<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PULITZER INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the Offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
PULITZER INC.
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
(314) 340-8000
April 19, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 10:00 A.M., Central Daylight Time, on Wednesday, May
12, 1999, at the Missouri Botanical Garden, Shoenberg Auditorium, 4344 Shaw
Boulevard, St. Louis, Missouri 63110.
Your Board of Directors urges you to read the accompanying proxy statement
and recommends that you vote for (i) the election of the three persons nominated
as Class A directors of the Company to three-year terms expiring in 2002, (ii)
the approval of the Pulitzer Inc. 1999 Key Employees' Restricted Stock Purchase
Plan, (iii) the approval of the Pulitzer Inc. 1999 Stock Option Plan, (iv) the
approval of the Pulitzer Inc. 1999 Employee Stock Purchase Plan, and (v) the
ratification of the appointment of the firm of Deloitte & Touche LLP as
independent auditors of the Company for the 1999 fiscal year.
At the meeting, the Board of Directors will report on the Company's
affairs, and a discussion period will be provided for questions and comments.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs. Whether or not you plan to attend the meeting, it is
important that your shares be represented. Accordingly, we request that you
sign, date and mail the enclosed proxy in the envelope provided at your earliest
convenience.
Thank you for your cooperation.
Very truly yours,
/s/Michael E. Pulitzer
Michael E. Pulitzer
Chairman of the Board
/s/Robert C. Woodworth
Robert C. Woodworth
President and Chief Executive Officer
<PAGE> 3
PULITZER INC.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------
St. Louis, Missouri
April 19, 1999
The Annual Meeting of Stockholders of Pulitzer Inc. will be held at the
Missouri Botanical Garden, Shoenberg Auditorium, 4344 Shaw Boulevard, St. Louis,
Missouri 63110 on Wednesday, May 12, 1999, at 10:00 A.M., Central Daylight Time,
for the following purposes:
1. To elect three Class A directors to three-year terms expiring in
2002.
2. To consider and vote upon a proposal to approve the Pulitzer Inc.
1999 Key Employees' Restricted Stock Purchase Plan.
3. To consider and vote upon a proposal to approve the Pulitzer Inc.
1999 Stock Option Plan.
4. To consider and vote upon a proposal to approve the Pulitzer Inc.
1999 Employee Stock Purchase Plan.
5. To ratify the appointment of the firm of Deloitte & Touche LLP as
independent auditors of the Company for the 1999 fiscal year.
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on April 9, 1999 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. A
list of such stockholders will be available for inspection ten days prior to the
annual meeting at the Company's executive offices, located at 900 North Tucker
Boulevard, St. Louis, Missouri 63101.
Stockholders are requested to complete, sign, date and return the enclosed
form of proxy in the envelope provided. No postage is required if mailed in the
United States.
JAMES V. MALONEY
Secretary
<PAGE> 4
PULITZER INC.
900 NORTH TUCKER BOULEVARD
ST. LOUIS, MISSOURI 63101
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of the common stock, $.01
par value per share (the "Common Stock"), and Class B common stock, $.01 par
value per share (the "Class B Common Stock"), of Pulitzer Inc. (the "Company")
in connection with the solicitation of proxies on behalf of the Board of
Directors of the Company for use at the Annual Meeting of Stockholders to be
held on May 12, 1999, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors knows of no
other business which will come before the meeting.
Proxies for use at the meeting were first mailed to stockholders on or
about April 19, 1999, and will be solicited chiefly by mail, but additional
solicitations may be made by telephone or facsimile by the officers or regular
employees of the Company. The Company may enlist the assistance of brokerage
houses in soliciting proxies. All solicitation expenses, including costs of
preparing, assembling and mailing proxy material, will be borne by the Company.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the meeting and a return envelope for the proxy
are enclosed. Stockholders may revoke the authority granted by their execution
of proxies at any time before their effective exercise by filing with the
Secretary of the Company a written revocation or duly executed proxy bearing a
later date or by voting in person at the meeting. Shares represented by executed
and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies will
be voted for the election of the three persons nominated as Class A directors of
the Company, for the approval of (i) the Pulitzer Inc. 1999 Key Employees'
Restricted Stock Purchase Plan, (ii) the Pulitzer Inc. 1999 Stock Option Plan,
and (iii) the Pulitzer Inc. 1999 Employee Stock Purchase Plan, and for the
ratification of the appointment of Deloitte & Touche LLP as independent auditors
of the Company for the 1999 fiscal year.
The affirmative vote of a plurality of the shares present in person or
represented by proxy and entitled to vote at the meeting is required for the
election of directors and the affirmative vote of a majority of the aggregate
voting power of the shares present in person or represented by proxy and
entitled to vote at the meeting is required for the approval of (i) the Pulitzer
Inc. 1999 Key Employees' Restricted Stock Purchase Plan, (ii) the Pulitzer Inc.
1999 Stock Option Plan and (iii) the Pulitzer Inc. 1999 Employee Stock Purchase
Plan, for the ratification of the appointment of Deloitte & Touche LLP and for
the approval of such other matters as may properly come before the meeting or
any adjournment thereof. A stockholder entitled to vote for the election of
directors can withhold authority to vote for all nominees or can withhold
authority to vote for any one or more nominees. Abstentions from the vote
regarding approval of (i) the Pulitzer Inc. 1999 Key Employees' Restricted Stock
Purchase Plan, (ii) the Pulitzer Inc. 1999 Stock Option Plan, and (iii) the
Pulitzer Inc. 1999 Employee Stock Purchase Plan, the vote to consider
ratification of the appointment of Deloitte & Touche LLP or the approval of such
other matters as may properly come before the meeting or any adjournment thereof
are treated as votes against each proposal. Broker non-votes are treated as
shares as to which the beneficial owners have withheld voting authority and,
therefore, as shares not entitled to vote on the matter as to which there is a
broker non-vote.
1
<PAGE> 5
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on April 9, 1999, are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. The Company had outstanding on April 9, 1999, 8,292,447 shares of
Common Stock, each of which is entitled to one vote upon matters presented at
the meeting, and 14,339,284 shares of Class B Common Stock, each of which is
entitled to ten votes upon matters presented at the meeting. As of April 9,
1999, 13,573,126 shares of Class B Common Stock were held in a voting trust. It
is expected that the shares held in the voting trust will be voted for the
election of the three persons nominated as Class A directors, for the approval
of (i) the Pulitzer Inc. 1999 Key Employees' Restricted Stock Purchase Plan,
(ii) the Pulitzer Inc. 1999 Stock Option Plan, and (iii) the Pulitzer Inc. 1999
Employee Stock Purchase Plan, and for the ratification of the appointment of
Deloitte & Touche LLP as independent auditors of the Company for the 1999 fiscal
year. See "Principal Stockholders -- Voting Trust."
