million of
fixed rate public notes, as described in note (a) above. The premium and
related costs of approximately $12.2 million were recorded as an
extraordinary loss in the fourth quarter of 1994, reducing net income. This
extraordinary loss is not reflected in the pro forma statements of income.
(d) To record the disposition of Times Mirror Cable. Proceeds of $2.296 billion
are comprised of approximately $932 million of Cox Class A Common Stock,
received by the Other Stockholders in the Merger, and the assumption of
$1.364 billion in debt and accrued interest by Cox. The gain is expected to
be approximately $1.6 billion. This gain is not reflected in the pro forma
statements of income.
(e) To reflect the deemed distribution of approximately $932 million of the
proceeds from the sale of Times Mirror Cable. These proceeds are in the
form of Cox Class A Common Stock distributed by Cox directly to the Other
Stockholders in the Merger.
(f) To retire treasury stock outstanding as of the Merger date.
(g) To record the issuance of $350 million, or 16,563,343 shares, of Series B
Preferred Stock assumed to be exchanged for Series A Common Stock.
Stockholders electing to receive Series B Preferred Stock will receive it
in exchange for a like number of shares of Common Stock. Each share of
Series B Preferred Stock has a stated value of $21.131 per share. The
Series B Preferred Stock is stated at liquidation value.
(h) To record the issuance of $412 million of Series A Preferred Stock to the
Chandler Trusts. The Series A Preferred Stock is stated at liquidation
value.
(i) To reduce interest expense assuming all commercial paper and $500 million
of fixed rate public notes outstanding as of January 1, 1993 were retired
using cash proceeds from the new indebtedness or were assumed by Cox
pursuant to the Merger.
(j) The pro forma earnings per share calculation was determined on the
aggregate number of shares of Series A and Series C Common Stock assumed
outstanding at January 1, 1993, assuming that the issuance of the Series B
Preferred Stock reduces the number of Series A shares by 16,563,343. The
Series A and Series B Preferred Stock are not common stock equivalents for
earnings per share purposes. The estimated preferred stock dividends of
$59.8 million for 1993 and $44.9 million for the first three quarters of
1994 have been deducted from income from continuing operations for purposes
of determining earnings per common share from continuing operations. The
preferred stock dividends have been estimated using a 9% dividend rate for
the Series A Preferred Stock and a 6.5% dividend rate for the Series B
Preferred Stock. Subsequent to the Merger, dividends on Common Stock are
expected to be reduced as described under "Dividend Policy."
54
<PAGE> 57
DIVIDEND POLICY
New Times Mirror has declared a dividend on the Common Stock of $.27 per
share payable on March 10, 1995 to stockholders of record as of February 22,
1995. Following payment of this dividend, New Times Mirror expects to pay
quarterly dividends on its Common Stock at a rate below the rate previously paid
with respect to Old Times Mirror Common Stock. Management's review of factors
being considered in recommending a new dividend level would suggest that it
would be appropriate to reduce the dividend level by between 66 2/3% and 80% to
an annual dividend of between $.22 and $.36 per share compared to the $1.08
previously paid on Old Times Mirror Common Stock. The dividend reduction is
intended to bring the dividend policy more in line with the policy of other
publicly traded companies with comparable businesses and to provide additional
funds for investment in new business opportunities. As part of the settlement of
the Stockholders' Litigation, the Board of Directors of the Company approved the
Initial New Times Mirror Dividend Policy. The Initial New Times Mirror Dividend
Policy provides that the annual dividend on Common Stock, beginning in June 1995
and continuing for a period of three years, will be no less than $.24 per share.
The Initial New Times Mirror Dividend Policy is subject to the exercise by the
New Times Mirror Board of Directors of its fiduciary obligations and the
exercise of the Board's business judgment in connection with, among other
things, the declaration of future dividends, as well as to any and all
requirements of Delaware law or any other applicable law, and to any and all
covenants, restrictions or limitations in connection with any financing.
Following the expiration of the Initial New Times Mirror Dividend Policy, any
policy of New Times Mirror regarding the payment of common dividends will depend
on New Times Mirror's future earnings, capital requirements, financial condition
and other factors.
The Series A Preferred Stock, all of which will be held by the Chandler
Trusts, will be entitled to quarterly dividends at a rate which will be
established at its issuance, such that the Series A Preferred Stock would trade
at par on the issuance date on a fully distributed basis. The holders of Series
B Preferred Stock will be entitled to cumulative quarterly dividends at an
annual rate equal to at least 6.5% of the stated value of the Series B Preferred
Stock. See "Description of Preferred Stock."
For a discussion of Times Mirror's dividend payment history, see "Price
Range and Dividend Data."
55
<PAGE> 58
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers of New Times Mirror are identical to the executive
officers of Old Times Mirror prior to the Transactions except that Mr. Larry W.
Wangberg, who was Senior Vice President of Old Times Mirror and President and
Chief Executive Officer of Times Mirror Cable Television, Inc., is not an
executive officer of New Times Mirror. The executive officers of New Times
Mirror are listed below. Executive officers are elected to serve until they
resign or are removed, or are otherwise disqualified to serve, or until their
successors are elected and qualified. Except as indicated below, all such
officers were employed by Old Times Mirror for more than five years.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES OFFICER
NAME AGE WITH NEW TIMES MIRROR SINCE(1)
- ----------------------------- --- ------------------------------------------------- --------
<S> <C> <C> <C>
Robert F. Erburu............. 64 Chairman of the Board, President and Chief 1961
Executive Officer
Curtis A. Hessler............ 50 Executive Vice President 1991(2)
Richard T. Schlosberg III.... 50 Executive Vice President 1990
Edward E. Johnson............ 50 Senior Vice President 1984
Donald F. Wright............. 60 Senior Vice President 1988
Patrick A. Clifford.......... 53 Group Vice President 1990
Ann E. Dilworth.............. 47 Group Vice President, New Consumer Media 1992(3)
John H. Zenger............... 63 Group Vice President 1992(4)
James F. Guthrie............. 50 Vice President and Chief Financial Officer 1993(5)
James R. Simpson............. 54 Vice President, Human Resources 1983
Thomas Unterman.............. 50 Vice President and General Counsel 1992(6)
Efrem Zimbalist III.......... 47 Vice President, Strategic Development 1993(7)
Debra A. Gastler............. 41 Vice President, Taxes 1994(8)
Michael N. Liebhold.......... 50 Vice President, Technology 1994(9)
Stephen C. Meier............. 44 Vice President, Administration and Community 1989
Affairs
Thanos Triant................ 48 Vice President, Information Systems 1994(10)
Stuart K. Coppens............ 46 Controller and Chief Accounting Officer 1994(11)
Alan L. Ross................. 50 Treasurer 1981
O. Jean Williams............. 46 Secretary and Associate General Counsel 1989
</TABLE>
- ---------------
(1) The date indicated relates to the date on which such person first became an
officer of Old Times Mirror. All of the executive officers of New Times
Mirror, other than Robert F. Erburu, Curtis A. Hessler, Thomas Unterman,
James F. Guthrie and O. Jean Williams, were elected to the positions
indicated effective January 30, 1995. Messrs. Erburu, Hessler, Unterman and
Guthrie and Ms. Williams were elected to the positions indicated effective
June 3, 1994.
(2) Curtis A. Hessler was elected as an executive officer of Old Times Mirror
effective February 15, 1991. Mr. Hessler was an executive of UNISYS
Corporation from June 1984 to February 1991, serving as vice chairman at
the time of his departure.
(3) Ann E. Dilworth was elected as an executive officer of Old Times Mirror
effective August 3, 1992. She was president of Addison-Wesley General and
International Publishing Company from 1988 to 1991.
(4) John H. Zenger was elected as an executive officer of Old Times Mirror
effective March 26, 1992. Prior thereto, he had been chairman and chief
executive officer of Zenger-Miller, Inc. since 1977.
(5) James F. Guthrie was elected as an executive officer of Old Times Mirror
effective March 4, 1993. Prior thereto, he had been senior vice president
and chief financial officer of Times Mirror Cable Television, Inc. since
1982.
(6) Thomas Unterman was elected as an executive officer of Old Times Mirror
effective October 1, 1992. Prior thereto, he had been a partner at Morrison
& Foerster since 1986.
(7) Efrem Zimbalist III was elected as an executive officer of Old Times Mirror
effective March 4, 1993. Mr. Zimbalist was chairman and chief executive
officer of Correia Art Glass, Inc. from 1978 until he joined the Company in
July 1992.
(8) Debra A. Gastler was elected as an executive officer of Old Times Mirror
effective January 3, 1994. Prior thereto, she had been Vice President, Tax
of Pacific Enterprises since 1990 and director of taxes of Pacific
Enterprises since 1987.
56
<PAGE> 59
(9) Michael Liebhold was elected as an executive officer of Old Times Mirror
effective March 3, 1994. Prior thereto, he was lead research scientist and
manager at Apple Computer, Inc. in the area of advanced media systems since
1984, and was senior scientist, Media Architecture Research, Advanced
Technology Group at the time of his departure.
(10) Thanos Triant was elected as an executive officer of Old Times Mirror
effective March 3, 1994. He was director, systems architecture, of Sun
Microsystems since 1992 and director of management systems of Sun
Microsystems since 1990. Prior thereto, he was senior vice president,
Business Development and Technology of McGraw Hill Financial Services since
1989.
(11) Stuart K. Coppens was elected as an executive officer of Old Times Mirror
effective May 3, 1994. Prior thereto, he had been Vice President, Finance
at Richard D. Irwin since 1991. He was Director of Accounting at Times
Mirror Cable Television, Inc. from 1983-1991. Both Richard D. Irwin and
Times Mirror Cable Television, Inc. are wholly-owned subsidiaries of the
Company.
DIRECTORS
The Board of Directors of New Times Mirror is identical to the Board of
Directors of Times Mirror prior to the Transactions except that the Board of
Directors of New Times Mirror includes one additional member, Mr. C. Michael
Armstrong. Like Old Times Mirror, New Times Mirror has three classes of
directors, the terms of office of which will expire, respectively, at the annual
meetings of stockholders in 1995, 1996 and 1997. Successors to any directors
whose terms are expiring are elected to three-year terms and hold office until
their successors are elected and qualified. Unless otherwise indicated: (i) the
business address for each person listed below is Times Mirror Square, Los
Angeles, California 90053 and (ii) each individual listed below is a citizen of
the United States.
CLASS III DIRECTORS
Class III directors will serve until the 1995 Annual Meeting of New Times
Mirror and until their respective successors are elected and qualified.
OTIS CHANDLER, 67, is owner of the Vintage Museum of Transportation and
Wildlife located in Oxnard, California. He has been a director of Times Mirror
since 1962. He served as Chairman of the Executive Committee of the Board of
Directors of Times Mirror from January 1, 1986 through December 31, 1991. Mr.
Chandler also served as Chairman of the Board and Editor-in-Chief of Times
Mirror from 1981 through 1985 and as Vice Chairman of the Board from 1968
through 1980. He was Publisher of the Los Angeles Times from 1960 through 1980.
Mr. Chandler is a member of the Nominating Committee. He is a graduate of
Stanford University. Mr. Chandler is also a trustee of the Chandler Trusts and a
director of Chandis Securities Company.
ROBERT F. ERBURU, 64, is Chairman of the Board, President and Chief
Executive Officer of Times Mirror. A director of Times Mirror since 1968, Mr.
Erburu served as President of Times Mirror from 1974 through 1986 and reassumed
that position on January 1, 1994. He has been Chief Executive Officer of Times
Mirror since 1981 and Chairman of the Board since 1986. He is a member of the
Executive Committee and the Nominating Committee and is Chairman of the
Retirement Plan Committee. Mr. Erburu graduated from the University of Southern
California with a B.A. degree in Journalism and holds a J.D. degree from Harvard
Law School. He is also a director of Tejon Ranch Company. Mr. Erburu is chairman
of the Board of Trustees of The Huntington Library, Art Collections and
Botanical Gardens and of the J. Paul Getty Trust, as well as a trustee of The
Ahmanson Foundation, and several other charitable foundations. He is a director
of the Council on Foreign Relations and the Tomas Rivera Center and is a Fellow
of the American Academy of Arts and Sciences. In addition, he is a member of the
Business Council, the Business Roundtable and the California Business
Roundtable.
CLAYTON W. FRYE, JR., 64, is the Senior Associate of Laurance S.
Rockefeller. He has served in that capacity since 1973 and is responsible for
overseeing and directing Mr. Rockefeller's business, real estate and investment
interests, among other things. Mr. Frye has been a director of Times Mirror
since 1988 and is Chairman of the Executive Personnel and Compensation Committee
and a member of the Executive Committee, the Audit Committee and the Finance
Committee. Mr. Frye is a graduate of Stanford University,
57
<PAGE> 60
where he received both an A.B. and an M.B.A. degree. He is also a director of
Tejon Ranch Company and several privately-held companies.
DAVID LAVENTHOL, 61, is Editor-at-Large of Times Mirror. He was President
of Times Mirror from January 1, 1987 to December 31, 1993 and Publisher and
Chief Executive Officer of the Los Angeles Times from August 31, 1989 to
December 31, 1993. He has been a director since 1987 and is a member of the
Retirement Plan Committee. He served as a Senior Vice President of Times Mirror
in 1986 and as a Vice President from 1981 through 1985. Mr. Laventhol also
served as Publisher and Chief Executive Officer of Newsday, Inc. from 1978 until
1986, having been an officer of that subsidiary of Times Mirror since 1971. He
graduated from Yale University and holds a master of arts degree from the
University of Minnesota. Mr. Laventhol is a director of the United Negro College
Fund and is Chairman of the Board of Trustees of the Museum of Contemporary Art
and Chairman of the Board of International Press Institute.
HAROLD M. WILLIAMS, 66, is President and Chief Executive Officer of the J.
Paul Getty Trust in Los Angeles, a charitable trust devoted to the arts and
humanities. Among its activities, the Trust operates the Getty Museum, an
internationally renowned collection of fine arts, in Malibu, California. Before
assuming his present position in 1981, Mr. Williams served approximately four
years as Chairman of the SEC in Washington, D.C. Mr. Williams has been a
director since 1983 and is a member of the Executive Committee, the Audit
Committee and the Finance Committee. He is a graduate of the University of
California at Los Angeles and holds a J.D. degree from Harvard Law School. Mr.
Williams is also a director of American Medical International, Inc. and Sun
America, Inc.
CLASS I DIRECTORS
Class I directors will serve until the 1996 Annual Meeting of New Times
Mirror and until their respective successors are elected and qualified.
C. MICHAEL ARMSTRONG, 56, is Chairman of the Board and Chief Executive
Officer of Hughes Aircraft Company, a subsidiary of General Motors Corporation.
Prior to assuming his present position in 1992, Mr. Armstrong served as Chairman
of the Board of IBM World Trade Corporation from 1989 to 1992. Mr. Armstrong has
a Bachelor of Science degree from Miami University and is a graduate of the
Dartmouth Institute. Mr. Armstrong is also a director of Travelers Corp. and a
trustee of the California Institute of Technology and Johns Hopkins University.
GWENDOLYN GARLAND BABCOCK, 59, has been a private investor for more than
five years. She has been a director of Times Mirror since 1976 and is a member
of the Finance Committee. Mrs. Babcock is a graduate of Bryn Mawr College. She
is a member of the board of overseers of The Huntington Library, Art Gallery and
Botanical Gardens. Mrs. Babcock is also a trustee of the Chandler Trusts and a
director of Chandis Securities Company.
DONALD R. BEALL, 56, is Chairman of the Board and Chief Executive Officer
of Rockwell International Corporation. Prior to assuming his present position in
February 1988, Mr. Beall served as President and Chief Operating Officer of
Rockwell Corporation for ten years. He has been a director of Times Mirror since
1990 and is a member of the Executive Committee, the Executive Personnel and
Compensation Committee and the Nominating Committee. Mr. Beall received a
bachelor of science degree from San Jose State University and a master of
business administration degree from the University of Pittsburgh. He is also a
director of Rockwell International Corporation, Amoco Corporation and Procter &
Gamble Co.
JOAN A. PAYDEN, 63, is a founder, president and chief executive officer of
Payden & Rygel, an investment management firm registered under the 1940
Investment Company Act which manages domestic and global fixed-income
portfolios. She has held those positions since the formation of the firm in
1983. Prior thereto, Ms. Payden was the managing partner of the west coast
operation of Scudder, Stevens & Clark. A director of Times Mirror since 1993,
Ms. Payden is a member of the Audit Committee and the Finance Committee. Ms.
Payden has a B.A. in Mathematics and Physics from Trinity College in Washington,
D.C. and completed graduate study at Columbia University as well as the Advanced
Management Program at Harvard Business School. She is a chartered financial
analyst and is a member of the Executive Committee of the Los Angeles
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<PAGE> 61
Chamber of Commerce as well as a trustee of the Pacific Asia Museum and Loyola
Marymount University. She is also a member of the Board of Visitors of the
Anderson Graduate School of Management at UCLA.
WARREN B. WILLIAMSON, 66, is Chairman and Chief Executive Officer of
Chandis Securities Company and Chairman of the Board of Trustees of the Chandler
Trusts. In 1989, Mr. Williamson retired from Crowell, Weedon and Co., a stock
brokerage firm with which he had been associated since 1970. He has been a
director of Times Mirror since 1977, and is Chairman of the Executive Committee,
Chairman of the Finance Committee and a member of the Executive Personnel and
Compensation Committee. Mr. Williamson is a graduate of Claremont Men's College.
He is also a director of Chandis Securities Company and Hollywood Park, Inc. In
addition, Mr. Williamson is Chairman of the Trustees of the Art Center College
of Design.
CLASS II DIRECTORS
Class II directors will serve until the 1997 Annual Meeting of New Times
Mirror and until their respective successors are elected and qualified.
JOHN E. BRYSON, 51, is Chairman of the Board and Chief Executive Officer of
SCEcorp and its principal subsidiary, Southern California Edison Company. He was
elected to his current positions in October 1990 after serving five years as
Executive Vice President and Chief Financial Officer of Southern California
Edison Company. Mr. Bryson has been a director of Times Mirror since 1991 and is
a member of the Executive Committee, the Executive Personnel and Compensation
Committee and the Audit Committee. He holds a Bachelor of Arts degree from
Stanford University and a J.D. degree from Yale Law School. Mr. Bryson is also a
director of SCEcorp, Southern California Edison Company and First Interstate
Bancorp.
BRUCE CHANDLER, 58, has been a private investor since 1989. From 1968 to
1989, he practiced law in the State of California. He has been a director of
Times Mirror since 1975 and is a member of the Finance Committee. Mr. Chandler
is a graduate of the University of Southern California and holds a J.D. degree
from the University of San Diego School of Law. He is also a trustee of the
Chandler Trusts and a director of Chandis Securities Company.
DR. ALFRED E. OSBORNE, JR., 50, is Director of the Entrepreneurial Studies
Center and Associate Professor of Business Economics at the Anderson School at
UCLA. He has been with UCLA since 1972. From August 1977 to July 1979, Dr.
Osborne served as a Brookings Institution Economic Policy Fellow at the SEC. He
has been a director of Times Mirror since 1980 and is Chairman of the Audit
Committee and a member of the Executive Personnel and Compensation Committee and
the Nominating Committee. Dr. Osborne holds a bachelor's degree in electrical
engineering, a master's degree in economics, a master of business administration
in finance and a doctorate in business-economics, all from Stanford University.
He is also a director of First Interstate Bank of California, Greyhound Lines,
Inc., Nordstrom, Inc., ReadiCare, Inc., Seda Specialty Packaging Corporation and
United States Filter Corporation. He is an independent general partner of
Technology Funding Venture Partners V, a 1940 Investment Company Act company.
WILLIAM STINEHART, JR., 50, is a partner in the law firm of Gibson, Dunn &
Crutcher where he has practiced law since 1969. Gibson, Dunn & Crutcher has
provided legal services to Times Mirror and its subsidiaries for many years,
including service in connection with the Transactions, and is expected to do so
in the future. Mr. Stinehart has been a director of Times Mirror since 1991 and
is a member of the Executive Committee, the Executive Personnel and Compensation
Committee and the Finance Committee. He holds a Bachelor of Arts degree from
Stanford University and a J.D. degree from UCLA Law School, and is a member of
the Board of Trustees of the Harvey and Mildred Mudd Foundation. He is also a
director of Chandis Securities.
DR. EDWARD ZAPANTA, 55, is a practicing physician providing neurosurgical
care in the Los Angeles area. He has been in private practice since 1970. Dr.
Zapanta has been a director of Times Mirror since 1988 and is Chairman of the
Nominating Committee and a member of the Finance Committee. Dr. Zapanta attended
the University of California at Los Angeles, received his medical doctor's
degree from the University of Southern California School of Medicine, and
currently serves as a trustee of the University of Southern California.
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<PAGE> 62
Dr. Zapanta is also Senior Medical Director of HealthCare Partners and a
director of Southern California Edison Company.
CERTAIN RELATIONSHIPS
Four of Times Mirror's present directors (Gwendolyn Garland Babcock, Bruce
Chandler, Otis Chandler and Warren B. Williamson) are cousins and are among the
seven trustees of Chandler Trust No. 1 and Chandler Trust No. 2. The other three
trustees are Camilla Chandler Frost, Douglas Goodan and Judy C. Webb. Camilla
Chandler Frost is the sister of Otis Chandler and a cousin of the other
directors named above. Douglas Goodan and Judy C. Webb are also cousins of the
directors named above. The trustees and other relatives are the beneficiaries of
the Chandler Trusts. At the start of business on February 1, 1995, the Chandler
Trusts owned in the aggregate 10,087,114 shares of New Times Mirror Series A
Common Stock and 11,100,814 shares of New Times Mirror Series C Common Stock,
and Chandis Securities owned 8,581,432 shares of New Times Mirror Series A
Common Stock and 9,656,432 shares of New Times Mirror Series C Common Stock.
Substantially all of the outstanding stock of Chandis Securities Company is
owned by one of the Chandler Trusts. In addition to their interests in shares
held by the Chandler Trusts, Mrs. Babcock, her husband and children hold an
aggregate of 9,680 shares of New Times Mirror Series A Common Stock and 4,020
shares of New Times Mirror Series C Common Stock, and Otis Chandler
(individually and as trustee), his wife and children hold an aggregate of 69,479
shares of New Times Mirror Series A Common Stock and 95,767 shares of New Times
Mirror Series C Common Stock. At the start of business on February 1, 1995, this
general family group owned directly or indirectly an aggregate of 18,945,185
shares of New Times Mirror Series A Common Stock and 21,048,813 shares of New
Times Mirror Series C Common Stock (including shares owned by the Chandler
Trusts and Chandis Securities Company), constituting 19.35% of the shares of New
Times Mirror Series A Common Stock and 68.43% of the New Times Mirror Series C
Common Stock outstanding on that date, representing 56.58% of the voting
interests of all outstanding shares of New Times Mirror Common Stock.
The persons named above and the general family group of which they are
members may be deemed to be "parents" of New Times Mirror within the meaning of
the Securities Act of 1933, as amended. Except as identified in "Ownership of
Common Stock" below, no other person was known by New Times Mirror to own
beneficially more than 5% of the outstanding voting securities of New Times
Mirror at the start of business on February 1, 1995. On that date, as indicated
below, all officers and directors owned beneficially, directly or indirectly, an
aggregate of 25,091,612 shares (25.63%) of the New Times Mirror Series A Common
Shares and 25,055,171 shares (81.45%) of the New Times Mirror Series C Common
Shares, representing 67.98% of the voting interests of all outstanding shares of
New Times Mirror Common Shares. This includes shares owned by members of the
general family group referred to above, the families of other officers and
directors and shares owned by the Chandler Trusts, Chandis Securities Company
and Pfaffinger Foundation (a non-profit corporation of which Robert F. Erburu is
a trustee) and various benefit plans for employees of New Times Mirror and its
subsidiaries.
COMMITTEES OF THE BOARD OF DIRECTORS OF NEW TIMES MIRROR
The standing committees of the Board of Directors of New Times Mirror are
identical to the standing committees of the Board of Old Times Mirror, and
include an Executive Committee, an Audit Committee, and Executive Personnel and
Compensation Committee, a Finance Committee, a Nominating Committee and a
Retirement Plan Committee. The functions of each of these six committees are
described and the members of each are listed below.
The Executive Committee may exercise substantially all authority of the
Board of Directors with specific exceptions provided by law and New Times
Mirror's bylaws. The members of the Executive Committee are Warren B. Williamson
(Chairman), Donald R. Beall, John E. Bryson, Robert F. Erburu, Clayton W. Frye,
Jr., William Stinehart, Jr. and Harold M. Williams.
Each year the Audit Committee will review New Times Mirror's audit plan,
the scope of activities of the independent auditors and of internal auditors,
the results of the audit after completion, and the fees for
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<PAGE> 63
services performed during the year, and recommend to the Board of Directors the
firm to be appointed as independent auditors. During a portion of each meeting
this Committee will meet with representatives of the independent auditors
without any officers or employees of Times Mirror present. The members of the
Audit Committee are Dr. Alfred E. Osborne, Jr. (Chairman), John E. Bryson,
Clayton W. Frye, Jr., Joan A. Payden and Harold M. Williams, none of whom is
either an officer or employee of New Times Mirror.
The Executive Personnel and Compensation Committee will administer the
Company's Key Employee Long-Term Incentive Plan, Executive Stock Option and
Restricted Stock Plans, determine the compensation of key officers of New Times
Mirror, authorize and approve bonus-incentive compensation programs for
executive personnel, including management succession and promotions. Clayton W.
Frye, Jr. (Chairman), Donald R. Beall, John E. Bryson, Dr. Alfred E. Osborne,
Jr., William Stinehart, Jr. and Warren B. Williamson, none of whom will be
either an officer or employee of New Times Mirror, are the members of the
Executive Personnel and Compensation Committee.
The Finance Committee will study and will make recommendations to the Board
of Directors regarding the investment of assets of New Times Mirror's pension
and profit sharing plans. Warren B. Williamson (Chairman), Gwendolyn Garland
Babcock, Bruce Chandler, Clayton W. Frye Jr., Joan A. Payden, William Stinehart,
Jr., Harold M. Williams and Dr. Edward Zapanta are the members of the Finance
Committee.
The Nominating Committee will consider and recommend to the Board nominees
for possible election to the Board of Directors and will consider other matters
pertaining to the size and composition of the Board of Directors and its
Committees. The members of the Nominating Committee are Dr. Edward Zapanta
(Chairman), Donald R. Beall, Otis Chandler, Robert F. Erburu and Dr. Alfred E.
Osborne, Jr. The Nominating Committee will give appropriate consideration to
qualified persons recommended by shareholders if such recommendations are
accompanied by information sufficient to enable the Nominating Committee to
evaluate the qualifications of the persons recommended. Such recommendations
must be submitted in writing to the Secretary of New Times Mirror no later than
December 31 preceding the annual meeting of shareholders at which directors are
to be elected.
The Retirement Plan Committee will be responsible for review, evaluation
and oversight of pension, profit-sharing and other retirement-oriented programs
of New Times Mirror and its subsidiaries and the performance of these programs
in relation to their purposes. Robert F. Erburu (Chairman) and David Laventhol
are the members of the Retirement Plan Committee.
COMPENSATION OF DIRECTORS
The Board of Directors of New Times Mirror is comprised of fifteen
directors, two of whom are salaried employees of New Times Mirror. Directors who
are not employees of New Times Mirror receive an annual retainer of $25,000 and
a fee of $800 for attendance at each meeting of the Board of Directors and for
attendance at each meeting of a committee of the board of which they are
members, except that the Chairmen of all the Committees except the Retirement
Plan Committee each receive an additional annual retainer of $3,000. Directors'
retainers, committee and meeting attendance fees may be deferred under the
Deferred Compensation Plan for Directors, adopted by Old Times Mirror in 1994
and which was assumed by New Times Mirror upon consummation of the Transactions.
Under the plan, such amounts may be distributed, in accordance with the
director's election at the time the deferral commitment is made, upon the
January following: (i) termination of service, (ii) the later of termination of
service or attainment of ages 55, 60, 65 or 70, or (iii) after a predetermined
number of years. The director's deferral agreement may provide either a lump sum
distribution or annual installment payments over 5, 10 or 15 years. In addition,
certain provisions have been made for hardship and discounted in-service and
change in control distributions. The crediting rate credited on the accounts,
which takes into consideration the underlying investments, if any, and plan
expenses, is determined annually by a committee appointed by the Executive
Personnel and Compensation Committee of the Board of Directors. Survivors are
entitled to receive the unpaid account balance if a director dies prior to
benefit commencement and payments as scheduled if a director dies following
commencement.
Alternatively, such non-employee directors may elect to receive a
percentage of their retainers and fees in the form of stock options under the
Directors Plan, which was assumed by New Times Mirror. Options
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granted under the Directors Plan have an exercise price equal to the market
value of a share of New Times Mirror Series A Common Stock on the date of grant,
are exercisable from grant and are exercisable for a number of shares equal to
the amount of retainer and fees that the director has elected to receive in the
form of options, divided by the grant date present value of one option as
determined pursuant to the Black-Scholes option valuation method. For each
director who is not an employee, New Times Mirror will provide $150,000 life
insurance coverage and $100,000 travel accident insurance while traveling on New
Times Mirror business, under plans assumed by New Times Mirror. Salaried
employees receive no additional compensation or benefits for their services as
directors.
A director with a least five years of service is entitled to a retirement
benefit payable for the number of years of service as an outside director under
The Times Mirror Company Pension Plan for Directors. New Times Mirror assumed
this plan upon consummation of the Transactions. The amount of the annual
benefit upon commencement of retirement is equal to the sum of the annual
retainer in effect at the time of termination plus attendance fees for Board
meetings and service on committees paid or payable for the calendar year
preceding termination. In order to receive a benefit, a director must be a
member of the Board in good standing at the time of his or her retirement and be
available while receiving benefits for consultation upon request.
COMPENSATION OF NEW TIMES MIRROR EXECUTIVES
Stockholders interested in the compensation paid by Old Times Mirror to
persons who became executive officers of New Times Mirror may refer to Old Times
Mirror's Proxy Statement for its 1994 Annual Meeting of Stockholders, a copy of
which is on file with the Commission and is available without charge to any
person, including any beneficial owner, to whom this Prospectus is delivered,
upon written or oral request to Secretary, The Times Mirror Company, Times
Mirror Square, Los Angeles, California 90053, telephone (213) 237-3700.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Times Mirror has an agreement with Mr. Otis Chandler, a director of Times
Mirror, under which he received a salary at the rate of $300,000 per year until
November 30, 1992, the date of his retirement as an employee of Times Mirror.
Following termination of his active employment, Mr. Chandler is entitled to
receive supplemental payments from Times Mirror sufficient to provide an
aggregate of $300,000 each year from (i) payments made to or for Mr. Chandler's
account under Times Mirror's Pension Plan and ESOP, and (ii) supplemental
payments to be made by Times Mirror. That agreement also provides for payment of
supplemental benefits to Mr. Chandler's widow following his death sufficient to
provide her, from her survivor's annuity under the Company's Pension Plan and a
supplemental benefit from Times Mirror, an aggregate of one-half of the amount
Mr. Chandler is entitled to receive after termination of his active employment.
Mr. and Mrs. Chandler are also entitled to continuation of life insurance on Mr.
Chandler's life and medical and dental coverage provided for certain active and
retired officers. In connection with the consummation of the Transactions, Mr.
Chandler's agreement with Times Mirror was assumed by New Times Mirror.
Old Times Mirror entered into an agreement with Mr. Larry W. Wangberg, who
at the time was Senior Vice President of Old Times Mirror and President and
Chief Executive Officer of Times Mirror Cable Television, Inc. ("TMCT"), under
which he was awarded a performance bonus of $1,000,000 upon completion of the
Merger. Mr. Wangberg resigned from his positions with Old Times Mirror and TMCT
effective as of January 31, 1995.
Gibson, Dunn & Crutcher has provided legal services to the Company and its
subsidiaries for many years, including services in connection with the
Transactions, and is expected to do so in the future. William Stinehart, Jr., a
partner of Gibson, Dunn & Crutcher, is a director of New Times Mirror.
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OWNERSHIP OF COMMON STOCK
With the exception of The Times Mirror Employee Stock Ownership Trust which
held 7.43% of the outstanding shares of Series C Common Stock (see "Employee
Benefit Plans" below), the following persons are the only persons known to the
Company to be "beneficial owners" (as that term is defined in the rules of the
SEC) of more than 5% of any class of the Company's voting securities outstanding
at the start of business on February 1, 1995, (except as otherwise noted).
