AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 3, 2002
REGISTRATION NO. 333-72838
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PRIMEDIA INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 2721 13-3647573
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification Number)
incorporation or organization) Classification Code Number)
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745 FIFTH AVENUE
NEW YORK, NEW YORK 10151
(212) 745-0100
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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BEVERLY C. CHELL, ESQ.
PRIMEDIA INC.
745 FIFTH AVENUE
NEW YORK, NEW YORK 10151
(212) 745-0100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
MARNI J. LERNER, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE(2)
PRIMEDIA Inc. Common Stock................ 6,243,944 shares $4.08 per share $27,127.92 $6.48
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended,
and based on the average of the high and low prices of the common stock on
the New York Stock Exchange on January 2, 2002.
(2) $60.44 was previously paid to the Securities and Exchange Commission, or the
Commission, on November 21, 2001, in connection with the filing of Amendment
No. 1 to the Registration Statement registering 122,095 shares of common
stock at a price of $1.98 per share, based on the average of the high and
low prices of the common stock on November 16, 2001 and $3,103.47 was
previously paid to the Commission on November 6, 2001, in connection with
the initial filing of the Registration Statement registering 6,115,200
shares of common stock at a price of $2.03 per share, based on the average
of the high and low prices of the common stock on October 30, 2001.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED JANUARY 3, 2002
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
6,243,944 SHARES
PRIMEDIA INC.
COMMON STOCK
THE SHARES OF OUR COMMON STOCK OFFERED BY THE PROSPECTUS ARE BEING OFFERED
ON BEHALF OF SELLING STOCKHOLDERS. OUR COMMON STOCK TRADES ON THE NEW YORK STOCK
EXCHANGE UNDER THE SYMBOL "PRM." THE CLOSING SALE PRICE OF OUR COMMON STOCK ON
THE NEW YORK STOCK EXCHANGE ON JANUARY 2, 2002 WAS $4.01.
THE SELLING STOCKHOLDERS MAY OFFER FROM TIME TO TIME AN AGGREGATE OF UP TO
6,243,944 SHARES OF OUR COMMON STOCK. WE WILL NOT RECEIVE ANY PROCEEDS FROM THE
SALE OF OUR COMMON STOCK. INVESTING IN OUR COMMON STOCK INVOLVES RISKS. YOU
SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE FOUR OF THIS
PROSPECTUS BEFORE INVESTING IN OUR COMMON STOCK.
THE SELLING STOCKHOLDERS MAY OFFER THEIR SHARES THROUGH PUBLIC OR PRIVATE
TRANSACTIONS, ON OR OFF THE NEW YORK STOCK EXCHANGE, AT PREVAILING MARKET PRICES
OR AT PRIVATELY NEGOTIATED PRICES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2002.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
PROSPECTUS.
TABLE OF CONTENTS
PAGE
--------
Where You Can Find More Information......................... 1
Incorporation of Certain Documents by Reference............. 1
Our Company................................................. 2
Risk Factors................................................ 4
Forward-Looking Statements.................................. 10
Use of Proceeds............................................. 11
Description of Common Stock................................. 11
Price Range of Our Common Stock............................. 13
Plan of Distribution........................................ 13
Legal Matters............................................... 14
Experts..................................................... 14
i
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and file reports, proxy and information statements and
other information with the Securities and Exchange Commission which we refer to
as the "Commission" or the "SEC". Those reports, proxy and information
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington D.C. 20549 and at the Commission's Regional
Offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of those materials also can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington D.C.
20549, at prescribed rates. The Commission also maintains a web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
In addition, reports, proxy statements and other information concerning us may
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate by reference into this prospectus the following documents
filed with the Commission:
(a) our annual report on Form 10-K for the fiscal year ended December 31,
2000;
(b) our quarterly reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;
(c) our current reports on Form 8-K or Form 8-K/A dated March 1, 2001,
July 6, 2001, July 26, 2001, August 1, 2001, August 16, 2001, August 24,
2001, August 31, 2001, October 12, 2001 and November 7, 2001;
(d) the description of our common stock contained in our Registration
Statement on Form 8-A dated October 10, 1995; and
(e) About.com, Inc.'s consolidated financial statements and accompanying
notes as of and for the year ended December 31, 2000 and our unaudited
pro forma consolidated financial statements and accompanying notes giving
effect to the About.com, Inc. merger included in our current report on
Form 8-K/A dated April 26, 2001.
All documents that we file with the Commission under Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus will be deemed
to be incorporated by reference in this prospectus and to be a part of this
prospectus from the date of the filing of those documents.
You may obtain copies of those documents from us, free of cost, by
contacting us at the following address or telephone number:
Corporate Secretary
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
(212) 745-0100
Information that we file later with the Commission that is incorporated by
reference in this prospectus will automatically update and supersede information
contained in this prospectus. You will be deemed to have notice of all
information incorporated by reference in this prospectus as if that information
was included in this prospectus.
1
OUR COMPANY
Unless the context otherwise indicates, the term "we" or "PRIMEDIA" means
the combined business operations of PRIMEDIA Inc. and its subsidiaries. You
should carefully consider the risks included under the caption "Risk Factors."
Market share data contained in this prospectus are based upon a product's share
of advertising or circulation, depending on the product, as compared to its
direct competition.
PRIMEDIA is the new tradition in media, combining traditional and new media.
We are a targeted media company with leading positions in consumer and
business-to-business markets. Our properties, which are delivered to over
200 million users, utilize the full media arsenal to deliver content via print
(magazines and directories), video (digital broadband, satellite and cable),
live events (trade and consumer shows) and the Internet. As of December 31,
2000, approximately 78% of our traditional media products ranked first or second
in advertising pages, advertising revenue, circulation or other competitive
metrics in their respective markets. We believe that in 2000 we sold the most
advertising pages of any magazine publisher in the United States and ranked
third in terms of revenue derived from sales of magazine copies at the newsstand
in the United States. Our Internet businesses rank sixth in unique visitors in
the United States as measured by MEDIA METRIX for September 2001.