GENERAL
The Company was capitalized on March 18, 1999 with approximately $550
million in cash and all the other assets of Pulitzer Publishing Company ("PPC")
(other than broadcasting assets) as a result of the Spin-off (as defined below)
and is operating the newspaper publishing and related "new media" businesses
formerly operated by PPC. The Company was organized as a corporation in 1998
and, prior to the Spin-off, was a wholly-owned subsidiary of PPC.
On March 18, 1999, pursuant to an Amended and Restated Agreement and Plan
of Merger, dated as of May 25, 1998 (the "Merger Agreement"), by and among PPC,
the Company and Hearst-Argyle Television, Inc. ("Hearst-Argyle"), Hearst-Argyle
acquired, through a merger transaction (the "Merger"), PPC's television and
radio broadcasting operations in exchange for the issuance to PPC's stockholders
of 37,096,774 shares of Hearst-Argyle's Series A common stock. Prior to the
Merger, PPC's newspaper publishing and related new media businesses were
contributed to the Company in a tax-free "spin-off" to PPC stockholders (the
"Spin-off"). The Merger and Spin-off are collectively referred to as the
"Transactions."
2
<PAGE> 6
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock and Class B Common Stock as of April 9,
1999, (i) by each director of the Company, (ii) by each person known by the
Company to own beneficially 5% or more of its Common Stock, (iii) by the
executive officers named in the Summary Compensation Table (see "Executive
Compensation") and (iv) by all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
CLASS B
COMMON STOCK COMMON STOCK PERCENT OF AGGREGATE
------------------- -------------------- VOTING POWER
DIRECTORS, OFFICERS AND NUMBER NUMBER OF COMMON STOCK AND
5% STOCKHOLDERS OF SHARES PERCENT OF SHARES PERCENT CLASS B COMMON STOCK
----------------------- --------- ------- ---------- ------- --------------------
<S> <C> <C> <C> <C> <C>
Trustees of Pulitzer Inc. Voting
Trust(1)............................ -- -- 13,573,126 94.7% 89.5%
Emily Rauh Pulitzer(2)(3)(4).......... -- -- 6,311,667 44.0 41.6%
Michael E. Pulitzer(2)(3)(5).......... -- -- 3,539,906 24.7% 23.3%
David E. Moore(2)(3)(6)............... 1,695 -- 3,697,035 25.8% 24.4%
James M. Snowden, Jr.................. 3,666 * -- -- **
William Bush.......................... -- -- -- -- --
Alice B. Hayes........................ -- -- -- -- --
Ronald H. Ridgway(3).................. 28,936 * -- -- **
Ken J. Elkins......................... 18,029 * -- -- **
Robert C. Woodworth(3)................ -- -- -- -- **
Terrance C.Z. Egger................... 915 *
Gabelli Funds, Inc.(7)................
One Corporate Center
Rye, New York 10580-1434 654,245 7.9% -- -- **
Nicholas Company, Inc.(8).............
701 North Water Street
Milwaukee, Wisconsin 53202 470,866 5.7% -- -- **
All directors and officers as a group
(13 persons)(3)..................... 54,317 * 13,548,608 94.5% 89.5%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding Common Stock.
** Represents less than 1% of the aggregate voting power of Common Stock and
Class B Common Stock.
(1) The Trustees of the Pulitzer Inc. Voting Trust are Cole C. Campbell, David
E. Moore, Michael E. Pulitzer, Emily Rauh Pulitzer, Ronald H. Ridgway and
Robert C. Woodworth. The Pulitzer Inc. Voting Trust and each of the
individual Trustees may be reached at 900 North Tucker Boulevard, St.
Louis, Missouri 63101.
(2) Excludes shares which may be deemed to be beneficially owned pursuant to a
Tax Agreement, dated October 23, 1998, among David E. Moore, Emily Rauh
Pulitzer and Michael E. Pulitzer and/or their respective affiliates.
(3) Excludes shares which may be deemed to be beneficially owned solely as a
trustee of the Pulitzer Inc. Voting Trust.
(4) Includes 6,270,553 shares held in trusts. These shares are beneficially
owned by Mrs. Pulitzer.
(5) Includes 3,437,853 shares held in trusts and 37,780 shares held in a
private foundation. These shares are beneficially owned by Mr. Pulitzer.
Also includes 64,273 shares held in a trust for the benefit of the wife of
Michael E. Pulitzer. Mr. Pulitzer disclaims beneficial ownership of these
shares.
(6) Includes 366 shares of Class B Common Stock beneficially owned by the wife
of David E. Moore. Mr. Moore disclaims beneficial ownership of these
shares. Also includes 651,231 shares held in trust. These shares are
beneficially owned by Mr. Moore.
(7) This figure is based on information set forth in Schedule 13D dated April
7, 1999, filed by Gabelli Funds, Inc., and its investment adviser, GAMCO,
with the Securities and Exchange Commission. The Schedule 13D states that
(i) Gabelli Funds, Inc. has the sole power to vote, or direct the vote of,
and the sole power to dispose or direct the disposition of, 88,000 of such
shares, and (ii) GAMCO has the sole power to vote, or direct the vote of,
and the sole power to dispose or direct the disposition of, 564,245 of such
shares, and (iii) Gabelli International Ltd. has the sole power to vote, or
direct the vote of, and the sole power to dispose or direct the disposition
of, 2,000 of such shares.
(8) This figure is based on information set forth in Amendment No. 2 to
Schedule 13G dated February 10, 1999, filed by Nicholas Company, Inc.,
investment advisor to Nicholas Fund, Inc., with the Securities and Exchange
Commission. The Schedule 13G states that (i) Nicholas Fund, Inc. has the
sole power to vote, or direct the vote of such shares, and (ii) that
Nicholas Company, Inc. has the sole power to dispose or direct the
disposition of such shares.
