-----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, V+K6SipTJ5wNNe0WXKpBk0FqaimNeX25BFwgMTmD8rIL8GqwvCiCcrWAxZcnlJvI PQRxtUg/VgJNAAXcYrDHQA== 0000904454-98-000117.txt : 19980720 0000904454-98-000117.hdr.sgml : 19980720 ACCESSION NUMBER: 0000904454-98-000117 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980714 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KING WORLD PRODUCTIONS INC CENTRAL INDEX KEY: 0000756764 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE DISTRIBUTION [7822] IRS NUMBER: 132565808 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09244 FILM NUMBER: 98665554 BUSINESS ADDRESS: STREET 1: 1700 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2123154000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended May 31, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 1-9244 _____________________________ KING WORLD PRODUCTIONS, INC. ______________________________________________________ (Exact name of registrant as specified in its charter) Delaware 13-2565808 _______________________________ ____________________________________ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 12400 Wilshire Boulevard Suite 1200 Los Angeles, California 90025 __________________________________________________ (Address of principal executive offices)(Zip Code) Registrant's telephone number, including area code: 310 826-1108 ____________ 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 _____ _____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value, 73,175,007 shares outstanding as of July 8, 1998. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in thousands) May 31, August 31, 1998 1997 ___________ __________ (Unaudited) CURRENT ASSETS: Cash and cash equivalents $224,752 $317,782 Short-term investments 77,476 234,677 Accounts receivable (net of allowance for doubtful accounts of $3,301 and $4,101 at May 31, 1998 and August 31, 1997, respectively) 81,780 75,092 Producer advances and deferred costs 85,698 74,652 Other current assets 1,482 1,857 ________ ________ Total current assets 471,188 704,060 ________ ________ LONG-TERM INVESTMENTS, at cost, which approximates market value 422,560 177,590 ________ ________ FIXED ASSETS, at cost 29,349 21,455 Less - accumulated depreciation and amortization (13,070) (11,706) ________ ________ 16,279 9,749 ________ ________ PRODUCER ADVANCES AND OTHER ASSETS 83,342 10,668 ________ ________ $993,369 $902,067 ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) LIABILITIES AND STOCKHOLDERS' EQUITY (Dollars in thousands) May 31, August 31, 1998 1997 ____________ __________ (Unaudited) CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 16,680 $ 18,014 Payable to producers and others 78,823 69,599 Income taxes payable 28,377 30,372 __________ __________ Total current liabilities 123,880 117,985 __________ __________ STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 5,000,000 shares authorized, none issued -- -- Common stock, $.01 par value; 150,000,000 shares authorized, 88,093,701 shares and 87,664,828 shares issued at May 31, 1998 and August 31, 1997, respectively 881 877 Paid-in capital 133,195 124,130 Retained earnings 1,103,339 1,001,190 Treasury stock, at cost; 15,250,494 and 14,413,594 shares at May 31, 1998 and August 31, 1997, respectively (367,926) (342,115) __________ __________ 869,489 784,082 __________ __________ $ 993,369 $ 902,067 ========== ========== The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended May 31, May 31, 1998 1997 1998 1997 (Dollars in thousands except per share data) REVENUES....................... $167,968 $166,751 $514,810 $506,207 ________ ________ ________ ________ EXPENSES: Producers' fees, programming and other direct operating costs............ 106,510 97,745 324,439 300,315 Selling, general and administrative expenses.... 18,564 22,385 57,720 62,078 ________ ________ ________ ________ 125,074 120,130 382,159 362,393 ________ ________ ________ ________ Income from operations..... 42,894 46,621 132,651 143,814 INTEREST AND DIVIDEND INCOME.............. 7,620 8,269 21,692 22,184 ________ ________ ________ ________ Income before provision for income taxes......... 50,514 54,890 154,343 165,998 PROVISION FOR INCOME TAXES..... 16,312 19,185 52,194 58,649 ________ ________ ________ ________ Net income................. $ 34,202 $ 35,705 $102,149 $107,349 ======== ======== ======== ======== BASIC EARNINGS PER SHARE....... $ .47 $ .48 $ 1.40 $ 1.44 ======== ======== ======== ======== DILUTED EARNINGS PER SHARE..... $ .45 $ .48 $ 1.34 $ 1.43 ======== ======== ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended May 31, ______________________ 1998 1997 _________ _________ (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $102,149 $107,349 Items not affecting cash: Depreciation and amortization 1,364 1,247 Change in assets and liabilities: Accounts receivable (6,688) (5,922) Producer advances and deferred costs (81,296) 55,143 Accounts payable and accrued liabilities (1,334) 2,224 Payable to producers and others 9,224 (6,647) Income taxes payable (1,995) (1,939) Other, net (2,049) (50) ________ ______ Net cash provided by operating activities 19,375 151,405 ________ ________ CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investments (87,769) (119,002) Additions to fixed assets (7,894) (7,584) ________ ________ Net cash used in investing activities (95,663) (126,586) ________ ________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 9,069 6,138 Purchase of treasury stock (25,811) (24,739) Payment of special dividend -- (74,843) ________ _______ Net cash provided by financing activities (16,742) (93,444) ________ ________ NET DECREASE IN CASH AND CASH EQUIVALENTS (93,030) (68,625) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 317,782 344,766 ________ ________ CASH AND CASH EQUIVALENTS AT END OF PERIOD $224,752 $276,141 ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Summary of significant accounting policies Principles of consolidation ___________________________ The accompanying consolidated financial statements include the accounts of King World Productions, Inc. ("King World") and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated. Unless the context suggests otherwise, the "Company", as used herein, means King World and its subsidiaries. All share and per share data presented in these consolidated financial statements have been adjusted to give effect to a two-for-one stock split, effected in the form of a 100% stock dividend, which was paid by the Company on February 17, 1998. The unaudited consolidated financial statements for the nine months and three months ended May 31, 1998 have been prepared in accordance with the instructions to Form 10-Q and include, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for such periods. They do not, however, include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. For further information, reference is made to the consolidated financial statements for the fiscal year ended August 31, 1997 and the footnotes related thereto included in the Company's Annual Report on Form 10-K from which the August 31, 1997 balances presented herein have been derived. The results of operations for the nine months and three months ended May 31, 1998 are not necessarily indicative of the results of operations for the full year. Revenue recognition ___________________ License fees from first-run syndicated television properties are