For the year ended December 31, 2000, we had net sales of approximately
$1.7 billion and EBITDA of approximately $256.7 million. For the nine months
ended September 30, 2001, we had net sales of approximately $1.3 billion and
EBITDA of approximately $113.8 million. For the year ended December 31, 2000,
our net loss was approximately $346.8 million, and for the nine months ended
September 30, 2001, our net loss was approximately $503.4 million.
OUR GROWTH STRATEGY
We believe that as technology has created a flood of information, it has
shifted the role of the media from making information broadly available across
all audiences to sifting out and qualifying information for the benefit of
specific audiences. As a result, we have organized our business into two
operating segments: consumer and business-to-business. Our consumer segment is
the largest publisher of specialty magazines and apartment rental guides and one
of the largest producers and distributors of special interest videos in the
United States. Through the About.com, Inc. merger, we acquired a network of
highly-targeted, topic-specific web sites and the leading producer of original
content on the Internet. Our business-to-business segment is a leading publisher
of business-to-business magazines, books, directories and databases, addressing
the specialized information needs of professionals.
Our growth strategy is to deliver information over multiple traditional and
new media platforms to highly specific niches in both the consumer and
business-to-business markets, thereby attracting both dedicated users of
information and the advertisers determined to reach them. We expect to derive
our revenue principally from lead generation advertising as well as from
subscriptions to our products and brand awareness advertising. Lead generation
advertising is advertising focused on triggering a purchase decision by the
reader or viewer. We believe lead generation advertising is less susceptible to
general economic conditions than general brand awareness advertising.
RECENT DEVELOPMENTS
On November 28, 2001, as part of our plan to sell non-core assets and reduce
debt, we sold Bacon's Information Inc. to Observer AB for $90 million. We
recognized a gain on sale of approximately $50 million.
2
The following chart summarizes the businesses of our two segments:
[LOGO]
We were incorporated on November 22, 1991 in the State of Delaware. Our
principal executive offices are located at 745 Fifth Avenue, New York, New York,
10151; telephone number (212) 745-0100. Our common stock is publicly traded on
the New York Stock Exchange under the symbol "PRM."
3
RISK FACTORS
RISK FACTORS RELATING TO OUR BUSINESS
WE MAY NOT BE ABLE TO ACHIEVE THE EXPECTED RESULTS FROM ACQUISITIONS AND
INVESTMENTS.
We may not be able to continue to integrate the business of About.com, Inc.
or EMAP, Inc., which we refer to as EMAP USA, into our existing businesses
without encountering difficulties. In addition, we may make acquisitions and
investments in the future. The integration of About.com, Inc., EMAP USA and
other businesses we may acquire is and will be a complex, time consuming and
expensive process involving a number of issues, including:
- difficulty integrating acquired technologies, operations and personnel
with our existing businesses;
- diversion of management attention in connection with both negotiating the
acquisitions and integrating the assets;
- strain on managerial and operational resources as management tries to
oversee larger operations;
- exposure to unforeseen liabilities of acquired companies;
- potential issuance of securities in connection with a future acquisition
with rights that are superior to the rights of holders of our currently
outstanding securities; and
- the requirement to record potentially significant additional future
operating costs for the amortization of certain intangible assets.
Our future operating results will depend to a significant degree on our
ability to address these issues. In addition, we have invested and may invest in
the future in some early-stage companies with limited operating histories and
limited or no revenues. We may not be able to successfully develop these young
companies and, in some cases, we may not own enough equity in them to control
their development.
GENERAL ECONOMIC TRENDS AND THE EVENTS OF SEPTEMBER 11, 2001 MAY REDUCE OUR
ADVERTISING REVENUES AND COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS.
Our advertising revenues are subject to the risks arising from adverse
changes in domestic and global economic conditions and fluctuations in consumer
confidence and spending, which may decline as a result of numerous factors
outside of our control, like terrorist attacks and acts of war. A decline in the
level of business activity of our advertisers has had and could continue to have
an adverse effect on our revenues and profit margins. Because of the recent
economic slowdown in the United States, many advertisers, particularly
business-to-business advertisers, are reducing advertising expenditures. If the
current economic slowdown continues or worsens or terrorists attacks continue or
worsen, our results of operations may be adversely affected.
WE HAVE SUBSTANTIAL INDEBTEDNESS AND OTHER MONETARY OBLIGATIONS, WHICH
CONSUME A SUBSTANTIAL PORTION OF THE CASH FLOW THAT WE GENERATE.
We have substantial indebtedness and expect to incur additional indebtedness
under our bank credit facilities or otherwise. As of September 30, 2001, we had
approximately $2,034.7 million of outstanding indebtedness and $562.5 million of
outstanding preferred stock. In addition, as a result of our acquisition of EMAP
USA, we drew upon our revolving credit facility in an amount of $265 million. A
substantial portion of our cash flow is dedicated to the payment of principal
and interest on indebtedness and to the payment of dividends on our preferred
stock, which reduces funds available for capital expenditures and business
opportunities and may limit our ability to respond to adverse developments in
our business or in the economy. For the year ended December 31, 2000, we paid
$117.7 million of principal and $141.9 million of interest, and for the nine
months ended September 30, 2001, we paid $82.4 million of interest. In addition,
for the year ended December 31,
4
2000, we made cash dividend payments of $53.1 million on our outstanding
preferred stock, and for the nine months ended September 30, 2001, we made cash
dividend payments of $39.8 million on our outstanding preferred stock. As a
result of our recent transactions in connection with the financing of our
acquisition of EMAP USA, we expect our annual interest payments to increase by
approximately $11 million.
