SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MEREDITH CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
THOMAS L. SLAUGHTER
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 14, 1994
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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, on Monday, November 14, 1994, at 10:00 A.M., local time, for
the following purposes:
(1) To elect four Class II directors for terms expiring in 1997, as provided
in the Bylaws of the Company;
(2) To consider and act upon a proposal of the Compensation Committee of the
Board of Directors to approve the business criteria, classes of eligible
participants and maximum annual incentives awarded under the Company's
Management Incentive Plan;
(3) To consider and act upon a proposal of the Board of Directors to amend
the Company's Restated Articles of Incorporation to increase the
authorized shares of class B stock solely for issuance as share
dividends on class B stock, to increase the authorized shares of common
stock and to modify certain provisions relating to the payment of share
dividends;
(4) To consider and act upon a proposal of the Board of Directors to amend
the Company's Restated Articles of Incorporation to broaden the class of
"permitted transferees" of class B stock; and
(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
15, 1994, 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 26, 1994
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.
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 14, 1994
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INTRODUCTION
This Proxy Statement is being sent to stockholders on or about September 26,
1994, 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, on Monday, November 14, 1994, 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
proposal establishing the business criteria, classes of eligible participants
and maximum annual incentives awarded under the Company's Management Incentive
Plan, FOR the amendment to the Company's Restated Articles of Incorporation to
increase the authorized shares of class B stock solely for issuance as share
dividends on class B stock, to increase the authorized shares of common stock
and to modify certain provisions relating to the payment of share dividends, FOR
the amendment to the Company's Restated Articles of Incorporation to broaden the
class of "permitted transferees" of class B stock 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, approve the matters concerning the
Company's Management Incentive Plan and for any other matters 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 of common stock present in person or by proxy and
voting as a class, a quorum being present, the affirmative vote of a majority of
the total number of votes entitled to be cast represented by shares of class B
stock present in person or by proxy and voting as a class, a quorum being
present, and the affirmative vote of a majority of the total number of votes
entitled to be cast represented by shares of both classes of stock combined
present in person or by proxy, a quorum being present, are required to approve
the amendments to the Company's Restated Articles of Incorporation. 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.
1
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 mails, 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
15, 1994, is entitled to one vote per share so held on all matters to come
before the meeting. At the close of business on September 15, 1994, there were
outstanding and entitled to vote at the annual meeting 10,074,667 shares of
common stock of the Company. Each holder of record of class B stock at the close
of business on September 15, 1994, is entitled to ten votes per share so held on
all matters to come before the meeting. At the close of business on September
15, 1994, there were outstanding and entitled to vote at the annual meeting
3,584,210 shares of class B stock of the Company, for a total of 45,916,767
votes.
In determining whether a quorum exists at the Annual Meeting for purposes of
all matters to be voted on, all votes "for" or "against," as well as all
abstentions (including votes to withhold authority to vote in certain cases)
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 percentage 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" or "abstaining" from a particular proposal, 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 3,450,780 shares of common stock
(approximately 34% of the outstanding common stock) and 3,100,362 shares of
class B stock (approximately 86% of the outstanding class B stock).
2
Set forth below is information as of June 30, 1994 (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).................. 1,024,974 23,103 21% 1,303,394 23,103 37%
1716 Locust Street
Des Moines, Iowa 50309-3023
Frederick B. Henry, Director (3)(4)(6)................ 346,112 21,191 12% 432,617 560,352 28%
1657 Art School Road
Chester Springs, Pennsylvania 19425
Patrick Henry, Jr.(3)(6).............................. 0 0 * 12,825 453,597 13%
P.O. Box 3077
Aspen, Colorado 81611
Norwest Corporation(5)(6)............................. 312,846 421,131 13% 290,524 348,183 18%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Fidelity Investments (6).............................. 1,107,288 0 11% 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............................. 300 0 * 0 0 *
Robert A. Burnett, Director(4)........................ 33,724 0 * 17,574 12,000 *
Pierson M. Grieve, Director........................... 3,562 0 * 0 0 *
Larry D. Hartsook, Vice President-Finance(7).......... 7,562 0 * 0 0 *
Robert E. Lee, Director............................... 4,262 0 * 700 0 *
Richard S. Levitt, Director(4)........................ 3,562 6,000 * 0 6,000 *
Philip A. Jones, President-Broadcast Group(7)......... 13,802 0 * 0 0 *
William T. Kerr, Director, President & 25,877 0 * 0 0 *
COO(7)(8).............................................
Nicholas L. Reding, Director.......................... 1,385 0 * 0 0 *
Jack D. Rehm, Director, Chairman of the 71,010 336 * 11,365 336 *
Board & CEO(4)(7)(8)..................................
Gerald D. Thornton, Director.......................... 3,073 0 * 0 0 *
Barbara S. Uehling, Director.......................... 3,662 0 * 100 0 *
Joseph J. Ward, President-Book Group(7)............... 11,556 0 * 0 0 *
Daniel Yankelovich, Director(9)....................... 4,462 0 * 0 0 *
(c) ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP(3)(4)(5)(6)(7)(8) (18 persons)............. 2,979,019 471,761 51% 2,069,099 1,403,571 96%
<FN>
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* 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.
3
(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, 1993, 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 Invest-ment 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) Title as of July 1, 1994.
(9) Retired as of May 11, 1994.
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 II
directors to serve three-year terms to expire in 1997. All nominees are
currently serving as directors. Messrs. Henry and Reding were previously elected
by the stockholders. Messrs. Baum and Kerr were elected by the Board of
Directors to fill vacancies due to the retirement of Messrs. Daniel Yankelovich
and Jack D. Sparks, respectively. Should any of these nominees become unable to
serve, 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 management may
nominate. Certain information concerning each of the four nominees, and each of
the continuing directors is set forth below.