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SERIES A PERCENT OF SERIES C PERCENT OF AGGREGATE
BENEFICIAL OWNER COMMON STOCK SERIES COMMON STOCK SERIES VOTING POWER
- --------------------------------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
The Trustees of the Chandler
Trusts......................... 18,668,546* 19.07% 20,757,246* 67.48% 55.79%
c/o Chandis Securities Company
350 West Colorado Boulevard
Suite 430
Pasadena, CA 91105
Gwendolyn Garland Babcock........ 18,670,558* 19.07% 20,757,886* 67.48% 55.80%
c/o Chandis Securities Company
350 West Colorado Boulevard
Suite 430
Pasadena, CA 91105
Bruce Chandler................... 18,668,546* 19.07% 20,757,246* 67.48% 55.79%
c/o Chandis Securities Company
350 West Colorado Boulevard
Suite 430
Pasadena, CA 91105
Otis Chandler.................... 18,726,127* 19.13% 20,820,035* 67.69% 55.96%
Times Mirror Square
Los Angeles, CA 90053
Warren B. Williamson............. 18,668,546* 19.07% 20,757,246* 67.48% 55.79%
c/o Chandis Securities Company
350 West Colorado Boulevard
Suite 430
Pasadena, CA 91105
The Capital Group Companies,
Inc............................ 8,086,200** 8.26% -- -- 1.99%
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- ---------------
* Includes shares held by the Chandler Trusts. The trustees of the Chandler
Trusts (all of whom are cousins) and their relatives are the beneficiaries of
the Chandler Trusts. Four of the trustees of the Chandler Trusts, Gwendolyn
Garland Babcock, Bruce Chandler, Otis Chandler and Warren B. Williamson, are
members of Times Mirror's Board of Directors and Mr. Williamson also serves
on the Executive Committee of the Board of Directors. See
"Business -- Directors of New Times Mirror -- Certain Relationships."
** As of December 31, 1994, Capital Guardian Trust Company and Capital Research
Management Company, operating subsidiaries of The Capital Group Companies,
Inc., exercised investment discretion with respect to 1,051,200 and 7,035,000
shares of New Times Mirror Series A Common Stock, respectively, or a combined
total of 8.26% of the outstanding shares of New Times Mirror Series A Common
Stock, which were owned by various institutional investors.
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"Beneficial ownership" of New Times Mirror's Common Stock by the named
executive officers and by all directors and officers as a group, at the start of
business on February 1, 1995 is shown in the following table. For this purpose,
the rules of the SEC require that every person who has or shares the power to
vote or dispose of shares of stock be reported as a "beneficial owner" of all
shares as to which such power exists. As a consequence, many persons may be
deemed to be the "beneficial owners" of the same securities and for this reason
all shares of New Times Mirror Series A Common Stock and New Times Mirror Series
C Common Stock held by the trustees of the Chandler Trusts are included in the
shares reported in the table below as "beneficially owned" by each director who
is also a trustee of the Chandler Trusts. See "Business Directors of New Times
Mirror -- Certain Relationships."
<TABLE>
<CAPTION>
SERIES A COMMON STOCK SERIES C COMMON STOCK
---------------------------------------------------- --------------------------
ADDITIONAL ADDITIONAL
SHARES SHARES
NUMBER OF DEEMED TO BE PERCENT NUMBER DEEMED TO BE
SHARES "BENEFICIALLY OF OF SHARES "BENEFICIALLY
NAME OWNED(1) OWNED"(2) TOTAL SERIES OWNED(1) OWNED"(2)
- ----------------------------------------- ---------- ------------- ---------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Armstrong..................... -- -- -- -- -- --
Gwendolyn Garland Babcock................ -- 18,670,558(3) 18,670,558 19.07% -- 20,757,886(3)
Donald R. Beall.......................... 1,000 -- 1,000 * -- --
John E. Bryson........................... -- -- -- -- -- --
Bruce Chandler........................... -- 18,668,546(3) 18,668,546 19.07% -- 20,757,246(3)
Otis Chandler............................ 42 18,726,085(3) 18,726,127 19.13% 42 20,819,993(3)
Robert F. Erburu......................... 156,987 2,995,999(4) 3,152,986 3.22% 119,613 1,793,174(4)
Clayton W. Frye, Jr...................... 4,770 -- 4,770 * 270 --
Curtis A. Hessler........................ 17,323 -- 17,323 * 290 --
David Laventhol.......................... 42,250 2,739,776(5) 2,782,026 2.84% 24,422 1,208,884(5)
Dr. Alfred E. Osborne, Jr................ 700 -- 700 * 550 --
Joan A. Payden........................... 1,000 -- 1,000 * -- --
Richard T. Schlosberg, III............... 18,480 -- 18,480 * 1,000 --
William Stinehart, Jr.................... 500 -- 500 * -- --
Harold M. Williams....................... 200 -- 200 * 200 --
Warren B. Williamson..................... -- 18,668,546(3) 18,668,546 19.07% -- 20,757,246(3)
Dr. Edward Zapanta....................... 1,050 -- 1,050 * -- --
All directors and officers as a group (33
persons, including those named
above)(6)............................... 310,186 24,781,426 25,091,612 25.63% 171,251 24,883,920
<CAPTION>
PERCENT AGGREGATE
OF VOTING
NAME TOTAL SERIES POWER
- ----------------------------------------- ---------- -------- ---------
<S> <C> <C> <C>
C. Michael Armstrong..................... -- -- --
Gwendolyn Garland Babcock................ 20,757,886 67.48% 55.80%
Donald R. Beall.......................... -- -- *
John E. Bryson........................... -- -- --
Bruce Chandler........................... 20,757,246 67.48% 55.79%
Otis Chandler............................ 20,820,035 67.69% 55.96%
Robert F. Erburu......................... 1,912,787 6.22% 5.49%
Clayton W. Frye, Jr...................... 270 -- *
Curtis A. Hessler........................ 290 * *
David Laventhol.......................... 1,233,306 4.01% 3.73%
Dr. Alfred E. Osborne, Jr................ 550 * *
Joan A. Payden........................... -- -- *
Richard T. Schlosberg, III............... 1,000 -- *
William Stinehart, Jr.................... -- -- *
Harold M. Williams....................... 200 * *
Warren B. Williamson..................... 20,757,246 67.48% 55.79%
Dr. Edward Zapanta....................... -- -- *
All directors and officers as a group (33
persons, including those named
above)(6)............................... 25,055,171 81.45% 67.98%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes shares purchased on or before November 30, 1994 by the Trustee
under the Times Mirror Savings Plus Plan and held by the Trustee for the
accounts of participating officers at that date, and shares allocated to the
accounts of participating officers as of November 30, 1994 under the Times
Mirror Employee Stock Ownership Plan. See "Employee Benefit Plans" below.
(2) Beneficial ownership of shares listed in these columns is disclaimed by the
directors.
(3) See "Business -- Directors of New Times Mirror -- Certain Relationships."
(4) Includes shares owned by Pfaffinger Foundation, the Times Mirror Stock Trust
and the Times Mirror Savings Plus Plan Trust. Mr. Erburu disclaims
beneficial ownership of these shares.
(5) Includes shares owned by the Times Mirror Stock Trust and the Times Mirror
Savings Plus Plan Trust. Mr. Laventhol disclaims beneficial ownership of
these shares.
(6) Includes shares held by the Times Mirror Employee Stock Ownership Trust,
Pfaffinger Foundation, the Times Mirror Stock Trust and the Times Mirror
Savings Plus Plan Trust, as well as shares owned by the Chandler family.
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EMPLOYEE BENEFIT PLANS
Three trusts maintained by Times Mirror hold shares of New Times Mirror
Common Stock for various qualified retirement plans for employees of Times
Mirror and its subsidiaries. These trusts and their holdings of Times Mirror
Common Stock as of the start of business on February 1, 1995 are as follows:
<TABLE>
<CAPTION>
SERIES A COMMON STOCK SERIES C COMMON STOCK
------------------------- -------------------------
NUMBER OF PERCENT OF NUMBER OF PERCENT OF
SHARES SERIES SHARES SERIES
NAME OF TRUST HELD OUTSTANDING HELD OUTSTANDING
- -------------------------------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
The Times Mirror Stock Trust(1)................... -- -- 901,582 2.93%
The Times Mirror Employee Stock Ownership
Trust(2)........................................ 3,088,409 3.15% 2,286,604 7.43%
Times Mirror Savings Plus Plan Trust(3)........... 2,741,050 2.80% 307,781 1.00%
</TABLE>
- ---------------
(1) This trust holds New Times Mirror Common Stock on behalf of The Times Mirror
Pension Plan and various retirement plans for employees of Times Mirror's
subsidiaries. All decisions as to the voting and disposition of such New
Times Mirror Common Stock are under the authority and responsibility of the
trust's two trustees, Robert F. Erburu and David Laventhol.
(2) Shares of New Times Mirror Common Stock allocated to participants' accounts
in the Times Mirror Employee Stock Ownership Plan are voted by the
participants themselves on matters presented at meetings of stockholders,
while unallocated shares and shares with respect to which no participant
directions are received are voted by the three trustees: James F. Guthrie
(Vice President and Chief Financial Officer), James R. Simpson (Vice
President, Human Resources) and Thomas Unterman (Vice President and General
Counsel). The three trustees have authority and responsibility for the
disposition of both allocated and unallocated shares of New Times Mirror
Common Stock.
(3) Shares of New Times Mirror Common Stock held in the Times Mirror Savings
Plus Plan accounts or allocated to participants' Payroll-Based Stock
Ownership Plan ("PAYSOP") accounts are voted by the participants themselves
on matters presented at meetings of stockholders. Shares allocated to the
Times Mirror Savings Plus Plan accounts with respect to which no participant
directions are received remain unvoted. Shares allocated to the PAYSOP
accounts with respect to which no participant directions are received are
voted by Bank of America, N.T. & S.A., as Trustee of the Times Mirror
Savings Plus Plan.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Gibson, Dunn & Crutcher, counsel to the Company
("Counsel"), the following discussion accurately sets forth the material federal
income tax consequences of the Exchange Offer and the ownership and disposition
of shares of Series B Preferred Stock to Holders ("Holders") who tender their
shares of Common Stock in the Exchange Offer. Holders should note, however, that
stock with terms comparable to those of the Series B Preferred Stock has not
been the subject of any Treasury Regulations, rulings or judicial decisions.
There can be no assurance that the Internal Revenue Service (the "Service") will
take a similar view as to any of the tax consequences described below. Except as
described below, no ruling has been or will be requested from the Service on tax
matters relating to the Series B Preferred Stock.
This summary is based upon the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury Regulations, administrative rulings
and judicial decisions now in effect, all of which are subject to change
(possibly with retroactive effect) or different interpretations. This summary
does not purport to deal with all aspects of federal income taxation that may be
relevant to a Holder's decision to tender in the Exchange Offer. This summary is
not intended to be applicable to all categories of investors, some of which,
such as dealers in securities, banks, insurance companies, tax-exempt
organizations and foreign entities or persons, may be subject to special rules
not discussed below. In addition, the summary is limited to persons that will
hold the Common Stock, or the Series B Preferred Stock, received in exchange
therefor as "capital assets" (generally, property held for investment) within
the meaning of Section 1221 of the Code. HOLDERS ARE ADVISED TO CONSULT THEIR
TAX ADVISORS REGARDING THE FEDERAL, STATE,
65
<PAGE> 68
LOCAL AND FOREIGN TAX CONSEQUENCES OF THE EXCHANGE OFFER AND THE OWNERSHIP AND
DISPOSITION OF SERIES B PREFERRED STOCK.
TREATMENT OF THE EXCHANGE OFFER
Times Mirror has received the following rulings from the Service in
connection with the Exchange Offer:
(i) The receipt of Series B Preferred Stock by tendering Holders will
be treated as part of a tax-free reorganization under Section 368(a)(1)(D)
of the Code.
(ii) No gain or loss will be recognized by (and no amount will be
included in the income of) a tendering Holder on the exchange of Common
Stock for Series B Preferred Stock.
(iii) A Holder's tax basis in the Series B Preferred Stock received
pursuant to the Exchange Offer will equal such Holder's tax basis in the
Common Stock surrendered. The holding period of the Series B Preferred
Stock received by each Holder pursuant to the Exchange Offer will include
the period during which the Holder held the Common Stock surrendered,
provided that the Common Stock was held as a capital asset.
A ruling from the Service, while generally binding on the Service, may under
certain circumstances be revoked or modified by the Service retroactively.
The rulings received from the Service are based on the assumption that the
Merger qualifies as a tax-free reorganization under Section 368(a)(1)(A) of the
Code. The Service takes the position that the consequences of a transaction such
as the Merger are adequately established in the tax law, and it therefore will
not issue a "comfort" ruling as to whether such a transaction qualifies as a
reorganization under Section 368(a)(1)(A). Instead, Counsel delivered an opinion
in connection with the Transactions to the effect that the Merger qualifies as a
reorganization under Section 368(a)(1)(A) of the Code.
An opinion of Counsel is not binding on the Service or the courts. Further,
the opinion of Counsel will be based on, among other, current law and certain
representations as to factual matters made by, among others, Times Mirror, the
Company and Cox which, if incorrect in certain material respects, would
adversely affect the conclusions reached by Counsel in its opinion.
TREATMENT OF THE SERIES B PREFERRED STOCK
DIVIDENDS
Dividends paid on the Series B Preferred Stock out of the Company's current
or accumulated earnings and profits (if any) will be taxable as ordinary income
and should qualify for the 70% intercorporate dividends-received deduction
subject to the minimum holding period (generally at least 46 days) and other
applicable requirements. Under certain circumstances, a corporate Holder may be
subject to the alternative minimum tax with respect to the amount of its
dividends-received deduction. Dividends in excess of the Company's current and
accumulated earnings and profits will be taxed first as a tax-free return of
capital to the extent of the holder's basis in its Series B Preferred Stock, and
thereafter as capital gain from the sale or exchange of the Series B Preferred
Stock. Such gain will be long-term or short-term capital gain depending on the
Holder's holding period for the Series B Preferred Stock.
Under certain circumstances, a corporation that receives an "extraordinary
dividend," as defined in Section 1059(c) of the Code, is required to reduce its
stock basis by the non-taxed portion of such dividend. Generally, regular
quarterly dividends paid currently (i.e., dividends not accumulated beyond the
dividend payment date) to an original holder of the Series B Preferred Stock
should not constitute extraordinary dividends under Section 1059(c).
In addition, Section 1059(f) of the Code states that any dividend received
with respect to preferred stock will be treated as an extraordinary dividend
subject to Section 1059(a) of the Code (regardless of the period over which the
holder has held the stock) if (i) the issue price for such stock exceeds its
liquidation preference or its stated redemption price, (ii) when issued, such
stock has a dividend rate which declines (or can
66
<PAGE> 69
reasonably be expected to decline) in the future, or (iii) such stock is
otherwise structured to avoid the other provisions of Section 1059 and to enable
corporate stockholders to reduce tax through a combination of the
dividends-received deduction and loss on the disposition of the stock.
The Service could argue that Section 1059(f) of the Code requires all
dividends on the Series B Preferred Stock to be treated as extraordinary because
the issue price of the Series B Preferred Stock could exceed the value of the
Series A Common Stock issued upon conversion if such Series A Common Stock
decline in value after issuance of the Series B Preferred Stock. However, it can
be argued that (i) the conversion of Series B Preferred Stock into Series A
Common Stock does not constitute a redemption of the Series B Preferred Stock
for purposes of Section 1059(f) of the Code, (ii) even if the conversion were
considered a redemption, the Series B Preferred Stock does not have a stated
redemption price because the amount payable has no determinate value at the time
of issuance, and (iii) the issue price of the Series B Preferred Stock may be
less than the value of the Series A Common Stock issued upon its conversion.
Furthermore, the Series B Preferred Stock is not intended and is not structured
to enable corporate stockholders to reduce tax through a combination of the
dividends-received deduction and loss on the disposition of stock. Accordingly,
while the issue is not free from doubt, the provisions of Section 1059(f) should
not apply to the Series B Preferred Stock.
REDEMPTION PREMIUM
Under Section 305 of the Code and related Treasury Regulations, if the
redemption price of redeemable preferred stock exceeds its issue price, and such
redemption premium is not considered reasonable, such premium may in certain
circumstances be taxable as a constructive dividend taken into account by the
holder each year generally in the same manner as original issue discount would
be taken into account were the preferred stock treated as a debt instrument for
federal income tax purposes. Any such constructive dividends would be subject to
the same rules applicable to the stated quarterly dividends, as described in the
discussion of "Dividends" above. Such constructive dividends would also be taken
into account for purposes of applying the extraordinary dividend rules of
Section 1059 of the Code, and the amount or period over which such constructive
dividends are taken into account could in certain circumstances cause some or
all of the stated quarterly dividends to be treated as extraordinary dividends.
Although the matter is not free from doubt, for the reasons discussed below, a
holder of Series B Preferred Stock should not be required to include in income
any redemption premium under Section 305 of the Code.
As a result of amendments to the Code in 1990, where preferred stock is
either puttable or mandatorily redeemable, a premium payable on such put or
mandatory redemption will be considered reasonable only if such premium does not
exceed 0.25% of the mandatory redemption price multiplied by the number of
complete years to maturity (the "Mandatory Redemption Test"). The Series B
Preferred Stock is not puttable. Moreover, the Company is only required to issue
Series A Common Stock (and not cash or other property) in exchange for the
Series B Preferred Stock. In such a case, Section 317(b) of the Code, by
excluding "stock" from the definition of property, implies that the Series B
Preferred Stock should not be treated as mandatorily redeemable. Thus, the
Series B Preferred Stock should not be subject to the Mandatory Redemption Test.
Furthermore, were the Mandatory Redemption Test to apply, the amount payable on
"redemption" is uncertain and may be less than the issue price of the Series B
Preferred Stock. Thus, while the issue is not free from doubt, the Series B
Preferred Stock should not be viewed as having an unreasonable redemption
premium under the Mandatory Redemption Test.
Where preferred stock is callable by the issuer, a premium payable on
exercise of the call will be considered reasonable if such premium is in the
nature of a penalty for a premature redemption of the preferred stock and is
reasonable in amount under existing market conditions (the "Call Test"). A safe
harbor in the current Treasury Regulations provides that a premium will be
considered reasonable for purposes of the Call Test if such premium is no more
than 10% of the issue price and the preferred stock is not callable for five
years. For the reasons discussed above, the Series B Preferred Stock should not
be treated as callable to the extent of any Series A Common Stock received in
exchange therefor. In addition to the Series A Common Stock, a Holder is also
entitled to receive the Redemption Premium in the case of any early redemption
by the Company. The Redemption Premium payable with respect to the exercise of
the call does not appear to fall
67
<PAGE> 70
within the safe harbor set forth in the Treasury Regulations. However, the
Company believes that the Redemption Premium is a reasonable penalty for
premature redemption. Current Treasury Regulations also provide that even if
preferred stock is issued with an unreasonable redemption premium under the Call
Test, no part of such premium will be included in the holder's income as a
constructive dividend if such preferred stock is immediately callable and
remains callable throughout its term (i.e., there is no period of time during
which such stock cannot be called for redemption). The Series B Preferred Stock
is by its terms callable by the Company at any time after issuance (upon the
giving of proper notice). Thus, even if the Series B Preferred Stock were
considered issued with an unreasonable call premium, no part of such premium
would be included in the holder's income as a constructive dividend under the
Call Test as interpreted by the current Treasury Regulations.
Section 305(c) of the Code was amended in 1990, however, to provide that a
redemption premium will not fail to be treated as a distribution (or series of
distributions) merely because the stock is immediately callable. While the issue
is not free from doubt, the legislative history to such amendment implies that
the amendment was not intended to apply to preferred stock that is neither
puttable by the holder nor mandatorily redeemable. This legislative history also
indicates that amendments to regulations relating to the accrual of redemption
premiums on callable preferred stock are expected to be prospective only.
On June 21, 1994, the Service issued Proposed Treasury Regulations (the
"Proposed Regulations") under Section 305(c) which generally are proposed to be
effective with respect to preferred stock issued on or after the date final
regulations are promulgated. Under the Proposed Regulations, an issuer call will
not trigger the application of Section 305(c) unless the arrangement is
tantamount to a mandatory redemption provision. An issuer call will be treated
as a mandatory redemption provision under the Proposed Regulations if, based on
the facts and circumstances, redemption pursuant to the issuer's right is more
likely than not to occur. Even if redemption pursuant to the issuer's right is
more likely than not to occur, however, Section 305(c) will not apply if the
redemption premium is in the nature of a penalty for a premature redemption. As
stated above, the Company believes that the Redemption Premium is a reasonable
penalty for premature redemption. Further, under a safe harbor rule provided in
the Proposed Regulations, the Company's redemption right will not be treated as
more likely than not to occur if the Company and the Holder are not related
within the meaning of Sections 267(b) or 707(b) of the Code, there are no
arrangements that effectively require the Company to redeem the Series B
Preferred Stock, and exercise of the right to redeem would not reduce the yield
of such stock. The Company believes that it would qualify under this safe harbor
rule.
CALL OR MANDATORY CONVERSION INTO SERIES A COMMON STOCK
Gain or loss generally will not be recognized by a Holder upon call of the
Series B Preferred Stock for Series A Common Stock or mandatory conversion of
the Series B Preferred Stock into Series A Common Stock if no cash is received.
Income may be recognized, however, to the extent cash or Series A Common Stock
is received in payment of dividends in arrears. In addition, a Holder who
receives cash in lieu of a fractional share will be treated as having received
such share and (i) exchanged it for cash in a transaction subject to Section 302
of the Code described below under "Other Sales or Exchanges," and related
provisions if such cash is received directly from the Company, or alternatively
(ii) recognized gain or loss from the sale of the fractional share if such share
is disposed of by an agent appointed by the Company to sell such share on behalf
of the Holder. Generally, a Holder who receives cash (other than any cash in
lieu of a fractional share) from the Company in addition to Series A Common
Stock upon the call or conversion of the Series B Preferred Stock will recognize
gain (but probably not loss), if any, on such call or conversion, but not in
excess of the amount of such cash. The measure of such Holder's gain will be the
excess (if any) of the sum of such cash plus the value of the Series A Common
Stock received over such Holder's basis in the called or converted Series B
Preferred Stock. Depending upon the facts and circumstances, any gain may be
treated in whole or in part as a dividend, subject to the dividend rules
discussed above.
Generally, a Holder's basis in the Series A Common Stock received upon the
call or conversion of the Series B Preferred Stock (other than shares, if any,
taxed as a dividend upon receipt) will equal the basis of the called or
converted Series B Preferred Stock (adjusted to reflect any income or gain
recognized upon the call or conversion). The holding period of such Series A
Common Stock will include the holding period of the
68
<PAGE> 71
called or converted Series B Preferred Stock (except that the holding period of
any Series A Common Stock received in payment of dividends in arrears will
commence on the day following the date of call or conversion).
OTHER SALES OR EXCHANGES
A Holder generally will recognize gain or loss upon a sale or exchange of
Series B Preferred Stock measured by the difference (if any) between the amount
realized upon such sale or exchange and the Holder's tax basis in the Series B
Preferred Stock.
Under certain circumstances, a shareholder that receives "section 306
stock" within the meaning of Section 306(c) of the Code is required to recognize
as ordinary income, in the case of a taxable disposition of such stock, or as a
dividend income, in the case of a redemption of such stock, all or a portion of
the proceeds received by such shareholder from such disposition or redemption,
without regard to the shareholder's tax basis in its shares, and may not
recognize any loss therefrom. Times Mirror has received a ruling from the
Service to the effect that the Series B Preferred Stock received by tendering
Holders will be considered "section 306 stock" if, immediately prior to the
consummation of the Transactions, the receipt by such Holder of cash (in an
amount equal to the fair market value of such Series B Preferred Stock) in a
pro-rata (by value) redemption of shares of Times Mirror Series A Common Stock
or Times Mirror Series C Common Stock held by such Holder having an equal value
would have been treated as a dividend under Section 302 of the Code.
Under these circumstances, a redemption for cash generally would not have
been treated as a dividend with respect to a Holder under Section 302 if the
redemption (i) was "not essentially equivalent to a dividend" with respect to
the Holder, or (ii) was "substantially disproportionate" with respect to the
Holder. The determination of whether either of these tests would have been met
will depend on the facts and circumstances in each case, including the fair
market value of the Series A Preferred Stock issued to the Chandler Trusts, the
fair market value of the Series B Preferred Stock issued pursuant to the
Exchange Offer, the fair market value of the Series B Preferred Stock received
by a Holder, and the constructive stock ownership of such Holder under Section
318 of the Code. Therefore, whether any Series B Preferred Stock received by a
Holder constitutes section 306 stock cannot be determined until the consummation
of the Exchange Offer. Holders should consult with their tax advisers regarding
the consequences of the Exchange Offer under Section 306 of the Code.
ADJUSTMENT OF CONVERSION RATE AND DISTRIBUTIONS
Certain adjustments to the Common Equivalent Rate to reflect the Company's
issuance of certain rights, warrants, evidences of indebtedness, securities or
other assets (including adjustments resulting from certain extraordinary cash
dividends) to holders of Series A Common Stock may result in constructive
distributions taxable as dividends to the holders of the Series B Preferred
Stock. Similarly, if the Company elects to distribute assets currently to the
holders of the Series B Preferred Stock, such distribution may be taxable as a
dividend to the holders of the Series B Preferred Stock. Any of the actual or
constructive dividends described in this paragraph may constitute (and may cause
other dividends, including regular dividends, to constitute) extraordinary
dividends to corporate holders (see "Dividends" above).
BACKUP WITHHOLDING
Certain noncorporate holders may be subject to backup withholding at a rate
of 31% on dividends and certain consideration received upon the call or
conversion of the Series B Preferred Stock. Generally, backup withholding
applies only when the taxpayer fails to furnish or certify a proper Taxpayer
Identification Number or when the taxpayer is notified by the Service that he
has failed to report payments of interest and dividends properly. The Company
may require holders of the Series B Preferred Stock to establish an exemption
from backup withholding or to make arrangements satisfactory to the Company with
respect to the payment of backup withholding. A Holder who does not provide the
Company with a current Taxpayer Identification Number may be subject to
penalties imposed by the Service. Holders should consult their tax advisors
69
<PAGE> 72
regarding their qualification for exemption from backup withholding and the
procedure for obtaining any applicable exemption.
FEES AND EXPENSES
The Company will not pay any fees to commissions to any broker, dealer or
other persons, including, without limitation, the Information Agent or the
Exchange Agent, for soliciting tenders of Common Shares pursuant to the Exchange
Offer. The Company will reimburse brokers, dealers, commercial banks and trust
companies for customary handling and mailing expenses incurred in forwarding the
Company's offering materials to their customers.
First Interstate Bank of California has been retained by the Company as
Exchange Agent and D.F. King & Co., Inc. has been retained by the Company as
Information Agent in connection with the Exchange Offer. The Information Agent
and the Exchange Agent will receive reasonable and customary compensation for
their services in connection with the Exchange Offer and will be reimbursed for
their reasonable out-of-pocket expenses in connection therewith.
MISCELLANEOUS
No vote of stockholders is necessary for consummation of the Exchange
Offer, and stockholders who do not tender their Common Shares pursuant to the
Exchange Offer will have no appraisal rights under applicable state law, the
Restated Certificate or otherwise.
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Common Shares in any jurisdiction in which the
making or acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where securities or blue sky laws require the
Exchange Offer to be made by a licensed broker or dealer, the Exchange Offer is
being made on behalf of the Company by one or more registered brokers or dealers
licensed under the laws of such jurisdictions.
No person has been authorized to give any information or make any
representation on behalf of the Company other than as contained in this
Prospectus or in the Letters of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
LEGAL MATTERS
Certain legal matters relating to the validity of the Series B Preferred
Shares and certain federal income tax matters with respect to the Exchange Offer
will be passed upon for the Company by Gibson, Dunn & Crutcher, Los Angeles,
California.
EXPERTS
The consolidated financial statements of The Times Mirror Company at
December 31, 1992 and 1993, and for each of the three years in the period ended
December 31, 1993, included in this Prospectus and the Registration Statement on
Form S-4 of the Company have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein and in
the Registration Statement, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
70
<PAGE> 73
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors........................................................ F-2
Consolidated Financial Statements at December 31, 1993 and for the three years then
ended:
Statements of Consolidated Income................................................... F-3
Consolidated Balance Sheets......................................................... F-4
Statements of Shareholders' Equity.................................................. F-5
Statements of Consolidated Cash Flows............................................... F-6
Notes to Consolidated Financial Statements.......................................... F-7
Five-Year Summary of Business Segment Information................................... F-23
Condensed Consolidated Financial Statements at September 25, 1994 and for the three
month and nine month periods then ended (Unaudited):
Statements of Consolidated Income................................................... F-24
Condensed Consolidated Balance Sheets............................................... F-25
Statements of Condensed Consolidated Cash Flows..................................... F-26
Notes to Condensed Consolidated Financial Statements................................ F-27
</TABLE>
F-1
<PAGE> 74
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
The Times Mirror Company
We have audited the accompanying consolidated balance sheets of The Times
Mirror Company and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of The Times
Mirror Company and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Notes H and K to the consolidated financial statements, in
1992 the Company changed its method of accounting for income taxes and
postretirement benefits other than pensions.
