[LOGO] MEREDITH CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 11, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of holders of common stock and
class B stock of Meredith Corporation (hereinafter called the "Company") will be
held at the Company's principal executive offices, 1716 Locust Street, Des
Moines, Iowa 50309-3023, on Monday, November 11, 1996, at 10:00 A.M., local
time, for the following purposes:
(1) To elect four Class I directors for terms expiring in 1999, as
provided in the Bylaws of the Company;
(2) To consider and act upon a proposal of the Board of Directors
to approve the additional reserve of 75,000 shares of Company
common stock for issuance under the 1990 Restricted Stock Plan
for Non-Employee Directors.
(3) To consider and act upon a proposal of the Board of Directors
to approve the additional reserve of 75,000 shares of Company
common stock for issuance under the 1993 Stock Option Plan for
Non-Employee Directors.
(4) To consider and act upon a proposal of the Board of Directors
to approve the 1996 Stock Incentive Plan.
(5) To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
By resolution of the Board of Directors, only holders of record of the Company's
common stock and class B stock at the close of business on September 12, 1996,
are entitled to notice of and to vote at the meeting or at any adjournment or
adjournments thereof.
By Order of the Board of Directors,
THOMAS L. SLAUGHTER
VICE PRESIDENT -- GENERAL COUNSEL
AND SECRETARY
Des Moines, Iowa
September 25, 1996
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD(S) IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE FOR MAILING IN THE UNITED STATES. YOUR VOTE IS
IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. A PROMPT RESPONSE IS
HELPFUL, AND YOUR COOPERATION WILL BE APPRECIATED.
[LOGO] MEREDITH CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 11, 1996
INTRODUCTION
This Proxy Statement is being sent to stockholders on or about September 25,
1996, in connection with the solicitation of proxies by the Board of Directors
of Meredith Corporation (the "Company") to be used in voting at the Annual
Meeting of holders of common stock and class B stock of the Company to be held
at the Company's principal executive offices, 1716 Locust Street, Des Moines,
Iowa 50309-3023, on Monday, November 11, 1996, at 10:00 A.M., local time, and at
any adjournment or adjournments thereof.
YOU ARE REQUESTED TO SIGN AND COMPLETE THE ENCLOSED PROXY CARD(S) AND RETURN
IT (THEM) IN THE ENCLOSED ENVELOPE.
Proxies in such form, if duly signed and received in time for voting, will
be voted in accordance with the directions of the stockholders. If no
instructions are specified in a proxy, the proxy will be voted by the proxy
holder FOR the election as directors of the nominees hereinafter named, FOR the
additional reserve of Company common stock for the 1990 Restricted Stock Plan
for Non-Employee Directors, FOR the additional reserve of Company common stock
for the 1993 Stock Option Plan for Non-Employee Directors, FOR the adoption of
the 1996 Stock Incentive Plan and in its discretion upon such matters not
presently known or determined which may properly come before the meeting.
The affirmative vote of a majority of the total number of votes entitled to
be cast represented by shares present in person or by proxy, a quorum being
present, is required to elect directors, to approve the matters relating to the
1990 Restricted Stock Plan for Non-Employee Directors and the 1993 Stock Option
Plan for Non-Employee Directors, to approve the 1996 Stock Incentive Plan and
for any other matters which may properly come before the meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
The giving of a proxy does not preclude the right to vote in person or by
means of a subsequent proxy should the person giving the proxy so desire. Any
proxy may be revoked by giving notice to the Company in writing prior to the
meeting or in open meeting, but such revocation shall not affect any vote
previously taken.
The expense of soliciting proxies for the Annual Meeting, including the cost
of preparing, assembling and mailing the notice, proxy and Proxy Statement and
the reasonable costs of brokers, nominees and fiduciaries in supplying proxies
to beneficial owners, will be paid by the Company. The solicitation will be made
by the use of the mail, through brokers and banking institutions, and by
officers and regular employees of the Company.
SHARES ENTITLED TO VOTE
Each holder of common stock of record at the close of business on September
12, 1996, is entitled to one vote per share so held on all matters to come
before the meeting. At the close of business on September 12, 1996, there were
outstanding and entitled to vote at the Annual Meeting 20,275,755 shares of
common stock of the Company. Each holder of record of class B stock at the close
of business on September 12, 1996, is entitled to ten votes per share so held on
all matters to come before the meeting. At the close of business on September
12, 1996, there were outstanding and entitled to vote at the Annual Meeting
6,554,974 shares of class B stock of the Company, for a total of 85,825,495
votes.
In determining whether a quorum exists at the Annual Meeting for purposes of
all matters to be voted on, all votes, including votes to "withhold authority,"
and all abstentions will be counted. Abstentions with respect to a particular
proposal will be counted as part of the base number of votes to be used in
determining if that particular proposal has received the requisite number of
base votes for approval, while broker non-votes will not be counted in such base
for each proposal. Therefore, an abstention will have the same practical effect
as a vote "against" such proposal, while a broker non-vote will have no effect.
If an individual has signed a proxy card but failed to indicate a vote "for,"
"against," "withhold authority," "for all except," or "abstaining," such proxy
will be voted in favor of such proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or to dispose of shares of the Company, either alone or
jointly with others, are deemed to be beneficial owners of such shares. Because
the voting or dispositive power of certain stock listed in the following table
is shared, in some cases the same securities are listed opposite more than one
name in the table. In addition, in some cases, the same securities may be listed
in more than one column opposite the same person's name in the table (as for
example when a person holds sole dispositive power but shared voting power with
respect to shares). The total number of the Company's shares as listed in the
table, after elimination of such duplication is 5,514,553 shares of common stock
(approximately 27% of the outstanding common stock) and 6,037,712 shares of
class B stock (approximately 92% of the outstanding class B stock).
Set forth below is information as of June 30, 1996 (unless otherwise
indicated), concerning each person who is known to management to be the
beneficial owner of more than five percent (5%) of any class of the Company's
voting securities, and security ownership by management.
COMMON STOCK OWNED CLASS B STOCK OWNED(2)
-------------------------------------- ----------------------------------
SOLE VOTING SHARED SOLE VOTING SHARED
OR VOTING OR OR VOTING OR
INVESTMENT INVESTMENT % OF INVESTMENT INVESTMENT % OF
NAME AND ADDRESS POWER POWER CLASS(1) POWER POWER CLASS
- ---------------- ---------- ---------- -------- ----------- ---------- -----
(a) BENEFICIAL OWNERS OF MORE THAN 5%
E.T. Meredith III, Director (3)(4)(6)(9) ..... 2,034,162 46,206 21.0% 2,615,888 42,206 41%
1716 Locust Street
Des Moines, Iowa 50309-3023
Frederick B. Henry, Director (3)(4)(8) ....... 225,400 0 10.0% 922,042 1,030,796 30%
1657 Art School Road
Chester Springs, Pennsylvania 19425
Patrick Henry, Jr. (3)(6) .................... 0 0 4.6% 25,650 907,194 14%
P.O. Box 3077
Aspen, Colorado 81611
Norwest Corporation (5)(6) ................... 104,460 0 5.0% 270,450 693,966 15%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Fidelity Investments (6) ..................... 2,636,296 0 13.0% 0 0 0
FMR Corp
82 Devonshire Street
Boston, Massachusetts 02109-3614
(b) DIRECTORS, NOT LISTED ABOVE, INCLUDING
NOMINEES, AND NAMED EXECUTIVE OFFICERS
Herbert M. Baum, Director (8) ................ 4,078 0 * 0 0 0
Robert A. Burnett, Director (4)(8) ........... 49,948 0 * 35,148 24,000 *
Pierson M. Grieve, Director (8) .............. 8,602 0 * 0 0 0
Larry D. Hartsook, Vice President -- ......... 20,644 0 * 0 0 0
Finance (7)
Joel W. Johnson, Director (8) ................ 2,078 0 * 0 0 0
Philip A. Jones, President -- ................ 34,400 0 * 0 0 0
Broadcasting Group (7)
William T. Kerr, Director, ................... 62,701 2,000 * 0 0 0
President & COO (4)(7)
Robert E. Lee, Director (8) .................. 6,632 0 * 1,400 0 *
Richard S. Levitt, Director (4)(8) ........... 8,602 12,000 * 0 12,000 *
Christopher M. Little, President -- .......... 20,201 0 * 0 0 0
Publishing Group (7)
Nicholas L. Reding, Director (8) ............. 4,248 0 * 0 0 0
Jack D. Rehm, Director, Chairman of .......... 167,615 672 * 22,729 672 *
the Board & CEO (4)(7)
Barbara S. Uehling, Director (8) ............. 8,802 0 * 200 0 *
(c) ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (3)(4)(5)(6)(7)(8)(9) (18 persons) 2,712,299 61,498 30% 3,598,960 1,113,674 72%
- ------------------------
* Less than one percent.
(1) The calculation of percentage of class of Common Stock Owned includes any
amounts of common stock deemed to be owned by the stockholder as a result of
the stockholder's ownership of class B stock which is convertible, share for
share, into common stock.
(2) Class B stock is not transferable except to members of the family of the
holder and certain other related entities. Class B stock, however, is
convertible, share for share, at any time into fully transferable common
stock without the payment of any consideration.
(3) Includes shares owned by various trusts. The inclusion of these shares is
not to be taken as an admission by the named stockholder of beneficial
ownership of these shares for any other purpose.
(4) Includes any shares beneficially owned by spouses and relatives living in
the same home with the named individuals.
(5) Includes any shares beneficially owned by Norwest Bank Iowa, N.A., a
subsidiary of Norwest Corporation.
(6) Information as of December 31, 1995, based on Schedule 13G filed with the
Securities and Exchange Commission.
(7) Includes shares held by Norwest Bank Iowa, N.A., as trustee under the
Meredith Savings and Investment Plan for the benefit of certain officers,
which shares are voted by the trustee only at the direction of the
individual plan participants. The inclusion of these shares is not to be
taken as an admission by the respective officers of ownership of these
shares for any other purpose.