4
NOMINEES FOR ELECTION AS CLASS II DIRECTOR--
TERMS EXPIRE IN 1997
PRINCIPAL OCCUPATION AND BUSINESS
EXPERIENCE
NOMINEE, AGE AND YEAR DURING THE PAST FIVE YEARS AND OTHER
FIRST ELECTED AS A DIRECTOR INFORMATION
- - ------------------------------------------ --------------------------------------
Herbert M. Baum, 57, 1994................. President, Chairman & Chief Executive
Officer, Quaker State Corporation,
1993 to present; Executive Vice
President & President, Campbell
North and South America, Campbell
Soup Company, 1992 to 1993; Ex-
ecutive Vice President & President,
Campbell North America, Campbell
Soup Company, 1990 to 1992; Senior
Vice President & President, Campbell
U.S.A., Campbell Soup Company, 1986
to 1990. Mr. Baum is a director of
Quaker State Corporation.
Frederick B. Henry, 48, 1969.............. President, The Bohen Foundation
(private charitable foundation), 1985
to present.
William T. Kerr, 53, 1994................. President and Chief Operating Officer,
Meredith Corporation, July 1994 to
present; President-Magazine Group
and Executive Vice President,
Meredith Corporation, 1991 to 1994;
President-Magazine Group and Vice
President, The New York Times
Company, 1984 to 1991.
Nicholas L. Reding, 59, 1992.............. Vice Chairman, Monsanto Company
(diversified company in
pharmaceuticals, food products and
agriculture chemicals), 1992 to
present; Executive Vice President,
Monsanto Company, 1990 to 1992;
Executive Vice President, Monsanto
Company and President, Monsanto
Agricultural Company (an operating
unit of Monsanto Company), 1986 to
1990. Mr. Reding is a director of
Monsanto Company, International Mul-
tifoods Corp. and CPI Corp.
DIRECTORS CONTINUING IN OFFICE AS CLASS III DIRECTORS--
TERMS EXPIRE IN 1995
PRINCIPAL OCCUPATION AND BUSINESS
EXPERIENCE
DIRECTOR, AGE AND YEAR DURING THE PAST FIVE YEARS AND OTHER
FIRST ELECTED AS A DIRECTOR INFORMATION
- - ------------------------------------------ --------------------------------------
Robert A. Burnett, 67, 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, Dayton Hudson
Corporation, Midwest Resources and
ITT Corporation.
Richard S. Levitt, 64, 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, 61, 1966.............. Chairman of the Executive Committee,
Meredith Corporation, 1988 to present.
Gerald D. Thornton, 70, 1968.............. Retired. Vice President-Administrative
Services, Meredith Corporation, 1969
to 1989.
5
DIRECTORS CONTINUING IN OFFICE AS CLASS I DIRECTORS--
TERMS EXPIRE IN 1996
PRINCIPAL OCCUPATION AND BUSINESS
EXPERIENCE
DIRECTOR, AGE AND YEAR DURING THE PAST FIVE YEARS AND OTHER
FIRST ELECTED AS A DIRECTOR INFORMATION
- - ------------------------------------------ --------------------------------------
Pierson M. Grieve, 66, 1985............... Chairman and Chief Executive Officer,
Ecolab Inc. (developer and marketer of
cleaning, sanitizing and main-
tenance products and services), 1992
to present; Chairman, President and
CEO, Ecolab, Inc., 1985 to 1992. Mr.
Grieve is a director of Ecolab Inc.;
St. Paul Companies, Inc.; Norwest
Corporation; U S West, Inc.;
Minnegaso, a subsidiary of NovAm,
Inc.; and Waldorf Corporation.
Robert E. Lee, 59, 1982................... Executive Director, The Denver
Foundation (community foundation),
1989 to present; Chairman, First
Interstate Bank of Denver, 1981 to
1989. Mr. Lee is a director of
Equitable of Iowa Companies and
Storage Technology Corporation.
Jack D. Rehm, 61, 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; Chief Operating
Officer, Meredith Corporation, 1988
to 1989. Mr. Rehm is a director of
Equitable of Iowa Companies,
International Multifoods Corp. and
Norwest Bank Iowa, N.A.
Barbara S. Uehling, 62, 1980.............. Interim Director of the Business
Higher Education Forum, July 1994 to
present; Chancellor, University of
California, Santa Barbara, 1987 to
July 1994.
BOARD COMMITTEES
In fiscal 1993-94 there were five standing committees of the Board of
Directors:
AUDIT COMMITTEE. The members of this committee are Messrs. Henry (Chairman),
Levitt, Reding and Thornton and Dr. Uehling. 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 COMMITTEE. The members of this committee are Messrs. Lee
(Chairman), Grieve and Levitt. Mr. Yankelovich was a member of the committee
prior to his retirement in May 1994. The committee is composed entirely of
independent, outside 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 has acted since
January 1994 as an ad hoc nominating committee for directors to fill vacancies
on the Board.
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
6
changes in the corporate structure of the Company. The committee will consider
stockholder recommendations for directors sent to the Executive Committee, c/o
Thomas L. Slaughter, Meredith Corporation, 1716 Locust Street, Des Moines, Iowa
50309-3023.