As of September 30, 2001, borrowings under our bank credit facilities were
approximately $864 million. In addition, to partially finance our acquisition of
EMAP USA, we borrowed an additional $265 million under our revolving credit
facility. These borrowings bear interest at floating rates based on the federal
funds rate, the prime lending rate or LIBOR. Increases in interest rates on
indebtedness under our bank credit facilities would increase our interest
payment obligations and could have an adverse effect on us. The weighted average
interest rate on our bank credit facilities was 5.63% at September 30, 2001.
Our ability to make payments with respect to our indebtedness will depend on
our future operating performance, which will be affected by prevailing economic
conditions and financial, business, competitive and other factors. We will not
be able to control many of these factors, such as the economic conditions in the
markets in which we operate and initiatives taken by our competitors.
Based on the outstanding principal amount of our debt under our bank credit
facilities and outstanding senior notes as of September 30, 2001, we will be
required to repay $151.1 million of indebtedness on or prior to December 31,
2004, and we will have to repay substantial additional indebtedness and redeem a
significant amount of preferred stock thereafter. We may not be able to repay
that debt or redeem the preferred stock from available cash sources and may not
be able to refinance that debt or preferred stock on commercially reasonable
terms, if at all. If we are unable to repay, redeem or refinance these amounts
on or prior to their due dates, we may need to sell assets or take other actions
that could be detrimental to the holders of our common stock. In that event, we
may not be able to generate sufficient cash from asset sales to satisfy our cash
needs. If we are unable to repay, redeem or refinance our indebtedness and
preferred stock on or prior to their due dates, we will be in default and all of
our indebtedness could be accelerated.
OUR DEBT INSTRUMENTS LIMIT OUR BUSINESS FLEXIBILITY BY IMPOSING OPERATING AND
FINANCIAL RESTRICTIONS ON OUR OPERATIONS.
The agreements governing our indebtedness impose specific operating and
financial restrictions on us. These restrictions prohibit or limit us from,
among other things:
- changing the nature of our business;
- incurring additional indebtedness;
- creating liens on our assets;
- selling assets;
- engaging in mergers, consolidations or transactions with our affiliates;
- making investments in or loans to specific subsidiaries;
- making guarantees or specific restricted payments; and
- declaring or making dividend payments on our common or preferred stock.
As of September 30, 2001, under our most restrictive debt covenants, we must
maintain a minimum interest coverage ratio of 1.80 to 1 and a minimum fixed
charge coverage ratio of 1.05 to 1. Our maximum allowable debt leverage ratio is
6.0 to 1. The minimum interest coverage ratio and maximum debt coverage ratio we
must maintain become more restrictive over time. The maximum leverage ratio
decreases to 5.75 to 1, 5.5 to 1, 5.0 to 1 and 4.5 to 1, respectively, on
July 1, 2003, January 1, 2004, January 1, 2005 and January 1, 2006. The minimum
interest coverage ratio increases to 2.0 to 1, 2.25 to 1 and 2.5 to 1,
respectively, on July 1, 2003, January 1, 2004 and January 1, 2005. For
5
the twelve months ended September 30, 2001, our interest coverage ratio, fixed
charge coverage ratio and debt leverage ratio were 2.2 to 1, 1.3 to 1 and 5.4 to
1, respectively. These restrictions, in combination with our leveraged nature,
could limit our ability to effect future acquisitions or financings or otherwise
restrict corporate activities.
Our failure to comply with the terms and covenants in our indebtedness could
lead to a default under the terms of those documents, which would entitle the
lenders to accelerate the indebtedness and declare all amounts owed due and
payable. Moreover, the instruments governing almost all of our indebtedness,
including the notes, contain cross-default provisions so that a default under
any of our indebtedness may result in a default under our other indebtedness. If
a cross-default occurs, the maturity of almost all of our indebtedness could be
accelerated and become immediately due and payable. We may not be able to comply
with these restrictions in the future, or in order to comply with these
restrictions we may have to forgo opportunities that might otherwise be
beneficial to us.
OUR EARNINGS HAVE BEEN INSUFFICIENT TO PAY OUR FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS.
Our earnings were inadequate to cover fixed charges and fixed charges plus
preferred stock dividends and related accretion by $295.5 million and
$348.6 million, respectively, for the year ended December 31, 2000 and by
$470.2 million and $512.5 million, respectively, for the nine months ended
September 30, 2001. Earnings consist of loss before income taxes, fixed charges
and equity in losses of investees, and fixed charges consist of interest on all
indebtedness, amortization of deferred financing costs and that portion of
rental expenses that management believes to be representative of interest.
Although our earnings were affected by substantial non-cash and non-recurring
charges (including depreciation and amortization of property and equipment,
other intangible assets, excess of purchase price over net assets acquired and
deferred financing costs, write-off of deferred financing costs, gain on the
sales of businesses and other, net, provision for severance, closures and
integration costs, non-cash compensation and non-recurring charges, provision
for the impairment of investments and non-cash interest expense on an
acquisition obligation and other current liabilities of approximately
$419.1 million for the year ended December 31, 2000 and $483.4 million for the
nine months ended September 30, 2001), we cannot assure you that our cash flow
will be sufficient in future periods to permit us to make our required payments
on our indebtedness and preferred stock.
KOHLBERG KRAVIS ROBERTS & CO. L.P., OR KKR, HAS CONTROL OF OUR COMMON STOCK
AND HAS THE POWER TO ELECT ALL THE MEMBERS OF OUR BOARD OF DIRECTORS AND TO
APPROVE ANY ACTION REQUIRING STOCKHOLDER APPROVAL.
As of November 30, 2001, approximately 63.8% of the shares of our common
stock were held by investment partnerships created by KKR. These investments
partnerships have sole voting and investment power with respect to those shares.