recognized at the commencement of the license period pursuant to noncancelable agreements and as each show is made available to the licensee via satellite transmission. Because transmission to the satellite takes place, on the average, no more than two to three days prior to the broadcast of the programming, revenues are recognized on or about the air date. The Company typically receives a portion of the fees derived from the licensing of syndicated television programming in the form of retained advertising time, which is sold to advertisers by King World Media Sales Inc., a wholly-owned KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Summary of significant accounting policies (continued) subsidiary of the Company. Such revenues are recognized at the same time as the cash portion of the license fees derived from such programming is recognized, in amounts adjusted for expected ratings. License fees for non-first-run syndicated properties are recognized at the gross contract amount (net of discount to present value for license periods greater than one year) at the commencement of the license period and when certain other conditions are satisfied. Principal properties ____________________ The Company's principal properties are licenses to distribute THE OPRAH WINFREY SHOW, WHEEL OF FORTUNE and JEOPARDY!; and INSIDE EDITION, a first-run syndicated series produced and distributed by the Company. THE OPRAH WINFREY SHOW accounted for approximately 42% and 40% of revenues for the nine months ended May 31, 1998 and 1997, respectively; WHEEL OF FORTUNE accounted for approximately 21% and 20% of revenues for each of such periods, respectively; JEOPARDY! accounted for approximately 18% and 17% of revenues for each of such periods, respectively; and INSIDE EDITION accounted for approximately 7% and 8% of revenues for each of such periods, respectively. The Company distributes THE OPRAH WINFREY SHOW pursuant to an agreement with Harpo, Inc., the producer of the series ("Harpo"). Under the terms of the Company's agreement with Harpo, the Company has the exclusive right, and has agreed, to distribute episodes of THE OPRAH WINFREY SHOW produced through the 1999-2000 broadcast season. Pursuant to such agreement, Harpo and Ms. Winfrey have also committed to produce and host the show through the 1999-2000 broadcast season. Even if Harpo elects to continue to produce THE OPRAH WINFREY SHOW after the 1999-2000 broadcast season, it will not be obligated to distribute the series through the Company. The Company's agreements with Columbia TriStar Television, the producer of WHEEL OF FORTUNE and JEOPARDY!, provide that King World will be the exclusive distributor for each such series so long as the Company has obtained sufficient KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Summary of significant accounting policies (continued) broadcast commitments to cover the production and distribution costs of that series and that the Company may not, unless otherwise agreed by Columbia TriStar Television, distribute other game shows for first-run strip syndication so long as the Company is distributing WHEEL OF FORTUNE or JEOPARDY!. The Company has entered into an agreement with Full Moon & High Tide Productions, Inc., a company controlled by Roseanne, to co-produce THE ROSEANNE SHOW, an hour-long strip talk show hosted by Roseanne and distributed by the Company in first-run syndication. The series is scheduled to premiere on September 14, 1998. Under the terms of the agreement, the Company will have the exclusive right to distribute the show through the 2003-2004 broadcast season. As of July 8, 1998, the series had been licensed for the 1998-1999 and 1999-2000 broadcast seasons to television stations covering 90% of the total domestic television viewing households. The Company has also entered into an agreement with Columbia TriStar Television to co-produce a new strip version of the game show HOLLYWOOD SQUARES for distribution by the Company in first-run syndication. This series is also scheduled to premiere on September 14, 1998. As of July 8, 1998, the series had been licensed for the 1998-1999, 1999-2000 and 2000-2001 broadcast seasons to television stations covering 80% of the total domestic television viewing households. Producers' fees, programming and other direct operating costs _____________________________________________________________ Producers' fees, programming and other direct operating costs primarily include the producers' share of both cash license fees from the sale of programming to television stations and revenues derived from the sale of retained advertising time to advertisers with respect to programming distributed by the Company; participation fees payable by the Company to producers and talent; production and distribution costs for first-run syndicated programming; and the direct operating costs of King World Direct, the Company's direct response marketing subsidiary. That portion of any recognized revenue that is to be paid to producers and owners of programming is accrued as the license fees are earned. The share of revenues payable by the Company to such KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Summary of significant accounting policies (continued) producers and others is generally paid as cash license fees and revenues derived from the sale of retained advertising time are received from television stations and advertisers. Stockholders' equity ____________________ In the first quarter of fiscal 1998, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128 requires the presentation of "basic" earnings per share, which excludes any common stock equivalents and their related dilution, and "diluted" earnings per share, which includes the potential dilution from all common stock equivalents including options, warrants and convertible securities. Basic earnings per share has been computed using the weighted average number of shares of Common Stock outstanding of 72,921,000 and 74,228,000 for the three months ended May 31, 1998 and 1997, respectively, and 73,193,000 and 74,569,000 for the nine months ended May 31, 1998 and 1997, respectively. Diluted earnings per share, which includes the dilutive effect of the assumed exercise of vested and unvested stock options outstanding as of the end of each period reported, has been computed using the weighted average number of shares of Common Stock outstanding of 76,512,000 and 74,906,000 for the three months ended May 31, 1998 and 1997, respectively, and 76,458,000 and 75,320,000 for the nine months ended May 31, 1998 and 1997, respectively. Reported earnings per share in prior periods has been restated to conform with the provisions of SFAS 128. On January 19, 1998 the Company's Board of Directors declared a two-for-one stock split, effected in the form of a 100% stock dividend, which was paid on February 17, 1998 to stockholders of record on February 3, 1998. In connection with the stock split, the Company increased the number of authorized shares of Common Stock from 75 million to 150 million, which increase was approved by the stockholders of the Company on January 19, 1998. The par value of the additional 36,738,470 shares of Common Stock issued in connection with the stock split was credited to common stock and a like amount charged to paid-in capital. All share and per share data presented in these consolidated financial statements have been adjusted for all periods presented to reflect the stock split. KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (2)Producer advances On January 2, 1996, the Company paid an advance of $65 million to Harpo against Harpo's minimum participation payments for the 1997-1998 broadcast season which was fully recouped as of May 31, 1998. In addition, in September 1997, the Company made advances to Harpo in the aggregate amount of $130 million against Harpo's minimum participation payments for the 1998-1999 and 1999-2000 broadcast seasons, none of which had been recouped as of May 31, 1998. Based on the license agreements in place for such broadcast seasons, the Company believes that revenues from the series will be sufficient to enable the Company to recoup such advances for such seasons. All of the advances paid to Harpo are refundable to the Company by Harpo and Ms. Winfrey if King World terminates such license agreements with Harpo due to Harpo's failure to deliver episodes of THE OPRAH WINFREY SHOW. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition _____________________________________________ The discussion herein contains certain forward-looking statements covering the Company's objectives, planned or expected activities and anticipated financial performance. These forward-looking statements may generally be identified by words such as "expects", "anticipates", "believes", "plans", "should", "will" "may", "projects" (or variants of these words or phrases), or similar language indicating the expression of an opinion or view concerning the future with respect to the Company's financial position, results of operations, prospects or business. The Company's actual results may differ significantly from the results described in or suggested by such forward-looking statements. RESULTS OF OPERATIONS COMPARISON OF NINE MONTHS AND THREE MONTHS ENDED MAY 31, 1998 AND 1997 Revenues ________ Revenues for the first nine months of fiscal 1998 increased by approximately 2% over revenues for the first nine months of the prior fiscal year, primarily due to increased revenues from the sale of retained advertising time on and increased cash license fees from THE OPRAH WINFREY SHOW, WHEEL OF FORTUNE and JEOPARDY!, offset by lower revenues from ROLONDA (due to the discontinuation of the show) and King World Direct. The decrease in revenues from King World Direct was attributable to significantly lower sales of the WILD AMERICA video series and the Sears Craftsman Robogrip pliers. King World Direct operates in a seasonal business with revenues heavily reliant on the Christmas selling season. Consequently, King World Direct's revenues and earnings have historically been higher in the Company's second fiscal quarter than in the first, third and fourth fiscal quarters. The Company's revenues for the three months ended May 31, 1998 were comparable to revenues for the three months ended May 31, 1997, increasing by less than 1%, due primarily to the same factors discussed above with respect to the nine month period. The principal components of the Company's revenues for the nine months and three months ended May 31, 1998 and 1997 are as follows: Nine Months Ended Three Months Ended May 31, May 31, _________________ __________________ 1998 1997 1998 1997 ____ ____ ____ ____ THE OPRAH WINFREY SHOW 42% 40% 42% 41% WHEEL OF FORTUNE 21% 20% 21% 21% JEOPARDY! 18% 17% 18% 17% INSIDE EDITION 7% 8% 7% 8% AMERICAN JOURNAL (1) 4% 4% 4% 4% ROLANDA (2) -- 1% -- 1% King World Direct 2% 4% 1% 2% (1) The production of AMERICAN JOURNAL will be discontinued after the current broadcast season. (2) The production of ROLONDA was discontinued after the 1996-1997 broadcast season. Producers' fees, programming and other direct operating costs _____________________________________________________________ Under the terms of its agreement with Harpo, following the 1996-1997 season, the profit sharing arrangements between Harpo and the Company previously in effect were terminated and, in the 1997-1998 season and thereafter, the Company instead receives distribution fees based on a percentage of gross revenues derived from the series. These arrangements are less favorable to the Company than those contained in prior agreements between the Company and Harpo. As a result of these changes, the contribution of THE OPRAH WINFREY SHOW to the Company's net profits and cash flow has declined. Producers' fees, programming and other direct operating costs increased by approximately 8% in the first nine months of fiscal 1998 compared to the first nine months of fiscal 1997. The increase was primarily due to the greater portion of revenues payable to Harpo, as discussed above, as well as the increase in revenues generated by THE OPRAH WINFREY SHOW, WHEEL OF FORTUNE and JEOPARDY! (a portion of which is payable to the producer of each such series). These effects were partially offset by the lower operating costs of King World Direct and a decrease in production costs due to the discontinuation of ROLONDA. For the three months ended February 28, 1998, producers' fees, programming and other direct operating costs increased by approximately 9% due primarily to the same factors as those discussed above for the nine month period. Selling, general and administrative expenses. The Company has entered into employment agreements with its Chairman of the Board, its Vice Chairman and Chief Executive Officer and certain other executive officers. Such agreements provide, among other things, for performance-based bonuses, including bonuses payable upon the introduction of new shows and bonuses which vary depending on the Company's net income and Common Stock price during preestablished measurement periods. As a result, the Company's compensation expense will increase if the Company introduces a new series in syndication, if the Company's net income increases or if the Company's Common Stock price exceeds the specified levels during the applicable measurement periods. The Company has recognized the impact of certain of these bonuses in its operating results for the first, second and third quarters of fiscal 1998, which include all amounts payable in accordance with the terms of such employment agreements. Selling, general and administrative expenses for the first nine months of fiscal 1998 were lower by approximately 7%. The decrease was primarily due to a decrease in advertising and promotion costs for THE OPRAH WINFREY SHOW, ROLONDA and AMERICAN JOURNAL, partially offset by increases in the costs of programming under development and greater costs incurred in connection with the sales of programs distributed by the Company. Selling, general and administrative expenses for the three months ended May 31, 1998 decreased by 17% compared to the corresponding period of fiscal 1997, primarily due to the decrease in advertising and promotion costs for THE OPRAH WINFREY SHOW, ROLONDA and AMERICAN JOURNAL. Net income and earnings per share _________________________________ Due to the factors discussed above, the Company's operating income for the nine months and three months ended May 31, 1998 decreased by approximately 8% for each such period compared to the corresponding period of the prior year. Net income decreased by approximately $5.2 million, or 5%, for the nine months ended May 31, 1998 in comparison to the nine months ended May 31, 1997, reflecting the decrease in operating income and slightly lower interest income