FINANCE COMMITTEE. The members of this committee are Messrs. Levitt
(Chairman), Burnett, Henry, Lee and Reding. The committee, after review, advises
the Board with respect to corporate financial policies and procedures, dividend
policy, specific corporate financing plans and annual operating 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 and Lee
and Dr. Uehling. Mr. Yankelovich was the Chairman of the committee prior to his
retirement in May 1994. 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, if appropriate, to the Compensation Committee. 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 1993-94, the full Board met four times, the Audit Committee
met three times, the Finance Committee met four times, the Compensation
Committee met five times, the Pension Committee met three times and the
Executive Committee met twice. During fiscal 1993-94, no director participated
in fewer than 75% of the meetings while a member of the Board or a committee.
During fiscal 1993-94, 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
option to receive the annual retainer in restricted stock under the Meredith
Corporation 1990 Restricted Stock Plan for Non-Employee Directors. If a director
chose restricted stock, the retainer for that year was increased by 5% and
converted to stock. The restricted stock will vest at the end of five years
following the grant. During fiscal 1993-94, all non-employee directors, with
four exceptions, participated in the program. As further encouragement of
directors' ownership of Meredith stock, during fiscal 1993-94, the Company's
stockholders approved the adoption of the 1993 Stock Option Plan for
Non-Employee Directors. Each non-employee director received an option to
purchase 1,000 shares of Company common stock in November 1993 and will receive
additional options to purchase 1,000 shares each year during the term of the
Plan. Employee directors receive no compensation for board service. If a
non-employee member of the Board of Directors retires from the Board, the
director will receive 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, 1995.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee reviews, considers and approves changes in the
compensation of the Company's officers. The Compensation 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. The
Compensation Committee is composed entirely of independent outside directors.
There are no Compensation Committee interlocks or 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:
7
(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 shareholder 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 shareholder 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-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, enacted under the Revenue
Reconciliation Act of 1993, 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 will
continue to study Section 162(m) and the implementing regulations and their
impact upon the Company's compensation program. The Committee has adopted
appropriate changes to the Company's long-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.
The Committee recommends the approval of the stockholder proposal with respect
to the Company's Management Incentive Plan discussed elsewhere in this Proxy
Statement. The administration of the plan in accordance with the stockholder
proposal is intended to preserve the Company's right to a deduction for the
amounts paid under the plan.
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 $475,000 to $500,000 for the 1994 fiscal year. In providing this
increase, the Committee considered the Company's improving financial
performance, the increase in the price of the Company's stock, 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 1994 fiscal year,
at least 75% 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.
8
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
1994 fiscal year, the target incentive payments for goal achievement for the CEO
was set at 50% of his salary and for the other executive officers at 40% of
their respective salaries. Performance above goal could result in an incentive
payment for the CEO of up to 125% of base pay as of the end of the fiscal year
and for the other executive officers of up to 100% of base pay as of the end of
the fiscal year. 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 1994 fiscal year, Mr. Rehm received an incentive award of $625,000,
based on the Company's surpassing financial targets for net earnings and cash
flow, and in recognition of achieving qualitative organizational goals. The
Company exceeded budgeted net earnings by over 40%. In addition, cash flow
exceeded target by more than 15%. Other factors considered by the Committee in
determining Mr. Rehm's award were the accomplishments related to and growth of
the earnings base of the Company's core businesses. In addition, the Committee
recognized the 17% improvement in the price of the Company's common stock during
the fiscal year.
For the 1994 fiscal year, the other named executive officers received
incentive awards totaling $854,000. For the corporate officers, the awards were
based on the Company's surpassing financial targets for net earnings and cash
flow and in recognition of the achievement of qualitative goals. For the
operating group officers, the awards were based on the respective group
surpassing financial targets for net earnings and cash flow, the Company's
surpassing financial targets for net earnings and cash flow and in recognition
of the achievement of qualitative goals.
LONG-TERM INCENTIVE PROGRAM. In fiscal year 1994 the Committee utilized the
grant of nonqualified stock options under the 1992 Meredith Corporation
Incentive Stock Plan (the "1992 Plan") and the grant of restricted stock under
the Company's 1986 Restricted Stock Award Plan (the "1986 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 1994 fiscal year are exercisable 1/3 per year over the three-year
period commencing on the first anniversary of the award date. The options
granted will expire on the earlier to occur of the tenth anniversary of the date
of grant or the third anniversary of the date of retirement. All options granted
during fiscal year 1994 carry an exercise price at fair market value on the date
of grant. The restrictions on the stock awarded under the 1986 Plan will lapse
in five years from the date of grant.
The Committee did not grant any stock options or restricted stock to Mr.
Rehm during fiscal year 1994. During fiscal year 1994 the other named executive
officers were granted under the 1986 and 1992 Plans an aggregate total of 50,700
nonqualified stock options at $34.12 per share and 7,000 shares of restricted
stock in furtherance of the Committee's desire to encourage the executive
officers to focus on long-term performance and shareholder value.
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
and other key managers. Target levels of individual stock holdings are
established for the participants in the program at one or two times base pay.
Each participant 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 shareholder value. Mr. Rehm participated in the program and
achieved his target level prior to the 1994 fiscal year but did not receive an
award of restricted stock. The other named executive officers received an
aggregate total of 1,200 shares of restricted stock under this program in
addition to the shares reported above during fiscal year 1994.
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.
9
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 13 media and broadcast companies for the
purpose of preparing the shareholder performance graph contained elsewhere in
this Proxy Statement. Recognizing that there are no other companies that have
the same combination of businesses as the Company, the companies selected for
the Peer Group have multi-media businesses primarily with publishing and/or
television broadcasting in common with the Company.
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
shareholder value.
Mr. Robert E. Lee, Chairman
Mr. Pierson M. Grieve
Mr. Richard S. Levitt
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table provides a summary of compensation paid to the CEO and
the other four most highly compensated executive officers of the Company for
services rendered to the Company during each of the last three fiscal years.