In addition, on August 24, 2001, we issued 1,000,000 shares of our Series J
convertible preferred stock to a KKR investment partnership at a purchase price
of $125 per share with an aggregate liquidation preference of $125 million and
convertible into shares of our common stock at any time after the first
anniversary of the issue date at a conversion price per share of $125 million
divided by $7 per share. We also granted warrants which are not exercisable
until after the first anniversary of the grant date to KKR or one of its
affiliates to purchase up to 3.87 million shares of our common stock, and
additional warrants to purchase up to 4,000,000 shares of our common stock
depending on the date on which shares of our Series J preferred stock are
outstanding. As a result of their majority ownership, our stockholders that are
affiliated with KKR and their respective general partners and members, four of
whom are also our directors, control us and have the power to elect all of our
directors and approve any action requiring stockholder approval, including
adopting amendments to our certificate of incorporation and approving mergers or
sales of all or substantially all of our assets. Our stockholders that are
affiliated with KKR will also be able to prevent change of control events or
cause a change of control at any time.
6
INCREASES IN PAPER AND POSTAGE COSTS MAY HAVE AN ADVERSE IMPACT ON OUR FUTURE
FINANCIAL RESULTS.
The price of paper is a significant expense relating to our print products
and direct mail solicitations. Paper price increases may have an adverse effect
on our future results. Postage for product distribution and direct mail
solicitations is also a significant expense. We use the U.S. Postal Service for
distribution of many of our products and marketing materials. Postage costs
increased in January 2001 and can be expected to increase in the future. We may
not be able to pass these cost increases through to our customers.
WE DEPEND ON SOME IMPORTANT EMPLOYEES, AND THE LOSS OF ANY OF THOSE EMPLOYEES
MAY HARM OUR BUSINESS.
Our performance is substantially dependent on the performance of our
executive officers and other key employees. In addition, our success is
dependent on our ability to attract, train, retain and motivate high quality
personnel, especially for our management team. Competition for those employees
is intense. The loss of the services of any of our executive officers or key
employees may harm our business.
OUR TRADITIONAL BUSINESS IS SUBJECT TO COMPETITION FROM THE RAPIDLY
INCREASING AND COMPETITIVE MARKET FOR NEW MEDIA PRODUCTS AND SERVICES.
We derive a substantial portion of our revenues from our traditional
businesses. The increased availability of information on the Internet subjects
our traditional business to additional competition, which may adversely affect
our future operating results. Our strategies for obtaining sustained revenue
growth and profitability in the market for new media products and services may
not be sufficient to compensate for any losses of revenue in our traditional
businesses resulting from competition with new media.
Numerous well-established companies and smaller entrepreneurial companies
are focusing significant resources on developing and marketing products and
services that will compete with our products and services. Competition in the
market for Internet products and services may intensify in the future. In
addition, our current and potential competitors may have greater financial,
technical, operational and marketing resources. Competitive pressures may also
force prices for Internet goods and services down and those price reductions may
adversely affect us.
IF THE UNITED STATES OR OTHER GOVERNMENTS REGULATE THE INTERNET MORE CLOSELY,
OUR NEW MEDIA BUSINESSES MAY BE HARMED.
Any new law or regulation pertaining to the Internet or the application or
interpretation of existing laws could decrease the demand for our Internet
businesses, increase the cost of doing business of About.com, Inc. and our other
new media businesses or otherwise have a material adverse effect on our
business, results of operations and financial condition. There are and will be
an increasing number of laws and regulations pertaining to the Internet. These
laws or regulations may relate to liability for information retrieved from or
transmitted over the Internet, online content regulation, user privacy, taxation
and the quality of products and services. In addition, the applicability to the
Internet of existing laws governing intellectual property ownership and
infringement, copyright, trademark, trade secret, obscenity, libel, employment,
personal privacy and other issues is uncertain and developing.
IN ORDER FOR OUR NEW MEDIA BUSINESSES TO SUCCEED, WE MUST RESPOND TO THE
RAPID CHANGES IN TECHNOLOGY.
The markets for Internet products and services are characterized by:
- rapidly changing technology;
- evolving industry standards;
- frequent new product and service introductions; and
- changing customer demands.
The success of our new media businesses will depend on our ability to adapt
to this rapidly evolving marketplace. We may not be able to adequately adapt its
products and services or to acquire
7
new products and services that can compete successfully. In addition, we may not
be able to establish and maintain effective distribution channels.
THE SUCCESS OF OUR NEW MEDIA BUSINESSES DEPENDS ON USE OF THE INTERNET BY
BUSINESSES AND INDIVIDUALS.
The success of our new media businesses depends on use of the Internet for
advertising, marketing, providing services and conducting business. Our new
media businesses may suffer if commercial use of the Internet fails to grow in
the future. Commercial use of the Internet is currently at an early stage of
development and the future of the Internet is not clear. Internet usage may be
inhibited for any of the following reasons:
- the Internet infrastructure may not be able to support the demands placed
on it, and its performance and reliability may decline as usage grows;
- security and authentication concerns with respect to the transmission over
the Internet of confidential information, such as credit card numbers, and
attempts by unauthorized computer users, so-called hackers, to penetrate
online security systems; and
- privacy concerns, including those related to the ability of web sites to
gather user information without the user's knowledge or consent.
In addition, it is not clear how effective advertising on the Internet is in
generating business as compared to more traditional types of advertising such as
print, television and radio. The adoption of Internet advertising, particularly
by those entities that have historically relied upon traditional media for
advertising, requires the acceptance of a new way of conducting business,
exchanging information and advertising products and services. Advertisers that
have traditionally relied upon other advertising media may be reluctant to
advertise on the Internet. These businesses may find Internet advertising to be
less effective than traditional advertising media for promoting their products
and services.
WE FACE SPECIFIC SECURITY RISKS REGARDING THE TRANSMISSION OF CONFIDENTIAL
INFORMATION.