3
<PAGE> 7
VOTING TRUST
Stockholders of the Company holding 13,573,126 shares of Class B Common
Stock, representing approximately 89.5% of the combined voting power of the
Company's outstanding Common Stock and Class B Common Stock, have entered into
an agreement providing for the creation of a voting trust (the "Voting Trust").
These Class B stockholders have deposited their shares of Class B Common Stock
into the Voting Trust and will receive from the Voting Trust one or more
certificates (the "Voting Trust Certificates") evidencing their interest in the
shares so deposited.
The current trustees of the Voting Trust are Cole C. Campbell, David E.
Moore, Michael E. Pulitzer, Emily Rauh Pulitzer, Ronald H. Ridgway and Robert C.
Woodworth (the "Trustees"). The Trustees generally have all voting rights with
respect to the shares of Class B Common Stock subject to the Voting Trust.
However, in connection with certain matters, including any proposal for a
merger, consolidation, recapitalization or dissolution of the Company or
disposition of all or substantially all of its assets, the calling of a special
meeting of stockholders and the removal of directors, the Trustees may not vote
the shares deposited in the Voting Trust except in accordance with written
instructions from the holders of the Voting Trust Certificates. The Voting Trust
permits the conversion of the Class B Common Stock deposited in the Voting Trust
into Common Stock in connection with certain permitted events, including,
without limitation, sales which are exempt from the registration requirements of
the Securities Act of 1933, as amended, sales which meet the volume and manner
of sale requirements of Rule 144 promulgated thereunder and sales which are made
pursuant to registered public offerings. The Voting Trust may be terminated with
the written consent of holders of two-thirds of the outstanding Class B Common
Stock deposited in the Voting Trust. Unless extended or terminated by the
parties thereto, the Voting Trust expires on March 18, 2009.
THE TAX AGREEMENT
In connection with PPC's request for a private letter ruling from the IRS
regarding the tax treatment of the Spin-off, Marital Trust B U/I Joseph
Pulitzer, Jr. dated 6/12/74, as amended 10/20/92 ("Marital Trust B"), the
Pulitzer Family Trust, the Trust dated 3/22/82 FBO Michael E. Pulitzer (the "MEP
Trust") and David E. Moore (each a "Signatory" and collectively, the
"Signatories") entered into a letter agreement dated October 23, 1998 (the "Tax
Agreement") under which each of the Signatories agreed to certain limitations on
his, her or its ability to dispose of shares of the Company (Emily Rauh Pulitzer
is a trustee of Marital Trust B and the sole trustee of the Pulitzer Family
Trust, and Michael E. Pulitzer is the sole trustee of the MEP Trust). Under the
Tax Agreement, any sales of the Company's Common Stock by a Signatory during the
one-year period following the Spin-off and Merger must be made simultaneously
and proportionately with sales of the Series A common stock of Hearst-Argyle
received by such signatory pursuant to the Merger. In addition, during such
one-year period, the Signatories collectively may not dispose of more than 9.5%
of the Company's outstanding Common Stock and Class B Common Stock and no
Signatory may dispose of more than 3.15% of the Company's outstanding Common
Stock and Class B Common Stock unless otherwise agreed in writing by the other
Signatories.
ELECTION OF DIRECTORS
The members of the Company's Board of Directors are divided into three
classes, with the term of office of one class expiring in each year. Three Class
A Directors are to be elected at the Annual Meeting. Unless otherwise specified,
the enclosed proxy will be voted in favor of Emily Rauh Pulitzer, James M.
Snowden, Jr. and Robert C. Woodworth to serve until the 2002 Annual Meeting of
Stockholders and until their successors shall have been duly elected and shall
qualify. Each of the nominees now serves as a Class A director of the Company.
In the event any of these nominees shall be unable to serve as a director,
discretionary authority is reserved to vote for a substitute. The Board of
Directors has no reason to believe that any of these nominees will be unable to
serve.
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<PAGE> 8
MANAGEMENT
The following table sets forth certain information concerning the Company's
executive officers and directors.
<TABLE>
<CAPTION>
DATE OF TERM
EMPLOYMENT DIRECTOR EXPIRES
NAME, AGE AND CLASS POSITIONS WITH THE COMPANY BY COMPANY(2) SINCE(2) IN
------------------- -------------------------- ------------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS
CLASS A DIRECTORS
Emily Rauh Pulitzer; 65(1)..... Director -- 1999 1999
James M. Snowden, Jr.; 55...... Director -- 1999 1999
Robert C. Woodworth; 51........ Director; President and
Chief Executive Officer 1999 1999 1999
DIRECTORS CONTINUING IN OFFICE
CLASS B DIRECTORS
William Bush; 52............... Director -- 1999 2000
Michael E. Pulitzer; 69(1)..... Director; Chairman of the Board 1999 1998 2000
Ronald H. Ridgway; 60.......... Director; Senior Vice President-
Finance 1999 1998 2000
CLASS C DIRECTORS
Ken J. Elkins; 61.............. Director -- 1999 2001
Alice B. Hayes; 61............. Director -- 1999 2001
David E. Moore; 75(1).......... Director -- 1999 2001
OTHER EXECUTIVE OFFICERS
Terrance C.Z. Egger; 41........ Vice President 1999 -- --
James V. Maloney; 50........... Secretary 1999 -- --
</TABLE>
- ---------------
(1) Michael E. Pulitzer is a cousin of David E. Moore and a brother-in-law of
Emily Rauh Pulitzer.
(2) Any service as a director of or employment with PPC is discussed
individually in the biographies that follow this table.
EMILY RAUH PULITZER is the widow of Joseph Pulitzer, Jr. Mrs. Pulitzer was
a curator of the St. Louis Art Museum from 1964 through 1973. She currently
serves certain St. Louis and national charitable, civic and arts organizations.
Pursuant to the terms of Mrs. Pulitzer's consulting agreement with the Company,
the Company has agreed to use its best efforts to cause Mrs. Pulitzer to be a
member of its Board of Directors. Mrs. Pulitzer also served as a member of PPC's
Board of Directors from 1993 until March 1999.
JAMES M. SNOWDEN, JR. has been an Executive Vice President of Huntleigh
Securities Corporation ("Huntleigh") since November 6, 1995. Mr. Snowden was a
Vice President of A.G. Edwards & Sons, Inc. from June 1984 through November 3,
1995 and was a director of A.G. Edwards & Sons, Inc. from March 1988 through
February 1994. PPC retained, and the Company intends to retain in the future,
Huntleigh Securities Corporation as financial advisors in connection with such
financial matters as it deems appropriate. Mr. Snowden also served as a member
of PPC's Board of Directors from 1986 until March 1999.