LONG TERM COMPENSATION
--------------------------------------------------
ANNUAL COMPENSATION AWARDS
--------------------------------- ---------------------------- PAYOUTS
OTHER SECURITIES -------------------
ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPEN- STOCK OPTION LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) AWARD(S)(2)(3) AWARDS PAYOUTS(4) SATION(5)
- - ------------------------------------------- ---- -------- -------- ------- --------------- ---------- -------- ---------
Jack D. Rehm ...... Chairman of the Board, 1994 $500,000 $625,000 * 0 0 $382,320 $18,635
President and Chief 1993 452,500 593,750 * 0 150,000 0 0
Executive Officer(6) 1992 430,000 64,500 -- 130,000 0 --
William T. Kerr ... President-Magazine 1994 366,500 308,000 * 98,004 17,700 222,000 18,430
Group and Executive 1993 340,000 355,000 * 64,688 16,500 0 20,523
Vice President(6) 1992 270,833 444,000 -- 492,750 0 --
Philip A. Jones ... President-Broadcast 1994 287,000 287,000 * 68,994 14,100 31,800 17,598
Group 1993 267,500 150,000 * 49,163 13,200 6,000 6,966
1992 255,000 114,000 -- 52,000 42,600 --
Joseph J. Ward .... President-Book Group 1994 242,000 101,000 * 887,150 12,000 25,000 7,158
1993 225,000 235,000 * 41,400 11,100 0 7,786
1992 197,083 100,000 -- 78,000 0 --
Larry D. Hartsook Vice President-Finance 1994 175,000 158,000 * 43,575 6,900 118,000 17,223
1993 150,000 135,000 * 25,875 6,000 0 0
1992 120,333 45,000 -- 56,663 29,288 --
<FN>
- - ------------
* Less than required reportable amount.
(1) Amounts relating to 1992, if any, have been omitted in accordance with the
rules of the Securities and Exchange Commission.
10
(2) ACCUMULATED RESTRICTED STOCK
SHARES AGGREGATE YEAR END VALUE
-------- ----------------------------
Jack D. Rehm............................ 71,131** 3,023,068
William T. Kerr......................... 23,200 986,000
Phillip A. Jones........................ 10,500 446,250
Joseph J. Ward.......................... 7,000 297,500
Larry D. Hartsook....................... 4,800 204,000
<FN>
** Includes 27,431 shares Mr. Rehm acquired through the conversion of
deferred long term awards. Dividends are paid on reported Restricted
Stock.
(3) Restricted stock awards vest five years after date of grant except for Mr.
Rehm who has both 5 and 10 year vesting restrictions and Mr. Kerr who has
shares vesting at 3, 4, 5, 6 and 7 years.
(4) The Company's Long Term Executive Incentive Plan has been discontinued.
The 1994 payouts are the final payouts under the plan.
(5) 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 $6,838 for Mr. Rehm, $7,130 for Mr.
Kerr, $6,938 for Mr. Jones, $6,688 for Mr. Ward, and $6,563 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. Jones, $10,660, Mr.
Ward , $470 , and Mr. Hartsook, $10,660. Amounts relating to the year
1992, if any, have been omitted in accordance with the rules of the
Securities and Exchange Commission.
(6) Title during years reported.
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 1993-94
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 1993-94. 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.
11
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED ANNUAL
SECURITIES RATES OF STOCK PRICE
UNDERLYING % OF TOTAL APPRECIATION FOR OPTION
OPTIONS OPTIONS GRANTED EXERCISE TERM(3)
GRANTED TO EMPLOYEES IN OR BASE EXPIRATION ------------------------
NAME (1) FISCAL YEAR(1) PRICE $ DATE(2) 5%($) 10%($)
-------------------------------------------- ---------- ----------------- --------- ------------- ----------- -----------
Jack D. Rehm................................
William T. Kerr............................. 17,700 12.37% 34.125 Aug. 10, 2003 379,860 962,640
Philip A. Jones............................. 14,100 9.85% 34.125 Aug. 10, 2003 302,601 766,849
Joseph J. Ward.............................. 12,000 8.39% 34.125 Aug. 10, 2003 257,532 652,638
Larry D. Hartsook........................... 6,900 4.82% 34.125 Aug. 10, 2003 148,081 375,267
All Stockholders............................ -- -- -- -- 380,312,979 963,787,759
<FN>
- - ---------
(1) Total options granted during the fiscal year were 143,100.
(2) Options are exercisable for 1 year after death or termination of employment
due to disability and 3 years after retirement, but not later than 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,
1994.