ERNST & YOUNG LLP
Los Angeles, California
February 3, 1994, except for
Notes N and P, as to which
the date is November 9, 1994, and
Notes I, Q and R, as to
which the date is
January 9, 1995
F-2
<PAGE> 75
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Revenues............................................... $3,243,749 $3,155,430 $3,117,174
---------- ---------- ----------
Costs and Expenses
Cost of sales........................................ 1,759,052 1,716,971 1,701,238
Selling, general and administrative expenses......... 1,215,491 1,172,000 1,164,964
Restructuring charges................................ 80,164 202,700 42,300
---------- ---------- ----------
3,054,707 3,091,671 2,908,502
---------- ---------- ----------
Operating profit....................................... 189,042 63,759 208,672
Interest expense..................................... (84,054) (74,281) (76,724)
Nonrecurring charges................................. (85,614)
Other, net........................................... 4,797 3,420 9,014
---------- ---------- ----------
Income (loss) from continuing operations
before income taxes............................... 109,785 (7,102) 55,348
Income taxes......................................... 58,116 11,267 41,028
---------- ---------- ----------
Income (loss) from continuing operations............. 51,669 (18,369) 14,320
Discontinued operations:
Income from discontinued operations, net of income
taxes........................................... 133,788 75,144 67,634
Gain on sale of discontinued operations,
net of income taxes............................. 131,702
---------- ---------- ----------
Income before cumulative effect of changes
in accounting principles.......................... 317,159 56,775 81,954
Cumulative effect of changes in accounting
principles:
Postretirement benefits, net of income
tax benefit of $84,931.......................... (133,376)
Income taxes...................................... 10,000
---------- ---------- ----------
Net Income (Loss)...................................... $ 317,159 $ (66,601) $ 81,954
========== ========== ==========
Earnings (loss) per share:
Continuing operations............................. $ .40 $(.14) $.11
Discontinued operations:
Income from operations.......................... 1.04 .58 .53
Gain on sale.................................... 1.02
----- ------ ----
Before cumulative effect of changes in
accounting principles........................... 2.46 .44 .64
Cumulative effect of changes in accounting
principles:
Postretirement benefits......................... (1.04)
Income taxes.................................... .08
----- ------ ----
Earnings (loss) per share............................ $2.46 $ (.52) $.64
===== ====== ====
</TABLE>
See notes to consolidated financial statements
F-3
<PAGE> 76
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1993 1992
---------- ----------
<S> <C> <C>
Current Assets
Cash and cash equivalents.......................................... $ 46,756 $ 57,881
Accounts receivable, less allowances for doubtful accounts and
returns of $70,866 and $66,247................................... 511,347 516,422
Note and other receivables......................................... 296,458
Inventories........................................................ 161,251 167,168
Deferred income taxes.............................................. 40,965 49,107
Prepaid and other.................................................. 160,097 197,454
---------- ----------
Total current assets.......................................... 1,216,874 988,032
Property, Plant and Equipment
Land............................................................... 96,213 99,314
Buildings.......................................................... 621,141 600,900
Machinery and equipment............................................ 1,351,883 1,370,969
---------- ----------
2,069,237 2,071,183
Less allowances for depreciation and amortization.................. 760,609 725,863
---------- ----------
1,308,628 1,345,320
Other Assets
Goodwill........................................................... 714,357 740,784
Net assets of discontinued cable television operations............. 606,678 495,036
Other intangibles.................................................. 132,690 135,171
Deferred charges................................................... 156,957 159,766
Other assets....................................................... 363,713 369,236
---------- ----------
1,974,395 1,899,993
---------- ----------
$4,499,897 $4,233,345
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable................................................... $ 380,005 $ 378,148
Short-term debt.................................................... 336,356 100,809
Accrued liabilities................................................ 94,436 116,834
Employees' compensation............................................ 97,226 96,275
Income taxes....................................................... 1,232 383
Unearned income.................................................... 177,738 156,208
Other current liabilities.......................................... 56,173 34,715
---------- ----------
Total current liabilities................................... 1,143,166 883,372
Long-Term Debt....................................................... 795,454 1,114,367
Other Liabilities and Deferrals
Deferred income taxes.............................................. 196,869 47,504
Postretirement benefits............................................ 250,894 252,300
Other liabilities.................................................. 214,239 235,156
---------- ----------
662,002 534,960
Shareholders' Equity
Common stock
Series A, $1 par value: 300,000,000 authorized; 97,588,000
and 96,534,000 issued......................................... 97,588 96,534
Series B, $1 par value; 100,000,000 authorized; no shares issued
Series C, convertible, $1 par value; 150,000,000 authorized;
32,366,000 and 33,382,000 issued.............................. 32,366 33,382
Preferred stock, $1 par value; 4,500,000 shares authorized; no
shares issued
Additional paid-in capital......................................... 167,490 163,896
Retained earnings.................................................. 1,687,574 1,513,977
---------- ----------
1,985,018 1,807,789
Less treasury stock, at cost; 1,345,000 Series A shares............ 61,543 61,543
---------- ----------
1,923,475 1,746,246
Less guaranteed debt of ESOP....................................... 24,200 45,600
---------- ----------
1,899,275 1,700,646
---------- ----------
$4,499,897 $4,233,345
========== ==========
</TABLE>
See notes to consolidated financial statements
F-4
<PAGE> 77
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE YEARS ENDED DECEMBER 31, 1993
----------------------------------------------------------------------------------
COMMON STOCK ADDITIONAL
------------------- PAID-IN RETAINED TREASURY GUARANTEED
SERIES A SERIES C CAPITAL EARNINGS STOCK ESOP DEBT TOTAL
-------- -------- ---------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1991....... $93,497 $36,332 $150,942 $1,779,685 $(61,543) $(81,500) $1,917,413
Conversion of Series C shares
to Series A shares.......... 1,550 (1,550)
Transactions related to stock
option and restricted stock
plans....................... 20 15 6,611 6,646
Dividends on common stock...... (138,801) (138,801)
Net income..................... 81,954 81,954
Reduction of guaranteed
ESOP debt................... 16,900 16,900
Translation gains and other.... (104) (104)
------- ------- -------- ---------- -------- -------- ----------
BALANCE AT DECEMBER 31, 1991..... 95,067 34,797 157,553 1,722,734 (61,543) (64,600) 1,884,008
Conversion of Series C shares
to Series A shares.......... 1,438 (1,438)
Transactions related to stock
option and restricted stock
plans....................... 29 23 6,343 6,395
Dividends on common stock...... (138,861) (138,861)
Net loss....................... (66,601) (66,601)
Reduction of guaranteed
ESOP debt................... 19,000 19,000
Translation losses and other... (3,295) (3,295)
------- ------- -------- ---------- -------- -------- ----------
BALANCE AT DECEMBER 31, 1992..... 96,534 33,382 163,896 1,513,977 (61,543) (45,600) 1,700,646
Conversion of Series C shares
to Series A shares.......... 1,034 (1,034)
Transactions related to stock
option and restricted stock
plans....................... 20 18 3,594 3,632
Dividends on common stock...... (138,887) (138,887)
Net income..................... 317,159 317,159
Reduction of guaranteed
ESOP debt................... 21,400 21,400
Translation losses............. (4,675) (4,675)
------- ------- -------- ---------- -------- -------- ----------
BALANCE AT DECEMBER 31, 1993..... $97,588 $32,366 $167,490 $1,687,574 $(61,543) $(24,200) $1,899,275
======= ======= ======== ========== ======== ======== ==========
</TABLE>
See notes to consolidated financial statements
F-5
<PAGE> 78
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from continuing operations.............. $ 51,669 $ (18,369) $ 14,320
Adjustments to derive cash flows from continuing
operating activities:
Depreciation and amortization...................... 170,978 158,489 169,906
Amortization of product development costs.......... 55,876 51,948 43,696
Restructuring charges.............................. (35,523) 169,063 32,700
Provision for doubtful accounts.................... 23,105 38,523 40,832
Benefit for deferred income taxes.................. (1,851) (32,593) (8,176)
Nonrecurring charges............................... 85,614
Changes in assets and liabilities:
Trade accounts receivable........................ (34,771) (33,254) (22,456)
Inventories...................................... 5,618 (265) 674
Accounts payable................................. 15,184 11,664 18,382
Income taxes..................................... 75,761 (27,942) (10,305)
Other, net......................................... (23,587) (13,232) (18,346)
--------- --------- ---------
Net cash provided by continuing operating
activities....................................... 302,459 304,032 346,841
Income from discontinued operations................... 133,788 75,144 67,634
Adjustment to derive cash flows from discontinued
operating activities:
Change in net operating assets..................... (1,454) 104,741 74,172
--------- --------- ---------
Net cash provided by discontinued operating
activities....................................... 132,334 179,885 141,806
--------- --------- ---------
Net cash provided by operating activities.......... 434,793 483,917 488,647
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures.................................. (111,703) (115,740) (156,573)
Proceeds from sales of operating assets............... 33,546 46,842 46,045
Additions to product development costs................ (61,722) (62,002) (62,237)
Acquisitions, net of cash acquired.................... (54,318) (155,130) (2,025)
Other, net............................................ (1,091) 3,989 2,903
--------- --------- ---------
(195,288) (282,041) (171,887)
Net cash used in investing activities of discontinued
cable operations................................... (32,033) (178,857) (57,575)
--------- --------- ---------
Net cash used in investing activities.............. (227,321) (460,898) (229,462)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt..................................... (311,348) (101,722) (333,891)
Proceeds from issuance of debt........................ 249,397 243,463 206,994
Dividends paid........................................ (138,878) (138,846) (138,792)
Reduction of guaranteed ESOP debt..................... (21,400) (19,000) (16,900)
Common stock issuance related to stock options and
awards............................................. 3,632 6,395 6,646
--------- --------- ---------
Net cash used in financing activities.............. (218,597) (9,710) (275,943)
--------- --------- ---------
Increase (decrease) in cash and cash equivalents........ (11,125) 13,309 (16,758)
Cash and cash equivalents at beginning of year.......... 57,881 44,572 61,330
--------- --------- ---------
Cash and cash equivalents at end of year................ $ 46,756 $ 57,881 $ 44,572
========= ========= =========
Cash paid during the year for:
Interest (net of amounts capitalized)................. $ 89,134 $ 80,415 $ 73,010
Income taxes.......................................... 106,540 117,862 101,724
</TABLE>
See notes to consolidated financial statements
F-6
<PAGE> 79
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries after elimination of all significant intercompany
transactions and balances. Affiliated companies in which the Company owns a 20
percent to 50 percent interest are accounted for by the equity method. The
Company's share of affiliates' operating results is included in "Other, net."
RECLASSIFICATIONS
Certain amounts in previously issued financial statements have been
reclassified to conform to the 1993 presentation.
CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1992, the Company adopted new accounting principles
for income taxes and postretirement benefits. These changes in accounting are
described in Note H and Note K, respectively.
CASH EQUIVALENTS
Cash equivalents consist of investments that are readily convertible into
cash and generally have original maturities of three months or less.
INVENTORIES
Inventories are carried at the lower of cost or market and are determined
under the first-in, first-out method for books and certain finished products,
and under the last-in, first-out method for newsprint, paper and certain other
inventories.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried on the basis of cost. Generally,
depreciation is provided on a straight-line basis for buildings, machinery and
equipment.
GOODWILL AND OTHER INTANGIBLES
Goodwill recognized in business combinations accounted for as purchases
subsequent to October 31, 1970 ($700,904,000 at December 31, 1993, and
$727,331,000 at December 31, 1992 -- net of accumulated amortization of
$145,295,000 and $149,835,000, respectively) is being amortized over a period of
40 years. Goodwill arising from business combinations consummated prior to
November 1, 1970 is not being amortized because, in the opinion of management,
it has not diminished in value. Goodwill amortization expense, including amounts
related to discontinued operations, amounted to $26,737,000 for 1993,
$25,404,000 for 1992, and $25,648,000 for 1991.
Other intangibles arising in connection with acquisitions are being
amortized on a straight-line basis over their estimated useful lives from 3 to
21 years. Accumulated amortization was $98,597,000 and $96,453,000 at December
31, 1993 and 1992, respectively.
The Company assesses on an ongoing basis the recoverability of intangible
assets, including goodwill, based on estimates of future undiscounted cash flows
for the applicable business compared to net book value. If the future
undiscounted cash flow estimate were less than net book value, net book value
would then be reduced to the undiscounted cash flow estimate. The Company also
evaluates the amortization periods of
F-7
<PAGE> 80
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
assets, including goodwill and other intangible assets, to determine whether
events or circumstances warrant revised estimates of useful lives.
DEFERRED CHARGES
Deferred charges, principally book and training material preparation,
printing and duplication costs, are written off over the estimated product life
as the products are sold.
REVENUE RECOGNITION
Revenues from certain products sold with the right of return, principally
books, are recognized net of a provision for estimated returns. Magazine,
newspaper and other subscription revenues are deferred as unearned income at the
time of sale. As products are delivered to subscribers, a pro rata share of the
subscription price is included in revenue.
Magazine subscription selling expenses are deferred as current or
noncurrent assets and charged to expense over the same period as the related
revenue is earned.
RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
The Company has defined benefit pension plans and various other
contributory and noncontributory retirement plans covering substantially all
employees. In general, benefits under the defined benefit plans are based on
years of service and the employee's compensation during the last five years of
employment. In determining net periodic pension expense (income), prior service
costs are amortized on a straight-line basis over 10 years. The defined benefit
plans are funded on a current basis in accordance with the Employee Retirement
Income Security Act of 1974. An Employee Stock Ownership Plan (ESOP) provides
benefits in conjunction with certain defined benefits, and the fair value of
ESOP assets is recognized as an offset to required funding. The majority of the
Company's employees are covered by one defined benefit plan. Funding is not
expected to be required for this plan in the near future as this plan is
overfunded.
Postretirement health care and life insurance benefits provided by the
Company were substantially reduced as a result of plan modifications in 1993.
Various unfunded postretirement health care plans cover employees hired before
January 1, 1993, or approximately half of the Company's current employees. The
plans have significantly different provisions for lifetime maximums, retiree
cost-sharing, health care providers, prescription drug coverage and other
benefits. Postretirement life insurance benefits are generally insured by life
insurance policies and cover employees who retired on or before December 31,
1993. Life insurance benefits vary by plan, ranging from $1,000 to $250,000.
Certain employees become eligible for the postretirement health care benefits if
they meet minimum age and service requirements and retire from full-time, active
service.
VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION
The Company maintains a Voluntary Employee Beneficiary Association (VEBA)
trust to fund certain health care benefits. At December 31, 1993 and 1992, the
VEBA trust balance of $53,949,000 and $48,895,000, respectively, is included in
"Prepaid and other".
CASH MANAGEMENT SYSTEM
Under the Company's cash management system, the bank notifies the Company
daily of checks presented for payment against its primary disbursing accounts.
The Company transfers funds from other sources such as short-term investments or
commercial paper issuance, to cover the checks presented for
F-8
<PAGE> 81
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
payment. This program results in a book cash overdraft in the primary disbursing
accounts as a result of checks outstanding. The book overdraft, which was
reclassified to accounts payable, was $41,733,000 and $33,112,000 at December
31, 1993 and 1992, respectively.
NOTE B -- CAPITAL STOCK
Shares of Series A and Series C common stock are identical, except with
respect to voting rights, restrictions on transfer of Series C shares and the
right to convert Series C shares into Series A shares. Series A shares are
entitled to one vote per share and Series C shares are entitled to ten votes per
share. Series C shares are subject to mandatory conversion into Series A shares
upon transfer to any person other than a "Permitted Transferee" as defined in
the Company's Certificate of Incorporation or upon the occurrence of certain
regulatory events. Series B common stock is entitled to one-tenth vote per share
and is available for common stock issuance transactions, such as underwritten
public offerings and acquisitions. The preferred stock is issuable in series
under such terms and conditions as the board of directors may determine.
NOTE C -- ACQUISITION
On October 30, 1992, the Company acquired Wm. C. Brown Communications,
Inc., a leading publisher of college textbooks. This acquisition was accounted
for by the purchase method and resulted in a non-cash transaction of $30,112,000
for liabilities assumed. The operations of this company are reflected in the
Company's financial statements from date of acquisition. This acquisition
resulted in goodwill of $66,653,000, which is being amortized over 40 years. Pro
forma results for 1992, assuming this acquisition occurred on January 1, are not
materially different from the results reported.
NOTE D -- RESTRUCTURING CHARGES
Over the past three years, the Company has undertaken a number of
restructuring actions aimed at streamlining or consolidating certain operational
and administrative processes as well as refocusing certain product offerings. In
each of these years, the Company has charged the estimated costs related to
these actions against operations. Remaining liabilities of $116,560,000 related
to these restructuring charges are included in the consolidated balance sheet at
December 31, 1993. The majority of this amount will be spent during 1994, with
the remainder, principally related to lease payments, to be paid over lease
periods extending to 2002.
During 1993, the Company recorded restructuring charges of $80,164,000
($47,724,000 after taxes, or 37 cents per share). More than half of this amount
is for severance or pay-related actions and approximately forty percent relates
to leased facilities, product line changes and other costs necessary to
implement the Company's plans. The remainder includes various asset write-offs.
During 1992, the Company recorded restructuring charges of $202,700,000
($123,248,000 after taxes, or 96 cents per share). Nearly two-thirds of this
amount is for severance or pay-related actions. Approximately fifteen percent is
for leased facilities, while the remainder relates to product line changes and
other costs necessary to implement the restructuring plan at Matthew Bender.
During 1991, the Company recorded restructuring charges of $42,300,000
($25,514,000 after taxes, or 18 cents per share) primarily related to voluntary
early retirement and separation programs at the Los Angeles Times and The
Baltimore Sun.
NOTE E -- NONRECURRING CHARGES
During 1991, the Company sold Broadcasting Publications, Inc. at a loss of
$20,614,000 and recorded a $65,000,000 write-down of the note and other assets
outstanding from the 1987 sale of The Denver Post. These
F-9
<PAGE> 82
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE E -- NONRECURRING CHARGES (CONTINUED)
items reduced income from continuing operations before income taxes by
$85,614,000 or $52,985,000 (42 cents per share) after applicable income taxes.
NOTE F -- INTEREST EXPENSE
For the years ended December 31, 1993, 1992 and 1991, interest expense of
$84,445,000, $78,244,000 and $90,261,000, respectively, was incurred; $391,000,
$3,963,000 and $13,537,000 of which was capitalized.
NOTE G -- INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Newsprint, paper and other raw materials... $ 39,066 $ 50,633 $ 59,557
Books and other finished products.......... 94,675 91,205 71,788
Work-in-process............................ 27,510 25,330 20,596
-------- -------- --------
$161,251 $167,168 $151,941
======== ======== ========
</TABLE>
Inventories determined on the last-in, first-out method were $26,994,000,
$40,177,000 and $51,133,000 at December 31, 1993, 1992 and 1991, respectively,
and would have been higher by $8,232,000 in 1993, $4,631,000 in 1992 and
$7,427,000 in 1991 had the first-in, first-out method (which approximates
current cost) been used exclusively.
NOTE H -- INCOME TAXES
Income tax expense from continuing operations consists of the following (in
thousands):
<TABLE>
<CAPTION>
1993 1992 1991
------- -------- -------
<S> <C> <C> <C>
Current
Federal.................................... $34,561 $ 10,789 $14,596
State...................................... 14,715 19,997 21,158
Foreign.................................... 10,691 13,074 13,450
Deferred
Federal.................................... (4,333) (22,627) (9,170)
State...................................... 2,482 (9,966) 994
------- -------- -------
$58,116 $ 11,267 $41,028
======= ======== =======
</TABLE>
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," and recorded a cumulative adjustment increasing
net income by $10,000,000 (8 cents per share) as of January 1, 1992. There was
no other effect on earnings for 1992. Prior-year financial statements have not
been restated.
F-10
<PAGE> 83
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES (CONTINUED)
The tax effect of temporary differences results in deferred income tax
assets (liabilities) as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1993 1992
--------- ---------
<S> <C> <C>
Accelerated depreciation............................. $(185,127) $(145,994)
Retirement and health benefits....................... (137,361) (123,353)
Postretirement benefits.............................. 109,215 91,094
Valuation and other reserves......................... 84,986 68,531
Deferred gain on sale of assets...................... (84,901)
Other employee benefits.............................. 37,533 38,057
State and local income taxes......................... 19,400 10,427
Restructuring charges................................ 21,785 70,897
Subscription selling expenses........................ (13,746) (18,217)
Other deferred tax assets............................ 34,451 37,734
Other deferred tax liabilities....................... (42,139) (27,573)
--------- ---------
$(155,904) $ 1,603
========= =========
</TABLE>
The above aggregate amounts reflect a current deferred tax asset of
$40,965,000 and $49,107,000 at December 31, 1993 and 1992, respectively, and a
noncurrent deferred tax liability of $196,869,000 and $47,504,000 at December
31, 1993 and 1992, respectively.
Prior to January 1, 1992, deferred income taxes were provided on timing
differences between book and taxable income. Deferred income tax expense
(benefit) for continuing operations for 1991 resulted from the following (in
thousands):
<TABLE>
<CAPTION>
1991
--------
<S> <C>
Accelerated depreciation.......................................... $ 21,917
Pension income.................................................... 8,715
Write-down of assets.............................................. (23,184)
Restructuring costs............................................... (9,204)
Self-insurance reserves........................................... (3,165)
Other............................................................. (3,255)
--------
$ (8,176)
========
</TABLE>
F-11
<PAGE> 84
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE H -- INCOME TAXES (CONTINUED)
The difference between actual income tax expense and the U.S. federal
statutory income tax expense for continuing operations is reconciled as follows
(in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- -------
<S> <C> <C> <C>
Income (loss) from continuing operations
before income taxes:
United States............................. $ 88,803 $(28,278) $33,285
Foreign................................... 20,982 21,176 22,063
-------- -------- -------
$109,785 $ (7,102) $55,348
======== ======== =======
Federal statutory income tax rate........... 35% 34% 34%
Federal statutory income tax expense
(benefit)................................. $ 38,425 $ (2,415) $18,818
Increase (decrease) in income taxes
resulting from:
State and local income taxes, net of
Federal effect......................... 11,179 6,620 14,620
Goodwill amortization not deductible for
tax purposes........................... 7,120 6,462 5,601
Book donations value in excess of cost.... (2,194) (1,881) (1,245)
Foreign tax differentials................. 1,154 1,428 3,921
Other..................................... 2,432 1,053 (687)
-------- -------- -------
$ 58,116 $ 11,267 $41,028
======== ======== =======
</TABLE>
NOTE I -- DEBT
Short-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
---------------------
1993 1992
-------- --------
<S> <C> <C>
Commercial paper....................................... $312,000
Current maturities of long-term debt................... 24,356 $100,809
-------- --------
Total short-term debt.................................. $336,356 $100,809
======== ========
</TABLE>
F-12
<PAGE> 85
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE I -- DEBT (CONTINUED)
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1993 1992
-------- ----------
<S> <C> <C>
Commercial paper..................................... $ 46,231 $ 368,351
7 1/8% Debentures due March 1, 2013.................. 150,000
7 3/8% Debentures due July 1, 2023................... 100,000
8 7/8% Notes due March 1, 2001....................... 100,000 100,000
8.70% Notes due June 15, 1999........................ 100,000 100,000
8.60% Notes due November 15, 1993.................... 100,000
8.55% Notes due June 1, 2000......................... 99,500 100,000
Ten-Year Notes
8 7/8% due February 1, 1998........................ 100,000 100,000
8% due December 15, 1996........................... 100,000
8 1/4% due April 1, 1996........................... 100,000
Medium-Term Notes due from March 20, 1997 to April 3,
2000, with an average interest rate of 8.63%....... 100,000 100,000
Guaranteed debt of ESOP maturing through
December 15, 1994.................................. 24,200 45,600
Others at various interest rates, maturing through
2001............................................... 1,761 1,710
-------- ----------
821,692 1,215,661
Unamortized discount................................. (1,882) (485)
Less current maturities.............................. (24,356) (100,809)
-------- ----------
Total long-term debt................................. $795,454 $1,114,367
======== =========
</TABLE>
Commercial paper borrowings of $358,231,000 and $368,351,000 at December
31, 1993 and 1992, respectively, carried a weighted average interest rate of
3.3% in 1993 and 3.5% in 1992. The Company has agreements with several domestic
and foreign banks for unsecured long-term revolving lines of credit which
support its commercial paper borrowings. The domestic agreements, which expire
April 27, 1995, provide for borrowings up to $240,000,000 at the banks' base
rates. The commitment fee is 3/20 of one percent per annum. The foreign
agreements, which expire May 25, 1995, provide for borrowings up to $150,000,000
at interest rates based on, at the Company's option, London Interbank Offered
Rates (LIBOR), certificate of deposit rates or the bank's base rate. The
commitment fee is 1/16 of one percent per annum. As of December 31, 1993, the
Company had not borrowed under the agreements. Commercial paper borrowings
aggregating $46,231,000 are classified as long-term obligations at December 31,
1993, since the Company intends to refinance this debt on a long-term basis. In
addition, the Company has $51,850,000 of unused standby letters of credit at
December 31, 1993.
The ten-year notes are callable three years prior to maturity. A
medium-term note for $30,000,000 is callable two years prior to its maturity
date of March 20, 1998. The 8.70% Notes are due at the option of the holder five
years prior to maturity. The 8.55% Notes were due at the option of the holder on
June 1, 1993, and $500,000 was repaid on that date. The 8 1/4% Notes due April
1, 1996 were called March 1, 1993 and repaid on April 1, 1993. The 8% Notes due
December 15, 1996 were called November 15, 1993 and repaid on December 15, 1993.
The Company has an interest rate swap agreement expiring January 22, 1996.
This agreement is for a $100,000,000 notional amount and exchanges payments to
the Company at a fixed rate of 7.4% for payments by the Company at a variable
rate based on a spread over three month LIBOR set in arrears.
F-13
<PAGE> 86
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE I -- DEBT (CONTINUED)
The Company has guaranteed the debt of its Employee Stock Ownership Plan
(ESOP). Over the remaining term of the debt, interest is payable based on the
lesser of (a) 74 percent of the prime rate or (b) 88 percent of the certificate
of deposit rate. The Company has entered into interest rate swap agreements that
exchange interest payments at the prime rate for payments at fixed rates. As a
result of these agreements, the effective interest rate on the ESOP loans
varies, but in no event will it exceed 7.44%.
The Company's agreements with banks contain restrictive provisions relating
primarily to levels of indebtedness and maintenance of net worth. Under the most
restrictive of these agreements, consolidated debt may not exceed 135% of
consolidated net worth, and consolidated net worth must be at least
$1,250,000,000.
At December 31, 1993, the aggregate maturities of debt for the five
subsequent years are as follows (in thousands):
<TABLE>
<S> <C>
1994.............................................. $336,356
1995.............................................. 47,706
1996.............................................. --
1997.............................................. 10,000
1998.............................................. 140,000
</TABLE>
The fair value of debt at December 31, 1993, based primarily on the
Company's current refinancing rates for publicly-issued fixed rate debt with
comparable maturities, approximates its carrying value of $1,131,810,000. The
fair value of off-balance-sheet financial instruments is not significant at
December 31, 1993.
In connection with the proposed reorganization (See Note Q), the Company
commenced a tender offer for $399,500,000 aggregate principal amount of its
fixed-rate debt maturing from 1997 through 2001. The offer, which ended on
December 8, 1994, resulted in the tender of $345.2 million of debt. Proceeds
from private sales of short-term securities funded the tender and these
borrowings are expected to be repaid in early 1995 when the cable merger is
completed. In connection with the short-term security issuances, the Company
increased its unsecured short-term revolving bank lines of credit to an
aggregate amount of $630,000,000. In connection with the tender, in September
the Company entered into interest rate swap agreements which were to commence in
January 1995 and exchange payments at fixed rates for payments at variable rates
on an aggregate principal amount of $200,000,000 of debt. These swaps and a swap
entered into in 1993 were redeemed when the tender offers ended. The Company
will record an extraordinary loss of approximately $12,900,000 in the fourth
quarter of 1994 in connection with the tender offer.
The Company has commenced an offer to exchange long-term debt securities of
New Times Mirror for $250,000,000 of its outstanding long-term debt in
connection with the cable television merger. With respect to this debt, the
Company entered into long-term interest rate swap agreements commencing January
1995 which exchange payments at fixed rates for payments at variable rates.
As contemplated by the cable merger agreement, the Company expects to
borrow up to approximately $1.31 billion prior to the merger and the related
debt from this borrowing, along with approximately $54 million of fixed rate
debt which was not tendered, will be assumed by Cox Cable. Part of the proceeds
of these borrowings are expected to be used to retire the short-term securities
issued to finance the debt tender and to redeem, when first callable on February
1, 1995, the $100,000,000 of 8 7/8% Notes due February 1, 1998.
NOTE J -- STOCK OPTION AND AWARD PLANS
The 1984 and 1988 Executive Stock Option Plans, as amended, and the 1992
Key Employee Long-Term Incentive Plan (Incentive Plan) provide that options may
be granted to key employees to purchase shares of
F-14
<PAGE> 87
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE J -- STOCK OPTION AND AWARD PLANS (CONTINUED)
the Company's common stock at a price equal to the fair market value at the date
of grant. Options granted prior to December 27, 1991 had a purchase price equal
to 75 percent of the fair market value at the date of grant. The Incentive Plan
allows for the granting of incentive stock options, nonqualified stock options
and deferred cash incentive awards. Options that are not exercised expire ten
years from the date of grant. Options generally vest over a four-year period,
except that incentive stock options generally vest nine years and nine months
from the date of grant. Accelerated vesting for incentive stock options is
available, based on performance goals determined by the Board of Directors over
a three-year performance period. The following table sets forth information
relative to the plans:
<TABLE>
<CAPTION>
NUMBER PRICE PER
OF SHARES OPTION SHARE
--------- ----------------
<S> <C> <C>
Options Outstanding
January 1, 1991............................ 902,525 $18.66 to $37.93
Granted................................. 820,560 29.44
Exercised............................... (57,950) 18.66 to 30.90
Canceled................................ (55,415)
--------- ----------------
Options Outstanding
December 31, 1991.......................... 1,609,720 18.66 to 37.93
Granted................................. 456,550 30.13 to 36.94
Exercised............................... (116,027) 18.66 to 28.36
Canceled................................ (55,025) 19.46 to 36.94
--------- ----------------
Options Outstanding
December 31, 1992.......................... 1,895,218 18.66 to 37.93
Granted................................. 2,425,960 31.25 to 32.13
Exercised............................... (138,721) 18.66 to 30.71
Canceled................................ (170,909) 18.66 to 36.94
--------- ----------------
Options Outstanding
December 31, 1993.......................... 4,011,548 $18.66 to $37.93
========= ================
Options Exercisable
December 31, 1993.......................... 868,540 $18.66 to $37.93
========= ================
</TABLE>
At December 31, 1993, there were 515,492 options outstanding with purchase
prices equal to 75 percent of the fair market value at the date of grant. At
December 31, 1993, there were 239,800 shares of Series A common stock reserved
for future grants under the 1984 and 1988 Executive Stock Option Plans and
1,269,024 shares of Series A common stock reserved for future grants under the
Incentive Plan.
The 1982 and 1987 Restricted Stock Plans provide for the sale of 2,800,000
shares of the Company's common stock to key employees, including officers, at a
price equal to par value. The Incentive Plan generally replaced the restricted
stock sales. At December 31, 1993, there were 1,241,280 shares of Series A
common stock reserved for future sales. The Company expects that future sales,
if any, will not be significant.
F-15
<PAGE> 88
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
Retirement plan expense, including amounts related to discontinued
operations, of $34,137,000 for 1993, $16,454,000 for 1992, and $19,470,000 for
1991 includes net periodic pension expense (income) for the defined benefit
plans as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Service cost -- benefits earned during
period................................. $ 55,897 $ 48,325 $ 43,705
Interest cost on projected benefit
obligation............................. 57,591 55,245 55,502
Return on plan assets.................... (96,143) (96,796) (91,159)
Net amortization and deferral............ (8,263) (14,178) (11,005)
-------- -------- --------
Net periodic pension expense (income).... $ 9,082 $ (7,404) $ (2,957)
======== ======== ========
</TABLE>
Assumptions used in the actuarial computations were:
<TABLE>
<CAPTION>
DECEMBER 31
------------------------
1993 1992 1991
---- ----- -----
<S> <C> <C> <C>
Discount rate........................................ 7.5 % 7.0 % 7.5 %
Rate of increase in compensation levels.............. 6.25% 6.25% 6.25%
Expected long-term rate of return on assets.......... 9.75% 10.0 % 10.0 %
</TABLE>
The following table sets forth the plans' funded status and amounts
recognized in the consolidated balance sheets (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1993 1992
---------- ----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested............................................ $ 582,105 $ 615,625
Nonvested......................................... 8,480 12,655
---------- ----------
Accumulated benefit obligations..................... $ 590,585 $ 628,280
========== ==========
Projected benefit obligations....................... $ 806,986 $ 889,563
Plan assets at fair value........................... 1,054,781 1,004,419
---------- ----------
Excess of plan assets over projected benefit
obligations....................................... 247,795 114,856
Unrecognized net loss from past experience different
from that assumed................................. 116,153 272,002
Prior service cost not yet recognized............... 4,434 5,284
Unrecognized net asset being amortized over 13-15
years............................................. (112,224) (133,538)
Other............................................... 5,008 13,124
---------- ----------
Prepaid pension cost................................ $ 261,166 $ 271,728
========== ==========
</TABLE>
Nearly all of prepaid pension cost is included in "Other Assets" except for
approximately $8,572,000 and $8,835,000 which is included in net assets of
discontinued cable television operations as of December 31, 1993 and 1992,
respectively. Projected benefit obligations decreased by $71,310,000 at December
31, 1993 as a result of the change in the discount rate.
Plan assets include the Company's common stock, other listed stocks, and
corporate and government fixed-income securities. The fair value of plan assets
attributable to the Company's common stock at December 31, 1993 and 1992, was
$192,085,000 and $165,847,000, respectively, of which $161,995,000 and
$137,673,000, respectively, relate to the ESOP.
In 1985, the Company issued and sold shares of common stock at market value
of $150,000,000 to its ESOP. Repayment of the ESOP's bank debt has been
guaranteed by the Company. Company contributions are the primary source of funds
for the ESOP's repayment of its debt. Benefits provided by the ESOP are
coordinated with certain pension benefits. At December 31, 1993, the ESOP held
3,151,365 shares of Series A
F-16
<PAGE> 89
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS (CONTINUED)
common stock and 2,427,512 shares of Series C common stock. The ESOP currently
covers approximately two-thirds of the Company's employees.
Substantially all employees over age 21 with one year of service are
eligible to participate in the Company's Savings Plus Plan. Eligible employees
may contribute from 1 percent to 13 percent of their basic compensation. The
Company makes matching contributions equal to 50 percent of employee before-tax
contributions from 1 percent to 6 percent. Employees may choose among five
investment options, including a Company common stock fund, for investing their
contributions and the Company's matching contribution.
The Company adopted Statement of Financial Accounting Standards No. 106
(SFAS 106) "Employers' Accounting for Postretirement Benefits Other Than
Pensions," and recorded a cumulative charge of $218,307,000 ($133,376,000 net of
taxes, or $1.04 per share) as of January 1, 1992. SFAS 106 requires that
postretirement health care and life insurance be charged to expense over the
period the benefits are earned. The effect of this change in accounting
principle was to increase postretirement expense in 1992 by $20,221,000
($12,133,000 net of taxes, or 9 cents per share).
The net periodic postretirement benefit expense is as follows (in
thousands):
<TABLE>
<CAPTION>
1993 1992
------- -------
<S> <C> <C>
Service cost -- benefits earned during period............ $ 3,457 $10,903
Interest cost on accumulated projected benefit
obligation............................................. 11,110 15,947
Net amortization......................................... (8,155)
------- -------
Net periodic postretirement expense...................... $ 6,412 $26,850
======= =======
</TABLE>
Postretirement benefit expense in 1991, which was charged to expense as
incurred, was not significant.