ROBERT C. WOODWORTH has served as the Company's President and Chief
Executive Officer since January 1, 1999. Mr. Woodworth was a Vice President -
Newspapers of Knight Ridder, Inc. from May 1997 until December 1998. Prior to
that, Mr. Woodworth worked for Capital Cities/ABC, most recently as Publisher of
The Kansas City Star and Senior Vice President -- Metro Newspapers. Mr.
Woodworth, who joined Capital Cities in 1973, previously served in various
capacities at a number of Capital Cities properties, including Executive Vice
President and General Manager of The Fort-Worth Star Telegram and Vice President
- -- Operations of The Belleville News-Democrat.
5
<PAGE> 9
WILLIAM BUSH has been a partner in the law firm of Fulbright & Jaworski
L.L.P. (and its predecessor firm, Reavis & McGrath) since 1977. He is the
partner in charge of the New York office and a member of the Executive Committee
of the firm. PPC retained, and the Company intends to retain in the future,
Fulbright & Jaworski L.L.P. as attorneys in connection with such legal matters
as it deems appropriate. Mr. Bush also served as a member of PPC's Board of
Directors from 1997 until March 1999.
MICHAEL E. PULITZER was elected Chairman of the Board of the Company in May
1998, and served as the Company's President and Chief Executive Officer from May
1998 through December 1998. Mr. Pulitzer was elected Chairman of the Board of
PPC on June 11, 1993 and served as its President and Chief Executive Officer
from April 1986 through March 18, 1999. Mr. Pulitzer served as Vice Chairman of
the Board of PPC from April 1984 through March 1986 and as its President and
Chief Operating Officer from April 1979 through March 1984. It is contemplated
that Mr. Pulitzer will enter into an employment agreement with the Company. Mr.
Pulitzer also served as a member of PPC's Board of Directors from 1964 until
March 1999 and currently serves as a director of Hearst-Argyle.
RONALD H. RIDGWAY has served as the Company's Senior Vice
President -- Finance since May 1998 and served as PPC's Senior Vice
President -- Finance from March 1986 through March 18, 1999. Prior thereto, Mr.
Ridgway served as PPC's Vice President -- Finance from April 1984 through March
1986, as Treasurer from April 1979 through March 1986, and as Secretary and
Assistant Treasurer from January 1978 through March 1979. Mr. Ridgway also
served as a member of PPC's Board of Directors from 1979 until March 1999.
KEN J. ELKINS served as PPC's Senior Vice President -- Broadcasting
Operations from April 1986 through March 16, 1999 and prior thereto, from April
1984 through March 1986, served as PPC's Vice President -- Broadcast Operations.
Mr. Elkins is a director of Commerce Bank of St. Louis and a director of
Hearst-Argyle. Mr. Elkins also served as a member of PPC's Board of Directors
from 1983 until March 1999.
ALICE B. HAYES has been President of the University of San Diego since July
1995. From July 1989 through May 1995, Dr. Hayes was Executive Vice President
and Provost of St. Louis University, St. Louis, Missouri, and for over five
years prior thereto held various academic positions at Loyola University of
Chicago. Dr. Hayes also served as a member of PPC's Board of Directors from 1993
until March 1999.
DAVID E. MOORE, lifelong journalist, founded Harrison Independent
(Westchester County, NY), Connecticut Business Journal in association with
Westchester Business Journal, and International Business magazine. Mr. Moore has
entered into a consulting agreement with the Company which includes an agreement
by the Company to use its best efforts to cause Mr. Moore to be a member of its
Board of Directors. Mr. Moore also served as a member of PPC's Board of
Directors from 1984 until March 1999.
TERRANCE C.Z. EGGER has served as a Vice President of the Company since
February 1999 and served as a Vice President of PPC from March 1996 until March
1999 and General Manager of the St. Louis Post-Dispatch (the "Post-Dispatch")
since March 1996. Prior to joining PPC, Mr. Egger served as Vice President and
Advertising Director for TNI Partners.
JAMES V. MALONEY has served as Secretary of the Company since May 1998 and
served as PPC's Secretary from January 1984 to March 18, 1999. Mr. Maloney was
appointed Director of Shareholder Relations for the Company on March 18, 1999
and served as Director of Shareholder Relations for PPC from June 1987 until
March 1999.
During 1998, the Board of Directors of the Company held three meetings and
acted one time by unanimous written consent. Each director attended more than
seventy-five percent (75%) of the Board meetings held during the period he
served as a director. There were no committees of the Board of Directors of the
Company in 1998.
During 1998, PPC's Board of Directors held 13 meetings. Each director
attended more than seventy-five percent (75%) of the Board meetings and meetings
of Board committees on which he or she served.
6
<PAGE> 10
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain officers, and persons who own more than ten percent (10%)
of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
No such reports were required to be filed during 1998. The Company believes that
during the 1998 fiscal year, the officers, directors and holders of more than
10% of PPC's common stock and Class B common stock complied with all Section
16(a) filing requirements.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has, and the Board of Directors of
PPC had until March 18, 1999, an Audit Committee, Compensation Committee,
Executive Committee, Finance Committee, Nominating Committee and Planning
Committee.
The Company's Audit Committee consists of the two directors who are
determined to be independent directors under the corporate responsibility
requirements for companies listed on the New York Stock Exchange. The Audit
Committee is responsible to the Board of Directors for overseeing and reviewing
audit results and monitoring the effectiveness of internal audit functions.
Alice B. Hayes and James M. Snowden, Jr. currently serve as members of this
Committee.
PPC's Audit Committee consisted of two directors who were (i) determined to
be independent of management and free from any relationship that would interfere
with the exercise of independent judgment as members of the Audit Committee and
(ii) designated by a resolution adopted by a majority of PPC's whole Board of
Directors. This Committee, which met three times during 1998, was responsible to
PPC's Board of Directors for overseeing and reviewing audit results and
monitoring the effectiveness of internal audit functions. Alice B. Hayes and
James M. Snowden, Jr. served as members of this Committee during 1998 and until
March 1999.