Consumer concerns about the security of transmissions of confidential
information over public telecommunications facilities is a significant barrier
to electronic commerce and communications. Many factors may cause compromises or
breaches of our security systems or other Internet sites used to protect
proprietary information, including advances in computer and software
functionality or new discoveries in the field of cryptography. A compromise of
security on the Internet would have a negative effect on the use of the Internet
for commerce and communications and negatively impact our businesses. Security
breaches of our activities or the activities of our customers and sponsors
involving the storage and transmission of proprietary information, such as
credit card numbers, may expose us to a risk of loss or litigation and possible
liability. Our security measures designed to prevent security breaches and
insurance programs we obtain to address the potential losses or liabilities may
not be sufficient to cover any such losses or liabilities.
WE MAY HAVE LIABILITY FOR INFORMATION RETRIEVED FROM THE INTERNET.
Because materials may be downloaded from the Internet and subsequently
distributed to others, we may be subject to claims for defamation, negligence,
copyright or trademark infringement, personal injury or other theories based on
the nature, content, publication and distribution of those materials.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY, AND WE MAY BE LIABLE
FOR INFRINGING THE INTELLECTUAL PROPERTY OF OTHERS.
Third parties may infringe or misappropriate our and our subsidiaries'
patents, trademarks or other intellectual property, which could have a material
adverse effect on our business, results of operations or financial condition.
While we and our subsidiaries enter into confidentiality agreements with our
material employees, guides, consultants and strategic partners, and generally
control access to and distribution of our proprietary information, the steps we
and our subsidiaries have taken to protect our intellectual property may not
prevent misappropriation. In addition, we and our subsidiaries do not
8
know whether we will be able to defend our proprietary rights since the
validity, enforceability and scope of protection of proprietary rights in
Internet-related industries is still evolving.
Third parties may assert infringement claims against us or our subsidiaries.
From time to time in the ordinary course of business we and our subsidiaries
have been, and we expect to continue to be, subject to claims of alleged
infringement of the trademarks and other intellectual property rights of third
parties. These claims and any resultant litigation, should it occur, could
subject us and our subsidiaries to significant liability for damages. In
addition, even if we and our subsidiaries prevail, litigation could be
time-consuming and expensive to defend and could result in the diversion of our
time and attention. Any claims from third parties may also result in limitations
on our and our subsidiaries' ability to use the intellectual property subject to
these claims unless we are able to enter into agreements with the third parties
making these claims.
RISK FACTORS RELATING TO THE COMMON STOCK
WE DO NOT PLAN ON PAYING DIVIDENDS IN THE FORESEEABLE FUTURE AND, AS A
RESULT, YOU WILL NEED TO SELL SHARES TO REALIZE A RETURN ON YOUR INVESTMENT.
We do not anticipate paying cash dividends on our common stock in the
foreseeable future. Our ability to pay dividends is limited by some of our debt
instruments. Consequently, you will need to sell shares of our common stock to
realize a return on your investment, if any.
THE PRICE OF OUR COMMON STOCK HAS FLUCTUATED.
The market price of our common stock has been, and is likely to continue to
be, variable and experience fluctuations. As of November 30, 2001, as much as
approximately 36% of our market capitalization was traded publicly, which may
result in a high degree of volatility in our stock price. In recent years, the
stock market has experienced significant price and volume fluctuations. Future
market movements may adversely affect the market price of our common stock. The
market price of our common stock may continue to fluctuate significantly in
response to various factors, including:
- actual and anticipated operating results;
- the introduction of new products;
- changes in estimates by securities analysts;
- market conditions in the industry;
- announcements of mergers, acquisitions, alliances and joint ventures by
us;
- announcements of mergers and acquisitions and other actions by
competitors;
- regulatory and judicial actions; and
- general economic conditions.
RECENT SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE.
Recent sales of our common stock in the public market could cause our stock
price to decline and could impair our ability to raise funds in new stock
offerings. As of November 30, 2001, we had approximately 262,439,886 shares of
common stock outstanding (assuming the conversion of 1,000,000 shares of our
Series J convertible preferred stock into 17,857,143 shares of common stock) and
36,263,949 shares of common stock are issuable upon exercise of outstanding
options and warrants (after the lapse of certain time periods with respect to
certain options and warrants). Of the 262,439,886 shares of common stock
outstanding, approximately 195,852,689 shares may not be sold publicly except in
compliance with Rule 144.
9
Of these 195,852,689 Rule 144 shares, as of November 30, 2001:
- approximately 173,933,447 shares were held by affiliates of KKR, which
have demand and incidental registration rights with respect to those
shares;
- approximately 6,893,485 shares were held by management and the directors,
who also have vested options exercisable within 60 days for 10,190,224
shares; and
- an aggregate of approximately 15,025,757 shares were held by non-affiliate
entities, of which American Funds Insurance Series--Growth Fund, or
American Funds, held 6,115,200 shares and has demand and incidental
registration rights with respect to such shares, Paul Kagan and certain of
his affiliates held 878,000 shares and have incidental registration rights
with respect to such shares (as well as with respect to 6,649 shares of
common stock issued after November 30, 2001) and Liberty Prime, Inc. held
8,000,000 shares and has demand and incidental registration rights with
respect to such shares. American Funds purchased the 6,115,200 shares of
common stock held by it from CMGI, Inc. on October 11, 2001, which shares
are being registered pursuant to this registration statement. Affiliates
of Paul Kagan are requesting the registration of 128,744 shares of our
common stock (including 6,649 shares issued after November 30, 2001)
pursuant to this registration statement.
Of the 36,263,949 shares issuable upon exercise of outstanding options and
warrants (after the lapse of certain time periods with respect to certain
options and warrants), 3,870,000 shares of common stock underlying warrants
issued to KKR or one of its affiliates have incidental and demand registration
rights, 2,000,000 shares of common stock underlying warrants granted to an
affiliate of EMAP plc have incidental and demand registration rights and
1,500,000 shares of common stock that underlie warrants issued to Liberty Prime
have incidental and demand registration rights. Upon exercise of such
registration rights with respect to any of those shares, those shares will
become freely transferable.