(8) Within sixty (60) days following the date of this Proxy Statement, the
number of stock options that may be exercised by each of the following
listed non-employee directors under the Company's 1993 Stock Option Plan for
Non-Employee Directors is as follows: 2,200 shares for Messrs. Herbert M.
Baum and Joel W. Johnson; 4,200 shares for Messrs. Robert A. Burnett,
Pierson M. Grieve, Frederick B. Henry, Robert E. Lee, Richard S. Levitt,
Nicholas L. Reding and Dr. Barbara S. Uehling.
(9) Information as of April 30, 1996, based on Form 4 filed with the Securities
and Exchange Commission.
ELECTION OF DIRECTORS
The Restated Articles of Incorporation provide that the Board of Directors
shall consist of not fewer than three nor more than 15 persons, as may be
provided by the Bylaws, to be divided into three classes, each class to consist,
as nearly as may be possible, of one-third of the total number of directors. The
Bylaws provide that the number of directors shall be fixed from time to time by
resolution of the Board of Directors. The last resolution provided for 12
directors. The proxies cannot be voted for a greater number of persons than the
number of nominees named herein.
Listed below are the four persons who have been nominated as Class I
directors to serve three-year terms to expire in 1999. All nominees are
currently serving as directors and were previously elected by the stockholders.
Should any of these nominees become unable to serve prior to the upcoming Annual
Meeting, an event which is not anticipated by the Company, the proxies, except
those from stockholders who have given instructions to withhold voting for the
following nominees, will be voted for such other person as the
Compensation/Nominating Committee may nominate. Certain information concerning
each of the four nominees and each of the continuing directors is set forth
below.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS --
TERMS EXPIRE IN 1999
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEE AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- ------------------ --- ------------- ----------------------------------------------------------------------------
Pierson M. Grieve 68 1985 Chairman and CEO, Retired, Ecolab, Inc. (developer and marketer of cleaning,
sanitizing and maintenance products and services), December 1995 to
present; Chairman, Ecolab, Inc., 1992 to December 1995; Chairman and
Chief Executive Officer, Ecolab, Inc., 1992 to March 1995; Chairman,
President and Chief Executive Officer, Ecolab, Inc., 1985 to
1992. Mr. Grieve is a director of St. Paul Companies, Inc.; Norwest
Corporation; U S West, Inc.; Minnegasco, a subsidiary of NorAm,
Inc.; and Danka Business Systems, PLC.
Robert E. Lee 61 1982 Executive Director, The Denver Foundation (community foundation), 1989
to present. Mr. Lee is a director of Equitable of Iowa Companies and
Storage Technology Corporation.
Jack D. Rehm 63 1988 Chairman of the Board, Meredith Corporation, July 1992 to present; Chief
Executive Officer, Meredith Corporation, 1989 to present; President,
Meredith Corporation, 1988 to July 1994. Mr. Rehm is a director of Equitable
of Iowa Companies, International Multifoods Corporation and Norwest Bank
Iowa, N.A.
Barbara S. Uehling 64 1980 Executive Director of the Business -- Higher Education Forum (non-profit
organization that addresses issues of mutual concern to business and
higher education), February 1995 to present; Interim Director of the
Business -- Higher Education Forum, July 1994 to February 1995; Chancellor,
University of California, Santa Barbara, 1987 to July 1994.
DIRECTORS CONTINUING IN OFFICE AS CLASS II DIRECTORS --
TERMS EXPIRE IN 1997
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
DIRECTOR AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- ------------------ --- ------------- ----------------------------------------------------------------------
Herbert M. Baum 59 1994 Chairman & Chief Executive Officer, Quaker State Corporation (producer
of motor oil and lubricants and marketer of products and services
in the automotive aftermarket), July 1995 to present; President,
Chairman & Chief Executive Officer, Quaker State Corporation, 1993 to
June 1995; Executive Vice President & President, Campbell North and
South America, Campbell Soup Company (producer and marketer of
food products), 1992 to 1993; Executive Vice President &
President, Campbell North America, Campbell Soup Company, 1990 to
1992. Mr. Baum is a director of Quaker State Corporation and
Whitman Corporation.
Frederick B. Henry 50 1969 President, The Bohen Foundation (private charitable foundation), 1985
to present.
William T. Kerr 55 1994 President and Chief Operating Officer, Meredith Corporation, July 1994
to present; President-Magazine Group and Executive Vice President,
Meredith Corporation, 1991 to 1994. Mr. Kerr is a director of Principal
Mutual Life Insurance Company.
Nicholas L. Reding 61 1992 Vice Chairman, Monsanto Company (diversified company in pharmaceuticals,
food products and agricultural chemicals), 1992 to present; Executive
Vice President, Monsanto Company, 1990 to 1992. Mr. Reding is a director
of Monsanto Company, International Multifoods Corporation and CPI
Corporation.
DIRECTORS CONTINUING IN OFFICE AS CLASS III DIRECTORS --
TERMS EXPIRE IN 1998
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
DIRECTOR AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- ----------------- --- ------------- ------------------------------------------------------------------------
Robert A. Burnett 69 1969 Consultant, Meredith Corporation, 1992 to present; Retired. Chairman
of the Board, Meredith Corporation, 1989 to 1992. Mr. Burnett is a
director of Whirlpool Corporation, MidAmerican Energy Company, ITT
Corporation, ITT Industries, Inc., and ITT Hartford Group, Inc.
Joel W. Johnson 53 1994 Chairman, President and Chief Executive Officer, Hormel Foods
Corporation (producer and marketer of meat and food products), December
1995 to present; President and Chief Executive Officer, Hormel Foods
Corporation, 1993 to December 1995; President, Hormel Foods Corporation,
1992 to 1993; Executive Vice President, Hormel Foods Corporation,
1991 to 1992. Mr. Johnson is a director of Hormel Foods Corporation
and Ecolab, Inc.
Richard S. Levitt 66 1971 Chairman and Chief Executive Officer, Nellis Corporation (private
capital management), 1988 to present. Mr. Levitt is a director of
Gaylord Container Corporation and Norwest Corporation.
E. T. Meredith III 63 1966 Chairman of the Executive Committee, Meredith Corporation, 1988 to
present.
BOARD COMMITTEES
In fiscal 1995-96 there were five standing committees of the Board of Directors:
AUDIT COMMITTEE. The members of this committee are Messrs. Levitt
(Chairman), Henry, Johnson and Lee and Dr. Uehling. The committee is composed
entirely of non-employee directors. The committee reviews with the Company's
outside auditors the scope and results of the annual audit, determines the
responsibilities and scope of the Company's internal audit department and
carries on such other activities as required to give additional assurances
regarding financial information used by the Board and distributed to outsiders.
COMPENSATION/NOMINATING COMMITTEE. The members of this committee are Messrs.
Lee (Chairman), Henry, Levitt and Reding. The committee is composed entirely of
non-employee directors. The committee reviews and approves changes in corporate
officers' salaries and salary administration plans and programs, approves prior
to adoption any management incentive, bonus or stock plans or agreements and
administers such plans as required. The committee nominates directors to serve
on the Board. The committee will consider stockholder recommendations for
directors sent to the Compensation/Nominating Committee, c/o Thomas L.
Slaughter, Meredith Corporation, 1716 Locust Street, Des Moines, Iowa
50309-3023.
EXECUTIVE COMMITTEE. The members of this committee are Messrs. Meredith
(Chairman), Burnett, Kerr, Levitt and Rehm. The committee has, during intervals
between meetings of the Board, all the authority of the Board in management of
the business except for the authority to declare dividends, fix compensation of
any members of the committee, amend or repeal certain resolutions of the Board,
or make fundamental changes in the corporate structure of the Company.
FINANCE COMMITTEE. The members of this committee are Messrs. Reding
(Chairman), Baum, Burnett, Grieve and Lee. The committee advises the Board with
respect to corporate financial policies and procedures, dividend policy,
specific corporate financing plans and annual operating and capital budgets. It
also provides financial advice and counsel to management, appoints depositories
of corporate funds and specifies conditions of deposit and withdrawal,
supervises corporate investment portfolios and reviews capital expenditure
requests by management within the limits established by the Board.
PENSION COMMITTEE. The members of this committee are Messrs. Grieve
(Chairman), Baum, Henry and Johnson and Dr. Uehling. The committee reviews
pension plans and amendments to ascertain that they are being administered in
accordance with their terms and are providing authorized benefits, reviews
levels and types of benefits and recommends changes. The committee recommends to
the Board investment objectives for pension funds, reviews the performance of
the funds and recommends to the Board such committees it deems desirable for the
administration of the pension plans.
During fiscal 1995-96, the full Board met four times, the Audit Committee
met three times, the Finance Committee met four times, the
Compensation/Nominating Committee met five times, the Pension Committee met two
times and the Executive Committee met once. Other than Mr. Grieve, the directors
attended all of the meetings during fiscal 1995-96. Mr. Grieve missed one
meeting of the Board and one meeting of the Finance and Pension Committees
during fiscal 1995-96 due to an emergency.
During fiscal 1995-96, non-employee directors received an annual retainer of
$20,000 and $800 for each committee meeting ($600 for telephone meetings) and
each board meeting attended, with a $200 meeting supplement for committee
chairs. To encourage directors' ownership of Meredith stock, directors had the
opportunity to receive the annual retainer in restricted stock under the
Meredith Corporation 1990 Restricted Stock Plan for Non-Employee Directors. If a
director elected to receive restricted stock, the retainer for the year was
increased by 5% and converted to stock. The restricted stock vests on the fifth
anniversary of the date of the grant. During fiscal 1995-96, all non-employee
directors, with two exceptions, participated in the program. The 1993 Stock
Option Plan for Non-Employee Directors is a further encouragement of directors'
ownership of Meredith stock. Each non-employee director received an option to
purchase 2,000 shares of Company common stock on the day following the Annual
Meeting of Stockholders. Employee directors receive no compensation for board
service. If a non-employee member of the Board of Directors retires from the
Board, the director receives a monthly retirement benefit equal to 1/12 of the
annual retainer fee for directors at the date of such retirement, for a period
equal to the number of full calendar months during which the director served on
the Board, not to exceed 120 months. Pursuant to a consulting agreement, Robert
A. Burnett, former Chairman of the Board and a current director, receives not
less than $150,000 per year through July 1, 1997.