The Company's Compensation Committee consists of the directors who hold the
positions of Chairman of the Board and President, and two directors who are not
officers of the Company. The Board of Directors may at its discretion appoint a
fifth person, who, if such person is not a director, shall be an advisory member
of the Compensation Committee. The Compensation Committee renders advice with
respect to compensation matters, administers, among other things, the Annual
Incentive Compensation Plan, and will administer the Pulitzer Inc. 1999 Stock
Option Plan, the Pulitzer Inc. 1999 Key Employees' Restricted Stock Purchase
Plan and the Pulitzer Inc. 1999 Employee Stock Purchase Plan, subject to
stockholder approval of these plans. In addition to Michael E. Pulitzer and
Robert C. Woodworth, David E. Moore, William Bush and James M. Snowden, Jr.
currently serve as members of this Committee.
During 1998 and until March 1999, PPC's Compensation Committee consisted of
Michael E. Pulitzer, who was Chairman of the Board, President and Chief
Executive Officer of PPC, and three directors who were not officers of PPC.
PPC's Compensation Committee, which met three times during 1998, rendered advice
with respect to compensation matters and administered, among other things, the
Annual Incentive Compensation Plan, the PPC 1994 Stock Option Plan, the PPC 1994
Key Employees' Restricted Stock Purchase Plan and the PPC 1997 Employee Stock
Purchase Plan. In addition to Michael E. Pulitzer, David E. Moore, William Bush
and James M. Snowden, Jr. served as members of this Committee during 1998 and
until March 1999.
The Company's Executive Committee consists of the three directors who hold
the positions, respectively, of Chairman, President and Senior Vice President --
Finance, and, in the discretion of the Board of Directors, a fourth person,
designated by resolution adopted by a majority of PPC's whole Board of
Directors, who, if he or she is not a director, shall be an advisory member. The
Executive Committee exercises the power and authority of PPC's Board of
Directors during the period between Board meetings, subject to certain
limitations. In addition to Michael E. Pulitzer, Robert C. Woodworth and Ronald
H. Ridgway, David E. Moore currently serves as a member of this Committee.
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<PAGE> 11
During 1998 and until March 1999, PPC's Executive Committee consisted of
the four directors who held the positions of President, Senior Vice
President -- Finance, Senior Vice President -- Newspaper Operations, Senior Vice
President -- Broadcasting Operations, and one director who was not an officer of
PPC. The Executive Committee, which met one time during 1998, exercised the
power and authority of PPC's Board of Directors during the period between Board
meetings, subject to certain limitations. In addition to Michael E. Pulitzer,
Ronald H. Ridgway, Nicholas G. Penniman IV, and Ken J. Elkins, David E. Moore
served as a member of this Committee during 1998 and until March 1999.
The Company's Finance Committee consists of the three directors who hold
the positions, respectively, of Chairman, President and Senior Vice
President -- Finance and, in the discretion of the Board of Directors, a fourth
person, designated by resolution adopted by a majority of the whole Board of
Directors, who, if such person is not a director, shall be an advisory member.
This Committee may exercise, in general, the authority of the Board with respect
to (i) approval or disapproval of contracts obligating the Company for more than
$100,000 but not more than $750,000 or not more than $1,500,000 if the contract
relates to any Agency expense to be shared equally with The Herald Company,
Inc., (ii) designation of depositories for monies and other valuable effects of
the Company and (iii) designation of signatures on all checks, demands for money
or other similar accounts of the Company. Michael E. Pulitzer, Robert C.
Woodworth and Ronald H. Ridgway currently serve as members of this Committee.
During 1998 and until March 1999, PPC's Finance Committee consisted of the
three directors who held the positions of President, Senior Vice
President -- Finance and Senior Vice President -- Newspaper Operations. PPC's
Finance Committee, which met four times and acted two times by unanimous written
consent during 1998, had the authority to exercise, in general, the authority of
PPC's Board of Directors with respect to approval or disapproval of contracts
obligating PPC for more than $50,000 but not more than $500,000 or not more than
$1,000,000 if the contract related to any Agency expense to be shared equally
with The Herald Company, Inc. Michael E. Pulitzer, Ronald H. Ridgway and
Nicholas G. Penniman IV served as members of this Committee during 1998 and
until March 1999.
The Company's Nominating Committee consists of two or more directors who
are designated by resolution adopted by a majority of the whole Board of
Directors. This Committee recommends qualified candidates to the Board of
Directors and/or the stockholders for election as directors of the Company.
Michael E. Pulitzer, David E. Moore and James M. Snowden, Jr. currently serve as
members of this Committee.
In accordance with the Company's Restated Certificate of Incorporation, any
stockholder of record entitled to vote generally in the election of directors
desiring to nominate one or more persons for election as directors at any
meeting of stockholders may do so only if written notice of such stockholder's
intent to make such nomination or nominations is given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Company not less than 50 days nor more than 75 days prior to the meeting;
provided, however, that in the event that less than 60 days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of meeting was mailed or such public disclosure was made, whichever first
occurs. Each such notice to the Secretary shall set forth: (i) the name and
address of record of the stockholder who intends to make the nomination; (ii) a
representation that the stockholder is a holder of record of shares of capital
stock of the Company 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; (iii) the name, age, business and residence addresses, and principal
occupation or employment of each nominee; (iv) 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; (v) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission; and (vi) the consent of each nominee to
serve as a director of the Company if so elected. The Company may require any
proposed nominee to furnish such other information as may reasonably be required
by the Company to determine the eligibility of such proposed nominee to serve as
a director of the Company. The presiding officer of the meeting of
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<PAGE> 12
stockholders may, if the facts warrant, determine that a nomination was not made
in accordance with the foregoing procedure, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
During 1998 and until March 1999, PPC's Nominating Committee consisted of
three directors who were designated by resolution adopted by a majority of PPC's
whole Board of Directors. PPC's Nominating Committee, which met one time in
1998, recommended qualified candidates to PPC's Board of Directors and/or the
stockholders for election as directors of PPC. Michael E. Pulitzer, David E.
Moore and James M. Snowden, Jr. served as members of this Committee during 1998
and until March 1999.
The Company's Planning Committee consists of the three directors who hold
the positions, respectively, of Chairman, President and Senior Vice
President -- Finance and, in the discretion of the Board of Directors, up to
seven additional persons, designated by resolution adopted by a majority of the
whole Board of Directors, each of whom, if such person is not a director, shall
be an advisory member. This Committee may consider and develop short and
long-term plans and strategies for the Company for presentation to the Board of
Directors for consideration and appropriate action. In addition to Michael E.