Assumptions used in the actuarial computations were:
<TABLE>
<CAPTION>
DECEMBER 31
---------------
1993 1992
----- -----
<S> <C> <C>
Discount rate............................................... 7.5% 7.0%
Health care cost trend rate................................. 12.0% 13.0%
----- -----
</TABLE>
At December 31, 1993, the health care cost trend rate of 12 percent was
assumed to ratably decline to 5.5 percent by 2004 and remain at that level. At
December 31, 1992, the health care cost trend rate of 13 percent was assumed to
ratably decline to 5 percent by 2005 and remain at that level.
The following table sets forth the plans' unfunded obligations and amounts
recognized in the consolidated balance sheet (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
---------------------
1993 1992
-------- --------
<S> <C> <C>
Actuarial present value of benefit obligations:
Retirees............................................. $126,334 $102,033
Other fully eligible participants.................... 8,232 9,368
Other active participants............................ 31,323 39,312
-------- --------
Accumulated postretirement benefit obligations......... 165,889 150,713
Unrecognized net decrease in prior service cost........ 102,614 114,011
Unrecognized net loss from past experience different
from that assumed.................................... (17,609) (12,424)
-------- --------
Postretirement benefit liability....................... $250,894 $252,300
======== ========
</TABLE>
F-17
<PAGE> 90
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE K -- RETIREMENT PLANS AND POSTRETIREMENT BENEFITS (CONTINUED)
The assumed health care cost trend rate can significantly affect
postretirement expense and liabilities. An increase of 1% in the health care
cost trend rate would increase 1993 net periodic postretirement expense by
$1,802,000 and increase the accumulated postretirement benefit obligations as of
December 31, 1993 by $15,184,000.
In December 1992 the Company amended its postretirement health care and
life insurance benefit plans to substantially reduce benefits. The effect of the
plan amendments, which reduced the accumulated postretirement benefit
obligations by approximately $114,011,000 at December 31, 1992, will be
amortized over the average remaining eligibility period of plan participants.
NOTE L -- LEASES
Rental expense under operating leases, including amounts related to
discontinued operations, amounted to $76,571,000, $79,034,000, and $76,541,000
for the years ended December 31, 1993, 1992 and 1991, respectively. Capital
leases and contingent rentals are not significant. The future minimum lease
payments as of December 31, 1993 for all noncancellable operating leases,
including amounts related to discontinued operations, are as follows (in
thousands):
<TABLE>
<S> <C>
1994...................................................... $ 51,030
1995...................................................... 47,677
1996...................................................... 43,220
1997...................................................... 41,283
1998...................................................... 34,189
Later years............................................... 131,322
--------
Total........................................... $348,721
========
</TABLE>
NOTE M -- EARNINGS AND DIVIDENDS PER SHARE
Earnings per share computations are based upon the weighted average number
of shares of common stock and common stock equivalents outstanding during the
year. Fully diluted earnings per share are the same as the earnings per share
indicated.
Cash dividends declared per share of common stock amounted to $1.08 in
1993, 1992 and 1991.
NOTE N -- BUSINESS SEGMENTS
Financial data regarding the Company's business segments presented on page
F-23 of this report are incorporated herein by reference.
The Company operates principally in three industries: Newspaper Publishing;
Professional Information; and Consumer Media. Operations in Newspaper Publishing
include the publication and sale of metropolitan newspapers. Operations in
Professional Information include the publishing and sale of various types of
books, including law, medical and college-level business and economic textbooks,
the publishing of aeronautical charts and aviation information, and training
operations. Operations in Consumer Media include magazines, consumer book
publishing, consumer multimedia software and television programming. Total
revenue by industry segment includes sales to unaffiliated customers and
intersegment sales, which are accounted for at market price.
F-18
<PAGE> 91
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE O -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
A summary of the unaudited quarterly results of operations follows (in
thousands of dollars, except per share amounts):
<TABLE>
<CAPTION>
1993 QUARTERS ENDED
-----------------------------------------
MAR. 28 JUNE 27 SEPT. 26 DEC. 31
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues.............................................. $755,169 $784,632 $806,882 $897,066
-------- -------- -------- --------
Costs and expenses
Cost of sales....................................... 421,605 406,005 464,997 466,445
Selling, general and administrative expenses........ 289,305 317,729 279,532 328,925
Restructuring charges............................... 3,750 76,414
-------- -------- -------- --------
710,910 723,734 748,279 871,784
-------- -------- -------- --------
Operating profit...................................... 44,259 60,898 58,603 25,282
Interest expense.................................... (22,625) (21,095) (21,057) (19,277)
Other, net.......................................... 1,855 1,638 (1,211) 2,515
-------- -------- -------- --------
Income from continuing operations before income
taxes............................................... 23,489 41,441 36,335 8,520
Income taxes.......................................... 11,833 21,040 21,086 4,157
-------- -------- -------- --------
Income from continuing operations..................... 11,656 20,401 15,249 4,363
Income from discontinued operations, net of income
taxes............................................... 18,128 27,461 62,458 25,741
Gain on sale of discontinued operations, net of
income taxes........................................ 131,702
-------- -------- -------- --------
Net income.................................. $ 29,784 $ 47,862 $ 77,707 $161,806
======== ======== ======== ========
Earnings per share:
Continuing operations............................... $.09 $.16 $.12 $.04
Discontinued operations:
Income from operations........................... .14 .21 .48 .20
Gain on sale..................................... 1.02
---- ---- ---- -----
Earnings per share.......................... $.23 $.37 $.60 $1.26
==== ==== ==== =====
</TABLE>
<TABLE>
<CAPTION>
1992 QUARTERS ENDED
-------------------------------------------
MAR. 29 JUNE 28 SEPT. 27 DEC. 31
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
Revenues............................................ $ 737,813 $774,888 $778,571 $ 864,158
Restructuring charges............................... 19,000 183,700
Operating profit (loss)............................. 47,955 55,982 63,654 (103,832)
Income (loss) from continuing operations............ 15,457 20,182 21,786 (75,794)
Income from discontinued operations,
net of income taxes............................... 18,130 23,957 18,949 14,108
Cumulative effect of changes in accounting
principles........................................ (123,376)
Net income (loss)................................... (89,789) 44,139 40,735 (61,686)
Earnings (loss) per share:
Continuing operations............................. .12 .16 .17 (.59)
Discontinued operations........................... .14 .18 .15 .11
Cumulative effect of changes in accounting
principles..................................... (.96)
Earnings (loss) per share........................... $(.70) $.34 $.32 $(.48)
</TABLE>
F-19
<PAGE> 92
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE P -- DISCONTINUED OPERATIONS
As a result of the proposed reorganization described in Note Q, the
Company's cable television operations are now reported as discontinued
operations.
On March 29, 1993, the Company announced two agreements for the sale of its
four broadcast television stations to Argyle Television Holdings, Inc. (Argyle).
The sale of KTVI-TV, an ABC affiliate in St. Louis, Missouri, and WVTM-TV, an
NBC affiliate in Birmingham, Alabama, was completed in July. The sale of its
remaining two stations, KDFW-TV in Dallas, Texas, and KTBC-TV in Austin, Texas,
both CBS affiliates, was completed near the end of the year. The sale of the
four stations resulted in an after-tax gain of $131,702,000 net of income tax
expense of $76,928,000, or $1.02 per share. At year-end, the Company exercised
its option to increase the cash and decrease the securities portion of the sale
price and received $320 million in cash as well as warrants in Argyle. Most of
the proceeds were received in January 1994 and were used to redeem commercial
paper.
The results of operations of the Broadcast Television segment have been
reported as discontinued operations in the Statements of Consolidated Income.
Prior year financial statements have been reclassified to present the segment as
a discontinued operation. Operating results of the discontinued operations were
as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Revenues....................................... $565,242 $546,543 $496,887
-------- -------- --------
Income before income taxes(1).................. 227,267 126,675 110,604
Income taxes................................... 93,479 51,531 42,970
-------- -------- --------
Net income(2)........................ $133,788 $ 75,144 $ 67,634
======== ======== ========
</TABLE>
- ---------------
(1) Included in income before income taxes and net income were nonrecurring
gains at cable television as follows: 1993 -- gains on the sale of QVC
Network, Inc. common stock and on the sale of a small cable system totaling
$86,799,000 ($50,364,000 after taxes, or 39 cents per share); 1992 -- gain
on the sale of two Texas cable television systems totaling $8,673,000
($5,026,000 after taxes, or 4 cents per share); 1991 -- gain on the sale of
assets of $14,111,000 ($9,570,000 after taxes, or 7 cents per share).
(2) In July 1992, the Company acquired 20 percent of Community Cablevision
Company, which operates systems serving approximately 42,000 subscribers in
Orange County, California. The remaining 80 percent was acquired on October
1, 1992. This acquisition was accounted for by the purchase method. The
operations of Community Cablevision are reflected from the date of
acquisition.
Summarized balance sheet data for the discontinued cable television
operations are as follows (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1993 1992
-------- --------
<S> <C> <C>
Property, plant and equipment, net....................... $447,659 $411,520
Intangible assets, net................................... 240,523 264,947
Other assets............................................. 69,890 65,636
Amounts due (to) from the parent......................... 24,352 (67,844)
Deferred income tax liabilities.......................... 76,763 83,983
Other liabilities........................................ 98,983 95,240
Shareholder's equity..................................... $606,678 $495,036
======== ========
</TABLE>
F-20
<PAGE> 93
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE P -- DISCONTINUED OPERATIONS (CONTINUED)
Balance sheet data for the discontinued broadcast television operations
were not significant and are not segregated in the consolidated balance sheets.
The major components of cash flow for discontinued operations are as
follows (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------
1993 1992 1991
--------- --------- --------
<S> <C> <C> <C>
Income from discontinued operations.......... $ 133,788 $ 75,144 $ 67,634
Depreciation and amortization................ 100,013 84,326 82,242
Nonrecurring gains........................... (86,799) (8,673) (14,111)
Other, net................................... (14,668) 29,088 6,041
--------- --------- --------
Net cash provided by discontinued
operating activities............. $ 132,334 $ 179,885 $141,806
========= ========= ========
Capital expenditures......................... $(116,914) $ (82,333) $(60,426)
Proceeds from disposal of assets............. 91,665 14,952 20,224
Acquisitions, net of cash acquired........... (1,413) (110,910) (16,531)
Other, net................................... (5,371) (566) (842)
--------- --------- --------
Net cash used in investing
activities of discontinued cable
operations....................... $ (32,033) $(178,857) $(57,575)
========= ========= ========
</TABLE>
NOTE Q -- PROPOSED REORGANIZATION
In June 1994, the Company signed an agreement to merge its cable television
operations with Cox Cable Communications, Inc. (Cox Cable). It is contemplated
that prior to the merger the Company will borrow approximately $1.31 billion.
The Company will then transfer all of its non-cable operations, including the
$1.31 billion in cash, into a newly formed entity, New Times Mirror, as part of
a tax-free reorganization. Old Times Mirror, then owning the Company's cable
television operations and obligated to pay the newly incurred debt, will be
merged into Cox Cable. Each share of the Company's Series A and Series C common
stock outstanding prior to the merger will be converted into one share of New
Times Mirror Series A or Series C common stock, respectively. As a result,
voting interests in New Times Mirror will remain the same as voting interests in
Old Times Mirror. In addition, all non-Chandler Trust shareholders will receive
common stock of Cox Cable with an estimated aggregate fair value of
$932,000,000. Due to certain constraints imposed by the terms of the Chandler
Trusts, in lieu of common stock of Cox Cable, the Chandler Trusts will receive
non-voting, Series A cumulative preferred stock in New Times Mirror. The fair
value of the preferred stock received by the Chandler Trusts will be
substantially equivalent to the fair value of the Cox Cable common stock
received by the other shareholders, after giving effect to their respective
proportionate interest in Old Times Mirror. The Company expects this transaction
will increase shareholders' equity by approximately $670,000,000 and result in a
gain of about $1.62 billion. This transaction is expected to be completed on
February 1, 1995 and is subject to certain conditions, including the receipt of
various regulatory approvals.
In connection with the settlement of reorganization-related litigation,
subsequent to the reorganization, shareholders will to be offered the
opportunity to exchange shares of Series A or Series C common stock for shares
of Series B cumulative preferred stock on a one-for-one basis. The Series B
preferred stock will have one vote per share.
At September 25, 1994, the Company had approximately $750,000,000 of
publicly-held notes outstanding. The Company commenced a tender offer, which was
completed on December 8, 1994, for $399,500,000 aggregate principal amount of
its fixed-rate debt. The Company has commenced an offer to exchange long-term
debt securities of New Times Mirror for $250,000,000 of its outstanding
long-term debt (see Note I).
F-21
<PAGE> 94
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE Q -- PROPOSED REORGANIZATION (CONTINUED)
As previously reported, a number of lawsuits were filed in Delaware and
California seeking to enjoin the proposed reorganization (See Note R for further
information regarding these proceedings). The resolution of these lawsuits is
not expected to have a material adverse effect on the Company's financial
position or results of operations.
NOTE R -- CONTINGENT LIABILITIES
The Company and its subsidiaries are defendants in actions for libel and
other matters arising out of their business operations. In addition from time to
time, the Company and its subsidiaries are involved as parties in various
governmental and administrative proceedings, including environmental matters.
The Company does not believe that any such proceedings currently pending will
have a material adverse effect on its consolidated financial position, although
an adverse resolution in any reporting period of one or more of these matters
could have a material impact on results of operations for that period.
A number of lawsuits were filed in Delaware and California in mid-1994
seeking to enjoin the proposed reorganization described in Note Q. On October
11, 1994, the Company announced an agreement to settle all of the shareholder
litigation related to this proposed reorganization. Under the terms of the
settlement, upon completion of the transactions, the Company will offer
shareholders Series B preferred stock. The Chandler Trusts have agreed not to
participate in this exchange offer. In addition, the settlement calls for the
Company, subject to the exercise of the fiduciary duties of its Board of
Directors, to pay an annual dividend of at least 24 cents per share on its
common stock for the three years following the closing of the merger and to pay
up to $6 million for plaintiffs' attorney fees and expenses. The settlement has
been approved by the Delaware Chancery Court and the California Superior Court.
The settlement of this litigation will not have an adverse material impact on
the Company's financial position or results of operations.
NOTE S -- TRANSACTIONS WITH AN AFFILIATE
To assure a long-term supply of newsprint for the Los Angeles Times, the
Company has an agreement to purchase specified quantities of newsprint from a
supplier in which the Company has a 20 percent interest. The specified
quantities represent a majority of the Los Angeles Times' newsprint requirements
and are purchased at prevailing market prices.
NOTE T -- EVENT SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT AUDITORS
The transactions and events related to the Company's cable
merger/reorganization, as disclosed in Notes I, Q and R, were completed on
February 1, 1995 on a basis not substantially different from the descriptions
contained in these referenced notes.
F-22
<PAGE> 95
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
FIVE-YEAR SUMMARY OF BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
REVENUES
Newspaper Publishing............... $1,980,717 $1,943,229 $1,974,351 $2,066,872 $2,065,890
Professional Information........... 992,220 935,448 851,633 757,882 654,593
Consumer Media..................... 271,176 277,757 292,157 311,328 305,913
Corporate and Other................ 391 11,412 56,487
Intersegment Revenues.............. (364) (1,004) (1,358) (1,175) (630)
---------- ---------- ---------- ---------- ----------
$3,243,749 $3,155,430 $3,117,174 $3,146,319 $3,082,253
========== ========== ========== ========== ==========
OPERATING PROFIT (LOSS)(1)
Newspaper Publishing............... $ 107,346 $ 19,126 $ 93,094 $ 171,257 $ 309,850
Professional Information........... 174,855 114,348 193,161 165,741 144,836
Consumer Media..................... (3,785) (3,527) (7,775) (9,496) (1,180)
Corporate and Other................ (89,374) (66,188) (69,808) (59,364) (13,106)
---------- ---------- ---------- ---------- ----------
$ 189,042 $ 63,759 $ 208,672 $ 268,138 $ 440,400
========== ========== ========== ========== ==========
IDENTIFIABLE ASSETS
Newspaper Publishing............... $2,012,623 $2,036,453 $2,023,275 $2,044,545 $1,907,900
Professional Information........... 1,030,586 971,833 788,260 753,184 690,416
Consumer Media..................... 288,805 338,895 338,046 412,505 430,263
Corporate and Other................ 563,686 317,423 341,493 383,616 369,663
Discontinued Operations
Cable Television................ 606,678 495,036 509,942 484,611 439,185
Broadcast Television............ 285 123,439 120,649 125,109 125,562
Eliminations....................... (2,766) (49,734) (115,526) (83,489) (88,691)
---------- ---------- ---------- ---------- ----------
$4,499,897 $4,233,345 $4,006,139 $4,120,081 $3,874,298
========== ========== ========== ========== ==========
DEPRECIATION, AMORTIZATION AND
DEPLETION
Newspaper Publishing............... $ 113,877 $ 105,939 $ 110,946 $ 100,458 $ 82,234
Professional Information........... 44,490 40,092 41,640 42,701 40,743
Consumer Media..................... 10,816 10,705 14,656 23,730 24,022
Corporate and Other................ 1,795 1,753 2,664 2,588 7,616
---------- ---------- ---------- ---------- ----------
$ 170,978 $ 158,489 $ 169,906 $ 169,477 $ 154,615
========== ========== ========== ========== ==========
CAPITAL EXPENDITURES
Newspaper Publishing............... $ 66,429 $ 88,226 $ 119,963 $ 231,493 $ 312,473
Professional Information........... 33,006 19,984 19,324 26,080 19,088
Consumer Media..................... 1,718 1,579 1,142 2,744 10,102
Corporate and Other................ 940 321 494 938 785
Discontinued Operations
Cable Television................ 116,914 82,333 60,426 66,641 70,590
Broadcast Television............ 3,464 3,141 6,803 6,189
---------- ---------- ---------- ---------- ----------
$ 219,007 $ 195,907 $ 204,490 $ 334,699 $ 419,227
========== ========== ========== ========== ==========
</TABLE>
- ---------------
(1) Includes restructuring charges as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Newspaper Publishing................. $ 33,080 $ 106,700 $ 39,690
Professional Information............. 25,300 96,000 1,160
Corporate and Other.................. 21,784 1,450
---------- ---------- ----------
$ 80,164 $ 202,700 $ 42,300
========== ========== ==========
</TABLE>
F-23
<PAGE> 96
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
----------------------------- -----------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1994 1993 1994 1993
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES................................... $858,726 $806,882 $2,400,068 $2,346,683
-------- -------- ---------- ----------
COSTS AND EXPENSES
Cost of sales............................ 454,214 464,997 1,291,433 1,292,607
Selling, general and administrative
expenses.............................. 315,985 279,532 921,880 886,566
Restructuring charges.................... 3,750 3,750
-------- -------- ---------- ----------
770,199 748,279 2,213,313 2,182,923
OPERATING PROFIT........................... 88,527 58,603 186,755 163,760
Interest expense......................... (17,445) (21,057) (51,757) (64,777)
Nonrecurring gains....................... 11,872 22,099
Other, net............................... 90 (1,211) 2,062 2,282
-------- -------- ---------- ----------
Income from continuing operations before
income taxes............................. 83,044 36,335 159,159 101,265
Income taxes............................. 43,250 21,086 79,774 53,959
-------- -------- ---------- ----------
Income from continuing operations.......... 39,794 15,249 79,385 47,306
Income from discontinued operations, net of
income taxes............................. 12,505 62,458 41,009 108,047
-------- -------- ---------- ----------
NET INCOME................................. $ 52,299 $ 77,707 $ 120,394 $ 155,353
======== ======== ========== ==========
Earnings per share:
Continuing operations.................... $ .31 $ .12 $ .61 $ .37
Discontinued operations.................. .10 .48 .32 .84
-------- -------- ---------- ----------
Earnings per share......................... $ .41 $ .60 $ .93 $ 1.21
======== ======== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements
F-24
<PAGE> 97
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 31,
1994 1993
------------- ------------
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash and cash equivalents................................................... $ 92,242 $ 46,756
Accounts receivable, less allowance for doubtful accounts and returns of
$77,305 and $70,866...................................................... 524,549 511,347
Note and other receivables.................................................. 296,458
Inventories................................................................. 148,472 161,251
Deferred income taxes....................................................... 31,635 40,965
Net assets of discontinued cable television operations...................... 626,091
Prepaid and other........................................................... 117,291 160,097
---------- ----------
Total Current Assets..................................................... 1,540,280 1,216,874
Property, plant and equipment, at cost less accumulated depreciation of
$813,857 and $760,609....................................................... 1,294,005 1,308,628
Goodwill...................................................................... 711,947 714,357
Net assets of discontinued cable television operations........................ 606,678
Other intangibles............................................................. 122,652 132,690
Deferred charges and other assets............................................. 543,956 520,670
---------- ----------
$4,212,840 $4,499,897
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable............................................................ $ 359,680 $ 380,005
Accrued liabilities......................................................... 45,768 94,436
Short-term debt............................................................. 128,044 336,356
Income taxes................................................................ 20,713 1,232
Other current liabilities................................................... 336,421 331,137
---------- ----------
Total Current Liabilities................................................ 890,626 1,143,166
Long-term debt................................................................ 749,044 795,454
Deferred income taxes......................................................... 197,407 196,869
Other liabilities and deferrals............................................... 456,770 465,133
---------- ----------
Total Liabilities........................................................ 2,293,847 2,600,622
---------- ----------
Shareholders' Equity
Common stock
Series A, $1 par value; 300,000,000 authorized; 98,700,000 and 97,588,000
issued.................................................................. 98,700 97,588
Series B, $1 par value; 100,000,000 authorized; no shares issued
Series C, convertible, $1 par value; 150,000,000 authorized; 31,259,000
and 32,366,000 issued................................................... 31,259 32,366
Preferred stock, $1 par value; 4,500,000 shares authorized; no shares issued
Additional paid-in capital.................................................. 167,331 167,490
Retained earnings........................................................... 1,707,446 1,687,574
---------- ----------
2,004,736 1,985,018
---------- ----------
Less treasury stock, at cost; 1,345,000 Series A shares..................... 61,543 61,543
---------- ----------
1,943,193 1,923,475
Less guaranteed debt of ESOP................................................ 24,200 24,200
---------- ----------
Total Shareholders' Equity............................................... 1,918,993 1,899,275
---------- ----------
$4,212,840 $4,499,897
========== ==========
</TABLE>
See notes to condensed consolidated financial statements
F-25
<PAGE> 98
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR-TO-DATE ENDED
-----------------------------
SEPTEMBER 25, SEPTEMBER 26,
1994 1993
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by continuing operating activities....................... $ 234,556 $ 212,029
Net cash provided by discontinued operating activities..................... 108,765 115,325
--------- ---------
Net cash provided by operating activities.......................... 343,321 327,354
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of operating assets.................................... 334,760 35,541
Capital expenditures....................................................... (81,221) (72,823)
Acquisitions, net of cash acquired......................................... (39,737) (22,300)
Additions to product development costs..................................... (48,443) (39,146)
Other, net................................................................. (1,217) (26)
--------- ---------
Net cash provided by (used in) continuing investing activities............. 164,142 (98,754)
Net cash used in investing activities from discontinued cable operations... (103,626) (2,556)
--------- ---------
Net cash provided by (used in) investing activities................ 60,516 (101,310)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt.......................................................... (408,719) (358,717)
Proceeds from issuance of debt............................................. 154,697 248,563
Dividends paid............................................................. (104,175) (104,152)
Other, net................................................................. (154) 2,515
--------- ---------
Net cash used in financing activities.............................. (358,351) (211,791)
--------- ---------
Increase in cash and cash equivalents........................................ 45,486 14,253
Cash and cash equivalents at beginning of year............................... 46,756 57,881
--------- ---------
Cash and cash equivalents at end of period................................... $ 92,242 $ 72,134
========= =========
Cash paid during the period for:
Interest (net of amounts capitalized)...................................... $ 53,957 $ 71,815
Income taxes............................................................... 67,780 44,586
</TABLE>
See notes to condensed consolidated financial statements
F-26
<PAGE> 99
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A -- BASIS OF PREPARATION
The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. The results of operations for interim periods are not necessarily
indicative of the results that may be expected for the fiscal year. For further
information, refer to the consolidated financial statements and accompanying
notes incorporated in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993.
Certain amounts have been reclassified to conform to the third quarter 1994
presentation.
NOTE B -- PROPOSED REORGANIZATION
In June 1994, the Company signed an agreement to merge its cable television
operations with Cox Cable Communications, Inc. (Cox Cable). It is contemplated
that prior to the merger the Company will borrow approximately $1.31 billion.
The Company will then transfer all of its non-cable operations, including the
$1.31 billion in cash, into a newly formed entity, New Times Mirror, as part of
a tax-free reorganization. Old Times Mirror, then owning the Company's cable
television operations and obligated to pay the newly incurred debt, will be
merged into Cox Cable. Each share of the Company's Series A and Series C common
stock outstanding prior to the merger will be converted into one share of New
Times Mirror Series A or Series C common stock, respectively. As a result,
voting interests in New Times Mirror will remain the same as voting interests in
Old Times Mirror. In addition, all non-Chandler Trust shareholders will receive
common stock of Cox Cable with an estimated aggregate fair value of
$932,000,000. Due to certain constraints imposed by the terms of the Chandler
Trusts, in lieu of common stock of Cox Cable, the Chandler Trusts will receive
non-voting, Series A cumulative preferred stock in New Times Mirror. The fair
value of the preferred stock received by the Chandler Trusts will be
substantially equivalent to the fair value of the Cox Cable common stock
received by the other shareholders, after giving effect to their respective
proportionate interest in Old Times Mirror. The Company expects this transaction
will increase shareholders' equity by approximately $670,000,000 and result in a
gain of about $1.62 billion. This transaction is expected to be consummated on
February 1, 1995 and is subject to certain conditions, including the receipt of
various regulatory approvals.
In connection with the settlement of reorganization-related litigation,
subsequent to the reorganization, shareholders will to be offered the
opportunity to exchange shares of Series A or Series C common stock for shares
of Series B cumulative preferred stock on a one-for-one basis. The Series B
preferred stock will have one vote per share.
At September 25, 1994, the Company had approximately $750,000,000 of
publicly-held notes outstanding. The Company commenced a tender offer, which was
completed on December 8, 1994, for $399,500,000 aggregate principal amount of
its fixed-rate debt. The Company has commenced an offer to exchange long-term
debt securities of New Times Mirror for $250,000,000 of its outstanding
long-term debt (See Note F).
As previously reported, a number of lawsuits were filed in Delaware and
California seeking to enjoin the proposed reorganization (See Note J for further
information regarding these proceedings). The resolution of these lawsuits is
not expected to have a material adverse effect on the Company's financial
position or results of operations.
F-27
<PAGE> 100
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE C -- DISCONTINUED OPERATIONS
As a result of the proposed reorganization described in Note B, the
Company's cable television operations are reported as discontinued
operations.
In March 1993, the Company announced two agreements for the sale of its
broadcast television stations to Argyle Television Holdings, Inc. (Argyle). The
sale of KTVI-TV, an ABC affiliate in St. Louis, Missouri, and WVTM-TV, an NBC
affiliate in Birmingham, Alabama, was completed in July, 1993. The sale of the
Company's remaining two stations, KDFW-TV in Dallas, Texas and KTBC-TV in
Austin, Texas, both CBS affiliates, was completed near the end of 1993. The sale
of the four stations resulted in a gain of $131,702,000, net of income tax
expense of $76,928,000. Most of the $320,000,000 in proceeds was received in
January 1994 and was used to redeem commercial paper.
The results of operations of the Broadcast and Cable Television segments
have been reported separately as discontinued operations in the Statements of
Consolidated Income. Income from discontinued operations is summarized as
follows (in thousands):
<TABLE>
<CAPTION>
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
----------------------------- -----------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1994 1993 1994 1993
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues..................................... $121,768 $134,585 $368,929 $422,104
-------- -------- -------- --------
Income before income taxes................... 24,106 112,647 75,624 188,457
Income taxes................................. 11,601 50,189 34,615 80,410
-------- -------- -------- --------
Net income................................... $ 12,505 $ 62,458 $ 41,009 $108,047
======== ======== ======== ========
</TABLE>
Income from discontinued operations for 1993 included gains on sales of
assets totaling $82,019,000 or $47,604,000 (37 cents per share) after applicable
income taxes for the third quarter, and $86,799,000 or $50,364,000 (39 cents per
share) net of income taxes for the year-to-date.
The net assets of the Cable Television operations which will be transferred
to Cox Cable, comprised principally of fixed assets, goodwill and other
intangibles, have been classified as net assets of discontinued operations for
all reported periods.
NOTE D -- NONRECURRING GAINS
In the third quarter of 1994, the Company recognized a gain of $11,872,000,
or $4,215,000 (3 cents per share) after applicable income taxes, on the
divestiture of a small elementary-high school book publishing operation. In
addition, in May, 1994, the Company sold preferred stock and warrants to
purchase common stock obtained as part of the 1992 settlement of a note
receivable related to the 1987 sale of the Denver Post. This transaction
increased income before income taxes by $10,227,000, or $6,431,000 (5 cents per
share) after applicable income taxes.
F-28
<PAGE> 101
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE E -- INVENTORIES
Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 31,
1994 1993
------------- ------------
<S> <C> <C>
Newsprint, paper, and other raw materials............ $ 35,898 $ 39,066
Books and other finished products.................... 88,245 94,675
Work-in-process...................................... 24,329 27,510
-------- --------
$148,472 $161,251
======== ========
</TABLE>
NOTE F -- DEBT
Short-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 31,
1994 1993
------------- ------------
<S> <C> <C>
Commercial paper..................................... $103,574 $312,000
Current maturities of long-term debt................. 24,470 24,356
-------- --------
$128,044 $336,356
======== ========
</TABLE>
Long-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 25, DECEMBER 31,
1994 1993
------------- ------------
<S> <C> <C>
Commercial paper..................................... $ 46,231
7 1/8% Debentures due March 1, 2013.................. $150,000 150,000
7 3/8% Debentures due July 1, 2023................... 100,000 100,000
8 7/8% Notes due March 1, 2001....................... 100,000 100,000
8.70% Notes due June 15, 1999........................ 99,993 100,000
8.55% Notes due June 1, 2000......................... 99,500 99,500
8 7/8% Ten-Year Notes due February 1, 1998........... 100,000 100,000
Medium-Term Notes due from March 20, 1997 to April 3,
2000, with an average interest rate of 8.63%....... 100,000 100,000
Guaranteed debt of ESOP, maturing December 15,
1994............................................... 24,200 24,200
Others at various interest rates, maturing through
2003............................................... 1,596 1,761
-------- --------
775,289 821,692
Unamortized discount................................. (1,775) (1,882)
Less current maturities.............................. (24,470) (24,356)
-------- --------
$749,044 $795,454
======== ========
</TABLE>
Commercial paper borrowings of $103,574,000 at September 25, 1994 and
$358,231,000 at December 31, 1993, carried a weighted average interest rate of
4.9% and 3.3%, respectively. The Company has agreements with several domestic
and foreign banks for unsecured short-term revolving lines of credit which
support its commercial paper borrowings. The domestic agreements expire April
27, 1995 and provide for borrowings up to $240,000,000. The foreign agreements
expire May 25, 1995 and provide for borrowings up to $150,000,000. As of
September 25, 1994, the Company had not borrowed under these agreements. All of
the commercial paper borrowings are classified as short-term as of September 25,
1994.
F-29
<PAGE> 102
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE F -- DEBT (CONTINUED)
In connection with the proposed reorganization (See Note B), the Company
has commenced a tender offer for $399,500,000 aggregate principal amount of its
fixed-rate debt maturing from 1997 through 2001. The offer, which ended on
December 8, 1994, resulted in the tender of $345.2 million of debt. Proceeds
from private sales of short-term securities funded the tender and these
borrowings are expected to be repaid in early 1995 when the cable merger is
completed. In connection with the short-term security issuances, the Company
increased its unsecured short-term revolving bank lines of credit to an
aggregate amount of $630,000,000. In connection with the tender, in September
the Company entered into interest rate swap agreements which were to commence in
January 1995 and exchange payments at fixed rates for payments at variable rates
on an aggregate principal amount of $200,000,000 of debt. These swaps and a swap
entered into in 1993 were redeemed when the tender offers ended. The Company
will record an extraordinary loss of approximately $12,900,000 in the fourth
quarter of 1994 in connection with the tender offers.
