-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, pWTULNWtuTmAf4zoiZExnonnQM3oonx8yTEjNpl5c6BnTEID2LSrgWm2f3CO91mc SVj6exgc3MDFj4pGEmp2hg== 0000068813-95-000031.txt : 19950814 0000068813-95-000031.hdr.sgml : 19950814 ACCESSION NUMBER: 0000068813-95-000031 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTIMEDIA INC CENTRAL INDEX KEY: 0000068813 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 570173540 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06265 FILM NUMBER: 95561456 BUSINESS ADDRESS: STREET 1: 305 SOUTH MAIN ST STREET 2: P O BOX 1688 CITY: GREENVILLE STATE: SC ZIP: 29601 BUSINESS PHONE: 8032984373 MAIL ADDRESS: STREET 1: PO BOX 1688 CITY: GREENVILLE STATE: SC ZIP: 29602 10-Q 1 Securities and Exchange Commission WASHINGTON, D.C. 20549 FORM 10-Q __X__QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 _____TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended For the transition period from ____ to ___ June 30, 1995 Commission file number 0-6265 MULTIMEDIA, INC. (Exact name of registrant as specified in its charter) South Carolina 57-0173540 - ------------------------------- --------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 305 South Main Street, Greenville, South Carolina 29601 - ------------------------------------------------- --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (803) 298-4373 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No____ The number of shares outstanding for each of the issuer's classes of common stock, as of June 30, 1995: Common Stock, $.10 par value 37,865,078 shares outstanding PART I - FINANCIAL INFORMATION Item 1 - Financial Statements. The following consolidated financial statements are incorporated by reference from the Report to Shareholders for the quarter ended June 30, 1995. Consolidated Statements of Earnings, three months and six months ended June 30, 1995 and 1994. Consolidated Balance Sheets as of June 30, 1995 and December 31, 1994. Consolidated Statements of Cash Flows, six months ended June 30, 1995 and 1994. The information furnished reflects all adjustments consisting of normally recurring accruals which are, in the opinion of management, necessary to a fair statement of the results for the interim period. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations. Discussion regarding the Company's financial condition and results of operations for the quarter ended June 30, 1995 is included in the Report to Shareholders attached hereto as an exhibit and incorporated herein by reference. Multimedia's net earnings totaled $21.2 million for the quarter that ended on June 30, 1995, and earnings per share were $.54. These results represent increases of 8.9% and 5.9%, respectively, over those reported for the second quarter of last year. Excluding the after-tax loss associated with the launch of NEWSTALK TELEVISION, the Company's news-based interactive cable service, earnings per share were $.62, an increase of 21.6% over 1994's second quarter earnings per share from ongoing operations of $.51. Net earnings for the first six months of 1995 were $36.0 million and earnings per share were $.93, decreases of 2.1% and 3.1%, respectively, from the first six months of 1994. Excluding the impact of costs related to NEWSTALK TELEVISION in 1995 and gains on the sale of three radio stations in 1994, net earnings from ongoing operations for the six month period increased 20.7% to $41.9 million, and earnings per share from ongoing operations increased 18.7% to $1.08 per share. Revenues for the first six months of 1995 were $326.8 million, 6.9% higher than the corresponding period of the previous year. Operating profit rose 2.8% to $93.3 million for the period and increased 13.9% if the effects of NEWSTALK TELEVISION are excluded from the comparison. The increase in revenue of the newspaper division was primarily due to advertising revenue increases primarily due to volume growth in local and classified advertising and, to a lesser extent, due to increases in circulation revenue. The broadcasting division revenues were 11.3% ahead of last year's results for the quarter and 12.5% ahead year-to-date. These increases principally resulted from a healthy advertising climate and strong ratings positions at the Company's five television stations. The increase in revenue of the cable division resulted primarily from an increase in subscribers to approximately 450,000. Excluding the wireless cable operations, sold in August 1994, cable division revenues increased 7.6% for the second quarter and 6.4% for the first six months of 1995 as compared to the corresponding periods of 1994. For the quarter, the entertainment division's revenues increased 2.0% to $36.9 million as compared to the same quarter in 1994, reflective of the increased competition in the talk show marketplace. The increase in the number of programs competing for daytime audience shares continues to decrease ratings for the long-running shows. Excluding costs associated with the launch of NEWSTALK TELEVISION, operating profit for the Entertainment division was down 13.8% for the second quarter and 14.9% for the six months as compared to the same period in 1994. The Security