Pulitzer, Robert C. Woodworth and Ronald H. Ridgway, William Bush, Ken J.
Elkins, Alice B. Hayes, David E. Moore, Emily Rauh Pulitzer and James M.
Snowden, Jr. currently serve as members of this Committee.
During 1998 and until March 1999, PPC's Planning Committee consisted of the
four directors who held the positions of President, Senior Vice
President -- Finance, Senior Vice President -- Newspaper Operations and Senior
Vice President -- Broadcasting Operations and, in the discretion of PPC's Board
of Directors, five additional persons designated by resolution adopted by a
majority of PPC's whole Board of Directors. The PPC Planning Committee, which
met three times during 1998, had the authority to consider and develop short and
long-term plans and strategies for PPC for presentation to PPC's Board of
Directors for consideration and appropriate action. In addition to Michael E.
Pulitzer, Ronald H. Ridgway, Nicholas G. Penniman IV and Ken J. Elkins, William
Bush, David E. Moore, Alice B. Hayes, Emily Rauh Pulitzer and James M. Snowden,
Jr. served as members of this Committee during 1998 and until March 1999.
DIRECTOR COMPENSATION
Compensation for non-employee directors of the Company is, and compensation
for non-employee directors of PPC during 1998 and until March 18, 1999 was, set
at $5,000 per year. In addition, each non-employee director of the Company
receives $750 for each meeting of the Board of Directors or any of its
committees he or she attends in person or by telephone, a $1,000 travel
allowance if he or she attends in person, and a per diem payment of $150 for
each day he or she stays overnight in St. Louis or elsewhere in connection with
any meeting of the Board of Directors or any of its Committees. Each
non-employee director of PPC received similar meeting fees, travel allowances
and per diem payments.
Subject to stockholder approval of the Pulitzer Inc. 1999 Stock Option
Plan, options to purchase 3,000 shares of Common Stock, subject to adjustments
for future capital changes, if any, will automatically be granted thereunder to
each non-employee director of the Company (other than directors who beneficially
own 1% or more of any class of capital stock of the Company) on the date
following each Annual Meeting of Stockholders. The exercise price per share will
be equal to the fair market value per share of Common Stock on the date of
grant. Unless sooner terminated pursuant to the terms of the Pulitzer Inc. 1999
Stock Option Plan, each option will expire ten years from the date of grant. At
present, the non-employee directors eligible to participate in the Pulitzer Inc.
1999 Stock Option Plan are Dr. Hayes and Messrs. Bush, Elkins and Snowden.
David E. Moore, a director and member of the Company's Compensation
Committee, is party to a consulting agreement with the Company, dated March 18,
1999, pursuant to which Mr. Moore provides, at the request of the Chairman of
the Board of Directors, managerial advice regarding the business operations of
the Company and its subsidiaries and general business advice regarding long-term
strategic planning. For his services under the agreement, Mr. Moore will be paid
at an annual rate of $147,000 in 1999. The consulting agreement provides for
automatic renewals unless terminated by either party not later than December 1
of any calendar year. Additionally, Mr. Moore was party to a similar consulting
agreement with PPC, dated
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<PAGE> 13
October 21, 1986, which was terminated on March 18, 1999. For his services under
the agreement with PPC, Mr. Moore was paid $140,000 in 1998.
Emily Rauh Pulitzer, a director, is party to a consulting agreement with
the Company, dated March 18, 1999, pursuant to which Mrs. Pulitzer provides, at
the request of the Chairman of the Board of Directors, advice regarding the
business operations of the Company and its subsidiaries, particularly their
newspaper operations, and general advice regarding long-term strategic planning.
For her services under the agreement, Mrs. Pulitzer will be paid at an annual
rate of $147,000 in 1999. The consulting agreement provides for automatic
renewals unless terminated by either party not later than December 1 of any
calendar year. Mrs. Pulitzer was party to a similar consulting agreement with
PPC, dated January 26, 1998, which was terminated on March 18, 1999. For her
services under the agreement with PPC, Mrs. Pulitzer was paid $140,000 in 1998.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The philosophy of PPC's executive compensation policy was to have programs
which enabled PPC to attract and retain key executives and promote improved
corporate performance and which were linked to increasing stockholder value. The
following guidelines were established to carry out PPC's policy:
a) Base salaries should be maintained at levels consistent with competitive
market pay practices.
b) Executives should have a meaningful portion of their compensation at
risk.
c) A portion of executive compensation should be tied to the performance of
PPC.
d) Executive compensation should provide long-term incentives which align
the executive's interests with those of the stockholders.
e) Executive compensation should be subject to review by the Compensation
Committee.
It is anticipated that the philosophy of the Company's executive
compensation policy and the guidelines established to carry out that policy will
be substantially similar to those of PPC.
In 1998, PPC's Compensation Committee was comprised of four directors.
Michael E. Pulitzer was the only member who was an employee of PPC. Although a
member of PPC's Compensation Committee, Mr. Pulitzer did not participate in
decisions relating to his own compensation. PPC's Compensation Committee, from
time-to-time, utilized the services of independent compensation consultants.
The Company's Compensation Committee is comprised of five directors.
Michael E. Pulitzer and Robert C. Woodworth are the only members who are
employees of the Company. Although members of the Company's Compensation
Committee, Mr. Pulitzer and Mr. Woodworth do not participate in decisions
relating to their own compensation. The Committee intends, from time-to-time, to
utilize the services of independent compensation consultants.
EXECUTIVE COMPENSATION PROGRAM
PPC's regular executive compensation program for 1998 was comprised of the
following three key components:
Base Salary -- Base salaries for the executives named in the compensation
tables other than Robert C. Woodworth (the "Named Executives") were reviewed
annually by the PPC Compensation Committee, which took into account competitive
pay levels by making comparisons with other media companies. PPC participated in
an annual media compensation survey conducted by an independent compensation
consultant in order to have access to statistically summarized data regarding
competitive pay levels at other media companies. This survey included 73 media
companies which voluntarily participated, including all of the companies in the
S&P Publishing-Newspaper Index but excluding two of the companies in the S&P
Broadcast Media Index. The PPC Compensation Committee also considered (i) a
number of factors relating to the particular executive, including individual
performance, level of experience, ability and knowledge of the job and (ii)
overall corporate
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<PAGE> 14
performance, including operating cash flow, after tax cash flow, net income and
earnings per share, without emphasizing any specific aspect. Collectively, the
salaries of the Named Executives were above the median salaries but below the
75th percentile for similar executives as reported in the survey. The PPC
Compensation Committee believed that the base salary levels were reasonable and
necessary to retain those key employees.