The Company has commenced an offer to exchange long-term debt securities of
New Times Mirror for $250,000,000 of its outstanding long-term debt in
connection with the cable television merger. With respect to this debt, the
Company entered into long-term interest rate swap agreements commencing January
1995 which exchange payments at fixed rates for payments at variable rates.
As contemplated by the cable merger agreement, the Company expects to
borrow up to approximately $1.31 billion prior to the merger and the related
debt from this borrowing, along with approximately $54 million of fixed rate
debt which was not tendered, will be assumed by Cox Cable. Part of the proceeds
of these borrowings are expected to be used to retire the short-term securities
issued to finance the debt tender and to redeem, when first callable on February
1, 1995, the $100,000,000 of 8 7/8% Notes due February 1, 1998.
NOTE G -- EARNINGS AND DIVIDENDS PER SHARE
Earnings per share computations were based upon the weighted average number
of shares of common stock and common stock equivalents outstanding of
128,722,000 and 128,718,000 for third quarters ended September 25, 1994 and
September 26, 1993, respectively. The weighted average number of shares were
128,798,000 and 128,739,000 for year-to-date ended September 25, 1994 and
September 26, 1993, respectively. Fully diluted earnings per share were the same
as the earnings per share indicated.
Cash dividends of 27 cents per share of common stock were declared in the
third quarters of both 1994 and 1993.
NOTE H -- CASH MANAGEMENT SYSTEM
Under the Company's cash management system, the bank notifies the Company
daily of checks presented for payment against its primary disbursing accounts.
The Company transfers funds from other sources, such as short-term investments
or commercial paper issuance, to cover the checks presented for payment. This
program results in a book cash overdraft in the primary disbursing accounts as a
result of the checks outstanding. The book overdraft, which was reclassified to
accounts payable, was approximately $44,845,000 and $41,733,000 at September 25,
1994 and December 31, 1993, respectively.
NOTE I -- INCOME TAXES
The Company's effective tax rate for continuing operations exceeds the
federal statutory income tax rate due principally to state taxes and permanent
state and federal tax differences related to the non-deductible amortization of
goodwill and other intangibles.
F-30
<PAGE> 103
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE J -- CONTINGENT LIABILITIES
The Company and its subsidiaries are defendants in actions for libel and
other matters arising out of their business operations. In addition from time to
time, the Company and its subsidiaries are involved as parties in various
governmental and administrative proceedings, including environmental matters.
The Company does not believe that any such proceedings currently pending will
have a material adverse effect on its consolidated financial position, although
an adverse resolution in any reporting period of one or more of these matters
could have a material impact on results of operations for that period.
A number of lawsuits were filed in Delaware and California in mid-1994
seeking to enjoin the proposed reorganization described in Note B. On October
11, 1994, the Company announced an agreement to settle all of the shareholder
litigation related to this proposed reorganization. Under the terms of the
settlement, upon completion of the transactions, the Company will offer
shareholders Series B preferred stock. The Chandler Trusts have agreed not to
participate in this exchange offer. In addition, the settlement calls for the
Company, subject to the exercise of the fiduciary duties of its Board of
Directors, to pay an annual dividend of at least 24 cents per share on its
common stock for the three years following the closing of the merger and to pay
up to $6 million for plaintiffs' attorney fees and expenses. The settlement has
been approved by the Delaware Chancery Court and the California Superior Court.
The settlement of this litigation will not have an adverse material impact on
the Company's financial position or results of operations.
F-31
<PAGE> 104
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 102(b)(7) of the General Corporation Law of the State
of Delaware (the "GCL"), the Certificate of Incorporation of the registrant
eliminates the liability of the directors of the registrant to the registrant or
its stockholders for breach of fiduciary duty, except for liabilities related to
breach of the duty of loyalty, actions not in good faith, and certain other
liabilities.
As permitted by Section 145 of the GCL, Article VII, Section 1 of the
Bylaws of the registrant provides for the indemnification of its directors,
officers, and employees against expenses actually and reasonably incurred in
connection with certain stated proceedings and under certain stated conditions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
<TABLE>
<S> <C>
3.1 Restated Certificate of Incorporation of the registrant, as filed with the
Secretary of State of the State of Delaware on January 23, 1995.
3.2 Certificate of Amendment to Certificate of Incorporation of the registrant, as
filed with the Secretary of State of the State of Delaware on February 1, 1995.
3.3 Certificate of Designations of Series C Common Stock, as filed with the Secretary
of State of the State of Delaware on January 23, 1995.
3.4 Bylaws of the registrant.
3.5 Form of Certificate of Designations of Series A Preferred Stock.*
3.6 Form of Certificate of Designations of Series B Preferred Stock.*
5 Opinion of Gibson, Dunn & Crutcher regarding legality of securities being
registered.
8 Opinion of Gibson, Dunn & Crutcher regarding certain federal income tax matters.
11 Computation of Earnings Per Share.
12 Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of the registrant.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Gibson, Dunn & Crutcher (included in Exhibit 5 to this Registration
Statement).
</TABLE>
- ---------------
* Filed as an exhibit to the Registration Statement on Form S-4 of the
registrant (File No. 33-80154) and incorporated herein by reference.
(B) FINANCIAL SCHEDULES.
Not applicable.
(C) OPINIONS OF FINANCIAL ADVISORS.
Not applicable.
ITEM 22. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any
II-1
<PAGE> 105
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE> 106
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on February 14, 1995.
THE TIMES MIRROR COMPANY
By: /s/ ROBERT F. ERBURU
----------------------------------
Robert F. Erburu
Chairman of the Board,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed below by the following persons in
their capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ------------------
<S> <C> <C>
/s/ ROBERT F. ERBURU Director, President and February 14, 1995
- ---------------------------------------------
Robert F. Erburu Chief Executive Officer
(Principal Executive Officer)
/s/ JAMES F. GUTHRIE Vice President and February 14, 1995
- --------------------------------------------- Chief Financial Officer
James F. Guthrie (Principal Financial and
Accounting Officer)
/s/ OTIS CHANDLER Director February 14, 1995
- ---------------------------------------------
Otis Chandler
/s/ CLAYTON W. FRYE, JR. Director February 14, 1995
- ---------------------------------------------
Clayton W. Frye, Jr.
- --------------------------------------------- Director , 1995
David Laventhol
/s/ HAROLD M. WILLIAMS Director February 14, 1995
- ---------------------------------------------
Harold M. Williams
/s/ GWENDOLYN GARLAND BABCOCK Director February 14, 1995
- ---------------------------------------------
Gwendolyn Garland Babcock
/s/ DONALD R. BEALL Director February 14, 1995
- ---------------------------------------------
Donald R. Beall
/s/ JOAN A. PAYDEN Director February 14, 1995
- ---------------------------------------------
Joan A. Payden
</TABLE>
II-3
<PAGE> 107
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ------------------
<S> <C> <C>
/s/ WARREN B. WILLIAMSON Director February 14, 1995
- ---------------------------------------------
Warren B. Williamson
/s/ JOHN E. BRYSON Director February 14, 1995
- ---------------------------------------------
John E. Bryson
/s/ BRUCE CHANDLER Director February 14, 1995
- ---------------------------------------------
Bruce Chandler
/s/ DR. ALFRED E. OSBORNE, JR. Director February 14, 1995
- ---------------------------------------------
Dr. Alfred E. Osborne, Jr.
/s/ WILLIAM STINEHART, JR. Director February 14, 1995
- ---------------------------------------------
William Stinehart, Jr.
Director , 1995
- ---------------------------------------------
Dr. Edward Zapanta
/s/ C. MICHAEL ARMSTRONG Director February 14, 1995
- ---------------------------------------------
C. Michael Armstrong
</TABLE>
II-4
<PAGE> 108
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
------- ---------------------------------------------------------------------- ------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation of the Registrant, as filed with
the Secretary of State of the State of Delaware on January 23, 1995...
3.2 Certificate of Amendment to Certificate of Incorporation of the
Registrant, as filed with the Secretary of State of the State of
Delaware on February 1, 1995..........................................
3.3 Certificate of Designations of Series C Common Stock, as filed with
the Secretary of State of the State of Delaware on January 23, 1995...
3.4 Bylaws of the Registrant..............................................
3.5 Form of Certificate of Designations of Series A Preferred Stock*......
3.6 Form of Certificate of Designations of Series B Preferred Stock*......
5 Opinion of Gibson, Dunn & Crutcher regarding legality of securities
being registered......................................................
8 Opinion of Gibson, Dunn & Crutcher regarding certain federal income
tax matters...........................................................
11 Computation of Earnings Per Share.....................................
12 Computation of Ratio of Earnings to Fixed Charges.....................
21 Subsidiaries of the Registrant........................................
23.1 Consent of Ernst & Young LLP..........................................
23.2 Consent of Gibson, Dunn & Crutcher (included in Exhibit 5 to this
Registration Statement)...............................................
</TABLE>
- ---------------
* Filed as an exhibit to the Registration Statement on Form S-4 of the
registrant (File No. 33-80154) and incorporated herein by reference.
<PAGE> 1
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW TMC INC.
The undersigned, for the purpose of amending and restating the
Certificate of Incorporation of New TMC Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), do hereby
certify as follows:
1. The date of filing of the Corporation's original
Certificate of Incorporation with the Secretary of State of the State of
Delaware was June 2, 1994.
2. This Restated Certificate of Incorporation has been
duly adopted pursuant to Sections 242 and 245 of the Delaware General
Corporation Law; and
3. The Corporation's Certificate of Incorporation is
hereby amended and restated in its entirety as follows:
Article I: NAME
The name of this corporation is:
New TMC Inc.
Article II: DEFINITIONS
For the purposes of this Restated Certificate of Incorporation:
A. "Affiliate" and "Associate" have the meanings set
forth in Rule 12b-2 under the Securities Exchange Act of 1934 as in effect on
the date upon which the Corporation was incorporated in the State of Delaware.
B. "Beneficially Owns" has the meaning set forth in Rule
13d-3 under the Securities Exchange Act of 1934 as in effect on the date upon
which the Corporation was incorporated in the State of Delaware.
C. "Business Combination" means (a) any merger,
consolidation, combination or reorganization of the Corporation or a Subsidiary
with or into a Related Person or of a Related Person with or into the
Corporation or a Subsidiary, (b) any
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sale, lease, exchange, transfer, liquidation or other disposition (including,
without limitation, a mortgage or any other security device) of assets of the
Corporation and/or one or more Subsidiaries (including, without limitation, any
voting securities of a Subsidiary) constituting a Substantial Part of the
Corporation to a Related Person, (c) any sale, lease, exchange, transfer,
liquidation or other disposition (including, without limitation, a mortgage or
any other security device) of assets of a Related Person (including, without
limitation, any voting securities of a subsidiary of such Related Person)
constituting a Substantial Part of such Related Person to the Corporation
and/or one or more Subsidiaries, (d) the issuance or transfer of any securities
(other than by way of a pro rata distribution to all stockholders) of the
Corporation or a Subsidiary to a Related Person which, when aggregated with all
prior issuances and transfers to such Related Person of securities of the
Corporation or such Subsidiary during the preceding 365 days, constitutes five
percent (5%) or more of the outstanding class or series of securities of the
Corporation or such Subsidiary, (e) the acquisition by the Corporation or a
Subsidiary of any securities issued by a Related Person if, after giving effect
thereto, the Corporation and its Subsidiaries would own an aggregate of one
percent (1%) or more of (i) the outstanding shares of any class or series of
any equity security issued by the Related Person or (ii) the outstanding
principal amount of any class or series of any debt security issued by the
Related Person (for purposes of such calculation, the Corporation and its
Subsidiaries shall be deemed to own at the time of such calculation any such
equity or debt securities of the Related Person that may then or thereafter be
acquired (x) upon the exercise of any options, warrants or other rights then
owned by the Corporation or a Subsidiary or (y) upon the conversion or exchange
of any other security then owned by the Corporation or a Subsidiary), (f) any
recapitalization or reorganization that would have the effect, directly or
indirectly, of increasing the voting power of a Related Person, and (g) any
agreement, contract or other arrangement providing for any of the transactions
described in this definition of a Business Combination.
D. "Continuing Director" means, as to any Related
Person, any member of the Board of Directors of the Corporation (the "Board")
who (i) is unaffiliated with and is not the Related Person and (ii) was a
member of the board of directors of The Times Mirror Company, a Delaware
corporation, prior to the date upon which the Corporation was incorporated in
the State of Delaware or thereafter became a member of the Board prior to the
time that the Related Person became a Related Person, and any successor of a
Continuing Director who is recommended to succeed a Continuing Director by a
majority of Continuing Directors then on the Board.
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E. "Disinterested Shares" means, as to any Related
Person, shares of Voting Stock held by stockholders other than such Related
Person.
F. "Effective Date" means the date upon which the
Corporation's Board of Directors has three or more directors.
G. "Fair Market Value" means: (a) in the case of stock,
the highest closing sale price during the thirty (30) day period immediately
preceding and including the date in question of a share of such stock on the
Composite Tape for securities listed on the New York Stock Exchange, or, if
such stock is not quoted on the Composite Tape, on the New York Stock Exchange,
or if such stock is not listed on such Exchange, 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 bid quotation with respect to a share of such
stock during the thirty (30) day period preceding and including the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotation System or any other quotation reporting system then in general use,
or, if no such quotations are available, the Fair Market Value on the date in
question of a share of such stock as determined by the Continuing Directors in
good faith, which determination shall be final; and (b) in the case of property
other than cash or stock, the Fair Market Value of such property on the date in
question as determined by the Continuing Directors in good faith, which
determination shall be final. In making such determinations, the Continuing
Directors may rely in good faith upon the books of account or other records of
the Corporation or statements prepared by its officers or by independent
accountants or by an appraiser selected with reasonable care by the Board.
H. "Related Person" means and includes any individual,
corporation, partnership or other person or entity, or any group of two or more
of the foregoing that have agreed to act together, which, together with its
Affiliates and Associates, Beneficially Owns, in the aggregate, five percent
(5%) (the "Threshold Percentage") or more of the outstanding Voting Interests
of the Corporation, and any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity; provided, however, that the
term "Related Person" shall not include either (i) any individual, corporation,
partnership or other person, entity or group which beneficially owned on the
date upon which the Corporation was incorporated in the State of Delaware five
percent (5%) or more of the common stock of The Times Mirror Company, a
Delaware Corporation, or (ii) any employee benefit plan established to provide
benefits for employees of the C orporation or its subsidiaries, any trust
established pursuant thereto, or any
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trustee or fiduciary when acting in such capacity with respect to any such plan
or trust.
I. "Subsidiary" means any corporation in which the
Corporation owns, directly or indirectly, securities which entitle the
Corporation to elect a majority of the board of directors of such corporation
or which otherwise give to the Corporation the power to control such
corporation.
J. "Substantial Part" means more than ten percent (10%)
of the Fair Market Value of the total consolidated assets of the corporation in
question and its subsidiaries as of the end of its most recent fiscal year
ending prior to the time the determination is being made.
K. "Voting Interests" means the total number of votes
which can be cast by all shares of Voting Stock then outstanding.
L. "Voting Stock" means all outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors of the Corporation, and each reference to a percentage or portion of
shares of Voting Stock shall refer to such percentage or portion of the votes
entitled to be cast by such shares.
Article III: REGISTERED OFFICE
The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle, and the name of its registered agent at
that address is The Corporation Trust Company.
Article IV: BUSINESS
The nature of the business and the purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
Article V: AUTHORIZED CAPITAL STOCK
Section 1. Authorized Shares.
The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is nine hundred
thirty-three million (933,000,000) shares, of which (i) nine hundred million
(900,000,000) shares, of a par value of $1 per share, shall be Common Stock
(the "Common Stock"), and (ii) thirty-three million (33,000,000) shares, of
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a par value of $1 per share, shall be Preferred Stock (hereinafter called
"Preferred Stock").
The Common Stock may be issued as a single class, without
series, or if so determined from time to time by the Board of Directors, either
in whole or in part in two or more series. Unless and until a Certificate of
Designation is filed with respect to two or more series, all shares of Common
Stock shall be of one class without series and shall be denominated Common
Stock. Upon the filing with the Secretary of State of a Certificate of
Designation providing for the issuance of either Series B Stock or Series C
Stock, each share of Common Stock outstanding or held in the treasury
immediately prior to such filing shall be converted without any action by the
holder thereof into one share of Series A Stock and each certificate
representing outstanding shares of Common Stock shall thereafter be deemed to
represent shares of Series A Stock.
If shares of Common stock are issued in two or more series,
five hundred million (500,000,000) shares shall be denominated Series A Common
Stock (hereinafter called "Series A Stock"). The remaining shares of Common
Stock may be issued as additional shares of Series A Stock, as Series B Common
Stock (hereinafter called "Series B Stock") and/or Series C Common Stock
(hereinafter called "Series C Stock"). Subject to the foregoing, the Board of
Directors shall have the authority to fix the number of shares constituting any
such series, and to increase or decrease the number of shares of any series
prior to or after the issuance of shares of that series, but not below the
number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease
shall resume the status of authorized but unissued shares of Common Stock.
Section 2. Series A Stock, Series B Stock and Series C Stock.
A. Powers, Preferences and Rights.
The Board of Directors shall have the authority to fix or to
alter the powers, designations, preferences and relative, participating,
optional or other rights, if any, or the qualifications, limitations or
restrictions thereof, if any, of the Series B Stock or Series C Stock; provided
that, except as set forth in the next sentence, in no such case shall the
powers, preferences and rights of the Series B Stock or Series C Stock be
greater than those provided for herein; and provided further that in no such
case shall the voting rights of the Series B Stock or the Series C Stock be
other than as provided for herein. The Board of Directors shall have the
authority to provide, in the case of the Series B Stock or Series C Stock, that
upon the voluntary or involuntary
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liquidation, winding-up or dissolution of the Corporation, the holders of
shares of such series shall be entitled to payment from, or to participate in
the distribution of, assets of the Corporation up to the amount of the par
value thereof prior to any payment to, or participation in such distribution of
assets by, the holder of Series A Stock. The Board also may make other changes
in the powers, preferences and rights of the Series B Stock and the Series C
Stock, provided that in no such case may the powers, preferences and rights of
any such series be greater than those described herein. Except as otherwise
required by law or expressly provided for in or pursuant to the authority
provided in this Restated Certificate of Incorporation or any resolution or
resolutions providing for the issuance of Series B Stock or Series C Stock, the
powers, preferences and rights of the Series A Stock, the Series B Stock and
the Series C Stock and the qualifications, limitations or restrictions thereof,
shall be in all respects identical.
B. Voting Rights.
Subject to the provisions for cumulative voting set forth in
Article X:
1. If there shall be only one series of Common Stock
outstanding, each share of Common Stock shall entitle the holder thereof to one
(1) vote.
2. If two or more series are issued and outstanding,
each share of Series A Stock shall entitle the holder thereof to one (1) vote,
each share of Series B Stock shall entitle the holder thereof to not less than
one-tenth (1/10) of a vote nor more than one (1) vote, and each share of Series
C Stock shall entitle the holder thereof to not less then one (1) vote nor more
than ten (10) votes. Such voting rights shall be set forth in a Certificate of
Designation to be filed with respect to such series. Except as set forth
herein, all actions submitted to a vote of stockholders shall be voted on by
the holders of Series A Stock, Series B Stock and Series C Stock (as well as
the holders of any series of Preferred Stock, if any, entitled to vote thereon)
voting together as a single class.
3. The holders of Series A Stock, Series B Stock and
Series C Stock shall each be entitled to vote separately as a series with
respect to (i) amendments to this Restated Certificate of Incorporation that
alter or change the powers, preferences or special rights of their respective
class of stock so as to affect them adversely and (ii) such other matters as
require class votes under the General Corporation Law of the State of Delaware
(except that the Board may
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increase or decrease the number of shares constituting Series B Stock or Series
C Stock).
4. Except as otherwise provided by law or pursuant to
this Article V or by resolution or resolutions of the Board providing for the
issue of any series of Preferred Stock, the holders of the Series A Stock, the
Series B Stock and the Series C Stock shall have sole voting power for all
purposes, each holder of the Series A Stock, Series B Stock and Series C Stock
being entitled to vote as provided in this paragraph B of Section 2 and in the
resolution or resolutions providing for the issuance of the Series B Stock or
the Series C Stock.
C. Dividends.
1. If no shares of a particular series of Common Stock
are outstanding, the Board may declare and distribute a stock dividend payable
in shares of that series to the holders of any other class or series of stock
then outstanding.
2. If and when dividends on the Series A Stock, Series B
Stock and Series C Stock are declared payable from time to time by the Board as
provided in this subparagraph C.2, whether payable in cash, in property or in
shares of stock of the Corporation, the holders of Series A Stock, the holders
of Series B Stock and the holders of Series C Stock shall be entitled to share
equally, on a per share basis, in such dividends, subject to the limitations
described below. Except for dividends permitted by subparagraph C.1, if
dividends are declared that are payable in shares of Series A Stock, Series B
Stock, or Series C Stock, such dividends shall be payable at the same rate on
all series of stock and the dividends payable in shares of Series A Stock shall
be payable only to holders of Series A Stock, the dividends payable in shares
of Series B Stock shall be payable only to holders of Series B Stock and the
dividends payable in shares of Series C Stock shall be payable only to holders
of Series C Stock. If the Corporation shall in any manner subdivide or combine
the outstanding shares of Series A Stock, Series B Stock, or Series C Stock,
the outstanding shares of the other such series of Common Stock shall be
proportionally subdivided or combined in the same manner and on the same basis
as the outstanding shares of Series A Stock, Series B Stock or Series C Stock,
as the case may be, which have been subdivided or combined.
3. Subject to provisions of law and the preferences of
the Preferred Stock and of any other stock ranking prior to the Series A Stock,
the Series B Stock, or the Series C Stock as to dividends, the holders of the
Series A Stock, the Series B Stock, and the Series C Stock shall be entitled to
receive dividends at such time and in such amounts as may be determined by the
Board and declared out of any funds lawfully available
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therefor, and shares of Preferred Stock of any series shall not be entitled to
share therein except as otherwise expressly provided in the resolution or
resolutions of the Board providing for the issue of such series.
D. Conversion of Series C Stock by Holder.
1. The holder of each share of Series C Stock shall have
the right at any time, or from time to time, at such holder's option, to
convert such share into one fully paid and nonassessable share of Series A
Stock on and subject to the terms and conditions hereinafter set forth.
2. In order to exercise his conversion privilege, the
holder of any shares of Series C Stock to be converted shall present and
surrender the certificate or certificates representing such shares during usual
business hours at any office or agency of the Corporation maintained for the
transfer of Series C Stock and shall deliver a written notice of the election
of the holder to convert the shares represented by such certificate or any
portion thereof specified in such notice. Such notice shall also state the
name or names (with address) in which the certificate or certificates for
shares of Series A Stock issuable on such conversion shall be registered. If
required by the Corporation, any certificate for shares surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder of such shares or
his duly authorized representative. Each conversion of shares of Series C
Stock shall be deemed to have been effected on the date (the "conversion date")
on which the certificate or certificates representing such shares shall have
been surrendered and such notice and any required instruments of transfer shall
have been received as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Series A Stock shall be
issuable on such conversion shall be, for the purpose of receiving dividends
and for all other corporate purposes whatsoever, deemed to have become the
holder or holders of record of the shares of Series A Stock represented thereby
on the conversion date.
3. As promptly as practicable after the presentation and
surrender for conversion, as herein provided, of any certificate for shares of
Series C Stock, the Corporation shall issue and deliver at such office or
agency, to or upon the written order of the holder thereof, certificates for
the number of shares of Series A Stock issuable upon such conversion. Subject
to the provisions of paragraph F of this Section 2, in case any certificate for
shares of Series C Stock shall be surrendered for conversion of a part only of
the shares represented thereby, the Corporation shall deliver at such office or
agency, to or upon the written
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order of the holder thereof, a certificate or certificates for the number of
shares of Series C Stock represented by such surrendered certificate which are
not being converted. The issuance of certificates for shares of Series A Stock
issuable upon the conversion of shares of Series C Stock by the registered
holder thereof shall be made without charge to the converting holder for any
tax imposed on the Corporation in respect of the issue thereof. The
Corporation shall not, however, be required to pay any tax which may be payable
with respect to any transfer involved in the issue and delivery of any
certificate in a name other than that of the registered holder of the shares
being converted, and the Corporation shall not be required to issue or deliver
any such certificate unless and until the person requesting the issue thereof
shall have paid to the Corporation the amount of such tax or has established to
the satisfaction of the Corporation that such tax has been paid.
4. Upon any conversion of shares of Series C Stock into
shares of Series A Stock pursuant hereto, no adjustment with respect to
dividends shall be made; only those dividends shall be payable on the shares so
converted as have been declared and are payable to holders of record of shares
of Series C Stock on a date prior to the conversion date with respect to the
shares so converted; and only those dividends shall be payable on shares of
Series A Stock issued upon such conversion as have been declared and are
payable to holders of record of shares of Series A Stock on or after such
conversion date.
5. In case of any consolidation or merger of the
Corporation as a result of which the holders of Series A Stock shall be
entitled to receive cash, stock, other securities or other property with
respect to or in exchange for Series A Stock or in case of any sale or
conveyance of all or substantially all of the property or business of the
Corporation as an entirety, a holder of a share of Series C Stock shall have
the right thereafter to convert such share into the kind and amount of cash,
shares of stock and other securities and properties receivable upon such
consolidation, merger, sale or conveyance by a holder of one share of Series A
Stock and shall have no other conversion rights with regard to such share. The
provisions of this subparagraph D.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
6. Shares of the Series C Stock converted into Series A
Stock shall be retired and shall resume the status of authorized but unissued
shares of Series C Stock.
7. Such number of shares of Series A Stock as may from
time to time be required for such purpose shall be
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reserved for issuance upon conversion of outstanding shares of Series C Stock.
E. Termination of Series B or Series C Stock.
1. All outstanding shares of Series B Stock shall
automatically, without any further act or deed on the part of this Corporation
or any other person, be converted into shares of Series A stock on a
share-for-share basis
a. if, as a result of the existence of the
Series B Stock, the Series A Stock is excluded from trading on
the New York Stock Exchange, the American Stock Exchange and
all other national securities exchanges and is also excluded
from quotation on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") and any other
national quotation system then in use; or
b. at the option of the Corporation:
(i) at any time when the Board and the
holders of a majority of the outstanding shares of
the Series B Stock approve the conversion of all of
the Series B Stock into Series A Stock; or
(ii) if the Board, in its sole
discretion, elects to effect a conversion in
connection with its approval of any sale or lease of
all or any substantial part of the Corporation's
assets or any merger, consolidation, liquidation or
dissolution of the Corporation; or
(iii) if the Board, in its sole discretion,
elects to effect a conversion after a determination
that there has been a material adverse change in the
liquidity, marketability or market value of the
outstanding Series A Stock, considered in the
aggregate, (X) due to the exclusion of the Series A
Stock from trading on a national securities exchange
or the exclusion of the Series A Stock from quotation
on NASDAQ or such other system then in use, or (Y)
due to requirements under federal or state law, in
any such case as a result of the existence of the
Series B Stock.
2. All outstanding shares of Series C Stock shall
automatically, without any further act or deed on the part of this Corporation
or any other person, be converted into shares of Series A Stock on a
share-for-share basis
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a. if, as a result of the existence of the
Series C Stock, the Series A Stock is excluded from trading on
the New York Stock Exchange, the American Stock Exchange and
all other national securities exchanges and is also excluded
from quotation on NASDAQ and any other national quotation
system then in use; or
b. at the option of the Corporation:
(i) at any time when the Board and the
holders of a majority of the outstanding shares of
the Series C Stock approve the conversion of all of
the Series C Stock into Series A Stock; or
(ii) if the Board, in its sole
discretion, elects to effect a conversion in
connection with its approval of any sale or lease of
all or any substantial part of the Corporation's
assets or any merger, consolidation, liquidation or
dissolution of the Corporation; or
(iii) if the Board, in its sole discretion,
elects to effect a conversion after a determination
that there has been a material adverse change in the
liquidity, marketability or market value of the
outstanding Series A Stock, considered in the
aggregate, (X) due to the exclusion of the Series A
Stock from trading on a national securities exchange
or the exclusion of the Series A Stock from quotation
on NASDAQ or such other system then in use, or (Y)
due to requirements under federal or state law, in
any such case as a result of the existence of the
Series C Stock.
3. In the event of any automatic conversion of Series B
Stock or Series C Stock pursuant to this paragraph E, certificates formerly
representing outstanding shares of Series B Stock or Series C Stock will
thereafter be deemed to represent a like number of shares of Series A Stock.
F. Limitations on Transfer of Series C Stock.
1. No record or beneficial owner of shares of Series C
stock may transfer, and the Corporation shall not register the transfer of,
such shares of Series C Stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a "Permitted Transferee" as provided
herein.
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a. In the case of a holder of record of the
Series C Stock (the "Series C Holder") who is a natural person
and the beneficial owner of the shares of Series C Stock to be
transferred, Permitted Transferees shall include only the
following:
(i) The spouse of such Series C Holder,
any lineal descendant of a grandparent of such Series
C Holder, or any spouse of such lineal descendant
(herein collectively referred to as "such Series C
Holder's Family Members");
(ii) The trustee or trustees of a trust
(including a voting trust) principally for the
benefit of such Series C Holder and/or one or more
such Series C Holder's Family Members; provided,
however, if at any time such trust ceases to meet the
requirements of this subparagraph (ii), all shares of
Series C stock then held by such trustee or trustees
shall immediately and automatically, without further
act or deed on the part of the Corporation or any
other person, be converted into Series A Stock on a
share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock;
(iii) A corporation, if sufficient shares
entitled to elect at least a majority of the entire
board of directors of such corporation are
beneficially owned by, or a partnership in which all
of the partners are, and all of the partnership
interests are owned by, the Series C Holder and/or
one or more of the Permitted Transferees of such
Series C Holder determined under this subparagraph
F.a. provided that if by reason of any change in the
ownership of such stock or partners or partnership
interests, such corporation or partnership would no
longer qualify as a Permitted Transferee of such
Series C Holder, all shares of Series C Stock then
held by such corporation or partnership shall
immediately and automatically, without further act or
deed on the part of the corporation or any other
person, be converted into shares of Series A Stock on
a share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock;
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(iv) An organization established by the
Series C Holder or such Series C Holder's Family
Members, contributions to which are deductible for
federal income, estate or gift tax purposes (a
"Charitable Organization") and a majority of whose
governing board at all times consists of the Series C
Holder and/or one or more of the Permitted
Transferees of such Series C Holder, or any successor
to such Charitable Organization meeting such
definition; provided that if by reason of any change
in the composition of the governing board of such
Charitable Organization, such Charitable Organization
shall no longer qualify as a Permitted Transferee of
such Series C Holder, all shares of Series C Stock
then held by such Charitable Organization shall
immediately and automatically, without further act or
deed on the part of the Corporation or any other
person, be converted into shares of Series A Stock on
a share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock; and
(v) The executor, administrator or
personal representative of the estate of a deceased
Series C Holder or the trustee of the estate of a
bankrupt or insolvent Series C Holder or the guardian
or conservator of a Series C Holder adjudged disabled
or incompetent by a court of competent jurisdiction,
acting in his capacity as such.
b. In the case of a Series C Holder holding the
shares of Series C Stock as trustee pursuant to a trust other
than a trust described in subparagraph F.l.c. below, Permitted
Transferees shall include only the following:
(i) any successor trustee of such trust
who is not, and by becoming successor trustee will
not become, a Related Person;
(ii) the person who established such
trust; and
(iii) a Permitted Transferee of such person
who established such trust.
c. In the case of a Series C Holder holding the
shares of Series C Stock as trustee pursuant to a
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trust which was irrevocable on the Record Date (a "Transferor
Trust"), Permitted Transferees shall include only the
following:
(i) any successor trustee of such
Transferor Trust who is described in subparagraph
F.l.c(ii), (iii) or (iv) below or who is not, and by
becoming successor trustee will not otherwise become,
a Related Person;
(ii) any person to whom or for whose
benefit the income may be distributed during the term
of such Transferor Trust;
(iii) any person to whom or for whose
benefit the principal may be distributed either
during or at the end of the term of such Transferor
Trust whether by power of appointment or otherwise;
and
(iv) any lineal descendant of a
grandparent of the creator of such Transferor Trust,
the spouse of such creator and the spouse of any such
lineal descendant.
d. In the case of a record (but not beneficial)
owner of the Series C Stock as nominee for the person who was
the beneficial owner thereof on the Record Date, Permitted
Transferees shall include only such beneficial owner and a
Permitted Transferee of such beneficial owner.
e. In the case of a Series C Holder which is a
partnership and the beneficial owner of the shares of Series C
Stock proposed to be transferred, Permitted Transferees shall
include only:
(i) any partner of such partnership who
was also a partner of such partnership on the Record
Date;
(ii) any person transferring shares of
Series C stock to such partnership after the Record
Date (provided, however, that such transferor may not
receive shares of Series C Stock in excess of the
shares transferred by the transferor to such
partnership); and
(iii) any Permitted Transferee of such
person referred to in subparagraph F.1.e(i) or
F.1.e(ii) above (not in excess of the number of
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shares which such person is entitled to receive
pursuant to this subparagraph F.1.e).
f. In the case of a Series C Holder which is a
corporation and the beneficial owner of the shares proposed to
be transferred, Permitted Transferees shall include only:
(i) any stockholder of such corporation
on the Record Date that is generally entitled to vote
in the election of directors of such corporation (a
"Voting Stockholder"), provided that such corporation
does not have more than 30 Voting Stockholders of
Record on the Record Date (or such greater number of
Voting Stockholders as may be allowed under the
applicable state law of such corporation in order to
qualify as a close corporation);
(ii) any stockholder of such corporation
on the Record Date who receives shares of Series C
Stock pro rata to his stock ownership in such
corporation through a dividend or through a
distribution made upon liquidation of such
corporation;
(iii) any person transferring shares of
Series C Stock to such corporation after the Record
Date (provided, however, that such transferor may not
receive shares of Series C Stock in excess of the
shares transferred by the transferor to such
corporation);
(iv) any Permitted Transferee of such
stockholder or person referred to in subparagraph
F.1.f(i), (ii) or (iii) above (not in excess of the
number of shares which such stockholder or person is
entitled to receive pursuant to this subparagraph
F.1.f); and
(v) the survivor of a merger or
consolidation of such corporation if those persons
who owned beneficially sufficient shares entitled to
elect at least a majority of the entire board of
directors of such constituent corporation immediately
prior to the merger or consolidation own beneficially
sufficient shares entitled to elect at least a
majority of the entire board of directors of the
surviving corporation, provided that if by reason of
any change in the ownership of such stock such
surviving corporation would no longer qualify as
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a Permitted Transferee, all shares of Series C Stock
then held by such surviving corporation shall
immediately and automatically, without further act or
deed on the part of the corporation or any other
person, be converted into shares of Series A Stock on
a share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock.