We may also issue shares of our common stock from time to time as
consideration for future acquisitions and investments or for other financing
activities. The number of shares we may issue may be significant, and we may
grant registration rights covering those shares.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking
statements under the captions "Our Growth Strategy," "Risk Factors" and
elsewhere. In some cases these statements are identified by our use of
forward-looking words or phrases such as "believe," "expect," "anticipate,"
"intend," "estimate," "continue," "may increase," "may fluctuate" and similar
expressions or by our use of future or conditional verbs such as "will,"
"should," "would" and "could." Forward-looking statements may also use different
words and phrases. We have based the forward-looking statements on our current
assumptions, expectations and projections about future events. Although the
expectations reflected in these forward-looking statements represent
management's best judgment at the time they were made, we can give no assurance
that these expectations will prove to be correct.
These forward-looking statements involve risks and uncertainties, including:
- risks relating to our ability to successfully continue to integrate our
businesses with About.com, Inc. and EMAP USA and our continuing strategy
of expanding our business through acquisitions of and investments in
businesses, technologies, products and services from other businesses;
- the U.S. economy, terrorist acts and acts of war and their impact on
advertising revenues; and
- other risks and uncertainties, including those listed under the caption
"Risk Factors."
For more information see "Risk Factors." We caution prospective purchasers
not to place undue reliance on these forward-looking statements.
10
USE OF PROCEEDS
There will be no cash proceeds to us from the offering.
DESCRIPTION OF COMMON STOCK
GENERAL
As of November 30, 2001, we had 350,000,000 shares of authorized capital
stock. Those shares consisted of:
- 300,000,000 shares of common stock, of which 244,582,743 shares were
outstanding as of October 31 2001; and
- 50,000,000 shares of preferred stock, of which:
- 2,000,000 shares were designated Series D exchangeable preferred stock,
all of which were outstanding as of November 30, 2001;
- 1,250,000 shares were designated Series F exchangeable preferred stock,
all of which were outstanding as of November 30, 2001;
- 2,500,000 shares were designated Series H exchangeable preferred stock,
all of which were outstanding as of November 30, 2001; and
- 1,000,000 shares were designated Series J convertible preferred stock, all
of which were outstanding as of November 30, 2001.
COMMON STOCK
DIVIDENDS. The owners of our common stock may receive dividends when
declared by the board of directors out of funds legally available for the
payment of dividends. We have no present intention of declaring and paying cash
dividends on the common stock at any time in the foreseeable future. The terms
of our credit agreements, indentures and series of preferred stock limit our
ability to declare and pay cash dividends on the common stock.
VOTING RIGHTS. Each share of common stock is entitled to one vote in the
election of directors and all other matters submitted to stockholder vote. There
are no cumulative voting rights.
LIQUIDATION RIGHTS. If we liquidate, dissolve or wind-up our business,
whether voluntarily or not, our common stockholders will share equally in the
distribution of all assets remaining after payment to creditors and preferred
stockholders.
PREEMPTIVE RIGHTS. The common stock has no preemptive or similar rights.
LISTING. Our common stock is listed on the New York Stock Exchange under
the symbol "PRM."
ANTI-TAKEOVER PROVISIONS. We are subject to the provisions of Delaware law
described below regarding business combinations with interested stockholders.
Section 203 of the Delaware General Corporation Law applies to a broad range
of business combinations between a Delaware corporation and an interested
stockholder. The Delaware law definition of business combination includes
mergers, sales of assets, issuances of voting stock and certain other
transactions. An interested stockholder is defined as any person who owns,
directly or indirectly, 15% or more of the outstanding voting stock of a
corporation.
Section 203 prohibits a corporation from engaging in a business combination
with an interested stockholder for a period of three years following the date on
which the stockholder became an interested stockholder, unless:
- the board of directors approved the business combination before the
stockholder became an interested stockholder, or the board of directors
approved the transaction that resulted in the stockholder becoming an
interested stockholder;
11
- upon completion of the transaction which resulted in the stockholder
becoming an interested stockholder, such stockholder owned at least 85% of
the voting stock outstanding when the transaction began other than shares
held by directors who are also officers and other than shares held by
certain employee stock plans; or
- the board of directors approved the business combination after the
stockholder became an interested stockholder and the business combination
was approved at a meeting by at least two-thirds of the outstanding voting
stock not owned by such stockholder.
These limitations on business combinations with interested stockholders do
not apply to a corporation that does not have a class of stock listed on a
national securities exchange, authorized for quotation on an interdealer
quotation system of a registered national securities association or held of
record by more than 2,000 stockholders.
SELLING HOLDERS
The following table sets forth (i) the name of each holder, (ii) the nature
of any position, office or other material relationship that the holder has had
within the past three years with us, (iii) the number of shares of common stock
and (if one percent or more) the percentage of common stock beneficially owned
by each holder, based on the number of outstanding shares of common stock as of
November 30, 2001, (iv) the number of shares of common stock that may be offered
and sold by or on behalf of each holder hereunder and (v) the amount and (if one
percent or more) the percentage of common stock to be owned by each holder upon
the completion of the offering assuming all shares offered by such holder are
sold. Any or all of the shares listed below under the heading "Shares to be
Sold" may be offered for sale by or on behalf of the holder.
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OWNED AFTER THE
THE OFFERING OFFERING
--------------------- SHARES TO BE ---------------------
HOLDERS NUMBER PERCENT SOLD NUMBER PERCENT
------- ---------- -------- ------------ ---------- --------
American Funds Insurance Series-Growth
Fund(1)..................................... 6,115,200 2.5% 6,115,200 0 0%
Cypress Information Associates, Inc.(2)....... 707,110 * 126,023 581,087 *
Paul and Florence Kagan(2).................... 77,781 * 2,599 75,182 *
Melanie Canter(2)............................. 10,879 * 61 10,818 *
Linda Cosmero(2).............................. 10,879 * 61 10,818 *
------------------------
* Less than 1%.