earned on the Company's cash and investments, partially offset by a lower effective tax rate for the first nine months of fiscal 1998. Basic earnings per share decreased by 3% from $1.44 per share in the first nine months of fiscal 1997 to $1.40 per share in the first nine months of the current fiscal year as a result of the decline in net income offset by a decrease in the number of shares outstanding resulting from the Company's stock repurchase program. Diluted earnings per share decreased by 6% from $1.43 per share in the first nine months of the prior year to $1.34 in the first nine months of fiscal 1998, due primarily to a higher average Common Stock price for the first nine months of fiscal 1998 (which resulted in a greater dilutive effect of outstanding stock options under the method used by the Company to calculate diluted earnings per share). For the three months ended May 31, 1998 as compared to the same period of the prior year, net income decreased by 4% from $35.7 million to $34.2 million; basic earnings per share decreased by 2% from $.48 per share to $.47 per share; and diluted earnings per share decreased by 6% from $.48 per share to $.45 per share, all for the same reasons discussed above for the nine month period. Due to the success of the shows distributed by the Company and in order to mitigate the influence of some of the factors referred to above, the Company has been obtaining multi-year licenses and license renewals from television stations for its principal distribution properties, extending as far into the future as the 2001-2002 broadcast season. In general, these licenses and renewals have been at rates as favorable or more favorable to the Company than the rates applicable to the 1997-1998 broadcast season. All such licenses and renewals are contingent upon the continued production of the series by their respective producers through the broadcast seasons for which the licenses run. The Company believes that the impact of inflation on its operations has not been significant. LIQUIDITY AND CAPITAL RESOURCES The Company requires capital resources to fund development, production and promotion costs of independently produced programming, including, in some instances, advances to producers and talent, to produce its own programs and to acquire distribution rights to new programming. In acquiring distribution rights from independent producers, King World has tried to avoid making significant capital commitments to such producers until it has obtained broadcast commitments from a substantial number of television stations. As a result of this strategy and the success of its existing syndication properties, to date, King World has funded substantially all programming acquisition, development, production and promotion costs and advances from its operations. The Company is currently funding the development and production costs of THE ROSEANNE SHOW and its new version of HOLLYWOOD SQUARES. The distribution of television programming is highly competitive and the Company may be obliged to offer, among other things, guarantees and cash advances to acquire, renew or extend distribution rights. Under the terms of the Company's agreement with Harpo, the Company has the exclusive right, and has agreed, to distribute episodes of THE OPRAH WINFREY SHOW produced through the 1999-2000 broadcast season. Pursuant to such agreement, Harpo and Ms. Winfrey have also committed to produce and host the show through the 1999-2000 broadcast season. After the 1999-2000 broadcast season, King World's right to distribute THE OPRAH WINFREY SHOW, if not renewed, will terminate. For several years, the Company has been, and is now, in the process of developing new television shows for syndication that it hopes will gain widespread audience appeal and generate significant revenues and income for the Company. Three such shows, THE ROSEANNE SHOW and a new version of the game show HOLLYWOOD SQUARES, are scheduled to premiere in the 1998-1999 broadcast season and a variety/talk show hosted by Martin Short for possible premiere in the 1999/2000 broadcast season. Although the Company hopes to renew its distribution arrangements with Harpo for television seasons following the 1999-2000 season, there can be no assurance that (a) Harpo and Ms. Winfrey will continue to produce and host the show beyond that season; (b) even if they do continue to produce and host the show beyond that season, that the Company will be able to obtain the distribution rights for any such future season on terms favorable to the Company; or (c) that the revenues generated by these or any other new shows will be sufficient to offset the loss of revenues and income that would result if such future distribution rights are not so obtained. The failure to renew such distribution rights on favorable terms, coupled with the failure of such new shows to gain widespread audience appeal, could be expected to have a material adverse effect on the Company's results of operations and financial condition after the 1999-2000 broadcast season. On January 2, 1996 the Company paid an advance of $65 million to Harpo against Harpo's minimum participation payments for the 1997-1998 broadcast season which was fully recouped as of May 31, 1998. In addition, in September 1997, the Company made advances to Harpo in the aggregate amount of $130 million against Harpo's minimum participation payments for the 1998-1999 and 1999-2000 broadcast seasons, none of which was recouped as of May 31, 1998. Based on the license agreements in place for such broadcast seasons, the Company believes that revenues from the series will be sufficient to enable the Company to recoup the advances for such seasons. All of the advances paid to Harpo are refundable to the Company by Harpo and Ms. Winfrey if King World terminates its agreement with Harpo due to Harpo's failure to deliver episodes of THE OPRAH WINFREY SHOW. The Company has used its cash reserves to make acquisitions of and investments in broadcast and related properties in the entertainment field, to repurchase shares of its Common Stock and to fund the cost of development, production and promotion of new programming. The Company continues to evaluate opportunities in these areas, and may seek to raise capital in public or private securities markets to finance such activities if it considers it advantageous to do so. A division of the Company, King World Ventures, has primary responsibility for the Company's investment and acquisition program, including analysis of new business opportunities. On April 15, 1997, the Company announced that the Board of Directors had approved a program to repurchase up to 10,000,000 shares of its Common Stock from time to time in the open market and in privately negotiated transactions. Through July 8, 1998, 3,041,700 shares of Common Stock had been repurchased for aggregate consideration of approximately $66.0 million or approximately $21.70 per share (such amounts have been adjusted to reflect the two-for-one stock split). The Company intends to continue to repurchase shares of its Common Stock in the open market and in privately negotiated transactions if and when it deems it advantageous to do so. Purchases under the share repurchase program will be financed out of the Company's available cash and liquid investments. On May 16, 1997, a special dividend distribution of $1.00 per share was paid to stockholders of record on