Effective as of this Annual Meeting, the compensation program for the
non-employee directors who are not expected to retire from service on the Board
on or before February 2, 1998, will be changed to provide for a $35,000 annual
retainer with an additional $3,000 annual retainer for committee chairmen. Each
director may elect to receive all or 50% of the annual retainer (including the
chairman retainer) in either restricted stock or stock equivalents equal to 105%
of the amount of the annual retainer converted. The annual grant of stock
options will be increased to 3,000 options. The non-employee director pension
and life insurance programs have been ended for directors with anticipated
retirement dates after February 2, 1998. The accrued pension balance for those
directors will be converted into stock equivalents as of this Annual Meeting
date and credited to each director's account. Stock equivalents equal to future
declared dividends on the Company's common stock also will be credited. On
retirement, the director will receive shares of Company common stock equal to
the whole number of stock equivalents. The increase in the reserves of Company
common stock for issuance under the 1990 Restricted Stock Plan for Non-Employee
Directors and the 1993 Stock Option Plan for Non-Employee Directors proposed in
this Proxy Statement for approval of the stockholders will permit the full
implementation of this new compensation program.
REPORT OF THE COMPENSATION / NOMINATING
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation/Nominating Committee reviews, considers and approves
changes in the compensation of the Company's officers. The Committee administers
various stock and other compensation-related plans provided for the benefit of
the Company's officers, directors, and other key managers, with the purpose of
encouraging the participants to achieve the Company's performance goals and to
align the interests of the participants with the interests of the Company's
stockholders. The Compensation/Nominating Committee is composed entirely of
independent outside directors. There are no Compensation Committee interlocks
and there is no insider participation on the Committee. The Committee has
provided the following report on executive compensation for inclusion in this
Proxy Statement:
COMPENSATION PHILOSOPHY
The Company's executive compensation philosophy has the following objectives:
(1) To provide compensation opportunities competitive with those
available at comparable firms in the specific industries in which the
Company conducts its businesses and the national marketplace;
(2) To provide the opportunity to earn beyond competitive levels if
superior operating performance and stockholder returns are achieved;
(3) To design incentives that balance the need to meet or exceed annual
operating plans with the need to grow the business long term and provide
superior stockholder returns;
(4) To provide clear, controllable and measurable objectives for the
executives to meet; and
(5) To attract, retain and motivate top-caliber executives in each market
segment in which the Company competes.
Pay for performance, which is directly linked to both short-term and
long-term compensation, is the foundation of the compensation program for the
Company's Chief Executive Officer and other executive officers.
Section 162(m) of the Internal Revenue Code limits the deductibility of
certain items of compensation paid to the CEO and to each of the named executive
officers to $1,000,000 annually. The Committee believes that it is in the best
interests of the Company to receive maximum tax deductibility for compensation
paid to the CEO and the other executive officers under Section 162(m). The
Committee has adopted or approved appropriate changes to the Company's long-term
and short-term incentive programs to provide for the deductibility of
compensation received under the plans, but reserves the right to provide for
compensation to the CEO and other executive officers, that may not be
deductible, if in the best interests of the Company and the stockholders. The
1996 Stock Incentive Plan, described elsewhere in this Proxy Statement, contains
provisions required by Section 162(m) for grants of stock options under said
plan to be exempt under Section 162(m) and is being presented for approval by
the Company's stockholders.
CEO AND EXECUTIVE OFFICER COMPENSATION PROGRAM ELEMENTS
Periodic media and general industry competitive market reviews of executive
compensation are conducted with the assistance of outside compensation
consultants. The Company's compensation program strives to be competitive in
relation to the market data available. The Committee establishes CEO and other
executive officer base salaries within the mid-range of the market survey data.
Short-term and long-term incentive targets are set in the same manner. Superior
performance may result in compensation beyond the mid-range.
BASE SALARY. Salaries for the CEO and executive officer group are based on
the marketplace value of each job and on individual contributions and
performance. The performance of the CEO and each executive officer is reviewed
annually by the Committee. Salary increases are based primarily on the annual
merit reviews. The rates of increase are tied to both individual performance and
general executive compensation trends.
Mr. Rehm's annual base salary, pursuant to his employment contract, was
increased from $525,000 to $600,000 for the 1995-1996 fiscal year. In providing
this increase, the Committee considered the Company's continued strong financial
performance, the continued building of stockholder value, and competitive media
marketplace factors. Mr. Rehm's salary is within the mid-range of salaries for
comparable positions as reported in the competitive markets surveyed.
SHORT-TERM INCENTIVE PROGRAM. The Company's Management Incentive Plan
provides the CEO and other executive officers with an annual incentive to attain
established financial and overall performance targets. For the 1995-1996 fiscal
year, at least 85% of the incentive awards to the CEO and all other executive
officers was based on specific financial targets relating to earnings and cash
flow, with the balance relating to predetermined qualitative organizational
objectives.
The goals for each participant are reviewed and revised annually in
connection with the approval of the budget for the upcoming fiscal year. For the
1995-1996 fiscal year, the incentive payments for goal achievement for the CEO
were set at 50% of base salary for achieving target and up to 125% of base
salary for achieving performance above target. The incentive payments for the
other executive officers ranged from 40% to 45% for achieving target and up to
100% to 112.5% for achieving performance above target. At each quarterly meeting
of the Committee, the progress of the CEO and the other executive officers
toward meeting the quantitative goals established for the fiscal year was
reviewed.
For the 1995-1996 fiscal year, the Company exceeded the target financial
performance goals established by the Committee at the beginning of the year for
Mr. Rehm to receive his incentive award. Mr. Rehm received an incentive award of
$750,000, which was determined primarily by the fact that the Company
significantly exceeded budgeted earnings and cash flow. Other factors considered
by the Committee in determining Mr. Rehm's award were the further strengthening
of the Company's core businesses through strategic dispositions, acquisitions
and alliances and the early achievement of the Company's fiscal 1997 return on
equity goal. In addition, the Committee recognized the over 64% improvement in
the price of the Company's common stock during the fiscal year.
For the 1995-1996 fiscal year, the other executive officers named in this
Proxy Statement received incentive awards totaling $1,257,000. For the corporate
officers (other than operating group presidents), the awards were based on the
fact that the Company surpassed financial targets for earnings and cash flow and
in recognition of the achievement of qualitative goals. For the operating group
presidents, the awards were based on the performance of the relevant group
and/or operation against the respective financial targets for earnings and cash
flow, the fact that the Company surpassed financial targets for earnings and in
recognition of the achievement of qualitative goals.
LONG-TERM INCENTIVE PROGRAM. In the 1995-1996 fiscal year, the Committee
utilized the grant of nonqualified stock options, under the 1992 Meredith
Corporation Stock Incentive Plan (the "1992 Plan"), to the executive officers in
the implementation of its long-term incentive program.
The nonqualified stock options awarded by the Committee under the 1992 Plan
during the 1995-1996 fiscal year as part of the long-term incentive program are
exercisable one-third per year over the three-year period commencing on the
first anniversary of the award date. The options granted will expire on the
tenth anniversary of the date of grant. All options granted become exercisable
in the event of the grantee's termination of employment due to death, disability
or retirement. Unless the grantee's employment with the Company is terminated
for reasons other than death, disability or retirement, the grantee may exercise
all exercisable stock options until the date of expiration. All options granted
during fiscal year 1995-1996 carry an exercise price at or above the fair market
value on the date of grant.
During fiscal year 1995-1996, Mr. Rehm was granted 65,000 nonqualified stock
options at $33.50 per share and 35,000 nonqualified stock options at $41.875 per
share, and the other named executive officers were granted an aggregate total of
112,800 nonqualified stock options at $33.50 per share. These grants were in
furtherance of the Committee's desire to encourage the executive officers to
focus on long-term performance and stockholder value under the long-term
incentive plan.
FIFTEEN PERCENT RETURN ON EQUITY ("ROE") PROGRAM. The Company established a
goal of achieving and maintaining a 15% ROE by the end of fiscal year 1996-1997.
Subsequent to the establishment of this goal, the Company adopted a change in
accounting principle related to subscription acquisition costs which reduced the
Company's stockholder equity thus favorably affecting the calculation of ROE. As
of the end of fiscal year 1995-1996, the Company's ROE was 16.2%, calculated as
if the accounting principle had not been adopted, and 19.6% as calculated under
the new accounting principle.
In fiscal 1994-1995, Mr. Rehm was granted 32,028 nonqualified options at
$23.125 per share and 25,000 shares of restricted stock under the 15% ROE
Program. The other named executive officers were granted an aggregate total of
220,186 nonqualified options at $23.125 per share under the 15% ROE Program. The
restrictions on up to 75% of the restricted stock were to lapse and the vesting
of up to 75% of the nonqualified options was to accelerate if the Company
achieved an ROE between 14.5% and 15% by the end of fiscal year 1996-1997. The
restrictions on the balance of the restricted stock were to lapse at the end of
the following fiscal year if 15% ROE was achieved for that year. Similarly, the
vesting of the balance of the nonqualified options was to accelerate to the end
of the following fiscal year if the 15% ROE was achieved. The Committee on
August 14, 1996, acting within its authority under the plan and in recognition
of the achievement of the Company's ROE goal one year in advance of its target,
authorized the lapse of the restrictions on 75% of the restricted stock granted
to Mr. Rehm effective September 1, 1996 (subject to a limitation on the number
of shares on which the restrictions lapse on that date to ensure the
deductibility of the value of the shares under Section 162(m)), and authorized
the acceleration of the vesting of 75% of the nonqualified options granted to
August 14, 1996. The Company must maintain at least a 15% ROE for the 1996-1997
fiscal year for the balance of the restrictions to lapse and vesting to
accelerate.
THE MEREDITH EXECUTIVE STOCK OWNERSHIP PROGRAM. A stock ownership program
has been designed by the Committee utilizing the 1992 Plan. The purpose of the
program is to encourage increased Company stock holdings by executive officers.