(1) The shares are held in the name of Waterbath & Co., nominee name for
American Funds. American Funds has had no position, office or other
material relationship with us within the last three years.
(2) Cypress Information Associates, Inc., or Cypress Information, is wholly
owned by Paul and Florence Kagan. Melanie Canter and Linda Cosmero are
relatives of Paul and Florence Kagan. Paul Kagan is currently the Vice
Chairman of a subsidiary of PRIMEDIA and has been a consultant with us for
approximately eight months. Prior thereto, for approximately four months, he
was the President of the Kagan group of companies owned by PRIMEDIA. As of
November 30, 2001, Paul Kagan and his affiliates (including Cypress
Information, Paul and Florence Kagan, Melanie Canter and Linda Cosmero)
owned 878,000 shares of our common stock. On January 3, 2002, we issued
3,928 shares of common stock to Cypress Information, 2,599 shares of common
stock to Paul and Florence Kagan and 61 shares of common stock to each of
Linda Cosmero and Melanie Canter. These issuances increased the total number
of shares of common stock owned by Paul Kagan and his affiliates (including
the shares of our common stock listed above owned by Cypress Information,
Paul and Florence Kagan, Melanie Canter and Linda Cosmero) to 884,649, which
is less than 1% of the number of shares of our common stock outstanding as
of November 30, 2001.
12
PRICE RANGE OF OUR COMMON STOCK
Our common stock trades on the New York Stock Exchange under the symbol
"PRM." The reported last sale price of our common stock on January 2, 2002 on
the New York Stock Exchange was $4.01 per share. The table below presents, for
the calendar quarters indicated, the high and low per share sale prices of
common stock as reported on the New York Stock Exchange, based on published
financial sources.
HIGH LOW
-------- --------
CALENDAR 1999
First Quarter............................................... $14.00 $11.63
Second Quarter.............................................. 17.75 13.56
Third Quarter............................................... 17.19 11.00
Fourth Quarter.............................................. 16.50 10.88
CALENDAR 2000
First Quarter............................................... 34.88 15.50
Second Quarter.............................................. 32.00 18.06
Third Quarter............................................... 22.31 16.00
Fourth Quarter.............................................. 17.00 7.00
CALENDAR 2001
First Quarter............................................... 12.94 6.25
Second Quarter.............................................. 9.10 4.87
Third Quarter............................................... 7.80 2.05
Fourth Quarter.............................................. 4.35 1.70
CALENDAR 2002
First Quarter (through January 2, 2002)..................... 4.35 3.80
We have not declared any dividends on our common stock.
PLAN OF DISTRIBUTION
We are registering shares of our common stock on behalf of American Funds,
which purchased such shares from CMGI, Inc. on October 11, 2001, and Paul and
Florence Kagan and some of their affiliates. We will pay for all costs, expenses
and fees in connection with the registration of the shares. The shares covered
by this prospectus and, if applicable, any prospectus supplement, may be offered
and sold by the selling stockholders from time to time in one or more of the
following types of transactions (including block transactions):
- on the New York Stock Exchange,
- in the over-the-counter market,
- in privately negotiated transactions,
- through put or call options transactions relating to the shares,
- through short sales of shares or
- a combination of such methods of sale.
The selling stockholders may sell their shares at prevailing market prices
or at privately negotiated prices. The transactions may or may not involve
brokers or dealers.
The selling stockholders may offer and sell their shares directly to
purchasers or to or through broker-dealers, which may act as agents or
principals. Any broker-dealers that participate with the selling stockholders in
the distribution of the common stock may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commissions or discounts received by
those broker-dealers and any profit on the resale of the common stock by those
broker-dealers might be deemed to the underwriting discounts and commissions
under the Securities Act.
13
Upon our being notified by the selling stockholders that any material
arrangement has been entered into with a broker or dealer for the sale of the
common stock through a secondary distribution, or a purchase by a broker or
dealer, a supplemented prospectus will be filed, if required, pursuant to
Rule 424(b) under the Securities Act, disclosing (a) the names of such
broker-dealers, (b) the number of shares involved, (c) the price at which such
shares are being sold, (d) the commission paid or the discounts or concessions
allowed to such broker-dealers, (e) where applicable, that such broker-dealers
did not conduct any investigation to verify the information set out or
incorporated by reference in this prospectus, as supplemented, and (f) other
facts material to the transaction.
We have agreed to indemnify American Funds against some liabilities,
including liabilities arising under the Securities Act.
Some of the brokers, dealers or agents and their associates who may become
involved in the sale of the shares may engage in transactions with and perform
other services for us in the ordinary course of their business for which they
receive customary compensation.
LEGAL MATTERS
Certain legal matters with respect to the shares of common stock are being
passed upon on our behalf by Simpson Thacher & Bartlett, New York, New York.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from PRIMEDIA's Annual Report on
Form 10-K for the year ended December 31, 2000 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of About.com, Inc. as of December 31,
2000 and for the year then ended, incorporated by reference in this prospectus
by reference from PRIMEDIA's current report on Form 8-K/A dated April 26, 2001,
have been audited by Ernst & Young LLP, independent auditors, as stated in their
report, which is incorporated herein by reference and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The consolidated financial statements of the Publishing business of EMAP,
Inc. acquired by PRIMEDIA Inc., as of March 31, 2001 and for the year then ended
incorporated in this prospectus by reference from PRIMEDIA Inc.'s current report
on Form 8-K/A dated November 7, 2001, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
6,243,944 SHARES OF COMMON STOCK
PRIMEDIA
THE NEW TRADITION IN MEDIA
---------------
PROSPECTUS
---------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by us in
connection with the sale of the securities being registered hereby. All amounts
are estimates except the registration fee.