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(#) FY-END($)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------------------------------- --------------- ----------- ----------- ------------- ----------- -------------
Jack D. Rehm............................ 0 0 25,000 50,000 198,375 803,000
Jack D. Rehm............................ 0 0 25,000 50,000 33,125 472,500
William T. Kerr......................... 2,000 15,370 3,500 28,700 27,773 324,898
Philip A. Jones......................... 0 0 4,400 22,900 34,914 259,416
Joseph J. Ward.......................... 0 0 3,700 19,400 29,360 219,344
Larry D. Hartsook....................... 0 0 2,000 10,900 15,870 122,028
NEW PLAN BENEFITS TABLE
The following table provides information on the maximum benefits payable to
eligible participants under the Supplement ("Supplement") to the Company's
Management Incentive Plan ("MIP"), which are the subject of a proposal to be
voted upon by the stockholders. The proposal is presented for the vote of the
stockholders to provide for the maximum deductibility of compensation paid to
the CEO and the other executive officers of the Company under Section 162(m) of
the Internal Revenue Code. The proposal states the business criteria on which
the CEO and the other executive officers will receive incentive payments under
the Supplement. For corporate officers, the award of the incentive is determined
by the Company's
12
achievement of corporate net income or corporate cash flow goals established on
an annual basis by the Compensation Committee. For operating group officers, the
award of an incentive is determined by group operating income or corporate net
earnings goals established on an annual basis by the Compensation Committee. The
eligible participants in the MIP are comprised of the following classes of
employees: (a) the Chief Executive Officer and the Chief Operating Officer, each
of whom are eligible to receive a maximum annual incentive of $1,250,000,
subject to reduction by the Compensation Committee in the exercise of its
discretion; (b) six other executive officers of the Company, each of whom are
eligible to receive an annual maximum incentive of $850,000, subject to
reduction by the Compensation Committee in the exercise of its discretion; and
(c) four non-executive officers of the Company, each of whom are eligible to
receive a maximum annual incentive of $850,000, subject to reduction by the
Compensation Committee in the exercise of its discretion. The following table
sets forth the maximum incentive payments under the Supplement as set by the
Compensation Committee for the 1995 fiscal year:
NEW PLAN BENEFITS
SUPPLEMENT TO THE COMPANY'S MANAGEMENT INCENTIVE PLAN
NAME AND POSITION DOLLAR VALUE($)(1)
- - ---------------------------------------------------- ------------------
Jack D. Rehm $ 750,000
Chairman of the Board and Chief
Executive Officer(2)
William T. Kerr $ 600,000
President and Chief Operating Officer(2)
Philip A. Jones $ 350,000
President-Broadcast Group
Joseph J. Ward $ 300,000
President-Book Group
Larry D. Hartsook $ 250,000
Vice President-Finance
Executive Officer Group(3) $3,050,000
Non-Executive Officer Employee Group(4) $ 640,000
<FN>
- - ---------
(1) Maximum annual benefits for the 1995 fiscal year, subject to reduction by
the Compensation Committee in the exercise of its discretion.
(2) Title as of July 1, 1994.
(3) Eight executive officers including the named executive officers.
(4) Four non-executive officers.
13
COMPARISON OF SHAREHOLDER RETURN
The following graph compares the performance of the Company's common stock
during the period July 1, 1989, to June 30, 1994, with the S&P 500 Index and a
Peer Group of 13 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; Capital Cities/ABC, Inc.; Gannett Company, Inc.; Lee Enterprises,
Inc.; McGraw-Hill, Inc.; Media General, Inc.; New York Times Company; Readers'
Digest Association, Inc.; E. W. Scripps Company; Time Warner, Inc.; Times Mirror
Company; Tribune Company and Washington Post Company. No changes have occurred
in the Peer Group composition from the prior year.
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, 1989.
It assumes that dividends were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MDP S&P 500 Peer Group
1989 100 100 100
1990 86 116 91
1991 79 125 86
1992 80 142 99
1993 107 161 112
1994 129 163 120
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.
Effective September 1, 1989, the defined benefit plan for nonunion employees
was converted to a "cash balance" defined benefit plan. Under the cash balance
plan, pension benefits accrued by participants as of the end of the 1989 plan
year (ending August 31, 1989) were converted to a cash balance equal to the lump
sum present value of their accrued benefits plus an amount equal to the
participant contributions, if any, made under the plan before it became
non-contributory in 1982, and interest on such contributions. A participant's
cash balance at the end of each plan year is credited with the sum of 2.5% of
his or her annual employment compensation (including bonuses) not in excess of
covered compensation (i.e., the average of
14
Social Security taxable wage bases in effect for the 35 calendar years ending
with the calendar year in which the current plan year began), 5.0% of the
portion of such compensation that exceeds covered compensation, and .1% of his
or her annual employment compensation (including bonuses) times his or her full
years of benefit service credited under the plan. Interest also is credited to
each participant's cash balance as of the end of each plan year at a rate equal
to the interest rate used by the Pension Benefit Guaranty Corporation for the
purpose of valuing immediate annuities as of January 1 each year. The cash
balance of each participant in the plan on September 1, 1989, whose age and
service then totaled 600 or more months shall be further increased at the end of
each plan year ending before January 1, 1999, if such cash balance as of the end
of that year would be less than the lump sum present value of a monthly pension
for life commencing on the participant's normal retirement date equal to 1% of
his or her average monthly compensation (including bonuses) for the five
consecutive calendar years in which he or she participated in the plan that
provide the highest average within the last ten consecutive calendar years, plus
.65% of the portion of such average monthly compensation that exceeds 1/12 of
covered compensation, times his or her years of benefit service not in excess of
25 years.
The first supplemental pension plan provides benefits for designated
employees equal to the additional benefits they would have received under the
cash balance plan if the maximum benefit and compensation limits under Sections
415 and 401(a)(17) of the Internal Revenue Code did not apply. The second
supplemental pension plan provides benefits for designated employees equal to
the benefits they would have received if the qualified defined benefit plan for
nonunion employees as in effect on August 31, 1989, immediately prior to its
conversion to a "cash balance" plan, had continued in effect unchanged, but
reduced by the actual benefits to which such employees become entitled under the
cash balance plan and the first supplemental pension plan.