Target levels of individual stock holdings are established for the participants
in the program at one or two times base pay. Each participant, other than Mr.
Rehm, is awarded restricted stock equal to 20% of his or her personal
acquisitions of Company stock since the last day of the prior fiscal year. The
incremental stock holdings must be maintained for a specified period of time in
order for the restrictions to lapse. The Committee believes this program will
provide further incentives to the participants to focus on long-term Company
performance and stockholder value. Mr. Rehm participated in the program and has
achieved his target level, but did not receive an award of restricted stock. The
other named executive officers received an aggregate total of 3,700 shares of
restricted stock under this program during fiscal year 1995-1996.
OTHER COMPENSATION
The CEO and other executive officers are eligible to participate in the
Company benefit plans described elsewhere in this Proxy Statement under the
terms of those plans and without consideration of achievement of performance
standards.
PEER GROUP SELECTION AND COMPARATIVE ANALYSIS
The Company does not believe that the published indices accurately reflect
the mix of businesses in which the Company competes. Therefore, the Company has
in good faith selected a Peer Group of 12 media and television broadcast
companies for the purpose of preparing the stockholder performance graph
contained elsewhere in this Proxy Statement. Recognizing that there are no other
companies that have the exact same combination of businesses as the Company, the
companies selected for the Peer Group have multimedia businesses primarily with
publishing and/or television broadcasting in common with the Company. In
previous years the Peer Group selected by the Company consisted of 13 media and
broadcast companies. With the merger of Capital Cities/ABC, Inc. and The Walt
Disney Company, the Company has removed Capital Cities/ABC, Inc. from its Peer
Group because that merged company's activities primarily are in other
combinations of businesses (e.g., film, entertainment and theme parks).
Many of the companies selected for the Peer Group are larger and/or engaged
in businesses other than the Company's core businesses. Consequently, for the
purposes of compensation comparisons, the Company and the Committee have chosen
to use broader media and general industry survey information that includes
information on members of the Peer Group. The Committee has attempted to
maintain the compensation for the CEO and other executive officers at a level
close to the mid-range of the surveyed groups.
CONCLUSION
The Committee believes that the Company's executive compensation programs
effectively tie executive pay to the performance of the Company and to
stockholder value.
Mr. Robert E. Lee, Chairman
Mr. Frederick B. Henry
Mr. Richard S. Levitt
Mr. Nicholas L. Reding
COMPENSATION OF EXECUTIVE OFFICERS
The following table provides a summary of compensation paid to the CEO and
the four most highly compensated executive officers of the Company for services
rendered to the Company during each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- -------------------------- ----------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING
ANNUAL AWARD(S) OPTION LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1)(2)(3)(4) AWARDS(3)(5) PAYOUTS(6) COMPENSATION(7)
- --------------------------- ---- ------ ----- ------------ ------------ ------------ ---------- ---------------
Jack D. Rehm 1996 $600,000 $750,000 * 0 100,000 -- $17,561
Chairman of the Board and 1995 525,000 650,000 * $601,563 32,028 -- 18,907
Chief Executive Officer 1994 500,000 625,000 * 0 0 $382,320 18,635
William T. Kerr 1996 $480,000 $540,000 * $ 78,250 52,500 -- $17,064
President and Chief 1995 440,000 490,000 * 211,750 128,284 -- 14,945
Operating Officer 1994 366,500 308,000 * 98,044 35,400 $222,000 18,430
Christopher M. Little (8) 1996 $356,000 $325,000 * $ 15,650 27,300 -- $18,700
President -- Publishing Group 1995 336,000 332,000 * 96,250 89,328 -- 19,510
1994
Philip A. Jones 1996 $320,000 $202,000 * $ 46,950 22,500 -- $15,789
President -- Broadcasting
Group 1995 302,000 293,000 * 197,313 79,814 -- 16,285
1994 287,000 287,000 * 68,994 28,200 $31,800 17,598
Larry D. Hartsook 1996 $193,500 $190,000 * $ 3,913 10,500 -- $16,472
Vice President -- Finance 1995 183,500 175,000 * 57,750 45,160 -- 16,444
1994 175,000 158,000 * 43,575 13,800 $118,000 17,223
- --------------------------
*Less than required reportable amount.
(1) Accumulated Restricted Stock**
AGGREGATE
SHARES YEAR-END VALUE
-------- --------------
Jack D. Rehm 167,262 *** $6,983,189
William T. Kerr 37,200 1,533,100
Christopher M. Little 7,200 300,600
Philip A. Jones 21,000 876,750
Larry D. Hartsook 11,100 463,425
- ---------------------------
** Adjusted for the stock dividend in the form of a two-for-one stock split on
3/16/95.
*** Includes 54,862 shares Mr. Rehm acquired through the conversion of deferred
long-term awards, and 25,000 shares awarded with restrictions that lapse
only if the Company achieves certain ROE goals (see note 4 below). Dividends
are paid on reported restricted stock.
(2) Restricted stock awards vest five years after date of grant except for Mr.
Rehm who has both five- and ten-year vesting restrictions and restrictions
that lapse only if the Company achieves certain ROE goals (see note 4 below)
and Mr. Kerr who has shares vesting at three, four, five, six and seven
years.
(3) Adjusted for the stock dividend in the form of a two-for-one stock split on
3/16/95.
(4) On September 1, 1994, Mr. Rehm was awarded 25,000 shares of restricted stock
with performance restrictions related to the Company's achieving at least a
14.50% ROE for the 1996-97 fiscal year and a 15% ROE for the 1997-98 fiscal
year. On August 14, 1996, the Compensation/Nominating Committee approved the
acceleration of the lapse of restrictions to September 1, 1996, on 75% of
the shares of restricted stock (subject to a limitation on the number of
shares on which the restrictions lapse on that date to ensure the
deductibility of the value of the shares under Section 162 (m)) in
recognition of the Company's having achieved and surpassed the ROE goal one
year early. The balance of the restrictions will lapse in 1997 if the
Company achieves an ROE of at least 15% for the 1996-97 fiscal year. The
restricted stock on which the restrictions do not lapse due to the failure
to achieve the ROE goal will be forfeited to the Company.
(5) On August 10, 1994, Mr. Rehm and the other named executive officers were
granted an aggregate of 252,214 nonqualified stock options exercisable in
February 2004, but with an acceleration of vesting to 1997 on a graduated
number up to 75% if the Company achieves an ROE for fiscal year 1996-97
equal to or greater than 14.50%, and the balance exercisable in 1998 if the
Company achieves an ROE of at least 15% for the 1997-98 fiscal year. On
August 14, 1996, the Compensation/Nominating Committee approved the
acceleration of the vesting of 75% of said options as of that date in
recognition of the Company's having achieved and surpassed the ROE goal one
year early. The balance of the options will become exercisable in 1997 if
the Company achieves an ROE of at least 15% for the 1996-97 fiscal year.
(6) The Company's Long-Term Executive Incentive Plan has been discontinued. The
1994 payouts are the final payouts under the plan.
(7) This column discloses: (a) matching contributions made by the Company equal
to 75% of the first 5% of the employee's contributions to the Meredith
Savings and Investment Plan, a defined contribution plan available generally
to the employees of the Company. The Company made matching contributions to
the plan of $5,764.30 for Mr. Rehm, $5,764.30 for Mr. Kerr, $6,300 for Mr.
Little, $5,128.74 for Mr. Jones, and $5,812.46 for Mr. Hartsook; (b) life
insurance premiums paid by the Company on policies that are owned by the
employees under split dollar insurance arrangements as follows: Mr. Rehm,
$11,797; Mr. Kerr, $11,300; Mr. Little, $12,400; Mr. Jones, $10,660; and Mr.
Hartsook, $10,660.
(8) Not employed by the Company as an executive officer prior to July 1, 1994.
OPTION GRANTS TABLE
The following table sets forth certain information with respect to options
to purchase shares of the Company's common stock awarded during the 1995-96
fiscal year to the named executive officers. All options granted were
nonqualified options. No stock appreciation rights alone or in tandem with stock
options were awarded in fiscal year 1995-96. The option exercise price is no
lower than the fair market value of the Company's common stock on the date of
the grant. All options become exercisable in installments of one-third on the
first three anniversaries of the date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(3)
- ----------------------------------------------------------------------------------------------- -------------------------------
% OF TOTAL
NUMBER OF OPTIONS GRANTED
SECURITIES TO EXERCISE
UNDERLYING EMPLOYEES IN OR BASE EXPIRATION
NAME OPTIONS GRANTED(1) FISCAL YEAR(1) PRICE($) DATE(2) 5%($) 10%($)
- ---- ------------------ --------------- --------- -------------- ----------- --------------
Jack D. Rehm 65,000 16.74% 33.500 August 8, 2005 1,369,418 3,470,374
Jack D. Rehm 35,000 9.01% 41.875 August 8, 2005 921,724 2,335,829
William T. Kerr 52,500 13.52% 33.500 August 8, 2005 1,106,068 2,802,995
Christopher M. Little 27,300 7.03% 33.500 August 8, 2005 575,156 1,457,557
Philip A. Jones 22,500 5.79% 33.500 August 8, 2005 474,029 1,201,283
Larry D. Hartsook 10,500 2.70% 33.500 August 8, 2005 221,214 560,599
All Stockholders -- -- -- -- 567,756,931 1,438,807,536
- -----------------------
(1) Total options granted during the fiscal year were 388,300.
(2) Options are fully exercisable after death or termination of employment due
to disability or retirement through the expiration date.
(3) As required by the rules of the Securities and Exchange Commission, the
dollar amounts under these columns represent the hypothetical gain or
"option spread" that would exist for the options based on assumed 5% and 10%
annual compounded rates of stock price appreciation over the full option
term. The prescribed rates are not intended to forecast possible future
appreciation.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth as to each named executive officer
information with respect to the status of all options granted as of June 30,
1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR
VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#)(1) FY-END ($)(1)
SHARES ACQUIRED VALUE REALIZED ---------------------------- ----------------------------
NAME ON EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------
Jack D. Rehm 0 0 300,000 132,028 8,063,250 1,132,772
William T. Kerr 0 0 69,400 175,784 1,722,896 2,800,827
Christopher M. Little 3,000 68,715 24,000 110,628 554,930 1,801,459
Philip A. Jones 0 0 54,600 102,314 1,392,393 1,729,149
Larry D. Hartsook 5,000 110,238 20,800 55,660 512,511 955,618
- -----------------------
(1) As adjusted for the stock dividend in the form of a two-for-one stock split
on 3/16/95.