Annual Incentive Compensation Plan -- Under PPC's Annual Incentive
Compensation Plan, an amount, not to exceed 75% of an employee's annual base
salary, could be awarded by the PPC Compensation Committee based on certain
criteria. Participants could earn from 0 to 140% of target bonuses. The PPC
Compensation Committee, based on recommendations made to it by independent
compensation consultants, determined that, generally, annual incentive awards
should range from 10% of base salary for junior executives to 50% of base salary
for the chief executive officer. The criterion for annual incentive bonuses was
a quantitative measure based on the actual level of operating cash flow
(operating income before depreciation and amortization) compared to an operating
cash flow goal established by the PPC Compensation Committee at the beginning of
the year. The PPC Compensation Committee believed that PPC's operating cash flow
performance would be reflected in stockholder values over the long term.
Operating cash flow goals established for the Post-Dispatch, publishing and
broadcasting segments and consolidated were used as performance measurements
depending upon the area(s) of responsibility of the Named Executives. Actual
operating cash flows for 1998 as a percentage of the goals established for the
four performance measurements ranged from 102% to 109%. For 1998, the Named
Executives as a group were paid 113% of their combined target annual incentive
bonus amount.
Stock Compensation -- Traditionally, stock compensation for PPC was
comprised primarily of stock options and restricted stock grants. Those programs
provided key executives with an opportunity to increase their ownership of PPC
stock, thereby aligning the executives' interests more closely with those of the
stockholders of PPC. The PPC Compensation Committee was responsible for
administering PPC's stock option and restricted stock plans. Grant levels were
based on subjective judgment, taking into account individual performance,
competitive practices of other media companies and the number and value of
options and restricted stock held by an individual, without emphasizing any
factor. No particular emphasis was placed on corporate performance. Because PPC
announced in February 1998 that it was evaluating strategic options for its
broadcasting division, no grants were made under PPC's stock option and
restricted stock plans for 1998 to the Named Executives or other employees of
PPC.
It is expected that the Company's regular executive compensation program
will be comprised generally of the foregoing key components.
TRANSACTIONS BONUS PROGRAM
To encourage PPC's executives, including the senior officers and managers
of its broadcasting division, to use their best efforts to assist PPC's in
achieving its strategic objectives and to encourage those executives to remain
with PPC and its broadcasting division until the consummation of the
Transactions, PPC adopted a program which provided for the payment of retention
awards and transaction completion bonuses. Pursuant to this program, which was
formulated with the assistance of an independent compensation consultant in the
spring of 1998, PPC entered into individual written agreements with the Named
Executives and various other executives of PPC or its broadcasting division.
Under the agreements with each of Michael E. Pulitzer, Ken J. Elkins,
Nicholas G. Penniman IV, Ronald H. Ridgway, C. Wayne Godsey and John Kueneke,
each Named Executive became entitled to a retention award equal to $900,000,
$600,000, $150,000, $450,000, $250,000 and $250,000, respectively, on March 18,
1999. The agreements with the Named Executives also provided for the payment of
bonuses upon completion of the Merger. The amounts of the transaction completion
bonuses were $2,090,000, $1,000,000, $225,000, $675,000, $375,000 and $375,000,
respectively. In addition, Terrance C.Z. Egger received a transaction completion
bonus of $200,000 upon consummation of the Merger. The agreements for Messrs.
Elkins, Godsey and Kueneke also provided for cash separation payments of
approximately $1,796,000, $907,000 and $696,000 respectively. All of the amounts
payable to Michael E. Pulitzer, and a significant portion of the amounts payable
to Ronald H. Ridgway, were deferred. PPC entered into similar agreements
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<PAGE> 15
with certain of its other officers and executives who received retention and/or
transaction completion bonuses aggregating approximately $4,498,000.
DEFERRED COMPENSATION PLAN
The Internal Revenue Code of 1986, as amended (the "Code"), limits the
deductibility of executive compensation paid by public companies. In general,
under the applicable limitations, PPC was not, and the Company will not be, able
to deduct annual compensation paid to certain executive officers in excess of
$1,000,000 (subject to certain exceptions not here relevant). Non-deductibility
would result in additional tax cost to the Company. In making compensation
decisions, the PPC Compensation Committee gave consideration to the net cost to
PPC (including, for this purpose, the potential limitation on deductibility of
executive compensation). To lessen the likelihood that a portion of Michael E.
Pulitzer's or any other PPC senior executive's compensation for any year would
not be nondeductible, the PPC Board of Directors adopted the PPC Senior
Executive Deferred Compensation Plan (the "Deferred Compensation Plan"),
pursuant to which payment of senior executives' bonus compensation was deferred
to the extent necessary to avoid a loss of deduction by PPC. In 1998, a total of
$543,101 of Mr. Pulitzer's compensation was deferred under the PPC Deferred
Compensation Plan. In connection with the Transactions, the obligations under
the PPC Deferred Compensation Plan, as well as deferred payment obligations to
Michael E. Pulitzer and Ronald H. Ridgway in connection with the Transactions,
were assumed by the Company. These compensation deferrals represent an unsecured
obligation of the Company, bear interest at an agreed upon rate and, in general,
will be paid or begin being paid following the date of the termination of a
participating executive's employment with the Company. It is anticipated that
the Company will make similar deferral arrangements for some or all of the
otherwise limited compensation earned in the future by its executive officers.
Nevertheless, there is no assurance that all of the compensation paid or payable
to Mr. Pulitzer, Mr. Woodworth or certain other executives for any year will be
deductible in full by the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
As Chief Executive Officer of PPC, Michael E. Pulitzer's base salary for
1998 was increased to $980,000 from $920,000 (effective January 1, 1998). Mr.