As of September 1, 1993, the latest date for which information is available,
278 employees participated in the bargaining unit defined benefit plan. As of
January 1, 1994, the latest date for which information is available, 1,870
nonunion employees participated in the nonunion defined benefit plans. Assuming
retirement at age 65, estimated annual retirement benefits under the nonunion
plans as in effect for the 1994 plan year would be as follows:
PENSION TABLE
YEARS OF SERVICE*
FINAL AVERAGE --------------------------------------
COMPENSATION 10 15 20 25
- - -------------------------------- -------- -------- -------- --------
$100,000 $ 15,871 $ 23,806 $ 31,742 $ 39,677
150,000 25,871 38,806 51,742 64,677
200,000 35,871 53,806 71,742 89,677
300,000 55,871 83,806 111,742 139,677
400,000 75,871 113,806 151,742 189,677
500,000 95,871 143,806 191,742 239,677
600,000 115,871 173,806 231,742 289,677
<FN>
- - ---------
* 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.
As of January 1, 1994, the credited years of service for individuals listed
in the pension table above are as follows: Jack D. Rehm, Chairman and Chief
Executive Officer--31 years; William T. Kerr, President and Chief Operating
Officer--2 years; Philip A. Jones, President-Broadcast Group--14 years; Joseph
J. Ward, President-Book Group--2 years; and Larry D. Hartsook, Vice
President-Finance--23 years. For 1993, covered compensation for purposes of the
supplemental pension plans including bonuses was $1,081,250 for Jack D. Rehm,
Chairman and Chief Executive Officer; $838,750 for William T. Kerr, President
and Chief Operating Officer; $441,342 for Philip A. Jones, President-Broadcast
Group; $473,500 for Joseph J. Ward, President-Book Group; and $356,000 for Larry
D. Hartsook, Vice President-Finance.
15
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, 1994, Mr. Rehm's base salary was $500,000. 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 has 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 provides that Mr. Kerr will 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 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, 1994, Mr. Kerr's contractually guaranteed
minimum cash compensation was $525,000. 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 MATERIAL TERMS OF THE PERFORMANCE
GOALS OF THE COMPANY'S MANAGEMENT INCENTIVE PLAN
Effective July 1, 1994, the Board of Directors adopted a Supplement (the
"Supplement") to the Company's Management Incentive Plan (the "Plan") to provide
awards to certain key employees of the Company and its subsidiaries based on the
attainment of certain financial objectives. These incentives have been an
integral part of the Company's overall compensation system for a number of
years. The approval of the material terms of the performance goals is intended
to conform the Plan, as supplemented, to recent changes in federal income tax
laws. The stockholders are asked to approve the material terms of the
performance-based incentives established under the Supplement to satisfy the
requirements of Section 162(m) of the Internal Revenue Code of 1986 with respect
to the deductibility of compensation. The material terms as described below
consist of the following: (i) individuals eligible to receive compensation under
the Supplement, (ii) the business criteria on which annual incentive
compensation is payable under the Supplement, and (iii) the maximum amounts of
compensation payable under the Supplement.
Under the Supplement, Corporate Officers and Operating Group Officers of the
Company and its subsidiaries are eligible to receive annual incentive bonuses
payable in cash. Generally a participant must be employed by the Company or a
subsidiary as of the last day of the fiscal year. If employment is terminated
prior to the last day of the fiscal year due to the participant's death,
disability or qualified retirement, a prorated bonus will be paid to the
participant or to the participant's designated beneficiary.
16
The Board may amend, suspend or modify the Plan and the Supplement at any
time, except as limited by the terms of the Plan and the Supplement.
The Compensation Committee will administer the Supplement and will approve
the participants and the objective performance goals in writing before the
beginning of each fiscal year. All amounts paid as compensation pursuant to the
Supplement must be payable as a result of achievement of objectively measured
performance targets from the following list of quantifiable, measurable business
criteria: corporate net earnings, cash flow, and operating group income. The
specific targets relating to performance goals constitute confidential business
information and are not disclosed.
The Compensation Committee must certify, in writing, that the goals have
been met before any payments to participants may be made. The Compensation
Committee will have no discretion to increase the bonus payable to any
participant or to otherwise alter the performance goals after the beginning of
the fiscal year, but, to the extent permitted under Section 162(m) of the
Internal Revenue Code of 1986, will retain the ability to eliminate or decrease
a bonus otherwise payable to a participant.
The maximum amounts payable each year under the Supplement are $1,250,000 to
each of the Chief Executive Officer and the Chief Operating Officer and $850,000
to any other participant. The maximum annual amounts were selected by the
Compensation Committee in its reasonable anticipation of the maximum possible
annual incentives that may be earned under the Supplement during the five-year
period beginning July 1, 1994. See the New Plan Benefits Table on Page 13 of
this Proxy Statement for additional information.
The Compensation Committee also has the right to award a discretionary cash
payment to each eligible participant under the Plan. Pursuant to the Supplement,
Executive Officers named in the Summary Compensation Table are not eligible for
a discretionary bonus.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the business criteria, classes of eligible participants
and maximum annual incentives awarded under the Company's Supplement to its
Management Incentive 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 AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF CLASS B STOCK
SOLELY FOR ISSUANCE AS SHARE DIVIDENDS ON CLASS B STOCK,
TO
INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK AND TO MODIFY CERTAIN PROVISIONS
RELATING TO THE PAYMENT OF SHARE DIVIDENDS
The Board of Directors is presenting for approval a proposal to amend the
Company's Restated Articles of Incorporation (the "Amendment") as follows:
(i) to increase the number of authorized shares of common stock from
50,000,000 to 80,000,000 and to increase the number of authorized shares of
class B stock to 15,000,000;
(ii) to modify the rights of common stock and class B stock with respect
to share dividends; and
(iii) to permit the issuance of additional shares of class B stock solely
in connection with share dividends.