NEW PLANS BENEFITS TABLE
The following table provides information on the nonqualified stock options
granted under the 1996 Stock Incentive Plan (the "1996 Plan") on August 14,
1996, subject to the approval of the 1996 Plan by the Company stockholders and
under the 1993 Stock Option Plan for Non-Employee Directors, as amended.
NEW PLANS BENEFITS
NAME AND POSITION NUMBER OF UNITS (1)
- ----------------- -------------------
Jack D. Rehm, Chairman and CEO .................. 0
William T. Kerr, President and COO .............. 87,500
Philip A. Jones, President-Broadcasting Group ... 22,500
Christopher M. Little, President-Publishing Group 27,300
Larry D. Hartsook, Vice President-Finance ....... 11,700
Executive Officer Group (2) ..................... 149,000
Non-Executive Director Group (3) ................ 25,000
Non-Executive Officer Employee Group (4) ........ 36,000
- ---------------------
(1) Number of nonqualified options granted on August 14, 1996, subject to
approval of the 1996 Plan by the stockholders.
(2) Eight executive officers including the above-named executive officers.
(3) Nine Directors. Seven at 3,000 options and two at 2,000 options. No
information is reported on the 1990 Restricted Stock Plan for Non-Employee
Directors, as amended, because the amount is not currently determinable.
(4) Four employees
COMPARISON OF STOCKHOLDER RETURN
The following graph compares the performance of the Company's common stock
during the period July 1, 1991, to June 30, 1996, with the S&P 500 Index and a
Peer Group of 12 companies engaged in multimedia businesses primarily with
publishing and/or television broadcasting in common with the Company.
The S&P 500 Index includes 500 U.S. companies in the industrial,
transportation, utilities and financial sectors and is weighted by market
capitalization. The Peer Group selected by the Company for comparison, which is
also weighted by market capitalization, is comprised of the following: A.H. Belo
Corporation; Gannett Company, Inc.; Lee Enterprises, Inc.; McGraw-Hill, Inc.;
Media General, Inc.; New York Times Company; Reader's Digest Association, Inc.;
E. W. Scripps Company; Time Warner, Inc.; Times Mirror Company; Tribune Company
and Washington Post Company. Capital Cities/ABC, Inc. has been deleted from the
Peer Group this year as a result of that company's merger with The Walt Disney
Company, because that merged company's activities primarily are in other
combinations of businesses (e.g., film, entertainment and theme parks).
The graph depicts the results of investing $100 in the Company's common
stock, the S&P 500 Index and the Peer Group at closing prices on June 30, 1991.
It assumes that dividends were reinvested.
[GRAPH]
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Meredith $100 $102 $137 $165 $199 $332
S&P 500 $100 $113 $129 $131 $165 $207
Peer Group $100 $119 $135 $136 $171 $209
RETIREMENT PROGRAMS AND EMPLOYMENT AGREEMENTS
The Company maintains separate qualified defined benefit plans for its union
and nonunion employees, as well as two nonqualified supplemental pension plans
covering certain nonunion employees. Defined benefit plans and the supplemental
pension plans are actuarial plans and the amount of the contribution with
respect to a specific person cannot readily be separately calculated by the
regular actuaries for the plans. The Company makes annual contributions to the
qualified plans to the extent permitted by the funding rules of the Internal
Revenue Service.
As of September 1, 1995, the latest date for which information is available,
256 employees participated in the bargaining unit defined benefit plan. As of
January 1, 1996, the latest date for which information is available, 1,934
nonunion employees participated in the nonunion defined benefit plans. Assuming
retirement at age 65, estimated annual retirement benefits under the nonunion
qualified plan as in effect for the 1996 plan year would be as follows:
PENSION TABLE
FINAL YEARS OF SERVICE*
AVERAGE -----------------------------------------------
COMPENSATION 10 15 20 25
------------ -------- -------- -------- --------
$100,000 $ 15,507 $ 23,261 $ 31,014 $ 38,768
150,000 25,507 38,261 51,014 63,768
200,000 35,507 53,261 71,014 88,768
300,000 55,507 83,261 111,014 138,768
400,000 75,507 113,261 151,014 188,768
500,000 95,507 143,261 191,014 238,768
600,000 115,507 173,261 231,014 288,768
- -------------------
*Service prior to September 1, 1989, may cause these amounts to be increased due
to the conversion of the defined benefit plan (including the participant
contributions, if any) to the cash balance formula. Service credit is capped at
25 years, so there are no incremental retirement benefits under the qualified
plan for years after 25 years of service.
As of January 1, 1996, the credited years of service for individuals listed
in the compensation table above are as follows: Jack D. Rehm, Chairman and Chief
Executive Officer -- 33 years; William T. Kerr, President and Chief Operating
Officer -- 4 years; Philip A. Jones, President-Broadcasting Group -- 16 years;
Christopher M. Little, President-Publishing Group -- 3 years; and Larry D.
Hartsook, Vice President- Finance -- 26 years. For 1995, covered compensation
for purposes of the supplemental pension plans including bonuses was $1,212,500
for Jack D. Rehm, Chairman and Chief Executive Officer; $950,000 for William T.
Kerr, President and Chief Operating Officer; $604,000 for Philip A. Jones,
President-Broadcasting Group; $678,000 for Christopher M. Little,
President-Publishing Group; and $363,500 for Larry D. Hartsook, Vice
President-Finance.
The Company has an agreement with Jack D. Rehm that provides for his
employment as Chief Executive Officer and Chairman or in such other capacity as
mutually agreed upon through October 31, 1997. Prior to January 1, 1993, Mr.
Rehm received an annual salary of not less than $430,000. From January 1, 1993,
forward, Mr. Rehm will receive an annual salary of not less than $475,000 and an
annual incentive bonus determined under the terms of the Company's Management
Incentive Plan. At June 30, 1996, Mr. Rehm's base salary was $600,000. In the
event of the termination of Mr. Rehm's employment due to death, his then current
annual base salary will be paid to his designated beneficiary for a period of 12
months following the date of death. In the event Mr. Rehm becomes permanently
disabled, his annual base salary will continue to be paid at periodically
reduced rates through October 31, 1998. If Mr. Rehm is discharged for reasons
other than cause, the Company will continue to pay Mr. Rehm his annual base
salary through October 31, 1997.
The Company entered into an agreement with William T. Kerr that provided for
his employment through June 30, 1994, subject to automatic renewal for
subsequent one-year terms. The agreement provided that Mr. Kerr would serve as
President-Magazine Group and corporate Executive Vice President or in such other
executive position as designated by the Company. Mr. Kerr was elected to the
position of President and Chief Operating Officer and as a Director of the
Company effective July 1, 1994. Mr. Kerr receives a minimum annual salary of
$325,000 and an incentive bonus determined under the terms of the Company's
Management Incentive Plan. For the fiscal year ending June 30, 1996, Mr. Kerr's
base salary was $480,000. In addition to participating in the Meredith
Employees' Retirement Income Plan, the Meredith Savings and Investment Plan and
the Company's supplemental retirement plans, the Company has established a
Minimum Supplemental Retirement Benefit Program ("MSRBP") for the benefit of Mr.
Kerr. The MSRBP provides for a minimum retirement benefit equal to the benefits
Mr. Kerr would have received under the retirement plans of a previous employer
offset by benefits accrued under the Company's pension plans. The MSRBP also
provides for a death benefit related to the value of the accrued benefit under
the MSRBP.
Messrs. Rehm, Kerr and the other executive officers of the Company have all
entered into Severance Agreements with the Company. These agreements provide for
the payment to the executive of an amount equal to three times the average
annual base salary and incentive compensation paid to the executive during the
three fiscal years immediately prior to a change in control of the Company as
defined in detail in the agreements. Two Restricted Stock Agreements entered
into with Mr. Rehm in 1992 provide for the lapse of the restrictions in the
event of a change in control of the Company, as defined in the agreements.
PROPOSAL TO APPROVE ADDITIONAL RESERVE OF
75,000 SHARES OF COMPANY COMMON STOCK
FOR ISSUANCE UNDER THE
1990 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
On November 12, 1990, the stockholders adopted the 1990 Restricted Stock
Plan for Non-Employee Directors (the "1990 Plan") to enable the directors to
acquire a financial interest in the Company and to align their interests with
those of the stockholders. On August 15, 1996, the Board of Directors approved
an amendment to the 1990 Plan. The 1990 Plan, as amended, permits the
non-employee director to receive the initial grant of 600 shares of Company
stock as either restricted stock or stock equivalents. The 1990 Plan, as
amended, permits the non-employee director to elect to convert either all or 50%
of an amount equal to 105% of the annual retainer (including any annual chairman
retainer) into either shares of restricted Company common stock or stock
equivalents.
The amendment to the 1990 Plan also includes the conversion of the accrued
pension benefit as of the date of stockholder approval of this proposal for each
non-employee director with an anticipated retirement date after February 2,
1998, into stock equivalents. The number of stock equivalents credited to each
such non-employee director's account will be determined by dividing the amount
of the director's accrued pension benefit by the fair market value of one share
of the Company's common stock on the Annual Meeting date.
If the Company pays a cash dividend with respect to the Company common stock
while stock equivalents are credited to a non-employee director's account, the
director's stock equivalent account will be credited with an amount equal to the
cash dividend that would have been paid had the director been the actual owner
of the stock equivalents then credited to the director's account divided by the
fair market value of one share of the Company's common stock on the dividend
payment date.
Upon the non-employee director's termination of service on the Board, the
Company will deliver to the director (or designated beneficiary or estate) a
number of shares of Company common stock equal to the whole number of stock
equivalents then credited to the director's account, together with a cash
payment equal to the fair market value of any fractional stock equivalents.