AMOUNT
-----------
Securities and Exchange Commission registration fee......... $ 3,170.39*
Legal fees and expenses..................................... 25,000.00
Accounting fees and expenses................................ 30,000.00
Printing and engraving expenses............................. 5,000.00
Miscellaneous............................................... 5,000.00
-----------
Total................................................... $ 68,170.39
===========
------------------------
* $60.44 was previously paid to the Securities and Exchange Commission, or the
Commission, on November 21, 2001 in connection with the filing of Amendment
No. 1 to the Registration Statement registering 122,095 shares of common
stock at a price of $1.98 per share, based on the average of the high and
low prices of the common stock on November 16, 2001. $3,103.47 was
previously paid to the Commission on November 6, 2001 in connection with the
initial filing of the Registration Statement registering 6,115,200 shares of
common stock at a price of $2.03 per share, based on the average of the high
and low prices of the common stock on October 30, 2001.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Reference is made to Section 102(b)(7) of the Delaware General
Corporation Law (the "DGCL") which enables a corporation in its original
certificate of incorporation or an amendment thereto to eliminate or limit the
personal liability of a director for violations of the director's fiduciary
duty, except (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
liability of directors for unlawful payment of dividends or unlawful stock
purchase or redemptions pursuant to Section 174 of the DGCL or (iv) for any
transaction from which a director derived an improper personal benefit.
Reference also is made to Section 145 of the DGCL, which provides that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer, director,
employee or agent of such corporation or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, for criminal proceedings, had no reasonable
cause to believe that his conduct was unlawful. A Delaware corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses that such officer or
director actually and reasonably incurred.
II-1
The certificate of incorporations and/or bylaws of PRIMEDIA Inc., provides
for the mandatory indemnification of its directors and officers, and the
discretionary indemnification of its employees and other agents, to the maximum
extent permitted by the DGCL.
As permitted by sections 102 and 145 of the DGCL, the certificate of
incorporation of PRIMEDIA Inc. eliminate a director's personal liability for
monetary damages to the company and its stockholders arising from a breach of a
director's fiduciary duty, other than for a breach of a director's duty of
loyalty or for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, and except as otherwise provided under
the DGCL.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
+4.1 Registration Rights Agreement dated as of October 31, 2001
between PRIMEDIA Inc. and American Funds Insurance
Series--Growth Fund.
+5.1 Opinion of Simpson Thacher & Bartlett as to the legality of
the 6,115,200 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of American Funds Insurance
Series--Growth Fund.
+5.2 Opinion of Simpson Thacher & Bartlett as to the legality of
the 122,095 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of Cypress Information Associates, Inc.
*5.3 Opinion of Simpson Thacher & Bartlett as to the legality of
the 6,649 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of Paul and Florence Kagen and some of
their affiliates.
+23.1 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.1).
*23.2 Consent of Deloitte & Touche LLP.
*23.3 Consent of Ernst & Young LLP.
*23.4 Consent of PricewaterhouseCoopers LLP.
+23.5 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.2).
*23.6 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.3)
+24.1 Power of Attorney (contained on signature page to initial
Registration Statement).
------------------------
* Filed herein
+ Previously filed
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales of the registered
securities are being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in he information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low and high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
II-2
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
(iii) To include any material information with respect to the plan
distribution not previously disclosed in the registration statement or
any material change in such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 2 to the Form S-3 Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on January 3, 2002.
PRIMEDIA INC.
By: /s/ BEVERLY C. CHELL
-----------------------------------------
(Beverly C. Chell)
VICE CHAIRMAN AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to the Form S-3 Registration Statement has been signed below by
or on behalf of the following persons in the capacities indicated with the
Registrant on January 3, 2002.
NAME TITLE
---- -----
* Chief Executive Officer and Director
------------------------------------
(Thomas S. Rogers)
* Chief Financial Officer
------------------------------------
(Lawrence R. Rutkowski)
* Controller
------------------------------------
(Robert J. Sforzo)
* Director
------------------------------------
(Charles G. McCurdy)
* Director
------------------------------------
(Beverly C. Chell)
* Director
------------------------------------
(Meyer Feldberg)
* Director
------------------------------------
(Henry R. Kravis)
* Director
------------------------------------
(George R. Roberts)
II-4
NAME TITLE
---- -----
* Director
------------------------------------
(Michael T. Tokarz)
* Director
------------------------------------
(Perry Golkin)
* Director
------------------------------------
(H. John Greeniaus)
* Director
------------------------------------
(David Bell)
*By: /s/ BEVERLY C. CHELL
--------------------------------------
ATTORNEY-IN-FACT
II-5
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
--------------------- -----------
+4.1 Registration Rights Agreement dated as of October 31, 2001
between PRIMEDIA Inc. and American Funds Insurance
Series--Growth Fund.
+5.1 Opinion of Simpson Thacher & Bartlett as to the legality of
the 6,115,200 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of American Funds Insurance
Series--Growth Fund.
+5.2 Opinion of Simpson Thacher & Bartlett as to the legality of
the 122,095 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of Cypress Information Associates, Inc.
*5.3 Opinion of Simpson Thacher & Bartlett as to the legality of
the 6,649 shares of PRIMEDIA Inc.'s common stock being
registered on behalf of Paul and Florence Kagan and some of
their affiliates.
+23.1 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.1).
*23.2 Consent of Deloitte & Touche LLP.
*23.3 Consent of Ernst & Young LLP.
*23.4 Consent of PricewaterhouseCoopers LLP.
+23.5 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.2).
*23.6 Consent of Simpson Thacher & Bartlett (contained in Exhibit
5.3).
+24.1 Power of Attorney (contained on signature page to initial
Registration Statement).
------------------------
* Filed herein
+ Previously filed