revenue and operating profit increases are primarily due to increases in the number of customers from approximately 60,000 at the end of the second quarter of 1994 to approximately 76,000 customers at June 30, 1995. There have been no material adverse changes in the Registrant's financial condition during the quarter ended June 30, 1995, and reference is made to management's discussion and analysis relating to liquidity and capital resources which appeared on pages 17-21 of the Company's 1994 Annual Report. On July 24, Gannett Co., Inc. and Multimedia, Inc. entered into a merger agreement by which Gannett will acquire Multimedia. Under the agreement, Gannett will pay Multimedia shareholders $45.25 for each of the outstanding shares of common stock. The purchase price will be adjusted if Multimedia's debt at December 31, 1995, exceeds a specified level. Closing of the transaction is conditioned on, among other things, shareholder approval, receipt of certain regulatory and governmental approvals, and the Company's debt not exceeding a specified level on the second business day prior to the closing of the transaction. Closing of the transaction is expected to occur promptly after Multimedia shareholder and regulatory approvals are obtained. PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K: (a) Exhibits: 10.6.5. 1995 Amendment to Contract for Services. Portions of this exhibit have been omitted and are the subject of a request made to the United States Securities and Exchange Commission for confidential treatment. 10.23. Form of Multimedia, Inc. Management Committee Employment Contract by and between the Registrant and each of its Executive Officers. 11. Computation of Primary and Fully Diluted Earnings per Share. 15. Independent accountants' report re unaudited interim financial information. 19. Report to Shareholders for the quarter ended June 30, 1995. 27. Financial Data Schedule. (b) Reports on Form 8-K. Items reported on Form 8-K dated July 24, 1995. Item 5. Other Events. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Multimedia, Inc. ------------------------------------- (Registrant) August 11, 1995 - -------------------------- ------------------------------------- (Date) Robert E. Hamby, Jr. Senior Vice President Finance & Administration Chief Financial Officer August 11, 1995 - -------------------------- ------------------------------------- (Date) Frederick G. Lohman Vice President - Controller EX-10 2 EXHIBIT 10.6.5 [DELETION*] AGREEMENT THIS AGREEMENT is entered into by and between Multimedia Entertainment, Inc. ("Multimedia") and Phillip J. Donahue ("Donahue"). [DELETION*] NOW, THEREFORE, it is agreed that: [DELETION*] *The deleted material is deemed confidential commercial or financial information by Multimedia, Inc. and has been filed separately with the United States Securities and Exchange Commission. [DELETION*] *The deleted material is deemed confidential commercial or financial information by Multimedia, Inc. and has been filed separately with the United States Securities and Exchange Commission. 2 [DELETION*] 7. The terms of this Agreement shall supersede Section 5 of the parties' 1994 Amendment to Contract for Services and such Section shall have no further force or effect. IN WITNESS WHEREOF, this Agreement is executed this ____ day of ________________, 1995. Multimedia Entertainment, Inc. By: ______________________________ __________________________________ Phillip J. Donahue *The deleted material is deemed confidential commercial or financial information by Multimedia, Inc. and has been filed separately with the United States Securities and Exchange Commission. 3 EX-10 3 EXHIBIT 10.23 MANAGEMENT COMMITTEE EMPLOYMENT AGREEMENT AGREEMENT by and between Multimedia, Inc., a South Carolina corporation (the "Company") and _________ _________ (the "Executive"), dated as of the ___ day of _______________. The Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Certain Definitions. (a) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated by the Company prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment. (b) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended. 2. Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean: 1 (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or (b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combina- tion, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 2 (d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; or (e) A sale, transfer or other disposition of [division of the Company employing the Executive] (the "Division") immediately after which neither the Company nor its shareholders collectively own directly or indirectly more than 50% of the Division. 3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third an- niversary of such date (the "Employment Period"). 