-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FiaSQLEo4QJFhQUUO/Jw5i1rKv8uW9palEf3KKapyt9WWpw6xCBaainWOMHVxIyY jBC181tTSp+vpVVJvwa4Ag== 0000947871-02-002457.txt : 20021219 0000947871-02-002457.hdr.sgml : 20021219 20021219160809 ACCESSION NUMBER: 0000947871-02-002457 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20021219 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: READERS DIGEST ASSOCIATION INC CENTRAL INDEX KEY: 0000858558 STANDARD INDUSTRIAL CLASSIFICATION: BOOKS: PUBLISHING OR PUBLISHING AND PRINTING [2731] IRS NUMBER: 131726769 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43188 FILM NUMBER: 02863208 BUSINESS ADDRESS: STREET 1: READERS DIGEST ROAD CITY: PLEASANTVILLE STATE: NY ZIP: 10570 BUSINESS PHONE: 9142381000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DEWITT WALLACE READERS DIGEST FUND INC CENTRAL INDEX KEY: 0000901623 IRS NUMBER: 126183757 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: TWO PARK AVE STREET 2: 23RD FL CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2122519840 MAIL ADDRESS: STREET 1: TWO PARK AVNEUE STREET 2: 23TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 SC 13D 1 sc13d_121802.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------------------------------------------ SCHEDULE 13D Under the Securities Exchange Act of 1934 THE READER'S DIGEST ASSOCIATION, INC. (Name of Issuer) Common Stock, Par Value $0.01 per Share (Title of Class of Securities) 755267200 --------- (CUSIP Number) DeWitt Wallace-Reader's Digest Fund, Inc. Lila Wallace-Reader's Digest Fund, Inc. M. Christine DeVita Two Park Avenue, 23rd Floor New York, New York 10016 (212) 251-9841 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Peter J. Rooney, Esq. Shearman & Sterling 599 Lexington Avenue New York, NY 10022 (212) 848-7871 December 13, 2002 (Date of Event which Requires Filing of this Statement) ------------------------------------------------------------------------------ If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. CUSIP No. 755267200 --------- (1) Name of Reporting Person S.S. or I.R.S. Identification Nos. of Above Persons DeWitt Wallace-Reader's Digest Fund, Inc. I.R.S. Identification No. 13-6183757 (2) Check the Appropriate Box if a Member of Group (See Instructions) (a) X ----------------------------------------------------------------- (b) [ ] ----------------------------------------------------------------- (3) SEC Use Only ----------------------------------------------------------- (4) Sources of Funds (See Instructions) OO ------------------------------------ (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e). [ ] (6) Citizenship or Place of Organization New York ---------------------------------- - -------------------------------------------------------------------------------- (7) Sole Voting Power 7,680,305 Number of ----------------------------------- Shares ----------------------------------------------------- Beneficially (8) Shared Voting Power None Owned by --------------------------------- Each -------------------------------------------------------------- Reporting (9) Sole Dispositive Power 7,680,305 Person ------------------------------ With ----------------------------------------------------- (10) Shared Dispositive Power None ---------------------------- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,638,487 (1) -------------- (12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] ---------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 12.9% ------------------------ (14) Type of Reporting Person (See Instructions) CO -------------------------------- - ---------- (1) Includes 4,958,182 shares of Reader's Digest Common Stock owned by the Lila Wallace-Reader's Digest Fund, Inc. as of December 13, 2002. CUSIP No. 755267200 --------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Lila Wallace-Reader's Digest Fund, Inc. I.R.S. Identification No. 13-6086859 (2) Check the Appropriate Box if a Member of Group (See Instructions) (a) X ----------------------------------------------------------------- (b) [ ] ----------------------------------------------------------------- (3) SEC Use Only ----------------------------------------------------------- (4) Sources of Funds (See Instructions) OO ------------------------------------ (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e). [ ] (6) Citizenship or Place of Organization New York ---------------------------------- - -------------------------------------------------------------------------------- (7) Sole Voting Power 4,958,182 Number of ----------------------------------- Shares ----------------------------------------------------- Beneficially (8) Shared Voting Power None Owned by --------------------------------- Each -------------------------------------------------------------- Reporting (9) Sole Dispositive Power 4,958,182 Person ------------------------------ With ----------------------------------------------------- (10) Shared Dispositive Power None ---------------------------- - -------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,638,487 (2) -------------- (12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] ---------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 12.9% ------------------------ (14) Type of Reporting Person (See Instructions) CO -------------------------------- - ---------- (2) Includes 7,680,305 shares of Reader's Digest Common Stock owned by the DeWitt Wallace-Reader's Digest Fund, Inc. as of December 13, 2002. Item 1. Security and Issuer ------------------- This Schedule 13D relates to the common stock, par value $0.01 per share (the "Reader's Digest Common Stock") of The Reader's Digest Association, Inc., a Delaware corporation (hereinafter referred to as "Reader's Digest" or the "Issuer"). The principal executive offices of the Issuer are located at Reader's Digest Road, Pleasantville, New York 10570-7000. Item 2. Identity and Background ----------------------- This joint statement is being filed by (a) the DeWitt Wallace-Reader's Digest Fund, Inc. (the "DeWitt Wallace Fund"), a corporation organized under the Not-for-Profit Corporation Law of the State of New York, and (b) the Lila Wallace-Reader's Digest Fund, Inc. (the "Lila Wallace Fund," and together with the DeWitt Wallace Fund, the "Reporting Persons"), a corporation organized under the Not-for-Profit Corporation Law of the State of New York. The Reporting Persons' principal business offices are located at Two Park Avenue, 23rd Floor, New York, New York 10016. During the last five years, neither of the Reporting Persons has been, and, to the best of such Reporting Person's knowledge, none of its directors has been, convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. The name, residence or business address and present principal occupation (including the name and address of the corporation or organization in which such employment is conducted) of each executive officer and director of the Reporting Persons is set forth in Schedule A to this Schedule 13D and is specifically incorporated herein by reference in its entirety. All such persons are citizens of the United States. Item 3. Source and Amount of Funds or Other Consideration ------------------------------------------------- On October 15, 2002, Reader's Digest and the Reporting Persons entered into a Recapitalization Agreement, pursuant to which Reader's Digest and the Reporting Persons agreed to effect a series of transactions pursuant to which (a) all shares of Class B Voting Common Stock of Reader's Digest (the "Class B Stock") and Class A Nonvoting Common Stock of Reader's Digest (the "Class A Stock") would be recapitalized into one class of voting common stock by means of a merger of a wholly-owned subsidiary of Reader's Digest into Reader's Digest, with Reader's Digest surviving, and (b) in consideration for the recapitalization, Reader's Digest agreed to purchase from the Reporting Persons 4,597,701 shares of Class B Stock for an aggregate of $99,999,996.75. On December 13, 2002, immediately prior to the merger, Reader's Digest purchased 4,597,701 shares of Class B Stock from the Reporting Persons, after which time the Reporting Persons beneficially owned 1,618,381 shares of Class B Stock and 10,664,063 shares of Class A Stock. Such shares were subsequently recapitalized into 12,638,487 shares of Reader's Digest Common Stock pursuant to the merger. Specifically, pursuant to the merger agreement, (a) each share of Class A Stock either issued and outstanding or held by Reader's Digest as treasury stock, including the 10,664,063 shares held by the Reporting Persons, immediately prior to the effective time of the merger was automatically converted into one share of Reader's Digest Common Stock, and (b) each share of Class B Stock either issued and outstanding or held by Reader's Digest as treasury stock, including the 1,618,381 shares held by the Reporting Persons, immediately prior to the effective time of the merger was automatically converted into 1.22 shares of Reader's Digest Common Stock. The description herein of the Recapitalization Agreement is qualified in its entirety by reference to such agreement, a copy of which is filed as Exhibit 99(a) and is incorporated herein by reference in its entirety. Item 4. Purpose of Transaction ---------------------- The Reporting Persons acquired the shares of Reader's Digest Common Stock pursuant to the merger described in Item 3. The Reporting Persons intend to review continuously their