The Amendment is being proposed principally to make it possible for the
Company to effect future stock splits through share dividends in which holders
of common stock would receive additional common stock and holders of class B
stock would receive additional class B stock. A stock split is not under current
consideration by the Board of Directors, but may be considered in the future. If
the Amendment is
17
approved, the Board of Directors could authorize a stock split without further
stockholder approval. A stock split may be considered as a means of broadening
the market for the Company's common stock. A copy of the Amendment is attached
as Exhibit A to this Proxy Statement.
Under the Company's Restated Articles of Incorporation as currently in
effect, holders of common stock and class B stock are entitled to share equally
in dividends, including share dividends, and the issuance of additional class B
stock is prohibited. The Amendment would permit a dividend of shares of common
stock to be paid to holders of common stock and an equal dividend of shares of
class B stock to be paid to class B stockholders. Such a dividend would maintain
the proportionate interests of the common stock and the class B stock, including
with respect to voting power. The Amendment provides that if a share dividend of
common stock is declared on the common stock, an equal share dividend of class B
stock must be declared on the class B stock, and vice versa.
The Restated Articles of Incorporation as currently in effect prohibit the
issuance of additional shares of class B stock. The Restated Articles of
Incorporation as currently in effect provide that all shares of class B stock
surrendered for conversion shall be cancelled and may not be reissued. As a
result of prior conversions, only 3,601,932 shares of class B stock remain
authorized, issued and outstanding. The Amendment would increase the authorized
shares of class B stock to 15,000,000, provided that the additional 11,398,068
authorized shares of class B stock may be issued solely in the form of a share
dividend on class B stock. As noted above, a share dividend on the class B stock
may only be paid when an equal share dividend of common stock is paid on the
common stock.
The Amendment also would increase the authorized shares of common stock from
50,000,000 to 80,000,000. Although presently authorized shares of common stock
are sufficient to meet all known present requirements, including a stock split
that may be considered by the Board of Directors, the Board of Directors
believes that it is desirable that the Company have the flexibility to issue a
substantial number of shares of common stock without further stockholder action.
The availability of additional shares will enhance the Company's flexibility in
connection with possible future actions, such as additional stock dividends and
stock splits, financings, employee benefit programs, the possible funding of new
product programs or businesses or for other corporate purposes. The Board of
Directors will determine whether, when and on what terms the issuance of shares
of common stock may be warranted in connection with any of the foregoing
purposes.
If the Amendment is approved, any or all of the authorized shares of common
stock, class B stock or preferred stock could be issued without further action
by the stockholders. The issuance of common stock otherwise than in the context
of a stock split would reduce the current stockholders' proportionate interests.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the Amendment to the Company's Restated Articles of
Incorporation. All proxies will be voted in favor of the Amendment unless a
contrary specification is made on the proxy by the Stockholder.
PROPOSAL TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION
TO BROADEN THE CLASS OF "PERMITTED TRANSFEREES"
OF CLASS B COMMON STOCK
The Board of Directors is also presenting for approval a proposal to define
the term "grandparent" (as used in the definition of a "Permitted Transferee"
for class B stock) as "an ancestor in any degree born after January 1, 1876."
Under the Company's Restated Articles of Incorporation as currently in
effect, class B stock may be transferred only to a "Permitted Transferee" as
defined in III.A.5(a) of the Restated Articles of Incorporation. Under the
existing definition, a "Permitted Transferee" includes (i) a lineal descendant
of a grandparent of a class B stockholder, (ii) a spouse of any such lineal
descendant, (iii) certain trusts, of which such persons are the beneficiaries,
and (iv) certain corporations and partnerships, of which such persons and other
Permitted Transferees are the only stockholders or partners.
18
Approximately ten years have elapsed since the adoption of the definitions
of Permitted Transferee, and as time has passed, class B stockholders have
recognized that the original limitation of the definition to a descendant of a
grandparent of the holder restricts the ability of class B stockholders to
organize their estates by making transfers to younger descendants, whose lineal
ancestor may now be a great grandparent or even a great great grandparent of the
intended transferee. They have, therefore, requested that the definition of
Permitted Transferee include descendants of "an ancestor in any degree born
after January 1, 1876," in lieu of descendants of a grandparent of the holder.
If the amendment is approved, the conversion of class B stock to common
stock could be postponed beyond the time that it may otherwise be required to be
converted.
The proposed amendment to Article III.A.5(c) of the Company's Restated
Articles of Incorporation is to add the following as (v):
(v) The term "grandparent" means an ancestor in any degree born after
January 1, 1876.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors recommends
a vote FOR approval of the amendment to the Company's Restated Articles of
Incorporation to broaden the class of "permitted transferees" of class B stock.
STOCKHOLDERS' PROPOSALS
Stockholders wishing to include proposals in the Company's Proxy Statement
and form of proxy for the 1995 Annual Meeting of Stockholders must submit the
proposals so that they are received by the Company no later than May 31, 1995.
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, 1994. 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 26, 1994
19
EXHIBIT A
AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION
OF MEREDITH CORPORATION
The first unnumbered paragraph of Article III.A of the Company's Restated
Articles of Incorporation is amended in its entirety to read as follows:
A. CAPITALIZATION. The total number of shares of stock of all classes
which the corporation shall have authority to issue is 100,000,000 shares, of
which 5,000,000 shares shall be preferred, par value $1.00 per share
(hereinafter called "series preferred stock"), 80,000,000 shares of which shall
be common stock, par value $1.00 per share (hereinafter called "common stock")
and 15,000,000 shares of which shall be class B common stock, par value $1.00
per share (hereinafter called "class B stock").