4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location. (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company. (b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a bi-weekly rate, at least equal to twenty- six times the highest bi-weekly base salary and any automobile or gas allowance paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce 3 any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company. (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's target bonus under the Company's annual incentive plans for the year in which the Effective Date occurs (annualized in the event that the Executive was not employed by the Company for the whole of such fiscal year) (the "Target Bonus") the average bonus paid to the Participant for the three years prior to the year in which Change of Control occurs, if the Executive does not participate in a formal bonus plan. Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus. (iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. (iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated com- panies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. (v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect 4 generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. (vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. (vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. (viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. 5. Termination of Employment. (a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive's legal rep- resentative. (b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean: 5 (i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive has engaged in the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. (c) Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean: (i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date; 6 (iv) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or (v) any failure by the Company to comply with and satisfy Section 11(c) of this Agreement. For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason other than death during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a ter- mination for Good Reason for all purposes of this Agreement. (d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. (e) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Ter- mination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 6. Obligations of the Company upon Termination. (a) Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason: (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: A. the sum of (1) the Executive's Annual Base Salary through the Date of 7 Termination to the extent not theretofore paid, (2) the product of (x) the Target Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and B. $ * ; and --------------- C. an amount equal to the excess of (a) the actuarial equivalent of the benefit under the Company's qualified defined benefit retirement plan (the "Retirement Plan") (utilizing actu- arial assumptions no less favorable to the Executive than those in effect under the Company's Retirement Plan immediately prior to the Effective Date), and any excess or supplemental retirement plan in which the Executive participates (together, the "SERP") which the Executive would receive if the Executive's employment continued for three years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, and, assuming that the Executive's compensation in each of the three years is that required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of the Executive's actual benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the Date of Termination; (ii) for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period; (iii) the Company shall, at its sole expense as incurred, provide the Executive with outplacement services the scope and provider of which shall be selected by the Executive in his reasonable sole discretion; and *With respect to each individual covered by this Management Committee Employment Agreement, the following sets forth, next to each individual's name, the dollar amount applicable to this section 6.(i.).B.: Donald D. Sbarra, $2,650,000; Douglas J. Greenlaw, $1,850,000; Robert E. Hamby, Jr., $1,500,000; Robert Turner, $1,250,000; William deB. Mebane, $1,250,000; Michael C. Burrus, $1,250,000; and Thomas L. Magaha, $650,000. 8 (iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"). (b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's benefi- ciaries, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their beneficiaries. (c) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to dis- ability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families. (d) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or 9 provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its af- filiated companies and for which the Executive may qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforce- ability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). The Company and the Executive agree that this Agreement sets forth the exclusive remedies of the Executive for a termination of employment by the Company or the Executive. 9. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are herein- after collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments do not 10 exceed 110% of the greatest amount (the "Reduced Amount") that could be paid to the Executive such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or such other nationally recognized certified public ac- counting firm as may be designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as ac- countant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized ac- counting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the un- certainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Under- payment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting 11 legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Execu- tive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limita- tions relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be enti- tled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of 12 its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: If to the Company: Multimedia, Inc. Attention: Mr. Robert E. Hamby, Jr. P.O. Box 1688 Greenville, South Carolina 29602 13 or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. (f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between and signed by the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement; provided that this Agreement may not be terminated at the request of a third party who has taken steps reasonably calculated to effect a Change of Control. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof. 14 IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. ____________________________________ [Executive] MULTIMEDIA, INC. By__________________________________ 15 EX-11 4 EXHIBIT 11 MULTIMEDIA, INC. Computation of Primary and Fully Diluted Earnings per Share Three Months Ended Six Months Ended 6/30/95 6/30/94 6/30/95 6/30/94 PRIMARY Net earnings applicable to common and common equivalent shares $21,165,000 19,443,000 $36,011,000 36,777,000 Shares: Weighted average number of common and common equivalent shares outstanding 38,886,000 38,191,000 38,708,000 38,280,000 Net earnings per share $ .54 .51 $ .93 .96 FULLY DILUTED Net earnings applicable to common and common equivalent shares $21,165,000 19,443,000 $36,011,000 36,777,000 Shares: Weighted average number of common and common equivalent shares assuming ending market price 38,889,000 38,192,000 38,860,000 38,277,000 Net earnings per share $ .54 .51 $ .93 .96 EX-15 5 [LETTER HEAD LOGO OF KPMG PEAT MARWICK LLP EXHIBIT 15 APPEARS HERE] The Board of Directors Multimedia, Inc.: We have reviewed the condensed consolidated balance sheet of Multimedia, Inc. and subsidiaries as of June 30, 1995, and the related condensed consolidated statements of earnings for the three-month and six-month periods ended June 30, 1995 and 1994 and the related condensed consolidated statements of cash flows for the six-month periods ended June 30, 1995 and 1994. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data, and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Multimedia, Inc. and subsidiaries as of December 31, 1994, and the related consolidated statements of earnings, stockholders' equity (deficit), and cash flows for the year then ended (not presented herein); and in our report dated February 10, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. [Signature of KPMG Peat Marwick LLP appears here] July 28, 1995 EX-19 6 (A Collage of pictures appears here) EXHIBIT 19 MULTIMEDIA, INC. 1995 SECOND QUARTER REPORT A LETTER TO OUR SHAREHOLDERS Multimedia's net earnings totaled $21.2 million for the quarter that ended on June 30, 1995, and earnings per share were $.54. These results represent increases of 8.9% and 5.9%, respectively, over those reported for the second quarter of last year. Excluding the after-tax loss associated with the launch of NEWSTALK TELEVISION, the Company's news-based interactive cable service, earnings per share were $.62, an increase of 21.6% over 1994's second quarter earnings per share from ongoing operations of $.51. Consolidated operating revenues for the year's second quarter were $170.3 million, an increase of 7.0% compared with the same period in 1994. Operating profit increased 5.5% over the prior-year quarter to $52.6 million. Excluding costs related to NEWSTALK TELEVISION, Multimedia's operating profit was 15.9% higher than the comparable quarter in 1994. Interest expense was $14.4 million, $500,000 less than last year's second quarter. Net earnings for the first six months of 1995 were $36.0 million and earnings per share were $.93, decreases of 2.1% and 3.1%, respectively, from the first six months of 1994. Excluding the impact of costs related to NEWSTALK TELEVISION in 1995 and gains on the sale of three radio stations in 1994, net earnings from ongoing operations for the six month period increased 20.7% to $41.9 million, and earnings per share from ongoing operations increased 18.7% to $1.08 per share. Revenues for the first six months of 1995 were $326.8 million, 6.9% higher than the previous year. Operating profit rose 2.8% to $93.3 million for the period and increased 13.9% if the effects of NEWSTALK TELEVISION are excluded from the comparison. Multimedia Newspaper Company's momentum from a strong first quarter helped produce revenues of $41.3 million for the quarter just ended, a 10.3% gain over the year-earlier period. Second quarter advertising revenue grew 11.1% compared with the same quarter in 1994, fueled by substantial gains in local and classified revenues, and circulation revenue was 6.1% ahead