The amendment also includes an increase in the reserve of shares of Company
common stock for issuance under the 1990 Plan by 75,000 shares to a total of
225,000 shares. The increase in the reserve is necessary to provide for the
shares of common stock to be delivered to each eligible non-employee director
upon retirement and for the continued administration of the 1990 Plan. The Board
approved this portion of the amendment subject to approval by the Company's
stockholders.
For information concerning federal tax treatment of restricted stock awards,
please see federal tax treatment information provided elsewhere in this Proxy
Statement.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the increase in the number of shares of Company common
stock reserved for issuance under the 1990 Plan and all proxies will be voted in
favor of the proposal unless a contrary specification is made on the proxy by
the stockholder.
PROPOSAL TO APPROVE THE ADDITIONAL
RESERVE OF 75,000 SHARES OF COMPANY
COMMON STOCK FOR ISSUANCE UNDER THE
1993 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On November 8, 1993, the stockholders adopted the 1993 Stock Option Plan for
Non-Employee Directors (the "1993 Plan") to provide incentives to the
non-employee directors to align their interests with those of the stockholders.
On August 15, 1996, the Board of Directors approved an amendment to the 1993
Plan.
The 1993 Plan, as amended, increases the number of options to purchase
Company common stock automatically granted to each non-employee director each
year from 2,000 options to 3,000 options. The increase in the number of options
granted to the directors is part of a revision of the compensation program for
non-employee directors.
To provide for a sufficient number of reserved shares for issuance under the
1993 Plan, the amendment also includes an increase in the number of reserved
shares of Company common stock by 75,000 shares to a total of 275,000 shares.
The Board approved this part of the amendment to the 1993 Plan subject to the
approval of the stockholders.
For information concerning federal tax treatment of stock options, please
see the federal tax treatment information provided elsewhere in this Proxy
Statement.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the increase in the number of shares of Company common
stock reserved for issuance under the 1993 Plan and all proxies will be voted in
favor of the proposal unless a contrary specification is made on the proxy of
the stockholder.
PROPOSAL TO APPROVE THE 1996
STOCK INCENTIVE PLAN
On August 14, 1996, the Board of Directors adopted the 1996 Stock Incentive
Plan (the "Plan"), subject to stockholder approval. THE FOLLOWING SUMMARY OF THE
PLAN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE COMPLETE TEXT OF THE PLAN
AS SET FORTH IN EXHIBIT A TO THIS PROXY STATEMENT. THE PLAN WILL BECOME
EFFECTIVE ONLY UPON APPROVAL BY A MAJORITY OF THE VOTES ENTITLED TO BE CAST
REPRESENTED BY SHARES PRESENT IN PERSON OR BY PROXY, A QUORUM BEING PRESENT,
VOTING ON THIS PROPOSAL AT THE ANNUAL MEETING OF STOCKHOLDERS.
PURPOSE OF THE PLAN. The stated purpose of the plan is to establish a
program of incentives for key managers of the Company which will stimulate,
recognize and reward the contribution of key executives toward the achievement
of long-range corporate goals and to align the interests of those executives
with those of the stockholders. The Plan also will assist the Company in
motivating, attracting and retaining high-quality managers.
SHARES SUBJECT TO PLAN. No more than 2,400,000 shares of common stock, $1.00
par value per share, of the Company (the "common stock") may be granted under
the Plan. These 2,400,000 shares of common stock may be either authorized but
unissued or reacquired shares. The number of shares reserved for issuance will
be adjusted upon a merger, reorganization, recapitalization, stock dividend, or
other change in the corporate structure of the Company affecting the common
stock. The maximum number of options or stock appreciation shares that may be
awarded to a participant during any two-year period is 500,000 shares. The
maximum number of shares that may be awarded as restricted stock during the term
of the plan is 240,000 shares.
ADMINISTRATION. The Plan provides for administration of the 1996 Plan by a
Committee of the Board consisting of two or more directors who qualify as
non-employee directors. The Plan will be administered by the
Compensation/Nominating Committee of the Board (the "Committee"). No member of
the Committee may participate in the Plan or any similar plan while serving on
the Committee. Among the powers granted to the Committee are the authority to
interpret the Plan; establish rules and regulations for its operation; select
employees to receive awards; determine the size and types of awards; and
determine the terms and conditions of such awards. Subject to certain
conditions, the Committee also has the power to amend the terms and conditions
of any outstanding award.
ELIGIBILITY AND SELECTION OF PARTICIPANTS. All key employees of the Company,
including employees of the Company who are members of the Board of Directors
(but excluding directors who are not employees) are eligible to participate in
the Plan. The selection of participants from eligible employees is within the
discretion of the Committee. The estimated number of persons who are eligible to
participate in the Plan at this time is forty.
AWARDS UNDER THE PLAN. In structuring the Plan, the Board of Directors
sought to provide for a variety of awards that could be flexibly administered in
order to carry out the purposes of the Plan. Accordingly, the Plan provides for
the grant of any or all of the following types of awards: (i) nonqualified stock
options; (ii) incentive stock options; (iii) stock appreciation rights; (iv)
restricted stock; and (v) performance shares. The Committee shall determine the
nature and amount of each award.
STOCK OPTIONS. The Plan authorizes the Committee to grant incentive stock
options, nonqualified stock options or a combination thereof to purchase common
stock.
Subject to the limitations on the number of options that may be granted
under the Plan, the Committee shall determine for each option its duration, the
terms and conditions to which the exercise of the option is subject, the number
of shares which may be purchased and the purchase price per share upon exercise
of the option. The purchase price per share may not be less than 100% of the
fair market value of such share on the date the option is granted, and no option
may be exercised later than the tenth anniversary date of its grant.
The option price upon exercise may be paid in full either: (i) in cash or
its equivalent; (ii) by tender of previously acquired shares; (iii) by a
combination of (i) and (ii); (iv) by sale of the shares immediately upon
exercise of the option; or (v) such other methods of payment as the Committee
deems appropriate.
STOCK APPRECIATION RIGHTS (SARS). The Plan authorizes the Committee to grant
SARs in relation to a specific stock option (the "Related Option") granted under
the Plan or independently of a stock option. Each SAR with a Related Option
entitles a participant to payment equal to the excess of the fair market value
of a share of common stock on the exercise date of the SAR over the option price
of the Related Option. An independent SAR entitles the participant to payment
equal to the excess of the fair market value of a share of common stock on the
exercise date of the SAR over the fair market value on the date of the grant.
Payment of the SAR shall be in cash or common stock as set forth in the award.
Each SAR grant will be subject to the terms and conditions the Committee may
impose, but no SAR may be exercised later than the tenth anniversary date of its
grant.
RESTRICTED STOCK. The Plan authorizes the Committee to grant awards in the
form of restricted shares of common stock. Such awards will be subject to such
terms, conditions, restrictions, and/or limitations, if any, as the Committee
deems appropriate, subject to the limitations on the number of shares of
restricted stock that may be granted under the Plan.
PERFORMANCE SHARES. The Plan authorizes the Committee to grant performance
shares to participants. The performance shares will be subject to the terms and
conditions as the Committee deems appropriate. Performance shares may be earned
in whole or in part if certain goals established by the Committee are achieved
over a period of time designated by the Committee.
OTHER TERMS OF AWARDS. No awards granted under the Plan shall be
transferable, other than by will or the laws of descent and distribution.
Further, all options and SARs granted to a participant under the Plan shall be
exercisable during the participant's lifetime only by such participant. The
Committee, at the time of granting an award, shall determine what effect the
death, disability, retirement or other termination of employment will have on
the ability of the participant to exercise or retain the benefits of such award.
Notwithstanding the foregoing, the Committee, in its discretion, may permit the
transferability of any award under the Plan to members of the participant's
immediate family or trusts or family partnerships for the benefit of such
persons, subject to terms and conditions imposed by the Committee.
NO STOCKHOLDER RIGHTS. No participant who receives an option shall have the
right of a stockholder of the Company until he actually acquires shares of
common stock upon the exercise of an option.
CHANGE OF CONTROL. Immediately upon a change in control of the Company (as
defined in the Plan), all outstanding stock option and stock appreciation rights
will become exercisable, all restrictions on restricted stock will lapse and all
performance shares will be delivered as if the performance goals had been met.
DURATION OF PLAN, AMENDMENT AND TERMINATION. The Plan will continue until
all shares subject to the Plan have been purchased or acquired. No award may be
granted on or after September 30, 2006. The Board may amend the Plan from time
to time or terminate the Plan, however, no amendment may be made without
stockholder approval if the amendment materially increases the number of shares
of common stock reserved under the Plan or the maximum number of options or SARs
that may be awarded to any participant in any two-year period.
FEDERAL TAX TREATMENT. Under current U.S. federal tax law, the following are
the income tax consequences generally arising with respect to awards under the
Plan.
A participant who is granted an incentive stock option will not realize any
taxable income at the time of the grant or at the time of exercise. Similarly,
the Company will not be entitled to any deduction at the time of grant or at the
time of exercise. However, the appreciation in value of the stock subject to an
incentive stock option will be included in alternative minimum taxable income in
the year of exercise. If the participant makes no disposition of shares acquired
pursuant to an incentive stock option within two years from the date of grant
and one year from the date of exercise, any gain realized on a subsequent
disposition of the shares will be treated as long-term capital gain. Under such
circumstances, the Company will not be entitled to any deduction for federal
income tax purposes. If the participant does not hold the shares for the
required periods, the participant will recognize ordinary income for the year in
which the disposition occurs in the amount (if any) by which the lesser of the
fair market value of such shares on the date of the exercise of the option or
the amount realized from the sale exceeds the option price and the Company will
be entitled to a corresponding deduction.
A participant who is granted a nonqualified stock option will not have
taxable income at the time of grant, but will have taxable income at the time of
exercise equal to the difference between the option price and the market value
of the shares on the date of exercise. The Company is entitled to a
corresponding deduction.
The grant of an SAR will produce no tax consequences for the participant or
the Company. The exercise of an SAR will result in taxable income to the
participant, equal to the amount of cash paid to the participant or the fair
market value of the shares delivered, as the case may be, and a corresponding
deduction to the Company.