For purposes of subparagraph F.1.f., a mutual company shall be treated
as a corporation, and the persons holding voting interests therein
shall be treated as stockholders.
g. In the case of a Series C Holder who is the
executor or administrator of the estate of a deceased Series C
Holder, guardian or conservator of the estate of a disabled or
incompetent Series C Holder or who is a trustee of the estate
of a bankrupt or insolvent Series C Holder, Permitted
Transferees shall include only a Permitted Transferee of such
deceased, disabled, bankrupt or insolvent Series C Holder.
2. Notwithstanding anything to the contrary set forth
herein, any Series C Holder may pledge such holder's shares of Series C 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 name of the pledgee and shall remain
subject to the provisions of this paragraph F. In the event of foreclosure or
other similar action by the pledgee, such pledged shares of Series C Stock may
only be transferred to a Permitted Transferee of the pledgor or converted into
shares of Series A Stock, as the pledgee may elect.
3. For purposes of this paragraph F:
a. The relationship of any person that is
derived by or through a legal adoption shall be considered a
natural one;
b. Each joint owner of shares of Series C Stock
shall be considered a Series C Holder of such shares;
c. A minor for whom shares of Series C Stock are
held pursuant to a Uniform Gifts to Minors Act or similar law
shall be considered a Series C Holder of such shares;
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d. Unless otherwise specified, the term "person"
means both natural persons and legal entities; and
e. The "Record Date" is the date for determining
the persons to whom the Series C Stock is initially
distributed by the Corporation as a dividend on the Common
Stock.
4. Any purported transfer of shares of Series C Stock not
permitted hereunder shall result in the conversion of the transferee's shares
of Series C Stock into shares of Series A Stock, effective on the date on which
certificates representing such shares are presented for transfer on the stock
transfer record books of the Corporation; provided, however, that if the
Corporation should determine that such shares were not so presented for
transfer within 20 days after the date of such sale, transfer, assignment or
other disposition, the transfer date shall be the actual date of such sale,
transfer, assignment or other disposition, as determined in good faith by the
Board or its appointed agent. The Corporation may, as a condition to the
transfer or the registration of transfer of shares of Series C 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. If no indication to the contrary is supplied at the time
shares of Series C Stock are presented for transfer, the transfer shall be
presumed by the Corporation to be a transfer to a person other than a Permitted
Transferee.
G. Registration of Series C Stock.
1. Shares of Series C Stock shall be registered in the
name(s) of the beneficial owner(s) thereof (as hereafter defined) and not in
"street" or "nominee" names; provided, however, certificates representing
shares of Series C Stock issued as a stock dividend on the Corporation's then
outstanding Common Stock may be registered in the same name and manner as the
certificates representing the shares of Common Stock with respect to which the
shares of Series C Stock were issued. For the purposes of paragraphs F and G
of this Section 2, the term "beneficial owner(s)" of any shares of Series C
Stock shall mean the person or persons who possess the power to vote or
dispose, or to direct the voting or disposition, of such shares and
"beneficially owned" shares shall refer to shares owned by such a beneficial
owner.
2. The Corporation shall note on the certificates
representing the shares of Series C Stock that there are restrictions on
transfer and registration of transfer imposed by paragraphs F and G of this
Section 2.
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H. Priority of Preferred Stock.
The Series A Stock, Series B Stock, and the Series C Stock are
subject to all the powers, rights, privileges, preferences and priorities of
the Preferred Stock as may be stated herein and as shall be stated and
expressed in any resolution or resolutions adopted by the Board, pursuant to
authority expressly granted to and vested in it by the provisions of this
Article V.
I. Liquidation, Dissolution or Winding Up.
In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary (sometimes referred to as
liquidation), after payment or provision for payment of the debts and other
liabilities of the Corporation and the preferential amounts to which the
holders of any stock ranking prior to the Series A Stock, the Series B Stock
and the Series C Stock in the distribution of assets shall be entitled upon
liquidation, unless otherwise provided by the Board in the resolution or
resolutions providing for the issuance of Series B Stock or Series C Stock the
holders of the Series A Stock, the Series B Stock and the Series C Stock and
the holders of any other stock ranking on a parity with the Series A Stock, the
Series B Stock and the Series C Stock in the distribution of assets upon
liquidation shall be entitled to share pro rata in the remaining assets of the
Corporation according to their respective interests.
Section 3. Preferred Stock.
Shares of Preferred stock may be issued from time to time in
one or more series. Shares of Preferred Stock which may be redeemed, purchased
or acquired by the Corporation may be reissued except as otherwise provided by
law. The Board is hereby authorized to fix or alter the designations and
powers, preferences and relative, participating, optional or other rights, if
any, and qualifications, limitations or restrictions thereof, including,
without limitation, the dividend rate (and whether dividends are cumulative),
conversion rights, if any, voting rights, rights and terms of redemption
(including sinking fund provisions, if any), redemption price and liquidation
preferences of any wholly unissued series of Preferred Stock, and the number of
shares constituting any such series and the designation thereof, or any of
them; and to increase or decrease the number of shares of any series subsequent
to the issue of shares of that series, but not below the number of shares of
such series then outstanding.
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Article VI: NUMBER OF DIRECTORS AND LIMITATION OF LIABILITY OF
DIRECTORS
Section 1. Number of Directors.
The number of directors which shall constitute the whole Board
of the Corporation shall be as specified in the Bylaws of the Corporation, as
the same may be amended from time to time.
Section 2. Limitation of Liability of Directors.
No director of the Corporation shall be personally liable to
the Corporation or its stockholder for monetary damages for breach of fiduciary
duty as a director; provided, however, that this Section shall not eliminate or
limit the liability of a director (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) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. This Section shall not eliminate or limit the liability of a director
for any act or omission occurring prior to the date on which this Section
becomes effective.
Section 3. Future Amendments.
In addition to the provisions of Section 2 hereof, if Delaware
law is amended hereafter to authorize or permit corporate action further
limiting or eliminating the personal liability of a director to the Corporation
or its stockholders, then the liability of each director of the Corporation
shall be further limited or eliminated to the fullest extent permitted by any
such future amendment of the law of the State of Delaware.
Section 4. Repeal or Modification.
Any repeal or modification of this Article VI or any provision
hereof shall not increase the personal liability of any director of the
Corporation for any act or occurrence taking place prior to such repeal or
modification, or otherwise adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
Article VII: MEETINGS
Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws of the Corporation
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may provide. The books of the Corporation may be kept (subject to any
provision of Delaware law) outside the State of Delaware at such place or
places as may be designated from time to time by the Board or in the Bylaws of
the Corporation. Elections of directors need not be by written ballot unless
the Bylaws of the Corporation shall so provide.
Article VIII: ELECTION OF DIRECTORS
Section 1. Classified Board.
The directors who shall take office prior to the Effective
Date shall serve until the next annual meeting of stockholders. As soon as
practicable after the Effective Date, but not later than first annual meeting
of stockholders after the Effective Date, the Board shall be divided by
resolution of the Board of Directors into three classes: Class I, Class II and
Class III. Such classes shall be as nearly equal in number of directors as
possible. Each director shall serve for a term ending at the third annual
stockholders meeting following the annual meeting at which such director was
elected; provided, however, that the directors first elected to Class I shall
serve for a term ending at the first annual meeting following the Effective
Date, the directors first elected to Class II shall serve for a term ending at
the second annual meeting following the Effective Date, and the directors first
elected to Class III shall serve for a term ending at the third annual meeting
following the Effective Date. Notwithstanding any of the foregoing provisions
of this Article VIII, each director shall serve until his term has expired and
his successor is elected and qualified, or until his earlier death, resignation
or removal.
At each annual election held after the Effective Date, the
directors chosen to succeed those whose terms then expire shall be identified
as being of the same class as the directors they succeed, unless, by reason of
any intervening changes in the authorized number of directors, the Board shall
designate one or more directorships whose term then expires as directorships of
another class in order more nearly to achieve equality in the number of
directors among the classes. When the Board of Directors fills a vacancy
resulting from the death, resignation or removal of a director, the director
chosen to fill that vacancy shall be of the same class as the director he
succeeds, unless, by reason of any previous changes in the authorized number of
directors, the Board shall designate the vacant directorship as a directorship
of another class in order more nearly to achieve equality in the number of
directors among the classes.
Notwithstanding the rule that the three classes shall be as
nearly equal in number of directors as possible, in the
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event of any change in the authorized number of directors each director then
continuing to serve as such will nevertheless continue as a director of the
class of which he is a member, until the expiration of his current term or his
earlier death, resignation or removal. If any newly created directorship or
vacancy on the Board, consistent with the rule that the three classes shall be
as nearly equal in number of directors as possible, may be allocated to one of
two or more classes, the Board shall allocate it to that of the available
classes whose term of office is due to expire at the earliest date following
such allocation.
Section 2. Directors Elected by Preferred Stock.
During any period when the holders of Preferred Stock or any
one or more series thereof, voting as a class, shall be entitled to elect a
specified number of directors by reason of dividend arrearages or other
contingencies giving them the right to do so, then and during such times as
such right continues (1) the then otherwise authorized number of directors
shall be increased by such specified number of directors, and the holders of
the Preferred Stock or such series thereof, voting as a class, shall be
entitled to elect the additional directors so provided for, pursuant to the
provisions of such Preferred Stock or series; (2) the additional directors
shall be members of those respective classes of directors in which vacancies
are created as a result of such increase in the authorized number of directors;
and (3) each such additional director shall serve until the annual meeting at
which the term of office of his class shall expire and until his successor
shall be elected and shall qualify, or until his right to hold such office
terminates pursuant to the provisions of such Preferred Stock or series,
whichever occurs earlier. Vacancies in any directorships created pursuant to
the provisions of any series of Preferred Stock may be filled in accordance
with the provisions of such series of Preferred Stock. Whenever the holders of
such Preferred Stock or series thereof are divested of such rights to elect a
specified number of directors, voting as a class, pursuant to the provisions of
such Preferred Stock or series, the terms of office of all directors elected by
the holders of such Preferred Stock or series, voting as a class pursuant to
such provisions, or elected to fill any vacancies resulting from the death,
resignation or removal of directors so elected by the holders of such Preferred
Stock or series, shall forthwith terminate and the authorized number of
directors shall be reduced accordingly.
Section 3. Removal.
Subject to the rights of any series of Preferred Stock then
outstanding, any director, or the entire Board, may be removed from office at
any time, but only (1) for cause, and
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(2) by the affirmative vote of the holders of a majority of the Voting
Interests; provided, however, that if the proposal to remove a director is made
by or on behalf of a Related Person or a director affiliated with a Related
Person, then in addition to (1) and (2) above such removal shall require the
affirmative vote of a majority of the Voting Interests of the Disinterested
Shares.
Section 4. Notice of Stockholder Nominees.
Except as otherwise provided for or fixed pursuant to the
provisions of Article V of this Restated Certificate of Incorporation or the
provisions of a Certificate of Designation filed with respect to any series of
capital stock, nominations of persons for election to the Board of the
Corporation shall be made only at a meeting of stockholders and only (1) by or
at the direction of the Board or (2) by any stockholder of the Corporation
entitled to vote for the election of directors at the meeting who complies with
the notice procedures set forth in this Section 4. Such nominations, other
than those made by or at the direction of the Board, shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than thirty (30) days
nor more than sixty (60) days prior to the meeting; provided, however, that in
the event that less than forty (40) days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. For purposes of
this Section 4, any adjournment(s) or postponement(s) of the original meeting
whereby the meeting will reconvene within thirty (30) days from the original
date shall be deemed for purposes of notice to be a continuation of the
original meeting and no nominations by a stockholder of persons to be elected
directors of the Corporation may be made at any such reconvened meeting unless
pursuant to a notice which was timely for the meeting on the date originally
scheduled. Such stockholder's notice shall set forth: (i) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to the Securities Exchange Act of
1934, as amended, (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(ii) as to the stockholder giving the notice (A) the name and address, as they
appear on the Corporation's books, of such stockholder, and (B) the class and
number of shares of the Corporation which
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are beneficially owned by such stockholder. In addition, the stockholder
making such nomination shall promptly provide any other information reasonably
requested by the Corporation. Notwithstanding the foregoing, nothing in this
Section 4 shall be interpreted or construed to require the inclusion of
information about any such nominee in any proxy statement distributed by, at
the direction of, or on behalf of the Board.
The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by this Section 4, and if he should
so determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.
Article IX: CUMULATIVE VOTING
Except as otherwise provided for or fixed pursuant to the
provisions of Article V of this Restated Certificate of Incorporation or the
provisions of a Certificate of Designation filed with respect to any series of
capital stock, in any election of directors of the Corporation, a holder of any
class or series of stock then entitled to vote in such election shall be
entitled to as many votes as shall equal (i) the number of votes which (except
for this Article as to cumulative voting) he would be entitled to cast for the
election of directors with respect to his shares of stock multiplied by (ii)
the number of directors to be elected in the election in which his class or
series of shares is entitled to vote and each stockholder may cast all of such
votes for a single director or for any two or more of them as he may see fit.
Article X: BUSINESS COMBINATIONS
Section 1. Vote Required for Certain Business Combinations.
Except as otherwise expressly provided in Section 2 of this
Article X, in addition to any affirmative vote required by law or any other
provision of this Restated Certificate of Incorporation, and in addition to any
voting rights granted to or held by holders of Preferred Stock, the approval or
authorization of any Business Combination shall require (1) the affirmative
vote of the holders of not less than eighty percent (80%) of the Voting
Interests (the "80% Voting Requirement") and (2) the affirmative vote of the
holders of a majority of the Voting Interests of the Disinterested Shares.
Section 2. Exceptions.
A. Section 1 of this Article X shall not be applicable
to any particular Business Combination, and such
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Business Combination shall require only such affirmative vote as may be
required by law, by any voting rights granted to or held by holders of
Preferred Stock and by any other provision of this Restated Certificate of
Incorporation, if the Business Combination shall have been approved by a
majority of the Continuing Directors.
B. The 80% Voting Requirement of Section 1 of this
Article X shall not be applicable to any particular Business Combination in
which stockholders of the Corporation, in one or more transactions, are to
receive cash, securities or other property in exchange for their shares of
capital stock of the Corporation, and such Business Combination shall require
only such affirmative vote as may be required by law, by any voting rights
granted to or held by holders of Preferred Stock and by any other provisions of
this Restated Certificate of Incorporation if all of the following conditions
are met:
1. The aggregate amount of cash plus the Fair Market
Value as of the date of the consummation of the Business Combination of any
consideration other than cash to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to the highest of
the following:
a. the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid or agreed to be paid by the Related Person for any
shares of Common Stock acquired by it (1) within the period of
eighteen (18) months immediately prior to and including the
date of the most recent public announcement of the proposal of
the Business Combination (the "Announcement Date") or (2) in
the transaction or series of transactions in which it became a
Related Person; or
b. the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on which the
Related Person became a Related Person (such latter date is
referred to as the "Determination Date"), whichever is higher;
or
c. the highest Fair Market Value per share of
Common Stock during the thirty (30) calendar day period
immediately preceding the Announcement Date, multiplied by the
ratio of (1) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person for any shares of Common
Stock acquired by it without regard to whether such shares
were acquired before or after the Determination Date to (2)
the lowest Fair Market Value per share of
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Common Stock occurring during the period commencing seventy
five (75) calendar days prior to the earlier of (i) the day on
which the Related Person first became a beneficial owner of
shares of Common Stock and (ii) the day on which there was the
first public announcement relating to the intention, or
possible intention, of the Related Person to become the
beneficial owner of shares of Common Stock and ending with the
day immediately prior to the Announcement Date; and
2. The aggregate amount of the cash plus the Fair Market
Value as of the date of the consummation of the Business Combination of any
consideration other than cash to be received per share by holders of shares of
any of a particular class or series of outstanding capital stock, other than
Common Stock, shall be at least equal to the highest of the following (it being
intended that the requirements of this paragraph B.2 shall be required to be
met with respect to every class or series of outstanding capital stock other
than Common Stock whether or not the Related Person has previously acquired any
shares of that particular class or series of capital stock):
a. the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid or agreed to be paid by the Related Person for any
shares of such class or series of capital stock acquired by it
(1) within the period of eighteen (18) months immediately
prior to and including the Announcement Date or (2) in the
transaction or series of transactions in which it became a
Related Person; or
b. the redemption price of each share of such
class or series, or if such shares have no redemption price,
the highest amount per share which such class or series was
entitled to receive upon liquidation of the Corporation as of
the Announcement Date or the Determination Date, whichever is
higher; or
c. the Fair Market Value per share of such class
or series on the Announcement Date or on the Determination
Date, whichever is higher; or
d. the highest Fair Market Value per share of
such class or series during the thirty (30) calendar day
period immediately preceding the Announcement Date, multiplied
by the ratio of (1) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Related Person for any shares of such class
or series acquired by it without regard to whether such
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shares were acquired before or after the Determination Date to
(2) the lowest Fair Market Value per share of such class or
series occurring during the period commencing seventy five
(75) calendar days prior to the earlier of (i) the day on
which the Related Person first became a beneficial owner of
shares of such class or series and (ii) the day on which there
was the first public announcement relating to the intention,
or possible intention, of the Related Person to become the
beneficial owner of shares of such class or series and ending
with the day immediately prior to the Announcement Date; and
3. The consideration to be received by holders of a
particular class or series of outstanding capital stock (including, without
limitation, Common Stock) shall be in cash or in the same form as the Related
Person has previously paid for shares of such class or series of capital stock.
If the Related Person has paid for shares of any class or series of capital
stock with varying forms of consideration, the form of consideration for such
class or series of capital stock shall be either cash or the form used to
acquire the largest number of shares of such class or series of capital stock
previously acquired by the Related Person; and
4. The Business Combination is approved by the holders
of a majority of the Voting Interests of the Disinterested Shares.
Section 3. Determination of Compliance.
A majority of the total number of Continuing Directors shall
have the power and duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Article X, including, without limitation, (a) whether a person is a Related
Person, (b) the number of shares of capital stock Beneficially Owned by any
person, (c) whether a person is an Affiliate or Associate of another, (d)
whether the applicable conditions set forth in paragraph B of Section 2 of this
Article X have been met with respect to any Business Combination, and (e)
whether the proposed transaction is a Business Combination.
Article XI: FACTORS TO CONSIDER
The Board, when evaluating any proposed transaction that would
result in a person or entity becoming a Related Person or a Related Person
increasing its ownership of capital stock of the Corporation, or any
transaction or any proposed transaction with another party which would
constitute a Business Combination if the other party to the transaction were
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a Related Person, shall, in connection with the exercise of its judgment in
determining what is in the best interests of the Corporation and its
stockholders, give due consideration to all relevant factors, including,
without limitation, freedom of the press, the independence and integrity of the
Company's media operations, the social and economic effects on the
stockholders, employees, customers, suppliers and other constituents of the
Corporation and its Subsidiaries and on the communities in which the
Corporation and its Subsidiaries operate or are located or which they serve.
Article XII: INDEMNIFICATION
The Corporation shall indemnify, in the manner and to the
fullest extent permitted by the Delaware General Corporation Law, as the same
exists or may thereafter be amended (the "Delaware Law") (but in the case of
any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), any person (or the estate of any person) who was or is a party to, or
is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was a director, officer
or employee of the Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise. The Corporation may, to
the fullest extent permitted by the Delaware Law, purchase and maintain
insurance on behalf of any such person against any liability which may be
asserted against him. To the fullest extent permitted by the Delaware Law, the
indemnification provided herein shall include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, and, in the manner
provided by the Delaware Law, any such expenses may be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding. The
indemnification provided herein shall not be deemed to limit the right of the
Corporation to indemnify any other person for any such expenses to the fullest
extent permitted by the Delaware Law, nor shall it be deemed exclusive of any
other rights to which any person seeking indemnification from the Corporation
may be entitled under any agreement, the Corporation's Bylaws, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
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Article XIII: STOCKHOLDER VOTE
Except as otherwise provided for or fixed pursuant to the
provisions of Article V of this Restated Certificate of Incorporation or the
provisions of a Certificate of Designation filed with respect to any series of
capital stock, any election or other action by stockholders of this Corporation
must be effected at an annual or special meeting of stockholders, and may not
be effected by written consent without a meeting.
Article XIV: STOCKHOLDER PROPOSALS AT ANNUAL MEETINGS
Business may be properly brought before an annual meeting by a
stockholder only upon the stockholder's timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than thirty (30) days nor more than sixty (60) days prior
to the meeting as originally scheduled; provided, however, that in the event
that less than forty (40) days' notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to
be timely must be so received not later than the close of business on the 10th
day following the day on which such notice of the date of the annual meeting
was mailed or such public disclosure was made. For purposes of this Article
XIV, any adjournment(s) or postponement(s) of the original meeting whereby the
meeting will reconvene within thirty (30) days from the original date shall be
deemed for purposes of notice to be a continuation of the original meeting and
no business may be brought before any reconvened meeting unless such timely
notice of such business was given to the Secretary of the Corporation for the
meeting as originally scheduled. A stockholder's notice to the Secretary 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 annual meeting, (ii) the name and record address of the stockholder
proposing such business, (iii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder, and (iv) any
material interest of the stockholder in such business. In addition, the
stockholder making such proposal shall promptly provide any other information
reasonably requested by the Corporation. Notwithstanding the foregoing,
nothing in this Article XIV shall be interpreted or construed to require the
inclusion of information about any such proposal in any proxy statement
distributed by, at the direction of, or on behalf of the Board.
The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the
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provisions of this Article XIV, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
Article XV: CALL OF SPECIAL MEETINGS
Except as otherwise provided for or fixed pursuant to the
provisions of Article V of this Restated Certificate of Incorporation or the
provisions of a Certificate of Designation filed with respect to any series of
capital stock, special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the Board, or by a majority of
the members of the Board; provided, however, that where a proposal requiring
stockholder approval is made by or on behalf of a Related Person or director
affiliated with a Related Person, or where a Related Person otherwise seeks
action requiring stockholder approval, then the affirmative vote of a majority
of the Continuing Directors shall also be required to call a special meeting of
stockholders for the purpose of considering such proposal or obtaining such
approval. Such special meetings may not be called by any other person or
persons or in any other manner.
Article XVI: AMENDMENT OF CORPORATE DOCUMENTS
Section 1. Certificate of Incorporation.
In addition to any affirmative vote required by applicable law
and any voting rights granted to or held by the holders of Preferred Stock, any
alteration, amendment, repeal or rescission (any "Change") of any provision of
this Restated Certificate of Incorporation must be approved by a majority of
the directors of the Corporation then in office and by the affirmative vote of
the holders of a majority of the Voting Interests; provided, however, that if
any such Change relates to Articles II, V, VI, VIII, IX, X, XI, XII, XI or XV
hereof or to this Article XVI, such Change must be approved either (i) by a
majority of the authorized number of directors, and if one or more Related
Persons exist, by a majority of the directors who are Continuing Directors with
respect to all Related Persons, or (ii) by the affirmative vote of the holders
of not less than eighty percent (80%) of the Voting Interests and, if the
Change is proposed by or on behalf of a Related Person or a director affiliated
with a Related Person, by the affirmative vote of the holders of a majority of
the Voting Interests of the Disinterested Shares.
Subject to the foregoing, the Corporation reserves the right
to amend, alter, repeal or rescind any provision contained in this Restated
Certificate of Incorporation in the manner now or hereafter prescribed by law.
29
<PAGE> 30
Section 2. Bylaws.
Any proposed Change of Section 2 or Section 5 of Article III
of the Bylaws of the Corporation must be approved either (i) by a majority of
the authorized number of directors and, if one or more Related Persons exist,
by a majority of the directors who are Continuing Directors with respect to all
Related Persons, or (ii) by the affirmative vote of the holders of not less
than eighty percent (80%) of the Voting Interests and, if the Change is
proposed by or on behalf of a Related Person or a director affiliated with a
Related Person, by the affirmative vote of the holders of a majority of the
Voting Interests of the Disinterested Shares.
Subject to the foregoing, the Board shall have the power to
make, alter, amend, repeal or rescind the Bylaws of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this
Restated Certificate of Incorporation on behalf of the Corporation and have
attested such execution and do verify and affirm, under penalty of perjury,
that this Restated Certificate of Incorporation is the act and deed of the
Corporation and that the facts stated herein are true as of this 20th day of
January, 1995.
NEW TMC INC.
/s/ THOMAS UNTERMAN
-----------------------------------
Thomas Unterman
Vice President
ATTEST:
/s/ O. JEAN WILLIAMS
- -----------------------------------
O. Jean Williams
Secretary
30
<PAGE> 1
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW TMC INC.,
A DELAWARE CORPORATION
Thomas Unterman certifies that:
1. He is the Vice President of New TMC Inc., a Delaware
corporation.
2. Article I of the Restated Certificate of
Incorporation is amended, effective as of 12:02 a.m. February 1, 1995, to read
in full as follows:
Article I: Name
The name of the corporation is:
The Times Mirror Company
3. The foregoing amendment to the Restated Certificate
of Incorporation has been duly adopted by written consent of the sole director
of New TMC Inc. and by written action of the sole stockholder of New TMC Inc.,
in accordance with Sections 242(b)(1), 141(f) and 228 of the General
Corporation Law of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment
on January 31, 1995.
/s/ THOMAS UNTERMAN
--------------------------------
THOMAS UNTERMAN
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF DESIGNATION
OF
SERIES C COMMON STOCK
OF
NEW TMC INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
New TMC Inc., a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article V of its Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"),
and in accordance with the provisions of Section 151 of the General Corporation
Law of the State of Delaware, its Board of Directors has adopted the following
resolution creating a series of its Common Stock, par value $1 per share,
designated as Series C Common Stock.
RESOLVED, that a series of the class of authorized Common
Stock, par value $1 per share, of the Corporation be hereby created, and that
the designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as the "Series C Common Stock" (the "Series C Stock") and
the number of shares constituting such series shall be Three Hundred Million
(300,000,000), which number may be increased or decreased by the Board of
Directors without a vote of shareholders; provided, however, that such number
may not be decreased below the number of then outstanding shares of Series C
Stock.
Section 2. Voting Rights. Subject to the provisions for
cumulative voting set forth in Article X of the Certificate of Incorporation:
(A) Each share of Series C Stock shall entitle the holder
thereof to ten (10) votes. Except as set forth herein and in the Certificate
of Incorporation, all actions submitted to a vote of shareholders shall be
voted on by the holders of Series A Common Stock (the "Series A Stock") and
Series C Stock (as well as the holders of any other series of Common Stock and
any series of Preferred Stock, if any, entitled to vote thereon), voting
together as a single class.
<PAGE> 2
(B) The holders of Series C Stock shall be entitled to
vote separately as a series with respect to (i) amendments to the Certificate
of Incorporation or this Certificate of Designation that alter or change the
powers, preferences or special rights of the Series C Stock so as to affect
them adversely and (ii) such other matters as require class votes under the
General Corporation Law of the State of Delaware (except that the Board may
increase or decrease the number of shares constituting Series C Stock, but not
below the number of shares of Series C Stock then outstanding).
Section 3. Dividends.
(A) If and when dividends on the Series A Stock, Series B
Common Stock (the "Series B Stock") (if any) and Series C Stock are declared
payable from time to time by the Board as provided in Article V, Section 2,
subparagraph C.2 of the Certificate of Incorporation, whether payable in cash,
in property or in shares of stock of the Corporation, the holders of Series A
Stock, the holders of Series B Stock (if any) and the holders of Series C Stock
shall be entitled to share equally, on a per share basis, in such dividends,
subject to the limitations described below. Except for dividends permitted by
Article V, Section 2, subparagraph C.1 of the Certificate of Incorporation, if
dividends are declared that are payable in shares of Series A Stock, Series B
Stock (if any), or Series C Stock, such dividends shall be payable at the same
rate on all series of stock and the dividends payable in shares of Series A
Stock shall be payable only to holders of Series A Stock, the dividends payable
in shares of Series B Stock (if any) shall be payable only to holders of Series
B Stock (if any) and the dividends payable in shares of Series C Stock shall be
payable only to holders of Series C Stock. If the Corporation shall in any
manner subdivide or combine the outstanding shares of Series A Stock, Series B
Stock (if any), or Series C Stock, the outstanding shares of the other such
series of Common Stock shall be proportionally subdivided or combined in the
same manner and on the same basis as the outstanding shares of Series A Stock,
Series B Stock (if any) or Series C Stock, as the case may be, which have been
subdivided or combined.
(B) Subject to provisions of law and the preferences of
the Preferred Stock and of any other stock ranking prior to the Series A Stock,
the Series B Stock (if any), or the Series C Stock as to dividends, the holders
of the Series A Stock, the Series B Stock (if any), and the Series C Stock
shall be entitled to receive dividends at such time and in such amounts as may
be determined by the Board and declared out of any funds lawfully available
therefor, and shares of Preferred Stock of any series shall not be entitled to
share therein except as
2
<PAGE> 3
otherwise expressly provided in the resolution or resolutions of the Board
providing for the issue of such series.
Section 4. Conversion of Series C Stock by Holder.
(A) The holder of each share of Series C Stock shall have
the right at any time, or from time to time, at such holder's option, to
convert such share into one fully paid and nonassessable share of Series A
Stock on and subject to the terms and conditions hereinafter set forth.
(B) In order to exercise his conversion privilege, the
holder of any shares of Series C Stock to be converted shall present and
surrender the certificate or certificates representing such shares during usual
business hours at any office or agency of the Corporation maintained for the
transfer of Series C Stock and shall deliver a written notice of the election
of the holder to convert the shares represented by such certificate or any
portion thereof specified in such notice. Such notice shall also state the
name or names (with address) in which the certificate or certificates for
shares of Series A Stock issuable on such conversion shall be registered. If
required by the Corporation, any certificate for shares surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder of such shares or
his duly authorized representative. Each conversion of shares of Series C
Stock shall be deemed to have been effected on the date (the "conversion date")
on which the certificate or certificates representing such shares shall have
been surrendered and such notice and any required instruments of transfer shall
have been received as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Series A Stock shall be
issuable on such conversion shall be, for the purpose of receiving dividends
and for all other corporate purposes whatsoever, deemed to have become the
holder or holders of record of the shares of Series A Stock represented thereby
on the conversion date.