of the second quarter last year. Division revenues for the first six months increased 10.2% over last year to $78.4 million. The Broadcasting division's second quarter revenues of $41.8 million were 11.3% more than the same period last year. Broadcasting revenues increased 12.5% to $75.2 million for the first half of the year. These increases result from a healthy advertising climate and the strong ratings positions of the Company's five television stations. KSDK-TV, Multimedia's St. Louis NBC affiliate, was again ranked the nation's #1 station in the top 30 markets in early news, late news and sign-on to sign-off in the May 1995 sweeps. Multimedia Cablevision generated revenues of $43.5 million for the quarter, an increase of 3.7% over the year-earlier period. For the six months, Cablevision revenues rose 2.7% in comparison with 1994 to $85.4 million. After eliminating the effect of the division's wireless cable operations that were sold in August 1994, Cable revenues were up 7.6% for the quarter and 6.4% for the first six months. On June 30, Multimedia had approximately 450,000 basic subscribers and was ranked the 27th largest cable operator in the country. Multimedia Entertainment's second quarter revenues increased 2.0% to $36.9 million when compared with the same quarter in 1994 and 2.1% to $74.4 million for the first half of the year. Nielsen NSI/SNAP ratings for the May 1995 sweeps show that DONAHUE had a 3.6, off 14.0% compared with last May; SALLY JESSY RAPHAEL produced a 4.2, the same rating as last year; JERRY SPRINGER'S ratings grew 10.0% to a 3.3; and RUSH LIMBAUGH, THE TELEVISION SHOW had a 2.4, an increase of 4.0% compared with the May 1994 sweeps. Excluding costs associated with the launch of NEWSTALK TELEVISION, operating profit for the Entertainment division was down 13.8% for the second quarter and 14.9% for the six months. For the latest quarter, Multimedia Security Service posted revenues of $6.8 million, reflecting a gain of 11.9% compared with last year's second quarter. For the first six months of this year, Security revenues were $13.4 million, up 15.0% over last year. Security had more than 76,000 customers at the end of the quarter, an increase of approximately 9,000 since March 31, 1995. This substantial growth reflects the purchase of more than 3,200 accounts in Oklahoma, as well as ongoing acquisitions and sales generated by the division's ten sales offices. On July 24, Gannett Co., Inc. and Multimedia, Inc. entered into a merger agreement by which Gannett will acquire Multimedia. Under the agreement, Gannett will pay Multimedia shareholders $45.25 for each of the outstanding shares. The purchase price will be adjusted if Multimedia's debt at December 31, 1995, exceeds a specified level. Closing of the transaction is conditioned on, among other things, shareholder approval, receipt of certain regulatory and governmental approvals, and the Company's debt not exceeding a specified level on the second business day prior to the closing of the transaction. Closing of the transaction is expected to occur promptly after Multimedia shareholder and regulatory approvals are obtained. Sincerely, (Signature - DONALD D. SBARRA) Donald D. Sbarra CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER AUGUST 7, 1995
THREE MONTHS HIGHLIGHTS (Unaudited)(In thousands) 1995 1994 REVENUES: Newspapers $ 41,304 37,447 Broadcasting 41,762 37,535 Cable 43,550 41,979 Entertainment 36,903 36,188 Security 6,808 6,082 $ 170,327 159,231 OPERATING PROFITS: Newspapers $ 13,177 11,524 Broadcasting 18,971 13,689 Cable 14,363 12,631 Entertainment 8,150 15,497 Security 1,046 800 Corporate (3,137) (4,290) $ 52,570 49,851
CONSOLIDATED STATEMENTS OF EARNINGS THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994 Three Months Six Months (Unaudited) (In thousands except per-share data) 1995 1994 1995 1994 Operating revenues: Newspapers $ 41,304 37,447 78,355 71,101 Broadcasting 41,762 37,535 75,212 66,855 Cable 43,550 41,979 85,450 83,202 Entertainment 36,903 36,188 74,377 72,855 Security 6,808 6,082 13,380 11,637 Total operating revenues 170,327 159,231 326,774 305,650 Operating costs and expenses: Production 64,321 55,700 125,996 108,879 Selling, general and administrative 39,877 39,036 79,768 76,679 Depreciation 9,899 10,811 20,449 21,631 Amortization 3,660 3,833 7,237 7,692 Total operating costs and expenses 117,757 109,380 233,450 214,881 Operating profit 52,570 49,851 93,324 90,769 Interest expense 14,399 14,902 28,862 29,775 Other income (expense), net (62) (1,100) (105) 2,177 Earnings before income taxes and minority interest 38,109 33,849 64,357 63,171 Income taxes 15,816 14,047 26,709 26,216 Minority interest in subsidiaries'income, net 1,128 359 1,637 178 Net earnings $ 21,165 19,443 36,011 36,777 Per share of common stock: Net earnings $ .54 .51 .93 .96 Cash dividends - - - - Weighted average shares 38,886 38,191 38,708 38,280
MULTIMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1995 AND DECEMBER 31, 1994