A participant who has been granted an award of restricted shares of common
stock will not realize taxable income at the time of the grant, and the Company
will not be entitled to a tax deduction at that time, unless the participant
makes an election to be taxed at the time of the grant. When the restrictions
lapse, the participant will recognize taxable income in an amount equal to the
excess of the fair market value of the shares at such time over the amount, if
any, paid for such shares. The Company will be entitled to a corresponding tax
deduction.
A participant who has been granted an award of performance shares of common
stock will not realize taxable income at the time of the grant, and the Company
will not be entitled to a tax deduction at that time, unless the participant
makes an election to be taxed at the time of the grant. When the restrictions
lapse, the participant will recognize taxable income in an amount equal to the
excess of the fair market value of the shares at such time over the amount, if
any, paid for such shares. The Company will be entitled to a corresponding tax
deduction.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the 1996 Stock Incentive Plan, and all proxies will be
voted in favor of the Plan unless a contrary specification is made on the proxy
by the stockholder.
STOCKHOLDERS' PROPOSALS
Stockholders wishing to include proposals in the Company's Proxy Statement
and form of proxy for the 1997 Annual Meeting of Stockholders must submit the
proposals so that they are received by the Company no later than May 28, 1997.
The proposals should be addressed to Thomas L. Slaughter, Meredith Corporation,
1716 Locust Street, Des Moines, Iowa 50309-3023.
INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendations of its Audit Committee, the Board of Directors of the
Company selected KPMG Peat Marwick as independent public accountants of the
Company and its subsidiaries for the fiscal year ending June 30, 1997. KPMG Peat
Marwick examined the financial statements of the Company and its subsidiaries
for the most recently completed fiscal year. Representatives of that firm are
expected to be present at the Annual Meeting with an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions presented at the meeting by stockholders.
FURTHER BUSINESS
Except as hereinbefore stated, the management knows of no further business
intended to be presented at the meeting, but, if any further business properly
comes before the meeting, the persons named in the enclosed form of proxy will
vote all proxies in accordance with their best judgment.
THOMAS L. SLAUGHTER
Vice President-General Counsel
and Secretary
Des Moines, Iowa
September 25, 1996
EXHIBIT A
MEREDITH CORPORATION
1996 STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of the Meredith Corporation 1996 Stock Incentive
Plan (the "Plan") is to establish a program of incentives for key managers of
Meredith Corporation (the "Company") which will (a) stimulate, recognize and
reward the contribution of key executives to achievement of long-range corporate
goals, (b) provide flexibility to the Company in its ability to motivate,
attract, and retain the services of those persons possessing a high level of
managerial ability and experience upon whose judgment, interest, and special
effort the successful conduct of its operation largely is dependent, and (c)
align the personal interests of those key executives with those of the Company's
stockholders.
2. ADMINISTRATION. The Plan will be administered by a committee (the
"Committee") of the Board of Directors of the Company, consisting of two or more
directors as the Board may designate from time to time, all of whom shall
qualify as non-employee directors within the meaning of Securities and Exchange
Commission Rule 16b-3 or any successor rule. The Committee shall have full power
to select key employees to whom awards are granted; to determine the size and
types of awards and their terms and conditions; to construe and interpret the
Plan; to establish and amend the rules for the Plan administration; and to make
all other determinations which may be necessary or advisable for the
administration of the Plan. All determinations of the Committee shall be final
and conclusive on all persons, including the Company, its stockholders and
participants, and their estates and beneficiaries.
3. RESERVED SHARES. Subject to adjustment as provided in Section 12 herein,
no more than Two Million Four Hundred Thousand (2,400,000) shares of Common
Stock of the Company may be issued under the Plan. All of these shares may be
either authorized but unissued or reacquired shares. If any award granted under
this Plan terminates, expires, or lapses prior to exercise for any reason, or if
shares are issued under the Plan and reacquired by the Company, any shares
subject to such award or any reacquired shares shall be available for the grant
of a new award under the Plan. All of the Plan shares may, but need not, be
issued pursuant to the exercise of incentive stock options. The maximum number
of option or stock appreciation shares which may be awarded to any participant
during any two-year period during the term of the Plan is 500,000 shares. The
maximum number of shares which may be awarded during the term of the Plan as
restricted stock is 240,000 shares. The shares authorized hereunder are in
addition to shares previously reserved under the Company's 1992 Stock Incentive
Plan (the "1992 Plan"). Any shares of Common Stock reserved under the 1992 Plan
in excess of the number of shares as to which options or other benefits were
granted prior to the date of the adoption of this Plan by the Board of
Directors, plus any shares as to which options or other benefits granted under
the 1992 Plan may lapse, expire or terminate after such date, shall be available
for issuance in connection with awards under this Plan.
4. ELIGIBILITY. All key employees of the Company, including employees who
are members of the Board of Directors shall be eligible to participate in this
Plan.
5. TYPES OF AWARDS. Awards under the Plan may be granted in any one or a
combination of (a) incentive stock options, (b) nonqualified stock options, (c)
stock appreciation rights, (d) restricted stock, and (e) performance shares.
6. STOCK OPTIONS. Subject to the terms of the Plan, stock options may be
granted to participants at any time as determined by the Committee. The
Committee shall determine the number of shares subject to each option and
whether the option is an incentive stock option within the meaning of Section
422 of the Internal Revenue Code. The option price for each option shall be
determined by the Committee but shall not be less than 100% of the fair market
value of the Common Stock on the date the option is granted. Each option shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no option shall be exercisable later than the tenth
(10th) anniversary date of its grant. Options granted under the Plan shall be
exercisable at such time and subject to such terms and conditions as the
Committee shall determine. The option price upon exercise of any option shall be
payable to the Company in full either (a) in cash or its equivalent; (b) by
tendering previously acquired shares having a fair market value at the time of
exercise equal to the option price; (c) by a certification of ownership of such
previously-acquired shares; (d) by delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale proceeds from the option shares or loan proceeds
to pay the exercise price and withholding taxes due to Company; or (e) such
other methods of payment as the Committee at its discretion deems appropriate.
7. STOCK APPRECIATION RIGHTS. The Committee may, in its discretion, grant a
stock appreciation right to the holder of any stock option granted hereunder. In
addition, stock appreciation rights may be granted independently of and without
relation to options. Each stock appreciation right shall be subject to such
terms and conditions consistent with the Plan as the Committee shall impose from
time to time, including the following:
(a) A stock appreciation right relating to an option may be made part of
such option at the time of its grant or at any time thereafter up to six
months prior to its expiration.
(b) Each stock appreciation right will entitle the holder to elect to
receive the appreciation in the fair market value of the shares subject
thereto up to the date the right is exercised. In the case of a right issued
in relation to an option, such appreciation shall be measured from not less
than the option price and in the case of a right issued independently of any
option, such appreciation shall be measured from not less than the fair
market value of the Common Stock on the date the right is granted. Payment
of such appreciation shall be made in cash or in Common Stock, or a
combination thereof, as set forth in the award.
(c) Each stock appreciation right will be exercisable at the times and
to the extent set forth therein, but no stock appreciation right may be
exercisable later than ten years after its grant. Exercise of a stock
appreciation right shall reduce the number of shares issuable under the Plan
(and the related option, if any) by the number of shares with respect to
which the right is exercised.
8. RESTRICTED STOCK. Subject to the terms and conditions of the Plan, the
Committee may award or sell shares of restricted stock to participants subject
to such terms and conditions as the Committee determines appropriate, including,
without limitation, restrictions on the sale or other disposition of shares and
rights of the Company to reacquire such shares upon termination of the
participant's employment within specified periods. Each participant who has been
awarded or purchases shares of restricted stock shall have such rights of a
stockholder with respect to such shares as the Committee may designate at the
time of the award, including the right to vote such shares and the right to
receive dividends paid on such shares. Any dividends or distributions paid in
shares of Common Stock with respect to restricted stock shall be subject to the
same restrictions and terms and conditions as the shares of restricted stock
with respect to which they are paid. The Committee may authorize the payment of
a cash bonus to a participant in connection with the lapse of the restrictions
on restricted stock equal to part or all of the income tax liability which the
participant is expected to incur in connection with the lapse.
9. PERFORMANCE SHARES. Subject to the terms and conditions of the Plan, the
Committee may award performance shares to participants subject to such terms and
conditions as the Committee determines appropriate. Performance shares may be
earned in whole or in part if certain goals established by the Committee are
achieved over a period of time designated by the Committee. The goals
established by the Committee may be based on business criteria selected by the
Committee, including net income, return on equity or assets, earnings per share,
cash flow and cost control.
10. NONTRANSFERABILITY. No awards granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all options
and stock appreciation rights granted to a participant under the Plan shall be
exercisable during his or her lifetime only by such participant. Notwithstanding
the foregoing, at the discretion of the Committee, a grant of any award
hereunder may permit the transfer of the benefit by the participant to members
of the participant's immediate family or trusts or family partnerships for the
benefit of such persons, subject to such terms and conditions as may be
established by the Committee.
11. FAIR MARKET VALUE. The fair market value of the Company's Common Stock
at any time shall be determined in such manner as the Committee may deem
appropriate, or as required by applicable law or regulation.