(C) As promptly as practicable after the presentation and
surrender for conversion, as herein provided, of any certificate for shares of
Series C Stock, the Corporation shall issue and deliver at such office or
agency, to or upon the written order of the holder thereof, certificates for
the number of shares of Series A Stock issuable upon such conversion. Subject
to the provisions of Section 6, below, in case any certificate for shares of
Series C Stock shall be surrendered for conversion of a part only of the shares
represented thereby, the Corporation shall deliver at such office or agency, to
or upon the written order of the holder thereof, a certificate or certificates
for the number of shares of Series C Stock represented by such surrendered
3
<PAGE> 4
certificate which are not being converted. The issuance of certificates for
shares of Series A Stock issuable upon the conversion of shares of Series C
Stock by the registered holder thereof shall be made without charge to the
converting holder for any tax imposed on the Corporation in respect of the
issue thereof. The Corporation shall not, however, be required to pay any tax
which may be payable with respect to any transfer involved in the issue and
delivery of any certificate in a name other than that of the registered holder
of the shares being converted, and the Corporation shall not be required to
issue or deliver any such certificate unless and until the person requesting
the issue thereof shall have paid to the Corporation the amount of such tax or
has established to the satisfaction of the Corporation that such tax has been
paid.
(D) Upon any conversion of shares of Series C Stock into
shares of Series A Stock pursuant hereto, no adjustment with respect to
dividends shall be made; only those dividends shall be payable on the shares so
converted as have been declared and are payable to holders of record of shares
of Series C Stock on a date prior to the conversion date with respect to the
shares so converted; and only those dividends shall be payable on shares of
Series A Stock issued upon such conversion as have been declared and are
payable to holders of record of shares of Series A Stock on or after such
conversion date.
(E) In case of any consolidation or merger of the
Corporation as a result of which the holders of Series A Stock shall be
entitled to receive cash, stock, other securities or other property with
respect to or in exchange for Series A Stock or in case of any sale or
conveyance of all or substantially all of the property or business of the
Corporation as an entirety, a holder of a share of Series C Stock shall have
the right thereafter to convert such share into the kind and amount of cash,
shares of stock and other securities and properties receivable upon such
consolidation, merger, sale or conveyance by a holder of one share of Series A
stock and shall have no other conversion rights with regard to such share. The
provisions of this subsection 4(E) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
(F) Shares of the Series C Stock converted into Series A
Stock shall be retired and shall resume the status of authorized but unissued
shares of Series C Stock.
(G) Such number of shares of Series A Stock as may from
time to time be required for such purpose shall be reserved for issuance upon
conversion of outstanding shares of Series C Stock.
4
<PAGE> 5
Section 5. Termination of Series C Stock.
(A) All outstanding shares of Series C Stock shall
automatically, without any further act or deed on the part of this Corporation
or any other person, be converted into shares of Series A Stock on a
share-for-share basis
(1) if, as a result of the existence of the
Series C Stock, the Series A Stock is excluded from trading on
the New York Stock Exchange, the American Stock Exchange and
all other national securities exchanges and is also excluded
from quotation on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") and any other
national quotation system then in use; or
(2) at the option of the Corporation:
(a) at any time when the Board and the
holders of a majority of the outstanding shares of
the Series C Stock approve the conversion of all of
the Series C stock into Series A Stock; or
(b) if the Board, in its sole
discretion, elects to effect a conversion in
connection with its approval of any sale or lease of
all or any substantial part of the Corporation's
assets or any merger, consolidation, liquidation or
dissolution of the Corporation; or
(c) if the Board, in its sole
discretion, elects to effect a conversion after a
determination that there has been a material adverse
change in the liquidity, marketability or market
value of the outstanding Series A Stock, considered
in the aggregate, (X) due to the exclusion of the
Series A Stock from trading on a national securities
exchange or the exclusion of the Series A Stock from
quotation on NASDAQ or such other system then in use,
or (Y) due to requirements under federal or state
law, in any such case as a result of the existence of
the Series C Stock.
(B) In the event of any automatic conversion of Series C
Stock pursuant to this Section 5, certificates formerly representing
outstanding shares of Series C Stock will thereafter be deemed to represent a
like number of shares of Series A Stock.
5
<PAGE> 6
Section 6. Limitations on Transfer of Series C Stock.
(A) No record or beneficial owner of shares of Series C
Stock may transfer, and the Corporation shall not register the transfer of,
such shares of Series C Stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a "Permitted Transferee" as provided
herein.
(1) In the case of a holder of record of the
Series C Stock (the "Series C Holder") who is a natural person
and the beneficial owner of the shares of Series C Stock to be
transferred, Permitted Transferees shall include only the
following:
(a) The spouse of such Series C Holder,
any lineal descendant of a grandparent of such Series
C Holder, or any spouse of such lineal descendant
(herein collectively referred to as "such Series C
Holder's Family Members");
(b) The trustee or trustees of a trust
(including a voting trust) principally for the
benefit of such Series C Holder and/or one or more of
such Series C Holder's Family Members, provided,
however, if at any time such trust ceases to meet the
requirements of this subparagraph (b), all shares of
Series C Stock then held by such trustee or trustees
shall immediately and automatically, without further
act or deed on the part of the Corporation or any
other person, be converted into Series A Stock on a
share-for- share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock;
(c) A corporation, if sufficient shares
entitled to elect at least a majority of the entire
board of directors of such corporation are
beneficially owned by, or a partnership in which all
of the partners are, and all of the partnership
interests are owned by, the Series C Holder and/or
one or more of the Permitted Transferees of such
Series C Holder determined under this subparagraph
6(A)(1), provided that if by reason of any change in
the ownership of such stock or partners or
partnership interests, such corporation or
partnership would no longer qualify as a Permitted
Transferee of such Series C Holder, all shares of
Series C Stock then held
6
<PAGE> 7
by such corporation or partnership shall immediately
and automatically, without further act or deed on the
part of the corporation or any other person, be
converted into shares of Series A Stock on a
share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A Stock;
(d) An organization established by the
Series C Holder or such Series C Holder's Family
Members, contributions to which are deductible for
federal income, estate or gift tax purposes (a
"Charitable Organization") and a majority of whose
governing board at all times consists of the Series C
Holder and/or one or more of the Permitted
Transferees of such Series C Holder, or any successor
to such Charitable Organization meeting such
definition; provided that if by reason of any change
in the composition of the governing board of such
Charitable Organization, such Charitable Organization
shall no longer qualify as a Permitted Transferee of
such Series C Holder, all shares of Series C Stock
then held by such Charitable Organization shall
immediately and automatically, without further act or
deed on the part of the corporation or any other
person, be converted into shares of Series A Stock on
a share-for-share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
the like number of shares of Series A Stock; and
(e) The executor, administrator or
personal representative of the estate of a deceased
Series C Holder or the trustee of the estate of a
bankrupt or insolvent Series C Holder or the guardian
or conservator of a Series C Holder adjudged disabled
or incompetent by a court of competent jurisdiction,
acting in his capacity as such.
(2) in the case of a Series C Holder holding the
shares of Series C Stock as trustee pursuant to a trust other
than a trust described in subparagraph 6(A)(3) below,
Permitted Transferees shall include only the following:
7
<PAGE> 8
(a) any successor trustee of such trust
who is not, and by becoming successor trustee will
not become, a Related Person;
(b) the person who established such
trust; and
(c) a Permitted Transferee of such
person who established such trust.
(3) In the case of a Series C Holder holding the
shares of Series C Stock as trustee pursuant to a trust which
was irrevocable on the Record Date (a "Transferor Trust"),
Permitted Transferees shall include only the following:
(a) any successor trustee of such
Transferor Trust who is described in subparagraph
6(A)(3)(b), (c) or (d) below or who is not, and by
becoming successor trustee will not otherwise become,
a Related Person;
(b) any person to whom or for whose
benefit the income may be distributed during the term
of such Transferor Trust;
(c) any person to whom or for whose
benefit the principal may be distributed either
during or at the end of the term of such Transferor
Trust whether by power of appointment or otherwise;
and
(d) any lineal descendant of a
grandparent of the creator of such Transferor Trust,
the spouse of such creator and the spouse of any such
lineal descendant.
(4) In the case of a record (but not beneficial)
owner of the Series C Stock as nominee for the person who was
the beneficial owner thereof on the Record Date, Permitted
Transferees shall include only such beneficial owner and a
Permitted Transferee of such beneficial owner.
(5) In the case of a Series C Holder which is a
partnership and the beneficial owner of the shares of Series C
Stock proposed to be transferred, Permitted Transferees shall
include only:
(a) any partner of such partnership who
was also a partner of such partnership on the Record
Date;
8
<PAGE> 9
(b) any person transferring shares of
Series C Stock to such partnership after the Record
Date (provided, however, that such transferor may not
receive shares of Series C Stock in excess of the
shares transferred by the transferor to such
partnership); and
(c) any Permitted Transferee of such
person referred to in subparagraph 6(A)(5)(a) or
6(A)(5)(b) above (not in excess of the number of
shares which such person is entitled to receive
pursuant to this subparagraph 6(A)(5)).
(6) In the case of a Series C Holder which is a
corporation and the beneficial owner of the shares proposed to
be transferred, Permitted Transferees shall include only:
(a) any shareholder of such corporation
on the Record Date that is generally entitled to vote
in the election of directors of such corporation (a
"Voting Shareholder"), provided that such corporation
does not have more than 30 Voting Shareholders of
Record on the Record Date (or such greater number of
Voting Shareholders as may be allowed under the
applicable state law of such corporation in order to
qualify as a close corporation);
(b) any shareholder of such corporation
on the Record Date who receives shares of Series C
Stock pro rata to his stock ownership in such
corporation through a dividend or through a
distribution made upon liquidation of such
corporation;
(c) any person transferring shares of
Series C Stock to such corporation after the Record
Date (provided, however, that such transferor may not
receive shares of Series C stock in excess of the
shares transferred by the transferor to such
corporation);
(d) any Permitted Transferee of such
shareholder or person referred to in subparagraph
6(A)(6)(a), (b) or (c) above (not in excess of the
number of shares which such shareholder or person is
entitled to receive pursuant to this subparagraph
6(A)(6)); and
(e) the survivor of a merger or
consolidation of such corporation if those
9
<PAGE> 10
persons who owned beneficially sufficient shares
entitled to elect at least a majority of the entire
board of directors of such constituent corporation
immediately prior to the merger or consolidation own
beneficially sufficient shares entitled to elect at
least a majority of the entire board of directors of
the surviving corporation, provided that if by reason
of any change in the ownership of such stock such
surviving corporation would no longer qualify as a
Permitted Transferee, all shares of Series C Stock
then held by such surviving corporation shall
immediately and automatically, without further act or
deed on the part of the corporation or any other
person, be converted into shares of Series A Stock on
a share-for- share basis, and stock certificates
formerly representing such shares of Series C Stock
shall thereupon and thereafter be deemed to represent
a like number of shares of Series A stock.
For purposes of subsection 6(A)(6), a mutual company shall be treated
as a corporation, and the persons holding voting interests therein
shall be treated as shareholders.
(7) In the case of a Series C Holder who is the
executor or administrator of the estate of a deceased Series C
Holder, guardian or conservator of the estate of a disabled or
incompetent Series C Holder or who is a trustee of the estate
of a bankrupt or insolvent Series C Holder, Permitted
Transferees shall include only a Permitted Transferee of such
deceased, disabled, bankrupt or insolvent Series C Holder.
(B) Notwithstanding anything to the contrary set forth
herein, any Series C Holder may pledge such holder's shares of Series C 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 name of the pledgee and shall remain
subject to the provisions of this Section 6. In the event of foreclosure or
other similar action by the pledge, such pledged shares of Series C Stock may
only be transferred to a Permitted Transferee of the pledgor or converted into
shares of Series A Stock, as the pledgee may elect.
(C) For purposes of this Section 6:
(1) The relationship of any person that
is derived by or through legal adoption shall be
considered a natural one;
10
<PAGE> 11
(2) Each joint owner of shares of Series
C Stock shall be considered a Series C Holder of such
shares;
(3) A minor for whom shares of Series C
Stock are held pursuant to a Uniform Gifts to Minors
Act or similar law shall be considered a Series C
Holder of such shares;
(4) Unless otherwise specified, the term
"person" means both natural persons and legal
entities; and
(5) The "Record Date" is the date for
determining the persons to whom the series C Stock is
initially distributed by the Corporation as a
dividend on the Common Stock.
(D) Any purported transfer of shares of Series C Stock
not permitted hereunder shall result in the conversion of the transferee's
shares of Series C Stock into shares of Series A Stock, effective on the date
on which certificates representing such shares are presented for transfer on
the stock transfer record books of the Corporation; provided, however, that if
the Corporation should determine that such shares were not so presented for
transfer within 20 days after the date of such sale, transfer, assignment or
other disposition, the transfer date shall be the actual date of such sale,
transfer, assignment or other disposition, as determined in good faith by the
Board or its appointed agent. The Corporation may, as a condition to the
transfer or registration of transfer of shares of Series C 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. If no indication to the contrary is supplied at the time shares of
Series C Stock are presented for transfer, the transfer shall be presumed by
the Corporation to be a transfer to a person other than a Permitted Transferee.
Section 7. Registration of Series C Stock.
(A) Shares of Series C Stock shall be registered in the
name(s) of the beneficial owner(s) thereof (as hereafter defined) and not in
"street" or "nominee" names; provided, however, certificates representing
shares of Series C Stock issued as a stock dividend on the Corporation's then
outstanding Common Stock may be registered in the same name and manner as the
certificates representing the shares of Common Stock with respect to which the
shares of Series C Stock were issued. For the purposes of Sections 6 and 7,
the term "beneficial owner(s)" of any shares of Series C Stock shall
11
<PAGE> 12
mean the person or persons who possess the power to vote or dispose, or to
direct the voting or disposition, of such shares and "beneficially owned"
shares shall refer to shares owned by such a beneficial owner.
(B) The Corporation shall note on the certificates
representing the shares of Series C Stock that there are restrictions on
transfer and registration of transfer imposed by Sections 6 and 7.
Section 8. Priority of Preferred Stock. The Series C Stock
is subject to all the powers, rights, privileges, preferences and priorities of
the Preferred Stock as may be stated herein and as shall be stated and
expressed in any resolution or resolutions adopted by the Board, pursuant to
authority expressly granted to and vested in it by the provisions of Article V
of the Certificate of Incorporation.
Section 9. Liquidation, Dissolution or Winding Up. In the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary (sometimes referred to as liquidation), after payment
or provision for payment of the debts and other liabilities of the Corporation
and the preferential amounts to which the holders of any stock ranking prior to
the Series A Stock, the Series B Stock (if any) and the Series C Stock in the
distribution of assets shall be entitled upon liquidation, unless otherwise
provided by the Board in the resolution or resolutions providing for the
issuance of Series B stock (if any) or Series C Stock the holders of the Series
A Stock, the Series B Stock (if any) and the Series C Stock and the holders of
any other stock ranking on a parity with the Series A Stock, the Series B Stock
(if any) and the Series C Stock in the distribution of assets upon liquidation
shall be entitled to share pro rata in the remaining assets of the Corporation
according to their respective interests.
12
<PAGE> 13
IN WITNESS WHEREOF, said New TMC Inc. has caused this
Certificate of Designation of Series C Common Stock to be duly executed by its
Vice President and attested to by its Secretary and has caused its corporate
seal to be affixed hereto, this 20th day of January, 1995.
NEW TMC INC.
By: /s/ THOMAS UNTERMAN
-------------------------------
Thomas Unterman
Vice President
ATTEST:
By: /s/ O. JEAN WILLIAMS
-----------------------------
O. Jean Williams
Secretary
<PAGE> 1
EXHIBIT 3.4
THE TIMES MIRROR COMPANY
(a Delaware corporation)
BYLAWS
(as amended)
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of The
Times Mirror Company (hereinafter called the Corporation) shall be in the City
of Wilmington, County of New Castle, State of Delaware.
SECTION 2. Principal Office. The principal office for the
transaction of the business of the Corporation shall be at Times Mirror Square,
in the City of Los Angeles, County of Los Angeles, State of California. The
Board of Directors (hereinafter called the Board) is hereby granted full power
and authority to change said principal office from one location to another.
SECTION 3. Other Offices. The Corporation may also have an
office or offices at such other place or places, either within or without the
State of Delaware, as the Board may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All annual meetings of
stockholders and all other meetings of stockholders shall be held either at the
principal office or at any other place within or without the State of Delaware
which may be designated by the Board pursuant to authority hereinafter granted
to said Board.
SECTION 2. Annual Meetings. Annual meetings of the
stockholders of the Corporation for the purpose of electing directors and for
the transaction of such other proper business as may come before such meetings
may be held at such time, date and place as the Board shall determine by
resolution.
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SECTION 3. Special Meetings. Special meetings of the
stockholders of the Corporation for any purpose or purposes may only be called
in accordance with the provisions in the Certificate of Incorporation.
SECTION 4. Notice of Meetings. Except as otherwise required
by law, notice of each meeting of the stockholders, whether annual or special,
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder of record entitled to vote at such
meeting by delivering a typewritten or printed notice thereof to him
personally, or by depositing such notice in the United States mail, in a
postage prepaid envelope, directed to him at his post office address furnished
by him to the Secretary of the Corporation for such purpose or, if he shall not
have furnished to the Secretary his address for such purpose, then at his post
office address last known to the Secretary, or by transmitting a notice thereof
to him at such address by telegraph, cable or wireless. Except as otherwise
expressly required by law, no publication of any notice of a meeting of the
stockholders shall be required. Every notice of a meeting of the stockholders
shall state the place, date and hour of the meeting, and, in the case of a
special meeting, shall also state the purpose for which the meeting is called.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder to whom notice may be omitted pursuant to applicable Delaware law
or who shall have waived such notice and such notice shall be deemed waived by
any stockholder who shall attend such meeting in person or by proxy, except a
stockholder who shall attend such 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. Except as otherwise expressly
required by law, notice of any adjourned meeting of the stockholders need not
be given if the time and place thereof are announced at the meeting at which
the adjournment is taken.
SECTION 5. Quorum. Except as otherwise required by law, the
holders of record of a majority in voting interest of the shares of stock of
the Corporation entitled to be voted thereat, present in person or by proxy,
shall constitute a quorum for the transaction of business at any meeting of the
stockholders of the Corporation or any adjournment thereof. Subject to the
requirement of a larger percentage vote contained in the Certificate of
Incorporation, these Bylaws or by statute, the stockholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to constitute a quorum.
In
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the absence of a quorum at any meeting or any adjournment thereof, a majority
in voting interest of the stockholders present in person or by proxy and
entitled to vote thereat or, in the absence therefrom of all the stockholders,
any officer entitled to preside at, or to act as secretary of, such meeting may
adjourn such meeting from time to time. At any such adjourned meeting at which
a quorum is present any business may be transacted which might have been
transacted at the meeting as originally called.
SECTION 6. Voting. (a) Each stockholder shall, at each
meeting of the stockholders, be entitled to vote in person or by proxy each
share of the stock of the Corporation having voting rights on the matter in
question and which shall have been held by him and registered in his name on
the books of the Corporation:
(i) on the date fixed pursuant to Article VI,
Section 5 of these Bylaws as the record date for the
determination of stockholders entitled to notice of and to
vote at such meeting, or
(ii) if no such record date shall have been so
fixed, then (a) at the close of business on the day next
preceding the day on which notice of the meeting shall be
given or (b) if notice of the meeting shall be waived, at the
close of business on the day next preceding the day on which
the meeting shall be held.
(b) Shares of its own stock belonging to the Corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of directors in such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes. Persons holding stock of the Corporation in a
fiduciary capacity shall be entitled to vote such stock. Persons whose stock
is pledged shall be entitled to vote, unless in the transfer by the pledgor on
the books of the Corporation he shall have expressly empowered the pledgee to
vote thereon, in which case only the pledgee, or his proxy, may represent such
stock and vote thereon. Stock having voting power standing of record in the
names of two or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety or otherwise, or with
respect to which two or more persons have the same fiduciary relationship,
shall be voted in accordance with the provisions of the General Corporation Law
of the State of Delaware.
(c) Any such voting rights may be exercised by the
stockholder entitled thereto in person or by his proxy
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appointed by an instrument in writing, subscribed by such stockholder or by his
attorney thereunto authorized and delivered to the secretary of the meeting;
provided, however, that no proxy shall be voted or acted upon after three years
from its date unless said proxy shall provide for a longer period. The
attendance at any meeting of a stockholder who may theretofore have given a
proxy shall not have the effect of revoking the same unless he shall in writing
so notify the secretary of the meeting prior to the voting of the proxy. At
any meeting of the stockholders all matters, except as otherwise provided in
the Certificate of Incorporation, in these Bylaws or by law, shall be decided
by the vote of a majority in voting interest of the stockholders present in
person or by proxy and entitled to vote thereat and thereon, a quorum being
present. The vote at any meeting of the stockholders on any question need not
be by ballot, unless so directed by the chairman of the meeting. On a vote by
ballot each ballot shall be signed by the stockholder voting, or by his proxy,
if there by such proxy, and it shall state the number of shares voted.
SECTION 7. List of Stockholders. The Secretary of the
Corporation shall prepare and make, at least ten (10) 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 (10) 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.
SECTION 8. Judges. If at any meeting of stockholders a vote
by written ballot shall be taken on any question, the chairman of such meeting
may appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
ability. Such judges shall decide upon the qualification of the voters and
shall certify and report the number of shares represented at the meeting and
entitled to vote on such question, determine the number of votes entitled to be
cast by each share, shall conduct and accept the votes, and, when the voting is
completed, shall ascertain and report the number of shares voted respectively
for and against the question, and shall determine, and retain
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for a reasonable period a record of the disposition of, any challenge made to
any determination made by such judges. Reports of judges shall be in writing
and subscribed and delivered by them to the Secretary of the Corporation. The
judges need not be stockholders of the Corporation, and any officer of the
Corporation may be a judge on any question other than a vote for or against a
proposal in which he shall have a material interest. The judges may appoint or
retain other persons or entities to assist the judges in the performance of the
duties of the judges.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. Subject to any requirements in
the Certificate of Incorporation, the Bylaws, and of the Delaware General
Corporation Law as to action which must be authorized or approved by the
stockholders, any and all corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be under
the direction of the Board to the fullest extent permitted by law. Without
limiting the generality of the foregoing, it is hereby expressly declared that
the Directors shall have the following powers, to wit:
First - To select and remove all the officers, agents and
employees of the Corporation, prescribe such powers and duties for them as may
not be inconsistent with law, with the Certificate of Incorporation or the
Bylaws, fix their compensation, and require from them security for faithful
service.
Second - To conduct, manage and control the affairs and
business of the Corporation, and to make such rules and regulations therefor
not inconsistent with law, or with the Certificate of Incorporation or the
Bylaws, as they may deem best.
Third - To change the location of the registered office of the
Corporation in Article I, Section 1 hereof; to change the principal office and
the principal office for the transaction of the business of the Corporation
from one location to another as provided in Article I, Section 2, hereof; to
fix and locate from time to time one or more subsidiary offices of the
Corporation within or without the State of Delaware as provided in Article I,
Section 3 hereof; to designate any place within or without the State of
Delaware for the holding of any stockholders' meeting or meetings; and to
adopt, make and use a corporate seal, and to prescribe the forms of
certificates of stock, and to alter the form of such
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seal and of such certificates from time to time, and in their judgment they may
deem best, provided such seal and such certificate shall at all times comply
with the provisions of law.
Fourth - To authorize the issue of shares of stock of the
Corporation from time to time, upon such terms and for such considerations as
may be lawful.
Fifth - To borrow money and incur indebtedness for the
purposes of the Corporation, and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds, debentures, deeds of
trust and securities therefor.
Sixth - By resolution adopted by a majority of the authorized
number of directors, to designate an executive and other committees of the
Board, each consisting of one or more directors, to serve at the pleasure of
the Board, and to prescribe the manner in which proceedings of such committee
or committees shall be conducted. Unless the Board or these Bylaws shall
otherwise prescribe the manner of proceedings of any such committee, meetings
of such committee may be regularly scheduled in advance and may be called at
any time by the chairman of the committee or by any two members thereof;
otherwise, the provisions of these Bylaws with respect to notice and conduct of
meetings of the Board shall govern. Any such committee, to the extent provided
in a resolution of the Board and subject to any restrictions or limitations on
the delegation of power and authority imposed by applicable Delaware law, shall
have and may exercise all of the powers and authority of the Board.
SECTION 2. Number and Term of Office. The authorized number
of directors of this Corporation shall be not less than ten (10) nor more than
twenty (20) until this Section 2 is amended by resolution duly adopted by the
directors or by the stockholders, in either case in accordance with the
provisions of Article XVI of the Certificate of Incorporation. The authorized
number of directors shall be fixed at fifteen (15) until such authorized number
is changed by a resolution duly adopted by the directors or by the
stockholders, in either case in accordance with the provisions of Article XVI
of the Certificate of Incorporation. Directors need not be shareholders. Each
of the directors of the Company shall serve until his or her term has expired
and his or her successor is elected and qualified, or until his or her earlier
death, resignation or removal.
[Amended by resolution adopted by the Board of Directors as of
December 16, 1994 and effective as of February 1, 1995]
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SECTION 3. Election of Directors. The directors shall be
elected by the stockholders of the Corporation, and at each election the
persons receiving the greatest number of votes, up to the number of directors
then to be elected, shall be the persons then elected. The election of
directors is subject to any provisions contained in the Certificate of
Incorporation relating thereto, including any provisions for a classified Board
and for cumulative voting.
SECTION 4. Resignations. Any director of the Corporation may
resign at any time by giving written notice to the Board or to the Secretary of
the Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately
upon receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 5. Vacancies. Except as otherwise provided in the
Certificate of Incorporation, any vacancy on the Board, whether because of
death, resignation, disqualification, an increase in the number of directors,
or any other cause, may be filled by vote of the majority of the remaining
directors, although less than a quorum. Each director so chosen to fill a
vacancy shall hold office until his successor shall have been elected and shall
qualify or until he shall resign or shall have been removed.
No reduction of the authorized number of directors shall have
the effect of removing any director prior to the expiration of his term of
office.
SECTION 6. Place of Meeting. The Board or any committee
thereof may hold any of its meetings at such place or places within or without
the State of Delaware as the Board or such committee may from time to time by
resolution designate or as shall be designated by the person or persons calling
the meeting or in the notice or a waiver of notice of any such meeting.
Directors may participate in any regular or special meeting of the Board or any
committee thereof by means of conference telephone or similar communications
equipment pursuant to which all persons participating in the meeting of the
Board or such committee can hear each other, and such participation shall
constitute presence in person at such meeting.
SECTION 7. First Meeting. The Board shall meet as soon as
practicable after each annual election of directors and notice of such first
meeting shall not be required.
SECTION 8. Regular Meetings. Regular meetings of the Board
may be held at such times as the Board shall from
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time to time by resolution determine. If any day fixed for a regular meeting
shall be a legal holiday at the place where the meeting is to be held, then the
meeting shall be held at the same hour and place on the next succeeding
business day not a legal holiday. Except as provided by law, notice of regular
meetings need not be given.
SECTION 9. Special Meetings. Special meetings of the Board
for any purpose or purposes shall be called at any time by the Chairman of the
Board or, if he is absent or unable or refuses to act, by the President or, if
he is absent or unable or refuses to act, by the Executive Vice President, or
if he is absent or unable or refuses to act, by any Senior Vice President or by
any Vice President or by any two directors. Except as otherwise provided by
law or by these Bylaws, written notice of the time and place of special
meetings shall be delivered personally to each director, or sent to each
director by mail or by other form of written communication, charges prepaid,
addressed to him at his address as it is shown upon the records of the
Corporation, or if it is not so shown on such records and is not readily
ascertainable, at the place in which the meetings of the directors are
regularly held. In case such notice is mailed or telegraphed, it shall be
deposited in the United States mail or delivered to the telegraph company in
the County in which the principal office for the transaction of the business of
the Corporation is located at least forty-eight (48) hours prior to the time of
the holding of the meeting. In case such notice is delivered personally as
above provided, it shall be so delivered at least twenty-four (24) hours prior
to the time of the holding of the meeting. Such mailing, telegraphing or
delivery as above provided shall be due, legal and personal notice to such
director. Except where otherwise required by law or by these Bylaws, notice of
the purpose of a special meeting need not be given. Notice of any meeting of
the Board shall not be required to be given to any director who is present at
such meeting, except a director who shall attend such 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.
SECTION 10. Quorum and Manner of Acting. Except as otherwise
provided in these Bylaws, the Certificate of Incorporation or by applicable
law, the presence of a majority of the authorized number of directors shall be
required to constitute a quorum for the transaction of business at any meeting
of the Board, and all matters shall be decided at any such meeting, a quorum
being present, by the affirmative votes of a majority of the directors present.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, provided any action taken
is approved by at least a majority of the
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required quorum for such meeting. In the absence of a quorum, a majority of
directors present at any meeting may adjourn the same from time to time until a
quorum shall be present. Notice of any adjourned meeting need not be given.
The directors shall act only as a Board, and the individual directors shall
have no power as such.
SECTION 11. Action by Consent. Any action required or
permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting if consent in writing is given thereto by all
members of the Board or of such committee, as the case may be, and such consent
is filed with the minutes of proceedings of the Board or committee.
SECTION 12. Compensation. Directors who are not employees of
the Corporation or any of its subsidiaries may receive an annual fee for their
services as directors in an amount fixed by resolution of the Board, and in
addition, a fixed fee, with or without expenses of attendance, may be allowed
by resolution of the Board for attendance at each meeting, including each
meeting of a committee of the Board. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity as an officer, agent, employee, or otherwise, and receiving
compensation therefor.
SECTION 13. Committees. The Board 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. Any
such committee, to the extent provided in the resolution of the Board and
subject to any restrictions or limitations on the delegation of power and
authority imposed by applicable Delaware law, 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. Any such committee shall keep
written minutes of its meetings and report the same to the Board at the next
regular meeting of the Board.
ARTICLE IV
OFFICERS
SECTION 1. Officers. The officers of the Corporation shall
be a Chairman of the Board, one or more Vice Chairmen of the Board, a
President, one or more Executive Vice Presidents, Senior Vice Presidents and
Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant
Secretaries, Assistant Treasurers, and Assistant Controllers,
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and such other officers as may be appointed at the discretion of the Board in
accordance with the provisions of Section 3 of this Article IV. One person may
hold two or more offices, except that the Secretary may not hold the offices of
Chairman of the Board or President.
SECTION 2. Election. The officers of the Corporation, except
such officers as may be appointed or elected in accordance with the provisions
of Section 3 or Section 5 of this Article IV, shall be chosen annually by the
Board at the organization meeting hereof, and each shall hold office until he
or she shall resign or shall be removed or otherwise disqualified to serve, or
his or her successor shall be elected and qualified.
SECTION 3. Other Officers. In addition to the officers
chosen annually by the Board at its organization meeting, the Board also may
appoint or elect such other officers as the business of the Corporation may
require, each of whom shall have such authority and perform such duties as are
provided in these Bylaws or as the Board may from time to time specify, and
shall hold office until he or she shall resign or shall be removed or otherwise
disqualified to serve, or his or her successor shall be elected and qualified.
SECTION 4. Removal and Resignation. Any officer may be
removed, either with or without cause, by a majority of the directors at the
time in office, at any regular or special meeting of the Board, or, except in
case of an officer chosen by the Board, by any officer upon whom such power of
removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to
the Board or to the President or to the Secretary of the Corporation. Any such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 5. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause shall be
filled in the manner prescribed in the Bylaws for regular appointments to such
office.
SECTION 6. Chairman of the Board. The Chairman of the Board
shall be the chief executive officer of the Corporation and shall, subject to
the control of the Board, have general supervision, direction and control of
the business and affairs of the Corporation. The Chairman of the Board shall
preside at all meetings of the stockholders and at all meetings of the Board.
The Chairman of the Board shall be
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a member of all committees, if any, and shall have the general powers and
duties of management usually vested in the chief executive officer of a
corporation and shall have such other powers and duties as may be prescribed by
the Board or the Bylaws.
SECTION 7. Vice Chairmen of the Board. The Vice Chairmen of
the Board shall exercise and may perform such powers and duties as may be
assigned to them by the Chairman of the Board, or by the Board, or as may be
prescribed by the Bylaws. In the absence or disability of the Chairman of the
Board, or in the event and during the period of a vacancy in that office, the
Vice Chairmen, in order of their rank as fixed by the Board or, if not ranked,
the Vice Chairman designated by the Board, shall preside at all meetings of the
stockholders and at all meetings of the Board.
SECTION 8. President. The President shall exercise and may
perform such powers and duties with respect to the administration of the
business and affairs of the Corporation as may from time to time be assigned by
the Chairman of the Board, or by the Board, or as may be prescribed by the
Bylaws. In the absence or disability of the Chairman of the Board and Vice
Chairmen of the Board, or in the event and during the period of a vacancy in
such office, the President shall perform all the duties of the Chairman of the
Board and when so acting shall have all of the powers of, and be subject to all
the restrictions upon, the Chairman of the Board and chief executive officer of
the Corporation.