June 30, December 31, (Unaudited) (In thousands) 1995 1994 ASSETS Current assets: Cash and cash equivalents $ 13,299 6,202 Net trade accounts receivable 94,789 93,426 Inventories 7,782 4,643 Deferred income tax benefits 9,941 9,581 Program rights 2,762 7,570 Deferred program costs 7,088 10,923 Prepaid expenses and other 7,388 6,795 Total current assets 143,049 139,140 Property , plant and equipment, at cost 607,764 558,749 Less accumulated depreciation 301,246 283,522 Net property , plant and equipment 306,518 275,227 Intangible assets, net 249,026 242,078 Other assets 30,533 27,533 $ 729,126 683,978 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Current installments of long-term debt $ 30,254 30,254 Accounts payable 19,173 24,512 Accrued interest 2,669 2,671 Accrued payroll 6,354 8,386 Accrued expenses 40,804 38,148 Income taxes payable 18,137 10,202 Program rights payable 3,108 7,793 Unearned income 21,365 20,556 Total current liabilities 141,864 142,522 Long-term debt 548,001 542,303 Deferred income taxes 53,574 54,090 Other liabilities 3,247 3,294 Minority interest 20,321 18,684 Stockholders'equity (deficit): Common stock 3,786 3,762 Additional paid-in capital 191,223 188,224 Retained earnings (deficit) (232,890) (268,901) Total stockholders'equity (deficit) (37,881) (76,915) $ 729,126 683,978
MULTIMEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited) (In thousands) 1995 1994 Net cash provided by operating activities $ 72,294 73,766 Additions to property, plant and equipment (47,990) (33,116) Acquisitions of properties (21,180) (8,824) Other 1,307 4,726 Net cash used for investing activities (67,863) (37,214) Addition (reduction) in revolving credit, net 46,754 (23,999) Long-term debt retired (41,056) (12,111) Other (3,032) (4,239) Net cash provided by (used for) financing activities 2,666 (40,349) Increase (decrease) in cash and cash equivalents 7,097 (3,797) Cash and cash equivalents, beginning of year 6,202 11,034 Cash and cash equivalents, end of period $ 13,299 7,237 NOTE: NET CASH PROVIDED BY OPERATING ACTIVITIES IS FURTHER ANALYZED AS FOLLOWS: Operating profit plus depreciation and amortization and amortization of stock options: Newspapers $ 26,792 23,532 Broadcasting 36,540 26,731 Cable 43,374 42,739 Entertainment 15,509 30,570 Security 4,696 4,354 Corporate (5,753) (6,055) 121,158 121,871 Interest expense less amoritzation of debt issue costs (28,318) (29,216) Change in current assets and liabilities 2,407 (2,260) Other (22,953) (16,629) Net cash provided by operating activities $ 72,294 73,766
MULTIMEDIA, INC. AND SUBSIDIARIES MULTIMEDIA, INC. AND SUBSIDIARIES MULTIMEDIA TENNESSEE MULTIMEDIA MULTIMEDIA NEWSPAPER COMPANY Daily: BROADCASTING COMPANY ENTERTAINMENT COMPANY 305 S. MAIN ST. The Leaf-Chronicle 305 S. MAIN ST. 45 ROCKEFELLER PLAZA P.O.BOX 1688 (Clarksville) P.O.BOX 1688 35TH FLOOR GREENVILLE,S.C. 29602 Monthly: GREENVILLE,S.C. 29602 NEW YORK, N.Y.10111 Music City News ALABAMA TELEVISION Donahue / Sally Jessy The Gospel Voice Daily and Sunday: GEORGIA Raphael / Pozner & (Nashville The Montgomery Macon:WMAZ-TV (CBS) Donahue / Jerry Springer / Television Production Advertiser Rush Limbaugh, The TNN Music City News MISSOURI Television Show/ Susan ARKANSAS Country Awards St.Louis: KSDK (NBC) Powter / Dennis Prager Daily: VIRGINIA OHIO The Baxter Bulletin NewsTalk Television Daily and Sunday: Cincinnati: WLWT (NBC) (Mountain Home) The Daily News-Leader Cleveland:WKYC (NBC) MULTIMEDIA SECURITY GEORGIA (Staunton) TENNESSEE SERVICE Daily: WEST VIRGINIA Knoxville:WBIR-TV (NBC) 800 E.WATERMAN The Observer (Moultrie) Daily: WICHITA, KANS. 67202 RADIO NORTH CAROLINA Point Pleasant Register GEORGIA Multimedia serves more Daily and Sunday: Multimedia also publishes Macon:WAYS (FM) than 76,000 security alarm Asheville Citizen-Times 49 non-daily products. WMAZ-AM customers. OHIO MULTIMEDIA Dailies: CABLEVISION COMPANY Gallipolis Daily Tribune 701 E. DOUGLAS AVE. The Daily Sentinel P.O.BOX 3027 (Pomeroy) WICHITA, KANS. 67202 Sunday: Sunday Times-Sentinel Multimedia operates more (Gallipolis) than 150 cable television franchises in Kansas, SOUTH CAROLINA Illinois, Indiana, North Dailies: Carolina and Oklahoma The Greenville News and serves approximately Greenville Piedmont 450,000 basic subscribers. Sunday: The Greenville News
IMPORTANT NOTICE TO SHAREHOLDERS Wachovia Bank of North Carolina, N.A.is the transfer agent and registrar for Multimedia, Inc.All communications regarding shareholdings or transfer of your shares should be directed to:Wachovia Bank of North Carolina, N.A., Corporate Trust Department, P.O.Box 3001, Winston-Salem, North Carolina 27102.1-800-633-4236 Toll-Free Telephone Number for Shareholder Services. (Logo- Multimedia) Multimedia, Inc. BULK RATE P.O. Box 1688 U.S. POSTAGE Greenville, South Carolina 29602 PAID (803) 298-4373 CHARLOTTE, N.C. PERMIT NO. 136 EX-27 7
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM 10-Q AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 6-MOS DEC-31-1995 JUN-30-1995 13299 0 94789 0 7782 143049 607764 (301246) 729126 141864 548001 3786 0 0 (41667) 729126 0 170327 0 117757 (62) 0 14399 38109 15816 21165 0 0 0 21165 .54 .54 Bonds - Represents total long-term debt. Other-SE - Represents total paid-in-capital and retained earnings. Other Expenses - Represents net other (income)/expense.
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