12. CHANGE IN CONTROL. Immediately upon a change in control of the Company
all outstanding stock options and stock appreciation rights shall become
exercisable, all restrictions on restricted stock shall lapse and all
performance shares shall be delivered as if the performance goals had been fully
achieved. For purposes hereof, a change in control of the Company shall be
deemed to have occurred on the first to occur of any of the following dates:
(a) on the date the Board of Directors of the Company votes to approve
and recommends a stockholder vote to approve:
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which
shares of the Common Stock and Class B Stock would be converted into
cash, securities or other property, other than any consolidation or
merger of the Company in which the holders of the Common Stock and Class
B Stock immediately prior to the consolidation or merger have at least a
majority of the ownership in and voting power of the surviving
corporation immediately after the consolidation or merger; or
(ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of
the assets of the Company; or
(iii) any plan or proposal for the liquidation or dissolution of the
Company; or
(b) on the date any person (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, hereinafter the "1934 Act"), other than the
Company's Savings and Investment Plan or similar successor plan, shall
become the beneficial owner (within the meaning of Rule 13d-3 under the 1934
Act) of thirty percent (30%) or more of the outstanding voting power of the
Company except as a result of actions beyond the control of such person,
including, without limitation, as a result of a shift in voting power of the
Company as a result of the conversion by other persons of their Class B
Stock into Common Stock; or
(c) on the date, during any period of twenty-four (24) consecutive
months on which individuals who at the beginning of such period constitute
the entire Board of Directors of the Company shall cease for any reason to
constitute a majority thereof unless the election of each new director
comprising the majority was approved by a vote of at least a 2/3 majority of
the Directors still in office who were Directors at the beginning of the
period.
Notwithstanding anything to the contrary contained herein, no change in control
shall be deemed to have occurred for the purpose of this Plan by virtue of any
combination or agreement among shareholders of the Company who are descendants
of E.T. Meredith, the founder of the Company, or trusts for the benefit of such
persons.
13. ADJUSTMENT PROVISIONS.
(a) If the Company shall at any time change the number of issued shares
of Common Stock without new consideration to the Company (such as by stock
dividends or stock splits), the total number of shares reserved for issuance
under this Plan, the maximum number of shares which may be made subject to a
stock option or stock appreciation right during any two-year period or
issued as restricted stock during the term of the Plan and the number of
shares covered by each outstanding benefit shall be equitably adjusted so
that the aggregate consideration payable to the Company, if any, shall not
be changed. In the case of any merger, consolidation or combination of the
Company with or into another corporation, other than a merger, consolidation
or combination in which the Company is the continuing corporation and which
does not result in the outstanding Common Stock being converted into or
exchanged for different securities, cash or other property, or any
combination thereof (an "Acquisition"):
(i) any participant to whom a stock option has been granted under
the Plan shall have the right (subject to the provisions of the Plan and
any limitation applicable to such option) thereafter and during the term
of such option, to receive upon exercise thereof the Acquisition
Consideration receivable upon such Acquisition by a holder of the number
of shares of Common Stock which might have been obtained upon exercise
of such option or portion thereof, as the case may be, immediately prior
to such Acquisition;
(ii) any participant to whom a stock appreciation right has been
granted under the Plan shall have the right (subject to the provisions
of the Plan and any limitation applicable to such right) thereafter and
during the term of such right to receive upon exercise thereof the
difference between the aggregate fair market value on the applicable
date (as set forth in such right) of the Acquisition Consideration
receivable upon such Acquisition by a holder of the number of shares of
Common Stock subject to such stock appreciation right, immediately prior
to such Acquisition, and the aggregate option price of the related
option or the aggregate fair market value on the date of the grant of
the right, whichever is applicable; and
(iii) any participant to whom a performance share award has been
granted under the Plan shall have the right (subject to the provisions
of the Plan and any limitations applicable to such award) thereafter and
during the term of such award to receive on the date set forth in such
award, the Acquisition Consideration receivable upon such Acquisition by
a holder of the number of shares of Common Stock which are covered by
such award.
The term "Acquisition Consideration" shall mean the kind and amount of
shares of the surviving or new corporation, cash, securities, evidence of
indebtedness, other property or any combination thereof receivable in
respect of one share of Common Stock of the Company upon consummation of an
Acquisition.
14. TAXES. The Company shall be entitled to withhold the amount of any tax
attributable to any amounts payable or shares deliverable under the Plan after
giving the person entitled to receive such payment or delivery notice as far in
advance as practicable, and the Company may defer making payment or delivery as
to any benefit if any such tax is payable until indemnified to its satisfaction.
The Committee may, in its discretion and subject to such rules as it may adopt,
permit a participant to pay all or a portion of any withholding taxes arising in
connection with the exercise of a nonqualified stock option or stock
appreciation right or receipt of performance shares, by electing to have the
Company withhold shares of Common Stock having a fair market value equal to the
amount to be withheld.
15. INDEMNIFICATION. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
16. DURATION, AMENDMENT AND TERMINATION. No stock option or other benefit
shall be granted after September 30, 2006; provided, however, that the terms and
conditions applicable to any option or benefit granted on or before such date
may thereafter be amended or modified by mutual agreement between the Company
and the participant or such other persons as may then have an interest therein.
The Board of Directors may amend the Plan from time to time or terminate the
Plan at any time. However, no such action shall reduce the amount of any
existing benefit or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall be made without
stockholder approval, if such amendment materially increases the number of
shares of Common Stock reserved under the Plan or the maximum number of option
or stock appreciation shares which may be awarded to any participant in any
two-year period.
17. SUCCESSOR. All obligations of the Company under the Plan, with respect
to awards granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.
18. STOCKHOLDER APPROVAL. The Plan was adopted by the Board of Directors on
August 14, 1996, subject to stockholder approval.
DETACH CARD BELOW, SIGN, DATE AND MAIL IN POSTAGE-PAID ENVELOPE PROVIDED.
[LOGO] MEREDITH CORPORATION
PLEASE ACT PROMPTLY. SIGN, DATE & MAIL YOUR PROXY CARD TODAY.
DETACH HERE
MEREDITH CORPORATION - PROXY - COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEREDITH
CORPORATION FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 11, 1996
FREDERICK B. HENRY, E. T. MEREDITH III and JACK D. REHM, and each of them are
hereby appointed proxies of the stockholder(s) signing this card on the reverse
side, with power of substitution acting by a majority of proxies present and
voting, or if only one proxy is present and voting, then acting by that one, to
vote the shares of Meredith Corporation common stock which said stockholder(s)
is (are) entitled to vote, at the ANNUAL MEETING OF STOCKHOLDERS to be held at
the company's principal executive offices, 1716 Locust Street, Des Moines, Iowa
50309-3023, on Monday, November 11, 1996, at 10:00 A.M., local time, and any
adjournment thereof, with all the powers the signing stockholders would possess
if present. The Directors recommend a vote FOR such matters. The proxies are
instructed to vote as follows:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS SHOWN ON THE REVERSE SIDE OF THIS CARD AND AS SET FORTH
IN THE NOTICE OF ANNUAL MEETING DATED SEPTEMBER 25, 1996. THE UNDERSIGNED
ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND THE
RELATED PROXY STATEMENT
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. ELECTION OF FOUR CLASS I DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING IN
1999, AS PROVIDED IN THE BYLAWS OF THE COMPANY:
[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS INDICATED BELOW)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
PIERSON M. GRIEVE, ROBERT E. LEE, JACK D. REHM, BARBARA S. UEHLING
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE DIRECTLY BELOW.)
- --------------------------------------------------------------------------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
DETACH HERE DETACH HERE
2. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS FOR AN ADDITIONAL
RESERVE OF 75,000 SHARES OF COMPANY COMMON STOCK FOR ISSUANCE UNDER THE
1990 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS FOR AN ADDITIONAL
RESERVE OF 75,000 SHARES OF COMPANY COMMON STOCK FOR ISSUANCE UNDER THE
1993 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF THE MEREDITH CORPORATION 1996 STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. IN ITS DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICIAL. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AN AUTHORIZED
PERSON.
PLEASE DATE THIS PROXY & SIGN IN
THE BOX BELOW.
DATE:______________________________
SIGN:______________________________
STOCKHOLDER SIGN ABOVE. CO-HOLDER
(IF ANY) SIGN ABOVE.
DETACH CARD BELOW, SIGN, DATE AND MAIL IN POSTAGE-PAID ENVELOPE PROVIDED.
[LOGO] MEREDITH CORPORATION
PLEASE ACT PROMPTLY. SIGN, DATE & MAIL YOUR PROXY CARD TODAY.
DETACH HERE
MEREDITH CORPORATION - PROXY - CLASS B COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEREDITH
CORPORATION FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 11, 1996
FREDERICK B. HENRY, E. T. MEREDITH III and JACK D. REHM, and each of them are
hereby appointed proxies of the stockholder(s) signing this card on the reverse
side, with power of substitution acting by a majority of proxies present and
voting, or if only one proxy is present and voting, then acting by that one, to
vote the shares of Meredith Corporation class B common stock which said
stockholder(s) is (are) entitled to vote, at the ANNUAL MEETING OF STOCKHOLDERS
to be held at the company's principal executive offices, 1716 Locust Street, Des
Moines, lowa 50309-3023, on Monday, November 11, 1996, at 10:00 A.M., local
time, and any adjournment thereof, with all the powers the signing stockholders
would possess if present. The Directors recommend a vote FOR such matters. The
proxies are instructed to vote as follows:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS SHOWN ON THE REVERSE SIDE OF THIS CARD AND AS SET FORTH
IN THE NOTICE OF ANNUAL MEETING DATED SEPTEMBER 25, 1996. THE UNDERSIGNED
ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND THE
RELATED PROXY STATEMENT
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. ELECTION OF FOUR CLASS I DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING IN
1999, AS PROVIDED IN THE BYLAWS OF THE COMPANY:
[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS INDICATED BELOW)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
PIERSON M. GRIEVE, ROBERT E. LEE, JACK D. REHM, BARBARA S. UEHLING
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE DIRECTLY BELOW.)
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE
DETACH HERE DETACH HERE
2. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS FOR AN ADDITIONAL
RESERVE OF 75,000 SHARES OF COMPANY COMMON STOCK FOR ISSUANCE UNDER THE
1990 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS FOR AN ADDITIONAL
RESERVE OF 75,000 SHARES OF COMPANY COMMON STOCK FOR ISSUANCE UNDER THE
1993 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF THE MEREDITH CORPORATION 1996 STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. IN ITS DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR
OTHER AUTHORIZED OFFICIAL. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AN AUTHORIZED
PERSON.
PLEASE DATE THIS PROXY & SIGN IN
THE BOX BELOW.
DATE:______________________________
SIGN:______________________________
STOCKHOLDER SIGN ABOVE. CO-HOLDER
(IF ANY) SIGN ABOVE.