investment in the Issuer on the basis of various factors, including the Issuer's business and financial condition, results of operations and prospects, general economic and industry conditions, the securities market in general and those for the Issuer's securities in particular, other developments and other investment opportunities available to the Reporting Persons. Based upon such review, the Reporting Persons will take such actions in the future as they may deem appropriate in light of the circumstances existing from time to time, which may include the acquisition of additional shares of Reader's Digest Common Stock or other securities of the Issuer either in the open market or in privately negotiated transactions. Similarly, depending on market and other factors, the Reporting Persons may determine to dispose of some or all of the Reader's Digest Common Stock that they currently own or that they may later acquire, either in the open market or in privately negotiated transactions. Pursuant to the Recapitalization Agreement, the Reporting Persons have the right to cause the Issuer to prepare and file up to two registration statements under the Securities Act of 1933, as amended, in order to permit the sale by the Reporting Persons of any shares of Reader's Digest Common Stock. The description herein of the Recapitalization Agreement is qualified in its entirety by reference to such agreement, a copy of which is filed as Exhibit 99(a) and is incorporated herein by reference in its entirety. Other than as described above, the Reporting Persons do not currently have any plans or proposals that would result in (a) the acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer, (b) an extraordinary corporate transaction involving the Issuer or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries, (d) any change in the present board of directors or management of the Issuer, (e) any material change in the Issuer's capitalization or dividend policy, (f) any other material change in the Issuer's business or corporate structure, (g) any change in the Issuer's charter or bylaws or other instrument corresponding thereto or other action which may impede the acquisition of control of the Issuer by any person, (h) causing a class of the Issuer's securities to be deregistered or delisted, (i) a class of equity securities of the Issuer becoming eligible for termination of registration or (j) any action similar to any of those enumerated above (although the Reporting Persons reserve the right to develop such plans). Item 5. Interest in Securities of the Issuer ------------------------------------ As a result of the recapitalization, the DeWitt Wallace Fund will be deemed to be the beneficial owner of 7,680,305 shares of Reader's Digest Common Stock, which would represent approximately 7.8% of the shares of Reader's Digest Common Stock outstanding after the merger (based on the number of shares of Reader's Digest Common Stock outstanding on September 12, 2002, as set forth in the Recapitalization Agreement, which is filed as Appendix A to the Issuer's proxy statement/prospectus dated November 12, 2002). The DeWitt Wallace Fund will have sole voting and dispositive power with respect to such shares of Reader's Digest Common Stock. Except as described herein, or in Schedule B hereto, neither the DeWitt Wallace Fund nor, to the best of the DeWitt Wallace Fund's knowledge, any other person referred to in Schedule A attached hereto, beneficially owns or has acquired or disposed of any shares of the Issuer during the past 60 days. As a result of the recapitalization, the Lila Wallace Fund will be deemed to be the beneficial owner of 4,958,182 shares of Reader's Digest Common Stock, which would represent approximately 5.1% of the shares of Reader's Digest Common Stock outstanding after the merger (based on the number of shares of Reader's Digest Common Stock outstanding on September 12, 2002, as set forth in the Recapitalization Agreement, which is filed as Appendix A to the Issuer's proxy statement/prospectus dated November 12, 2002). The Lila Wallace Fund will have sole voting and dispositive power with respect to such shares of Reader's Digest Common Stock. Except as described herein, or in Schedule B hereto, neither the Lila Wallace Fund nor, to the best of the Lila Wallace Fund's knowledge, any other person referred to in Schedule A attached hereto, beneficially owns or has acquired or disposed of any shares of the Issuer during the past 60 days. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer --------------------------------------------------------------------- Except for the Recapitalization Agreement and as set forth herein, none of the persons named in Item 2 has any contracts, arrangements, understandings or relationships (legal or otherwise) with any persons with respect to any securities of the Issuer, including, but not limited to, transfers or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Materials to be Filed as Exhibits --------------------------------- Exhibit 1 Joint Filing Agreement between the DeWitt Wallace-Reader's Digest Fund, Inc. and the Lila Wallace-Reader's Digest Fund, Inc. pursuant to Rule 13d-1(k)(l)(iii). Exhibit 99(a) Recapitalization Agreement, dated as of October 15, 2002, by and among the DeWitt Wallace-Reader's Digest Fund, Inc., the Lila Wallace-Reader's Digest Fund, Inc. and The Reader's Digest Association, Inc. (incorporated by reference to Appendix A to the Issuer's proxy statement/prospectus dated November 12, 2002). SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule 13D is true, complete and accurate. December 19, 2002 DEWITT WALLACE-READER'S DIGEST FUND, INC. By: /s/ M. Christine DeVita -------------------------- Name: M. Christine DeVita Title: President December 19, 2002 LILA WALLACE-READER'S DIGEST FUND, INC. By: /s/ M. Christine DeVita -------------------------- Name: M. Christine DeVita Title: President SCHEDULE A DEWITT WALLACE-READER'S DIGEST FUND, INC. AND LILA WALLACE-READER'S DIGEST FUND, INC. BOARD OF DIRECTORS Gordon Ambach Laraine S. Rotherberg 2715 31st Place, N.W. Partner, Fried, Frank, Harris, Washington, D.C. 20008 Shriver & Jacobson One New York Plaza, 29th Floor New York, NY 10004 W. Don Cornwell Joseph Shenker Chief Executive Officer, Granite Provost, Long Island University Broadcasting Corporation C.W. Post Campus 767 Third Avenue, 34th Floor 720 Northern Blvd. New York, NY 10017 Brookville, NY 11548 M. Christine DeVita Walter Shipley President, DeWitt Wallace-Reader's Digest Chairman, DeWitt Wallace-Reader's Fund & Lila Wallace-Reader's Digest Fund Digest Fund & Lila Wallace- New York, NY 10016 Reader's Digest Fund 270 Park Avenue, 9th Floor New York, NY 10017 Susan J. Kropf C. J. Silas President and Chief Operating Officer, P.O. Box 2127 Avon Products, Inc. Bartlesville, OK 74005 1345 Avenue of the Americas, 27th Floor New York, NY 10105 Peter C. Marzio Director, The Museum of Fine Arts, Houston 1001 Bissonet Houston, TX 77005
EXECUTIVE OFFICERS M. Christine DeVita President, DeWitt Wallace-Reader's Digest Fund & Lila Wallace-Reader's Digest Fund 2 Park Avenue, 23rd Floor New York, NY 10016 Mary E. Geras Director of Finance & Assistant Treasurer, DeWitt Wallace-Reader's Digest Fund & Lila Wallace-Reader's Digest Fund 2 Park Avenue, 23rd Floor New York, NY 10016 Rob D. Nagel Director of Investments & Treasurer, DeWitt Wallace-Reader's Digest Fund & Lila Wallace-Reader's Digest Fund 2 Park Avenue, 23rd Floor New York, NY 10016 Walter Shipley Chairman, DeWitt Wallace-Reader's Digest Fund & Lila Wallace-Reader's Digest Fund 270 Park Avenue, 9th Floor New York, NY 10017 SCHEDULE B BENEFICIAL OWNERSHIP OF SHARES OF THE READER'S DIGEST ASSOCIATION, INC. Shares of Common Stock ------------ Name of Beneficial Owner(1) - --------------------------- M. Christine DeVita......................................... 6,600 Laraine S. Rotherberg....................................... 100 Walter Shipley.............................................. 3,000 C. J. Silas................................................. 8,600 - ----------- (1) "Beneficial ownership" has been determined in accordance with rule 13d-3 under the Securities Exchange Act of 1934. Each director or officer has sole voting and dispositive power over the shares shown. Each director or executive officer beneficially owns less than 1% of the total outstanding shares of Common Stock. All directors and executive officers as a group own less than 1% of the total outstanding shares of Common Stock. EXHIBIT 1 JOINT FILING AGREEMENT The undersigned hereby agree that the Statement on Schedule 13D, dated December 19, 2002 ("Schedule 13D"), with respect to the Common Stock, par value $0.01, of The Reader's Digest Association, Inc. is, and any amendments thereto executed by each of us shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, and that this Agreement shall be included as an Exhibit to the Schedule 13D and each such amendment. Each of the undersigned agrees to be responsible for the timely filing of the Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning itself contained therein. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of December 19, 2002. DEWITT WALLACE-READER'S DIGEST FUND, INC. By: /s/ M. Christine DeVita -------------------------- Name: M. Christine DeVita Title: President LILA WALLACE-READER'S DIGEST FUND, INC. By: /s/ M. Christine DeVita -------------------------- Name: M. Christine DeVita Title: President -----END PRIVACY-ENHANCED MESSAGE-----