Article III.A.3. of the Company's Restated Articles of Incorporation is
amended in its entirety to read as follows:
If and when dividends on the common stock and class B stock are declared
payable from time to time by the board of directors from funds legally
available therefor, whether payable in cash, in property or in shares of
stock of the corporation, the holders of common stock and the holders of
class B stock shall be entitled to share equally, share for share, in such
dividends, except that if a share dividend of common stock is declared on
the common stock, an equal share dividend of class B stock shall be declared
on the class B stock, and if a share dividend of class B stock is declared
on the class B stock, an equal share dividend of common stock shall be
declared on the common stock. In no case may a share dividend of class B
stock be paid on common stock, nor may a share dividend of common stock be
paid on class B stock.
Article III.A.7. of the Company's Restated Articles of Incorporation is
amended in its entirety to read as follows:
Notwithstanding any other provision of these Restated Articles of
Incorporation, the authorized shares of class B stock which may be issued
after the date of this amendment to the Restated Articles of Incorporation
may only be issued in the form of a share dividend on class B stock.
A-1
PROXY MEREDITH CORPORATION COMMON STOCK
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING NOVEMBER 14, 1994
FREDERICK B. HENRY, E. T. MEREDITH III and JACK D. REHM, and each of them,
are hereby appointed proxies of the stockholder(s) signing the reverse side
hereof, 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, Des Moines, Iowa, on
Monday, November 14, 1994, at 10:00 A.M., local time, and at any adjournment
thereof, with all the powers the signing stockholder(s) would possess if
present. The proxies are instructed to vote as follows:
1. ELECTION OF FOUR CLASS II DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING IN
1997.
/ / FOR all nominees listed below (except as indicated below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
Herbert M. Baum, Frederick B. Henry, William T. Kerr, Nicholas L. Reding
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
________________________________________________________________________________
2. APPROVAL OF THE BUSINESS CRITERIA, CLASSES OF ELIGIBLE PARTICIPANTS AND
MAXIMUM ANNUAL INCENTIVES AWARDED UNDER THE COMPANY'S MANAGEMENT INCENTIVE PLAN;
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF CLASS B
STOCK SOLELY FOR ISSUANCE AS SHARE DIVIDENDS ON CLASS B STOCK, TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK AND TO MODIFY CERTAIN PROVISIONS RELATING TO
THE PAYMENT OF SHARE DIVIDENDS;
/ / FOR / / AGAINST / / ABSTAIN
4. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION TO BROADEN THE CLASS OF "PERMITTED
TRANSFEREES" OF CLASS B STOCK; AND
/ / FOR / / AGAINST / / ABSTAIN
5. In their discretion, upon such other matters as may properly come before the
meeting.
If you have a new address, please The shares represented by this proxy will be voted as
indicate below: specified by the stockholder, BUT IF NO SPECIFICATION
- - ----------------------------------- IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
- - ----------------------------------- DIRECTORS NAMED ABOVE AND FOR THE APPROVAL OF
- - ----------------------------------- PROPOSALS AS SHOWN ABOVE and as set forth in the
notice of annual meeting dated September 26, 1994,
and the accompanying Proxy Statement. The Directors
recommend a vote FOR such matters.
Dated: -----------------------------------------,1994
------------------------------------------------
------------------------------------------------
(Please sign exactly as shown hereon)
PROXY MEREDITH CORPORATION CLASS B COMMON STOCK
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING NOVEMBER 14, 1994
FREDERICK B. HENRY, E. T. MEREDITH III and JACK D. REHM, and each of them,
are hereby appointed proxies of the stockholder(s) signing the reverse side
hereof, 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 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, Des Moines, Iowa, on
Monday, November 14, 1994, at 10:00 A.M., local time, and at any adjournment
thereof, with all the powers the signing stockholder(s) would possess if
present. The proxies are instructed to vote as follows:
1. ELECTION OF FOUR CLASS II DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING IN
1997.
/ / FOR all nominees listed below (except as indicated below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
Herbert M. Baum, Frederick B. Henry, William T. Kerr, Nicholas L. Reding
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
________________________________________________________________________________
2. APPROVAL OF THE BUSINESS CRITERIA, CLASSES OF ELIGIBLE PARTICIPANTS AND
MAXIMUM ANNUAL INCENTIVES AWARDED UNDER THE COMPANY'S MANAGEMENT INCENTIVE PLAN;
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF CLASS B
STOCK SOLELY FOR ISSUANCE AS SHARE DIVIDENDS ON CLASS B STOCK, TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK AND TO MODIFY CERTAIN PROVISIONS RELATING TO
THE PAYMENT OF SHARE DIVIDENDS;
/ / FOR / / AGAINST / / ABSTAIN
4. APPROVAL OF A PROPOSAL OF THE BOARD OF DIRECTORS TO AMEND THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION TO BROADEN THE CLASS OF "PERMITTED
TRANSFEREES" OF CLASS B STOCK; AND
/ / FOR / / AGAINST / / ABSTAIN
5. In their discretion, upon such other matters as may properly come before the
meeting.
If you have a new address, please The shares represented by this proxy will be voted as
indicate below: specified by the stockholder, BUT IF NO SPECIFICATION
- - ----------------------------------- IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
- - ----------------------------------- DIRECTORS NAMED ABOVE AND FOR THE APPROVAL OF
- - ----------------------------------- PROPOSALS AS SHOWN ABOVE and as set forth in the
notice of annual meeting dated September 26, 1994,
and the accompanying Proxy Statement. The Directors
recommend a vote FOR such matters.
Dated: -----------------------------------------,1994
------------------------------------------------
------------------------------------------------
(Please sign exactly as shown hereon)