April 25, 1997. The Company used approximately $74.8 million of its cash and liquid investments to pay the special dividend. The Company has no present plan to declare additional cash dividends in the foreseeable future. On January 19, 1998 the Company's Board of Directors declared a two-for-one stock split, effected in the form of a 100% stock dividend, which was paid on February 17, 1998 to stockholders of record on February 3, 1998. In connection with the stock split, the Company increased the number of authorized shares of Common Stock from 75 million to 150 million, which increase was approved by the stockholders of the Company on January 19, 1998. The par value of the additional 36,738,470 shares of Common Stock issued in connection with the stock split was credited to Common Stock and a like amount charged to paid-in capital. All share and per share data presented in these consolidated financial statements have been adjusted for all periods presented to reflect the stock split. PART II - OTHER INFORMATION Item 5. Other Information _________________ On May 8, 1998, the Board of Directors elected Avram Miller as a director, to fill a new position on the Board created pursuant to Section 2.2 of the Company's By-Laws. Mr. Miller has been elected to the class of the Company's directors whose term expires at the 1999 annual meeting of stockholders. Item 6. Exhibits and Reports on Form 8-K ________________________________ (a) Exhibits: ________ 3.(i)Certificate of Amendment dated January 28, 1998 to Restated Certificate of Incorporation of the Company. 3.(ii)Restated By-Laws of the Company (as of May 8, 1998). 27.1 Financial Data Schedule. (b) Reports on Form 8-K ___________________ None. 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. KING WORLD PRODUCTIONS, INC. By: /s/ Steven A. LoCascio ______________________________ Steven A. LoCascio Senior Vice President and Chief Financial Officer and on behalf of the Registrant July 14, 1998 EX-3.(I) 2 EXHIBIT FOR FORM 10-Q SUBMISSION Exhibit 3(i) ____________ CERTIFICATE OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION OF KING WORLD PRODUCTIONS, INC. KING WORLD PRODUCTIONS, INC., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY as follows: FIRST: that at a meeting of the Board of Directors of the Corporation held on October 28, 1997, a resolution was duly passed setting forth a proposed amendment to the Restated Certificate of Incorporation of the Corporation, declaring such amendment to be advisable and directing that such amendment be submitted to the stockholders of the Corporation for their approval at the annual meeting of stockholders to be held on January 19, 1998 (the "Annual Meeting"). The resolution approving the proposed amendment is as follows: RESOLVED, that the Board of Directors hereby proposes, approves and declares the advisability of an amendment to Article IV of the Restated Certificate of Incorporation of the Corporation increasing the number of shares of Common Stock, par value $.01 per share, of the Corporation (the "Common Stock"), that the Corporation is authorized to issue from 75,000,000 to 150,000,000 and the total number of shares which the Corporation is authorized to issue from 80,000,000 to 155,000,000. SECOND: that the amendment to the Restated Certificate of Incorporation effected by this Certificate was duly authorized at the Annual Meeting by the holders of a majority of the outstanding stock of the Corporation entitled to vote thereon, after first having been declared advisable by the Board of Directors of the Corporation, all in accordance with the provisions of Section 242 of the General Corporation Law of the state of Delaware. THIRD: that the capital of the Corporation will not be reduced under, or by reason of, the foregoing amendment to the Restated Certificate of Incorporation of the Corporation. FOURTH: that by reason of the approval of the amendment to the Restated Certificate of Incorporation of the Corpora- tion by the stockholders, the first paragraph of Article IV of the Restated Certificate of Incorporation, as previously amended by an amendment thereto dated as of August 27, 1986, shall henceforth read in its entirety as follows: "The total number of shares of stock which the Corporation shall have authority to issue is one hundred fifty-five million (155,000,000) shares, consisting of five million (5,000,000) shares of Preferred Stock, par value $.01 per share (hereinafter called "Preferred Stock"), and one hundred fifty million (150,000,000) shares of Common Stock, par value $.01 per shares (hereinafter called "Common Stock")." IN WITNESS WHEREOF, KING WORLD PRODUCTIONS, INC. has caused this Certificate of Amendment to the Restated Certificate of Incorporation to be signed by an officer of the Corporation thereunto duly authorized, hereby declaring, certifying and acknowledging under penalties of perjury that the facts herein stated are true and that this Certificate of Amendment is the act and deed of the Corporation this 28th day of January 1998. KING WORLD PRODUCTIONS, INC. By ________________________________ EX-3.(II) 3 EXHIBIT FOR FORM 10-Q SUBMISSION Exhibit 3(ii) _____________ BY-LAWS OF KING WORLD PRODUCTIONS, INC. (Amended and Restated as of June 25, 1997) ARTICLE I Stockholders Section 1.1 ANNUAL MEETINGS. (a) An annual meeting of stockholders shall be held for the election of directors at such date, time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time. At any such annual meeting any business properly brought before the meeting may be transacted. (b) To be properly brought before an annual meeting, business must be (i) specified in the notice of the meeting (or any supplement thereto) given by or at the direction of the chairman of the meeting or the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the chairman of the meeting or the Board of Directors or (iii) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given written notice thereof, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation, not more than 120 days or less than 90 days in advance of the anniversary date of the immediately preceding annual meeting. Any such notice shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting and in the event that such business includes a proposal to amend either the Certificate of incorporation or By-laws of the Corporation, the language of the proposed amendment, (ii) the name and address of the stockholder proposing such business, (iii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business, (iv) any material interest of the stockholder in such business and (v) if the stockholder intends to solicit proxies in support of such stockholder's proposal, a representation to that effect. No business shall be conducted at an annual meeting of stockholders except in accordance with this Section 1.1(b), and chairman of the meeting may refuse to permit any business to be brought before an annual meeting without compliance with the foregoing procedures or if the stockholder solicits proxies in support of such stockholder's proposal without such stockholder having made the representation required by clause (v) of the preceding sentence." Section 1.2 SPECIAL MEETINGS. Except as otherwise required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, special meetings of the stockholders for any purpose or purposes may be called only by the Chairman of the Board, the President, or a majority of the entire Board of Directors. Only such business as is specified in the notice of any special meeting of the stockholders shall come before such meeting. Section 1.3 NOTICE OF MEETINGS. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the records of the Corporation. Section 1.4 ADJOURNMENTS. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.5 QUORUM. At each meeting of stockholders, except where otherwise provided by law or the certificate of incorporation or these By-laws, the holders of a majority of the outstanding shares of each class of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. For purposes of the foregoing, two or more classes or series of stock shall be considered a single class if the holders thereof are entitled to vote together as a single class at the meeting. In the absence of a quorum the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided by Section 1.4 of these By-laws until a quorum shall attend. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. Section 1.6 ORGANIZATION. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 1.7 VOTING; PROXIES. Unless otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Unless required by law or determined by the chairman of the meeting to be advisable, the vote on any matter, including the election of directors, need not be by written ballot. In the case of a vote by written ballot, each ballot shall be signed by the stockholder voting, or by such stockholder's proxy, and shall state the number of shares voted. Either the Board of Directors or, in the absence of a designation of inspectors by the Board, the chairman of any meeting of stockholders may, in its or such person's discretion, appoint two or more inspectors to act at any meeting of stockholders. Such inspectors shall perform such duties as shall be specified by the Board or the chairman of the meeting. Inspectors need not be stockholders. No director or nominee for the office of director shall be appointed such inspector. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. With respect to other matters, unless otherwise provided by law or by the Certificate of Incorporation or these By-laws, the affirmative vote of the holders of a majority of the shares of all classes of stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Where a separate vote by class is required, the affirmative vote of the holders of a majority of the shares of each class present in person or represented by proxy at the meeting shall be the act of such class, except as otherwise provided by law or by the Certificate of Incorporation or these By-laws. Section 1.8 ACTION BY WRITTEN CONSENT. (a) Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. (b) Consents to corporate action shall be valid for a maximum of 60 days after the date of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law. Consents may be revoked by written notice (i) to the Corporation, (ii) to the stockholder or stockholder soliciting consents or soliciting revocations in opposition to action by consent (the "Soliciting Stockholders"), or (iii) to a proxy solicitor or other agent designated by the Corporation or the Soliciting Stockholders. (c) Within ten business days after receipt of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law or the determination by the Board of Directors of the Corporation that the Corporation should seek corporate action by written consent, as the case may be, the Secretary of the Corporation shall engage nationally recognized independent inspectors of elections for the purpose of performing a ministerial review of the validity of the consents and revocations. The cost of retaining inspectors of elections shall be borne by the Corporation. (d) Following appointment of the inspectors, consents and revocations shall be delivered to the inspectors upon receipt by the Corporation, the Soliciting Stockholder or their proxy solicitors or other designated agents. As soon as practicable following the earlier of (i) the receipt by the inspectors, a copy of which shall be delivered to the Corporation, of any written demand by the Soliciting Stockholders, or (ii) 60 days after the date of the earliest dated consent delivered to the Corporation in the manner provided in Section 228(c) of the Delaware General Corporation Law, the inspectors shall issue a preliminary report to the Corporation and the Soliciting Stockholders stating the number of valid and unrevoked consents and whether, based on their preliminary count, the requisite number of valid and unrevoked consents has been obtained to authorize or take the action specified in the consents. (e) Unless the Corporation and the Soliciting Stockholders shall agree to a shorter or longer period, the Corporation and the Soliciting Stockholders shall have 48 hours to review the consents and revocations and to advise the inspectors and the opposing party in writing as to whether they intend to challenge the preliminary report of the inspectors. If no written notice of an intention to challenge the preliminary report is received within 48 hours after the inspectors' issuance of the preliminary report, the inspectors shall issue to the Corporation and the Soliciting Stockholders their final report containing the information from the inspectors' determination with respect to whether the requisite number of valid and unrevoked consents was obtained to authorize and take the action specified in the consents. If the Corporation or the Soliciting Stockholders issue written notice of an intention to challenge the inspectors' preliminary report within 48 hours after the issuance of that report, a challenge session shall be scheduled by the inspectors as promptly as practicable. Following completion of the challenge session, the inspectors shall as promptly as practicable issue their final report to the Soliciting Stockholders and the Corporation, which report shall contain the information included in the preliminary report, plus any change in the vote total as a result of the challenge and a certification of whether the requisite number of valid and unrevoked consents was obtained to authorize or take the action specified in the consents. Section 1.9 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allot- ment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed, (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and (2) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. Notwithstanding any inconsistent provision which may be contained in these By-Laws, in order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. The Board of Directors shall thereafter promptly, but in all events within ten days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten days of the date upon which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the Corporation having custody of the book in which proceedings of stockholders' meetings are recorded, to the attention of the Secretary of the Corporation. Delivery shall be by hand or by certified a or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action." Section 1.10 LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. ARTICLE II Board of Directors Section 2.1 GENERAL POWERS. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by law or by the certificate of incorporation of the corporation directed or required to be exercised or done by the stockholders. Section 2.2 NUMBER, QUALIFICATION AND ELECTION. Except as otherwise fixed by or pursuant to the provisions of Article IV of the Certificate of Incorporation of the Corporation relating to the rights of the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, the number of the directors of the Corporation shall be eight (8), but, by vote of a majority of the entire Board of Directors, the number thereof may be increased without limit, or decreased to not less than three (3), by amendment to this Section 2.2. The directors, other than those who may be elected by the holders of shares of any class or series of stock having a preference over the Common Stock of the Corporation as to dividends or upon liquidation pursuant to the terms of Article IV of the Certificate of Incorporation or any resolution or resolutions providing for the issuance of such stock adopted by the Board, shall be classified, with respect to the time for which they severally hold office, into three classes as follows: one class of two (2) directors shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1986, another class of two (2) directors shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1987 and another class of three (3) directors shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1988, with each class to hold office until its successors are elected and qualified. At each annual meeting of the stockholders of the Corporation, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. Each director shall be a least 21 years of age. Directors need not be stockholders of the Corporation. Subject to the rights of the holders of any class or series of stock having a preference over the Common Stock of the Corporation as to dividends or upon liquidation, at each annual meeting of the stockholders there shall be elected the directors of the class the term of office of which shall then expire. Section 2.3. NOTIFICATION OF NOMINATIONS. Subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors. Any stockholder entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if written notice of such stockholders' intent to make such nomination is given, either by personal delivery or by United States mail, Postage prepaid, to the Secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of stockholders, not more than 120 days or less than 90 days in advance of the anniversary date of the immediately preceding annual meeting, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business an the seventh day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth (a) the name and address of the stockholder who intends to make the nomination and of the person or, persons to be nominated, (b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (d) such other information regarding each nominee proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee be nominated, or intended to be nominated, by the Board of Directors; (e) the consent of each nominee to serve as a director of the corporation if so elected and (f) if the stockholder intends to solicit proxies in support of such stockholder's nominee(s), a representation to that effect. The chairman of the meeting may refuse to acknowledge the nomination of any person which was not made in accordance with the foregoing procedure or if the stockholder solicits proxies in support of such stockholder's nominee(s) without such stockholder having made the representation required by clause (f) of the preceding sentence. Section 2.4. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given. Section 2.5. SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, if any, by the Vice Chairman of the Board, if any, by the President or by a majority of the members of the Board. Reasonable notice thereof shall be given by the person or persons calling the meeting. Section 2.6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE PERMITTED. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this By-law shall constitute presence in person at such meeting. Section 2.7. QUORUM; VOTE REQUIRED FOR ACTION. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, at any meeting of the Board of Directors a majority of the entire Board shall constitute a quorum for the transaction of business and, except as so provided, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall attend. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting originally called. Section 2.8. ORGANIZATION. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in their absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.9. ACTION BY DIRECTORS WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 2.10. RESIGNATIONS. Any director of the Company may at any time resign by giving written notice to the Board of Directors, the Chairman of the Board, the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 2.11. VACANCIES. Subject to the rights of the holders of any class or series of stock having a preference over the Common Stock of the Corporation as to dividends or upon liquidation, any vacancies on the Board of Directors resulting from death, resignation, removal or other cause shall only be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, and newly created directorships resulting from any increase in the number of directors shall be filled by the Board, or if not so filled, by the stockholders at the next annual meeting thereof or at a special meeting called for that purpose in accordance with 1.2 of these By-laws. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been elected and qualified. Section 2.12. COMPENSATION OF DIRECTORS. The Board of Directors shall have the authority to fix the compensation of directors. ARTICLE III. Committees Section 3.1. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any Committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of dissolution, removing or indemnifying directors or amending these By-laws; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. The Board shall have power at any time to change the membership of any committee, to fill all vacancies in it and to discharge it, either with or without cause. Section 3.2. COMMITTEE RULES. Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these By-laws. ARTICLE IV. Officers Section 4.1. OFFICERS; ELECTION. As soon as practicable after the annual meeting of stockholders in each year, the Board of Directors shall elect a President and a Secretary, and it may, if it so determines, elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board may also elect one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person. Section 4.2. TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES. Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of stockholders next succeeding his or her election and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board at any regular or special meeting. Section 4.3. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he or she shall be present and shall have and may exercise such powers as may, from time to time, be assigned to him or her by the Board and as may be provided by law. Section 4.4. VICE CHAIRMAN OF THE BOARD. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he or she shall be present and shall have and may exercise such powers as may, from time to time, be assigned to him or her by the Board and as may be provided by law. Section 4.5. PRESIDENT. In the absence of the Chairman of the Board and Vice Chairman of the Board, the President shall preside at all meetings of the Board of Directors and of the stockholders at which he or she shall be present. The President shall be the chief executive officer and shall have general charge and supervision of the business of the Corporation and, in general, shall perform all duties incident to the office of president of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or as may be provided by law. Section 4.6. VICE PRESIDENTS. The Vice President or Vice Presidents, at the request or in the absence of the President or during the President's inability to act, shall perform the duties of the President, and when so acting shall have the powers of the President. If there be more than one Vice President, the Board of Directors may determine which one or more of the Vice Presidents shall perform any of such duties; or if such determination is not made by the Board, the President may make such determination; otherwise any of the Vice Presidents may perform any of such duties. The Vice President or Vice Presidents shall have such other powers and shall perform such other duties as may, from time to time, be assigned to him or her or them by the Board or the President or as may be provided by law. Section 4.7. SECRETARY. The Secretary shall have the duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose, shall see that all notices are duly given in accordance with the provisions of these By-laws or as required by law, shall be custodian of the records of the Corporation, may affix the corporate seal to any document the execution of which, on behalf of the Corporation, is duly authorized, and when so affixed may attest the same, and, in general, shall perform all duties incident to the office of secretary of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or the President or as may be provided by law. Section 4.8. TREASURER. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation and shall deposit or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by or under authority of the Board of Directors. If required by the Board, the Treasurer shall give a bond for the faithful discharge of his or her duties, with such surety or sureties as the Board may determine. The Treasurer shall keep or cause to be kept full and accurate records of all receipts and disbursements in books of the Corporation, shall render to the President and to the Board, whenever requested, an account of the financial condition of the Corporation, and, in general, shall perform all the duties incident to the office of treasurer of a corporation and such other duties as may, from time to time, be assigned to him or her by the Board or the President or as may be provided by law. Section 4.9. OTHER OFFICERS. The other officers, if any, of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in a resolution of the Board of Directors which is not inconsistent with these By-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties. ARTICLE V. Stock Section 5.1. CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by such holder in the Corporation. Any of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. Section 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond in such sum and with such surety or sureties as the Corporation may direct sufficient to indemnify the Corporation and its transfer agents or registrars against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 5.3. TRANSFER OF SHARES. Transfers of shares of stock of each class of the Corporation shall be made only on the books of the Corporation by the holder thereof, or by such holder's attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary of the Corporation or a transfer agent for such stock, if any, and on surrender of the certificate or certificates for such shares properly endorsed or accompanied by a duly executed stock transfer power and the payment of all taxes thereon. The person in whose name shares stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation; provided, however, that whenever any transfer of shares shall be made for collateral security and not absolutely, and written notice thereof shall be given to the Secretary or to such transfer agent, such fact shall be stated in the entry of the transfer. No transfer of shares shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. ARTICLE VI. Miscellaneous Section 6.1. FISCAL YEAR. The fiscal year of the Corporation shall be determined by the Board of Directors. Section 6.2. SEAL. The Corporation may have a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. Section 6.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES. Whenever notice is required to be given by law or under any provision of the certificate of incorporation or these By-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation or these By-laws. Section 6.4. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of the Corporation or serves or served at the request of the Corporation any other enterprise as a director, officer or employee. For purposes of this By-law, the term "Corporation" shall include any predecessor of the Corporation and any constituent corporation (including any constituent of a constituent) absorbed by the Corporation in a consolidation or merger; the term "other enterprise" shall include any corporation, partnership, joint venture, trust or employee benefit plan; service "at the request of the Corporation" shall include service as a director, officer or employee of the Corporation which imposes duties on, or involves services by, such director, officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation. Section 6.5. INTERESTED DIRECTORS; QUORUM. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction. Section 6.6. FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 6.7. AMENDMENT OF BY-LAWS. These By-laws may be amended or repealed, and new By-laws adopted, by the Board of Directors at any meeting thereof, provided that such proposed action in respect thereof shall be stated in the notice of such meeting. The stockholders entitled to vote shall have the power to adopt additional By-laws and may amend or repeal any By-law, whether or not adopted by them, only to the extent and in the manner provided in the Certificate of Incorporation. EX-27.1 4 EXHIBIT FOR FORM 10-Q SUBMISSION WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. EXHIBIT 27.1 FINANCIAL DATA SCHEDULE COMMERCIAL AND INDUSTRIAL COMPANIES ARTICLE 5 OF REGULATION S-X This schedule contains summary financial information extracted from the Consolidated Statements of Operations and Consolidated Balance Sheets of King World Productions, Inc. and its Subsidiaries and is quali- fied in its entirety by reference to such financial statements. TABLE MULTIPLIER 1,000 CURRENCY U.S. DOLLARS PERIOD-TYPE 1st QUARTER FISCAL-YEAR-END 08/31/98 PERIOD-START 03/01/98 PERIOD-END 05/31/98 EXCHANGE-RATE 1 CASH $224,752 SECURITIES $77,476 RECEIVABLES $78,479 ALLOWANCES $3,301 INVENTORY $0 CURRENT ASSETS $471,188 PP&E $29,349 DEPRECIATION $13,070 TOTAL-ASSETS $993,369 CURRENT-LIABILITIES $123,880 BONDS $0 COMMON $881 PREFERRED-MANDATORY $0 PREFERRED $0 OTHER-SE $1,236,534 TOTAL-LIABILITY-AND-EQUITY $993,369 SALES $0 TOTAL-REVENUES $167,968 CGS $0 TOTAL-COSTS $106,510 OTHER-EXPENSES $18,564 LOSS-PROVISION $0 INTEREST-EXPENSE $0 INCOME-PRETAX $50,514 INCOME-TAX $16,312 INCOME-CONTINUING $34,202 DISCONTINUED $0 EXTRAORDINARY $0 CHANGES $0 NET-INCOME $34,202 EPS-PRIMARY $0.47 EPS-DILUTED $0.45 -----END PRIVACY-ENHANCED MESSAGE-----