SECTION 9. Executive Vice Presidents. The Executive Vice
Presidents shall exercise and may perform such powers and duties with respect
to the administration of the business and affairs of the Corporation as may
from time to time be assigned to each of them by the Chairman of the Board, or
the Board, or as may be prescribed by these Bylaws. In the absence or
disability of the Chairman of the Board, Vice Chairmen of the Board and the
President, the Executive Vice Presidents in order of their rank as fixed by the
Board or, if not ranked, the Executive Vice President designated by the Board,
shall perform all of the duties of the Chairman of the Board and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
Chairman of the Board and chief executive officer of the Corporation.
SECTION 10. Senior Vice Presidents and Vice Presidents. The
Senior Vice Presidents and Vice Presidents shall exercise and may perform such
powers and duties with respect to the Corporation as may from time to time be
assigned to each of them by the Chairman of the Board, a Vice Chairman of the
Board, the President, an Executive Vice President, or the Board, or as may be
prescribed by these
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Bylaws. In the absence or disability of the Chairman of the Board, the Vice
Chairmen of the Board, the President and the Executive Vice Presidents, the
Senior Vice President and Vice President in order of their rank as fixed by the
Board or, if not ranked, the Senior Vice President or Vice President designated
by the Board, shall perform all of the duties of the Chairman of the Board, and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the Chairman of the Board and chief executive officer of the
Corporation.
SECTION 11. Secretary. The Secretary shall keep, or cause to
be kept, at the principal office, or such other place as the Board may order, a
book of minutes of all meetings of directors and stockholders, with the time
and place of holding, whether regular or special, and if special, how
authorized and the notice thereof given, the names of those present at
directors' meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the
principal office or at the office of the Corporation's transfer agent, a share
register, or a duplicate share register, showing the names of the stockholders
and their addresses; the number of shares of each class held by such
stockholder; the number and date of certificates issued for such shares; and
the number and date of cancellation of every certificate surrendered for
cancellation.
The Secretary shall give, or cause to be given, notice of all
the meetings of the stockholders and of the Board required by these Bylaws or
by law to be given, and he shall keep the seal of the Corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by these Bylaws or assigned by the Board, the Chairman of the
Board, a Vice Chairman of the Board, the President, an Executive Vice President
or any Senior Vice President or Vice President to whom the Secretary may
report. If for any reason the Secretary shall fail to give notice of any
special meeting of the Board called by one or more of the persons identified in
the first paragraph of Section 9, Article III, or if the Secretary shall fail
to give notice of any special meeting of the stockholders called by one or more
of the persons identified in Section 2, Article II, then any such person or
persons may give notice of any such special meeting.
SECTION 12. Treasurer. The Treasurer shall supervise, have
custody of and be responsible for all funds and securities of the Corporation.
The Treasurer shall deposit all moneys and other valuables in the name and to
the
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credit of the Corporation with such depositaries as may be designated by the
Board or in accordance with authority delegated by the Board. The Treasurer
shall disburse the funds of the Corporation as may be ordered or authorized by
the Board, shall render to the Chairman of the Board, the President and the
directors, whenever they request it, an account of all transactions as
Treasurer and shall have such other powers and perform such other duties as may
be prescribed by these Bylaws or assigned by the Board, the Chairman of the
Board, a Vice chairman of the Board, the President, an Executive Vice President
or any Senior Vice President or Vice President to whom the Treasurer may
report.
SECTION 13. Controller. The Controller shall keep and
maintain, or cause to be kept and maintained, adequate and correct accounts of
the properties and business transactions of the Corporation, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses, capital,
surplus and shares. Any surplus, including earned surplus, paid-in surplus and
surplus arising from a reduction of stated capital, shall be classified
according to source and shown in a separate account. The books of account
shall at all reasonable times be open to inspection by any director.
The Controller also shall supervise the maintenance of
adequate and correct accounts of the properties and business transactions of
all subsidiaries of the Corporation and shall have such other powers and
perform such other duties as may from time to time be prescribed by these
Bylaws or assigned to him by the Board, the Chairman of the Board, a Vice
Chairman of the Board, the President, an Executive Vice President or any Senior
Vice President or Vice President to whom the Controller may report.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Execution of Contracts. The Board, except as
otherwise provided in these Bylaws, may authorize any officer or officers, or
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the Corporation, and such authority may be general or
confined to specific instances; and unless so authorized by the Board or by
these Bylaws, no officer, agent or employee shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit
or to render it liable for any purpose or in any amount.
SECTION 2. Checks, Drafts, Etc. All checks, drafts or other
orders for payment of money, notes or other evidence
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of indebtedness, issued in the name of or payable to the Corporation, shall be
signed or endorsed by such person or persons and in such manner as, from time
to time, shall be determined by resolution of the Board. Each such officer,
assistant, agent or attorney shall give such bond, if any, as the Board may
require.
SECTION 3. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositaries as the Board
may select, or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation to
whom such power shall have been delegated by the Board. For the purpose of
deposit and for the purpose of collection for the account of the Corporation,
the President, any Vice President or the Treasurer (or any other officer or
officers, assistant or assistants, agent or agents, or attorney or attorneys of
the Corporation who shall from time to time be determined by the Board) may
endorse, assign and deliver checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation.
SECTION 4. General and Special Bank Accounts. The Board may
from time to time authorize the opening and keeping of general and special bank
accounts with such banks, trust companies or other depositaries as the Board
may select or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation to
whom such power shall have been delegated by the Board. The Board may make
such special rules and regulations with respect to such bank accounts, not
inconsistent with the provisions of these Bylaws, as it may deem expedient.
ARTICLE VI
SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Stock. Every owner of stock of
the Corporation shall be entitled to have a certificate or certificates, to be
in such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
Chairman of the Board, or the President or the Executive Vice President or a
Senior Vice President or a Vice President, and by the Secretary or an Assistant
Secretary. Any of or all of the signatures on the certificates may be a
facsimile. In case any officer,
14
<PAGE> 15
transfer agent or registrar who has signed or whose facsimile signature has
been placed upon any such certificate shall thereafter have ceased to be such
officer, transfer agent or registrar before such certificate is issued, such
certificate may nevertheless be issued by the Corporation with the same effect
as though the person who signed such certificate, or whose facsimile signature
shall have been placed thereupon, were such officer, transfer agent or
registrar at the date of issue. A record shall be kept of the respective names
of the persons, firms or corporations owning the stock represented by such
certificates, the number and class of shares represented by such certificates,
respectively, and the respective dates thereof, and in case of cancellation,
the respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled, except in cases provided
for in Section 4 of this Article VI.
SECTION 2. Transfers of Stock. Transfers of shares of stock
of the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary, or with a transfer clerk
or a transfer agent appointed as provided in Section 3 of Article VI, and upon
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact shall be so stated
expressly in the entry of transfer if, when the certificate or certificates
shall be presented to the Corporation for transfer, both the transferor and the
transferee request the Corporation to do so.
SECTION 3. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue, transfer and registration of certificates for shares of
the stock of the Corporation. It may appoint, or authorize any officer or
officers to appoint, one or more transfer clerks or one or more transfer agents
and one or more registrars, and may require all certificates for stock to bear
the signature or signatures of any of them.
SECTION 4. Lost, Stolen, Destroyed. and Mutilated
Certificates. In any case of loss, theft, destruction, or mutilation of any
certificate of stock, another may be issued in its place upon proof of such
loss, theft, destruction, or
15
<PAGE> 16
mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided, however, that a
new certificate may be issued without requiring any bond when, in the judgment
of the Board, it is proper to do so.
SECTION 5. 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 allotment of any rights, or entitled to exercise any rights in respect of
any other change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days prior to any other event for which a record date is fixed.
When a record date is so fixed, only stockholders who are such of record on
that date are entitled to notice of and to vote at the meeting or to give
written consent without a meeting, or to receive any such report, dividend,
distribution, or allotment or rights, or to exercise the rights, as the case
may be, notwithstanding any transfer of any shares on the books of the
Corporation after the record date. If in any case involving the determination
of stockholders for any purpose other than notice of or voting as a meeting of
stockholders or expressing consent to corporate action without a meeting the
Board shall not fix such a record date, the record date for determining
stockholders for such purpose shall be the close of business on the day on
which the Board shall adopt the resolution relating thereto. A determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of such meeting; provided, however, that the
Board may fix a new record date for the adjourned meeting.
ARTICLE VII
INDEMNIFICATION
SECTION 1. Actions, Etc. Other Than by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer or employee of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, against expenses
16
<PAGE> 17
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, that he had reasonable cause
to believe that his conduct was unlawful.
SECTION 2. Actions, Etc., by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer or
employee of the Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
SECTION 3. Indemnification of Agents. The Corporation may,
but only to the extent that the Board of Directors may (but shall not be
obligated to) authorize from time to time, grant rights to indemnification and
to the advancement of expenses to any agent of the Corporation to the fullest
extent of the provisions of this Article VII as they apply to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
17
<PAGE> 18
SECTION 4. Determination of Right of Indemnification. Any
indemnification under Section 1 of this Article VII or Section 2 of this
Article VII (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer or employee is proper in the circumstances because he has
met the applicable standard of conduct set forth in Section 1 of this Article
VII or Section 2 of this Article VII. Such determination shall be made (i) by
the Board by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
SECTION 5. Indemnification Against Expenses of Successful
Party. Notwithstanding the other provisions of this Article, to the extent
that a director, officer or employee of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred
to in Section 1 of this Article VII or Section 2 of this Article VII, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 6. Prepaid Expenses. Expenses incurred by an officer
or director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
in the specific case upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the Board deems appropriate.
SECTION 7. Other Rights and Remedies. The indemnification
provided by this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer or employee and shall inure to the benefit of the heirs,
executors and administrators of such a person.
18
<PAGE> 19
SECTION 8. Insurance. Upon resolution passed by the Board,
the Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer or employee of the Corporation, or is or was
serving at the request of the Corporation as a director, officer or employee of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article.
SECTION 9. Constituent Corporations. For the purposes of
this Article, references to "the Corporation" include all constituent
corporations absorbed in a consolidation or merger as well as the resulting or
surviving corporation, so that any person who is or was a director, officer or
employee of such a constituent corporation or is or was serving at the request
of such constituent corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as he would if he had served the resulting
or surviving corporation in the same capacity.
SECTION 10. Other Enterprises, Fines, and Serving at
Corporation's Request. For purposes of this Article, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any 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; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
ARTICLE VIII
MISCELLANEOUS
SECTION 1. Seal. The Board shall adopt a corporate seal,
which shall be in the form of a circle and shall bear the name of the
Corporation and words showing that the Corporation is incorporated in the State
of Delaware.
19
<PAGE> 20
SECTION 2. Waiver of Notices. Whenever notice is required to
be given by these Bylaws or the Certificate of Incorporation or by law, the
person entitled to said notice may waive such notice in writing, either before
or after the time stated therein, and such waiver shall be deemed equivalent to
notice.
SECTION 3. Amendments. Except as otherwise provided herein
or in the Certificate of Incorporation, these Bylaws, or any of them, may be
altered, amended, repealed or rescinded and new Bylaws may be adopted, (i) by
the Board, or (ii) by the stockholders, at any annual meeting of stockholders,
or at any special meeting of stockholders, provided that notice of such
proposed alteration, amendment, repeal, rescission or adoption is given in the
notice of meeting.
SECTION 4. Representation of Other Corporations. The
Chairman of the Board or the President or the Executive Vice President or a
Senior Vice President or any Vice President or the Secretary or any Assistant
Secretary of this Corporation are authorized to vote, represent and exercise on
behalf of this Corporation all rights incident to any and all shares of any
other corporation or corporations standing in the name of this Corporation.
The authority herein granted to said officers to vote or represent on behalf of
this Corporation any and all shares held by this Corporation in any other
corporation or corporations may be exercised either by such officers in person
or by any person authorized so to do by proxy or power of attorney duly
executed by said officers.
20
<PAGE> 1
EXHIBIT 5
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, California 90071-3197
January 9, 1995
(213) 229-7000 C 91007-03842
The Times Mirror Company
Times Mirror Square
Los Angeles, CA 90053
Re: Registration Statement on Form S-4
----------------------------------
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-4
(Registration No. 33-87482, as amended (the "Registration Statement"), under
the Securities Act of 1933, as amended (the "Securities Act"), filed by The
Times Mirror Company (formerly named New TMC Inc.), a Delaware corporation (the
"Company"), with the Securities and Exchange Commission (the "Commission").
The Registration Statement covers the following shares of stock of the Company
(collectively, the "Shares"): (i) 18,000,000 shares of Conversion Preferred
Stock, Series B, $1.00 par value per share (the "Series B Preferred Stock"),
issuable to certain shareholders of the Company pursuant to the terms of an
exchange offer (the "Exchange Offer") to be made by the Company and
(ii) 18,000,000 shares of Series A Common Stock, $1.00 par value per share
issuable upon conversion of the Series B Preferred Stock in accordance with
its terms.
We are familiar with corporate actions taken and proposed to
be taken by the Company in connection with the authorization and issuance of
the shares, and we have examined the original, or a photostatic or certified
copy of such records of the Company, certificates of officers of the Company
and/or public officials and such other documents as we have deemed relevant and
necessary as the basis for the opinion set forth below. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents
<PAGE> 2
submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon our examination mentioned above, subject to the
assumptions stated above and relying on statements of fact contained in the
documents that we have examined, we are of the opinion that the Shares have
been duly authorized for issuance and that the Shares, when issued in
accordance with the terms of the Exchange Offer and the terms of the Series B
Preferred Stock, as the case may be, will have been validly issued
and will be fully paid and nonassessable.
The Company is a Delaware corporation. We are not admitted to
practice in Delaware. However, we are generally familiar with the Delaware
General Corporation Law and have made such review thereof as we consider
necessary for the purpose of this opinion. Subject to the foregoing, this
opinion is limited to Delaware, California and federal law.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our firm appearing under the
caption "Legal Matters" in the Prospectus that forms a part of the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act or the General Rules and Regulations of the Commission.
Very truly yours,
GIBSON, DUNN & CRUTCHER
PFZ:JS:MAL
<PAGE> 1
EXHIBIT 8
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, California 90071-3197
February 9, 1995
(213) 229-7000 C 91007-03788
The Times Mirror Company
Times Mirror Square
Los Angeles, California 90053
Re: Registration Statement on Form S-4
----------------------------------
Gentlemen:
We are acting as counsel to The Times Mirror Company, a
Delaware corporation (the "Company"), in connection with the offer (the
"Exchange Offer") by the Company described in the Registration Statement on
Form S-4 (Registration No. 33-87482) (the "Registration Statement") filed with
the Securities and Exchange Commission in connection with the Exchange Offer on
December 16, 1994, as amended.
We hereby confirm our opinions set forth under the caption
"Certain Federal Income Tax Considerations" in the Registration Statement.
Furthermore, it is our opinion that the discussion under the caption "Certain
Federal Income Tax Considerations," to the extent that it constitutes legal
conclusions, is accurate in all material respects.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and further consent to the use of our name under
the caption "Certain Federal Income Tax Considerations" in the Registration
Statement and the prospectus that forms a part thereof.
Very truly yours,
/s/ Gibson, Dunn & Crutcher
------------------------------------
GIBSON, DUNN & CRUTCHER
<PAGE> 1
EXHIBIT 11
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------------
1994 1993 1992 1991
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding................................ 128,611,404 128,587,823 128,557,808 128,505,760
Dilutive stock options based on the treasury stock method
using average market price.............................. 195,752 153,081 260,641 120,606
----------- ----------- ----------- -----------
128,807,156 128,740,904 128,818,449 128,626,366
============ ============ ============ ============
Income (loss) from continuing operations.................. $ 126,238 $ 51,669 $ (18,369) $ 14,320
Discontinued operations:
Income from discontinued operations, net of income
taxes................................................. 59,111 133,788 75,144 67,634
Gain on sale of discontinued operations, net of income
taxes................................................. 131,702
----------- ----------- ----------- -----------
Income before extraordinary loss and cumulative effect of
changes in accounting principles........................ 185,349 317,159 56,775 81,954
Extraordinary loss on early retirement of debt, net of
income taxes............................................ (12,232)
Cumulative effect of changes in accounting principles:
Postretirement benefits................................. (133,376)
Income taxes............................................ 10,000
----------- ----------- ----------- -----------
Net income (loss)......................................... $ 173,117 $ 317,159 $ (66,601) $ 81,954
============ ============ ============ ============
Earnings (loss) per share:
Continuing operations................................... $ .98 $ .40 $ (.14) $ .11
Discontinued operations:
Income from operations................................ .46 1.04 .58 .53
Gain on sale.......................................... 1.02
Extraordinary loss...................................... (.09)
Cumulative effect of changes in accounting principles:
Postretirement benefits............................... (1.04)
Income taxes.......................................... .08
----------- ----------- ----------- -----------
Earnings (loss) per share................................. $ 1.35 $ 2.46 $ (.52) $ .64
============ ============ ============ ============
FULLY DILUTED
Average shares outstanding................................ 128,611,404 128,587,823 128,557,808 128,505,760
Dilutive stock options based on the treasury stock method
using year-end market price, if higher than average
market price............................................ 195,752 258,897 172,182 135,296
----------- ----------- ----------- -----------
128,807,156 128,846,720 128,729,990 128,641,056
============ ============ ============ ============
Income (loss) from continuing operations.................. $ 126,238 $ 51,669 $ (18,369) $ 14,320
Discontinued operations:
Income from discontinued operations, net of income
taxes................................................. 59,111 133,788 75,144 67,634
Gain on sale of discontinued operations, net of income
taxes................................................. 131,702
----------- ----------- ----------- -----------
Income before extraordinary loss and cumulative effect of
changes in accounting principles........................ 185,349 317,159 56,775 81,954
Extraordinary loss on early retirement of debt, net of
income taxes............................................ (12,232)
Cumulative effect of changes in accounting principles:
Postretirement benefits................................. (133,376)
Income taxes............................................ 10,000
----------- ----------- ----------- -----------
Net income (loss)......................................... $ 173,117 $ 317,159 $ (66,601) $ 81,954
============ ============ ============ ============
Earnings (loss) per share:
Continuing operations................................... $ .98 $ .40 $ (.14) $ .11
Discontinued operations:
Income from operations................................ .46 1.04 .58 .53
Gain on sale.......................................... 1.02
Extraordinary loss...................................... (.09)
Cumulative effect of changes in accounting principles:
Postretirement benefits............................. (1.04)
Income taxes........................................ .08
----------- ----------- ----------- -----------
Earnings (loss) per share................................. $ 1.35 $ 2.46 $ (.52) $ .64
============ ============ ============ ============
</TABLE>
Page 1 of 3
<PAGE> 2
EXHIBIT 11
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
--------------------------- ---------------------------
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
25, 26, 25, 26,
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding.......... 128,612,692 128,592,924 128,609,594 128,583,394
Dilutive stock options based on the
treasury stock method using
average market price.............. 108,907 124,806 188,768 155,754
----------- ----------- ----------- -----------
Total.......................... 128,721,599 128,717,730 128,798,362 128,739,148
========== ========== ========== ==========
Income from continuing operations... $ 39,794 $ 15,249 $ 79,385 $ 47,306
Income from discontinued operations,
net of income taxes............... 12,505 62,458 41,009 108,047
----------- ----------- ----------- -----------
Net income.......................... $ 52,299 $ 77,707 $ 120,394 $ 155,353
========== ========== ========== ==========
Earnings per share:
Continuing operations............. $ .31 $ .12 $ .61 $ .37
Discontinued operations........... .10 .48 .32 .84
----------- ----------- ----------- -----------
Earnings per share.................. $ .41 $ .60 $ .93 $ 1.21
========== ========== ========== ==========
FULLY DILUTED
Average shares outstanding.......... 128,612,692 128,592,924 128,609,594 128,583,394
Dilutive stock options based on the
treasury stock method using market
price at the close of the period,
if higher than average market
price............................. 108,907 124,806 188,768 155,754
----------- ----------- ----------- -----------
Total.......................... 128,721,599 128,717,730 128,798,362 128,739,148
========== ========== ========== ==========
Income from continuing operations... $ 39,794 $ 15,249 $ 79,385 $ 47,306
Income from discontinued operations,
net of income taxes............... 12,505 62,458 41,009 108,047
----------- ----------- ----------- -----------
Net Income.......................... $ 52,299 $ 77,707 $ 120,394 $ 155,353
========== ========== ========== ==========
Earnings per share:
Continuing operations............. $ .31 $ .12 $ .61 $ .37
Discontinued operations........... .10 .48 .32 .84
----------- ----------- ----------- -----------
Earnings per share.................. $ .41 $ .60 $ .93 $ 1.21
========== ========== ========== ==========
</TABLE>
Page 2 of 3
<PAGE> 3
EXHIBIT 11
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
-----------------------------
DECEMBER 31, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
PRIMARY
Average shares outstanding...................................... 128,615,548 128,601,111
Dilutive stock options based on the treasury stock method using
average market price......................................... 135,684 207,975
----------- -----------
128,751,232 128,809,086
=========== ===========
Income from continuing operations............................... $46,853 $4,363
Discontinued operations:
Income from discontinued operations, net of income taxes..... 18,102 25,741
Gain on sale of discontinued operations, net of taxes........ 131,702
----------- -----------
Income before extraordinary loss................................ 64,955 161,806
Extraordinary loss on early retirement of debt, net of income
taxes........................................................ (12,232)
----------- -----------
Net income...................................................... $52,723 $161,806
=========== ===========
Earnings per share:
Continuing operations........................................ $.36 $.04
Discontinued operations:
Income from operations..................................... .14 .20
Gain on sale............................................... 1.02
Extraordinary loss........................................... (.09)
----------- -----------
Earnings per share.............................................. $.41 $1.26
========== ==========
FULLY DILUTED
Average shares outstanding...................................... 128,615,548 128,601,111
Dilutive stock options based on the treasury stock method using
market price at the close of the period, if higher than
average market price......................................... 135,684 313,384
----------- -----------
128,751,232 128,914,495
=========== ===========
Income from continuing operations............................... $46,853 $4,363
Discontinued operations:
Income from discontinued operations, net of income taxes..... 18,102 25,741
Gain on sale of discontinued operations, net of taxes........ 131,702
----------- -----------
Income before extraordinary loss................................ 64,955 161,806
Extraordinary loss on early retirement of debt, net of income
taxes........................................................ (12,232)
----------- -----------
Net income...................................................... $52,723 $161,806
=========== ===========
Earnings per share:
Continuing operations........................................ $.36 $.04
Discontinued operations:
Income from operations..................................... .14 .20
Gain on sale............................................... 1.02
Extraordinary loss........................................... (.09)
----------- -----------
Earnings per share.............................................. $.41 $1.26
=========== ===========
</TABLE>
Page 3 of 3
<PAGE> 1
EXHIBIT 12
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE QUARTERS
YEAR ENDED DECEMBER 31 ENDED
---------------------------------------------------- SEPTEMBER 25,
1989 1990 1991 1992 1993 1994 1994
-------- -------- -------- -------- -------- -------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest expense.......................... $ 53,893 $ 74,817 $ 76,724 $ 74,281 $ 84,054 $ 51,757 $ 69,459
Interest related to ESOP(a)............... 7,202 6,473 5,074 4,113 2,611 1,056 1,376
Capitalized interest...................... 22,418 17,802 13,537 3,963 391 1,070 1,142
Portion of rents deemed to be interest.... 17,363 21,180 21,190 21,857 21,007 15,569 20,480
Amortization of debt expense.............. 759 512 866 600 995 265 339
-------- -------- -------- -------- -------- -------- --------
Total Fixed Charges................. $101,635 $120,784 $117,391 $104,814 $109,058 $ 69,717 $ 92,796
======== ======== ======== ======== ======== ======== ========
Earnings
Income (loss) from continuing operations
before income taxes..................... $395,663 $204,399 $ 55,348 $ (7,102) $109,785 $159,159 $247,747
Fixed charges, less capitalized interest
and interest related to ESOP............ 72,015 96,509 98,780 96,738 106,056 67,591 90,278
Amortization of capitalized interest...... 2,497 3,937 4,576 5,963 4,222 3,123 4,229
Distributed income from less than 50%
owned unconsolidated affiliates......... 3,890 9,191 190 214 281 196 292
Subtract: Equity loss (income) from less
than 50% owned unconsolidated
affiliates.............................. (4,518) (5,901) (2,857) 2,025 1,067 346 1,158
-------- -------- -------- -------- -------- -------- --------
Total Earnings...................... $469,547 $308,135 $156,037 $ 97,838 $221,411 $230,415 $343,704
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges.......... 4.6 2.6 1.3 (b) 2.0 3.3 3.7
</TABLE>
- ---------------
(a) The Company has guaranteed repayment of debt of the Employee Stock Ownership
Plan and, accordingly, has included the related interest in fixed charges.
This debt was repaid in December 1994.
(b) Earnings are approximately $7 million lower than the amount needed to cover
fixed charges in this year, as earnings in 1992 were impacted by over $200
million in restructuring charges.
Page 1 of 2
<PAGE> 2
EXHIBIT 12
THE TIMES MIRROR COMPANY AND SUBSIDIARIES
COMPUTATION OF PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES
AND PRO FORMA RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
THREE QUARTERS
ENDED
DECEMBER 31, SEPTEMBER 25,
1993 1994
------------ --------------
<S> <C> <C>
Pro Forma Fixed Charges
Pro forma interest expense................................... $ 34,021 $ 17,793
Interest related to ESOP(a).................................. 2,611 1,056
Capitalized interest......................................... 391 1,070
Portion of rents deemed to be interest....................... 21,007 15,569
Amortization of debt expense................................. 995 265
-------- --------
Total Pro Forma Fixed Charges........................ 59,025 35,753
Preferred Stock Dividends...................................... 117,776 87,164
-------- --------
Combined Fixed Charges and Preferred Stock
Dividends.......................................... $176,801 $122,917
======== ========
Pro Forma Earnings
Pro forma income from continuing operations before income
taxes..................................................... $159,818 $193,123
Pro forma fixed charges, less capitalized interest and
interest related to ESOP.................................. 56,023 33,627
Amortization of capitalized interest......................... 4,222 3,123
Distributed income from less than 50% owned unconsolidated
affiliates................................................ 281 196
Subtract: Equity loss (income) from less than 50% owned
unconsolidated affiliates................................. 1,067 346
-------- --------
Total Pro Forma Earnings............................. $221,411 $230,415
======== ========
Pro forma ratio of earnings to fixed charges................... 3.8 6.4
Pro forma ratio of earnings to combined fixed charges
and preferred stock dividends................................ 1.3 1.9
</TABLE>
- ---------------
(a) The Company has guaranteed repayment of $24,200,000 of debt of the Employee
Stock Ownership Plan and, accordingly, has included the related interest in
fixed charges.
Page 2 of 2
<PAGE> 1
EXHIBIT 21
THE TIMES MIRROR COMPANY
SUBSIDIARIES
SUBSIDIARIES:
ALLEN COMMUNICATION INCORPORATED
THE BALTIMORE SUN COMPANY
HOMESTEAD PUBLISHING CO.
EMPTY STOCKING FUND, INC.
B.P.I., INC.
CALIFORNIA COMMUNITY NEWS CORPORATION
CRC PRESS, INC.
ENVIRONMENTAL EDUCATION ENTERPRISES, INC.
INFORMATION & COMMUNICATION RESOURCES CORPORATION
THE HARTFORD COURANT COMPANY
HEART & CROWN ADVERTISING, INC.
JEPPESEN SANDERSON, INC.
JEPPESEN DATAPLAN, INC.
KASET, INC.
KASET INTERNATIONAL SA
LOS ANGELES TIMES INTERNATIONAL, LTD.
LOS ANGELES TIMES/WASHINGTON POST NEWS SERVICE (50% TMC)
LOZONO COMMUNICATIONS, INC. (50%)
MIRROR SYSTEMS, INC.
THE MORNING CALL, INC.
DIRECT MARKETING DISTRIBUTION, INC.
MOSBY-YEAR BOOK, INC.
AMERICAN VETERINARY PUBLICATIONS, INC.
B.C. DECKER, INC.
B.C. DECKER (CANADA), INC.
JEMS PUBLISHING COMPANY, INC.
MADISON PUBLISHING CORPORATION
MOSBY-GREAT PERFORMANCE, INC.
MOSBY-YEAR BOOK RESOURCE APPLICATIONS, INC.
STAYWELL HEALTH MANAGEMENT SYSTEMS, INC.
<PAGE> 2
TIMES MIRROR INTERNATIONAL PUBLISHERS U.S., INC.
MOSBY, LTD.
TIMES MIRROR PROFESSIONAL PUBLISHING, LTD.
MOSBY GmbH
MOSBY-YEAR BOOK EUROPE, INC.
TIMES MIRROR de ESPANA, S.A.
MOSBY-DOYMA LIBROS, S.A.
DOYMA MEXICANA, S.A. de C.V.
EDICIONES DOYMA de VENEZUELA, C.A.
DOYMA ANDINA, S.A.
DOYMA ARGENTINA, S.A.
DOYMA ITALIA, S.R.L.
WOLFE MEDICAL PUBLICATIONS LIMITED
TIMES MIRROR U.K. LIMITED
TIMES MIRROR INTERNATIONAL PUBLISHERS LIMITED
MOSBY-WILLIAMS & WILKINS PTY LIMITED (50% TIMES
MIRROR INTERNATIONAL PUBLISHER U.S., INC.
TIMES MIRROR INTERNATIONAL PUBLISHERS PTY LIMITED
NATIONAL JOURNAL, INC.
PUBLISHERS FOREST PRODUCTS CO. OF WASHINGTON
SOUTHERN CONNECTICUT NEWSPAPERS, INC.
THE SPORTING NEWS PUBLISHING COMPANY
TIMES MIRROR HIGHER EDUCATION GROUP, INC.
BUSINESS PUBLICATIONS, INC.
PROBUS PUBLISHING COMPANY
PROBUS PUBLISHING (EUROPE) LIMITED
WCB PUBLISHERS INTERNATIONAL, INC.
TIMES MIRROR INTERNATIONAL, INC.
TIMES MIRROR LAND AND TIMBER COMPANY
TIMES MIRROR MULTIMEDIA CORPORATION
TIMES MIRROR NATIONAL MARKETING, INC.
NEWSPAPERS FIRST, INC. (33%)
TIMES MIRROR PRESS
THE TIMES MIRROR PROGRAMMING COMPANY
TIMES MIRROR PTE. LTD.
TMACQ, INC.
TM HOLDINGS, INC.
JEPPESEN & CO., GmbH
JEPPESEN U.K. LIMITED
2
<PAGE> 3
TM PROPERTIES, INC.
TMD, INC.
HARRY N. ABRAMS, INCORPORATED
HARRY N. ABRAMS, B.V.
LEARNING INTERNATIONAL, INC.
TIMES MIRROR TRAINING GROUP EUROPE, INC.
LEARNING INTERNATIONAL DEUTSCHLAND GmbH
LEARNING INTERNATIONAL LIMITED
LEARNING INTERNATIONAL (ITALIA) S.r.1.
LEARNING INTERNATIONAL S.A.
LEARNING INTERNATIONAL S.A. N.V.
LEARNING INTERNATIONAL (Schweiz) AG
TM LEARNING INTERNATIONAL INC./FORMATION
TIM INTERNATIONAL INC.
MATTHEW BENDER & COMPANY, INCORPORATED
TM PROGRAMMING, INC. (66%)
NEWSDAY, INC.
DISTRIBUTION SYSTEMS OF AMERICA, INC.
TIMES MIRROR MAGAZINES, INC.
SPORTS MARKETING GROUP, INC.
FPP/EEJ PUBLICATIONS, INC.
ZENGER-MILLER, INC.
TIMES MIRROR AUSTRALIA PTY LIMITED
ZENGER-MILLER CANADA, INC.
ZENGER-MILLER de MEXICO, S.A. de C.V.
3
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-4 No. 33-87482) and the related Prospectus of The
Times Mirror Company for the registration of Series B Preferred Stock, par value
$1.00 per share, and to the inclusion in this Registration Statement of our
report dated February 3, 1994, except for Notes N and P, as to which the date is
November 9, 1994, and Notes I, Q and R, as to which the date is January 9, 1995,
with respect to the consolidated financial statements of The Times Mirror
Company for the three years ended December 31, 1993.
ERNST & YOUNG LLP
Los Angeles, California
February 13, 1995