Pulitzer was awarded a bonus under PPC's Annual Incentive Compensation Plan for
1998 of $548,800, of which $543,101 was deferred. His target bonus was set at
50% of base salary. The actual bonus paid represented 112% of the target. One
hundred percent of the bonus was based on the achievement of consolidated
operating cash flow measured against the goal established by PPC's Compensation
Committee for 1998. The aggregate compensation paid to Mr. Pulitzer in 1998 was
deemed appropriate by the Committee (without the participation of Mr. Pulitzer)
considering the overall performance of the Company, taking into account the
Company's operating cash flow, after tax cash flow, net income and earnings per
share, and the performance of Mr. Pulitzer, including his years of experience
and stature in the publishing and broadcasting industries. The total
compensation paid to Mr. Pulitzer in 1998 was approximately at the median of the
total compensation, including long-term incentives, of chief executive officers
of similar media companies. As stated above, Mr. Pulitzer did not participate in
PPC's long-term stock compensation plans; however, he is eligible to participate
in the Company's 1999 Stock Option Plan.
It is anticipated that the Board of Directors of the Company, acting upon
the recommendation of outside compensation consultants, will approve the terms
and conditions of an employment agreement to be made by the Company with Mr.
Pulitzer. It is anticipated that Mr. Pulitzer's agreement will be for a term of
seven years and that Mr. Pulitzer will remain Chairman of the Board of Directors
of the Company. Initially, Mr. Pulitzer's salary and bonus opportunities will be
substantially the same as provided to him by PPC. Mr. Pulitzer is eligible to
participate in the Pulitzer Inc. 1999 Stock Option Plan and received on April 7,
1999 an initial stock option award in the Company valued at approximately
$1,500,000 (under the Black-Scholes formula), subject to stockholder approval of
that plan. It is also expected that the annual retirement pension payable to him
under the qualified and nonqualified pension and retirement plans of the Company
will be increased to approximately 50% (from 40%) of his final average
compensation.
On December 18, 1998, the Company entered into an employment agreement with
Robert C. Woodworth pursuant to which Mr. Woodworth serves as President and
Chief Executive Officer of the
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Company for an initial term of three years, beginning January 1, 1999. At the
end of each year, the agreement automatically renews for an additional year. Mr.
Woodworth is entitled to receive an annual base salary of $575,000 and an annual
incentive bonus target of 100% of salary. Mr. Woodworth received an initial cash
bonus of $200,000 and an additional cash payment of $200,000 to compensate him
for lost bonus opportunities with his previous employer. Mr. Woodworth also
received on April 7, 1999 an initial stock option grant in the Company valued at
approximately $1,500,000 under the Black-Scholes formula and a restricted stock
award in the Company valued at approximately $1,000,000, subject to certain
vesting and other conditions and stockholder approval of the Pulitzer Inc. 1999
Stock Option Plan and the Pulitzer Inc. 1999 Key Employees' Restricted Stock
Purchase Plan. If Mr. Woodworth terminates his employment for "good reason" or
the Company terminates his employment without "cause," then Mr. Woodworth will
be entitled to severance equal to three years' salary plus accelerated vesting
of the initial option and restricted stock awards. The Company utilized the
services of an independent compensation consultant to develop the compensation
package which was negotiated with Mr. Woodworth.
Michael E. Pulitzer, William Bush, David E. Moore and James M. Snowden, Jr.
comprised the Compensation Committee of the Board of Directors of PPC. Mr.
Woodworth was not a member of that Committee. Accordingly, Mr. Woodworth's
participation in this Compensation Committee report is limited to matters
pertaining to the Company.
Compensation Committee
of the Board of Directors:
MICHAEL E. PULITZER, Chairman
WILLIAM BUSH
DAVID E. MOORE
JAMES M. SNOWDEN, JR.
ROBERT C. WOODWORTH
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James M. Snowden, Jr., a member of the Company's Compensation Committee and
a member during 1998 and until March 18, 1999 of PPC's Compensation Committee,
is an Executive Vice President of Huntleigh. From November 6, 1995 through March
18, 1999, Huntleigh had a retainer relationship with PPC with respect to general
financial advisory services. In addition, in December 1997, PPC entered into an
engagement letter with Huntleigh pursuant to which Huntleigh acted as a
financial adviser to PPC with respect to various alternatives regarding PPC's
broadcasting operations. Pursuant to the letter and upon consummation of the
Transactions, PPC paid Huntleigh approximately $10.1 million. PPC also agreed to
reimburse Huntleigh and its affiliates, partners, directors, agents, employees
and control person for certain legal and other expenses and to indemnify
Huntleigh against certain liabilities, including certain liabilities under the
federal securities laws. The Company intends to retain Huntleigh in the future
as financial advisors in connection with such financial matters as it deems
appropriate.
David E. Moore, a member of the Company's Compensation Committee and a
member during 1998 and until March 18, 1999 of PPC's Compensation Committee, was
a party to a consulting agreement with PPC, pursuant to which PPC paid Mr. Moore
$140,000 in 1998. Mr. Moore is a party to a consulting agreement with the
Company, pursuant to which the Company will pay Mr. Moore at an annual rate of
$147,000 in 1999. The consulting agreement with the Company provides for
automatic renewals.
William Bush, a member of the Company's Compensation Committee and a member
during 1998 and until March 18, 1999 of PPC's Compensation Committee, is a
partner in Fulbright & Jaworski L.L.P. PPC retained, and the Company intends to
retain in the future, Fulbright & Jaworski L.L.P. as attorneys in connection
with such legal matters as it deems appropriate.
For a discussion of the retention awards and transaction completion bonuses
received by PPC's Named Executives and various other executives of PPC or its
broadcasting division, see "Compensation Committee Report on Executive
Compensation -- Transactions Bonus Program."
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a discussion of David E. Moore and Emily Rauh Pulitzer's consulting
agreements with PPC and the Company, see "Management -- Director Compensation."
For discussion of Michael E. Pulitzer's anticipated employment agreement,
and Robert C. Woodworth's actual employment agreement, with the Company, see
"Compensation Committee Report on Executive Compensation -- Chief Executive
Officer Compensation."
It is anticipated that the Board of Directors of the Company, acting upon
the recommendation of outside compensation consultants, will approve the terms
and conditions of an employment agreement to be made by the Company with Ronald
H. Ridgway. It is anticipated that the term of Mr. Ridgway's agreement will be
between two and three years. Mr. Ridgway would serve as Senior Vice
President-Finance, the same position which he currently holds with the Company
and formerly held with PPC. His salary and bonus opportunities would be
substantially the same as were provided to him by PPC. It is anticipated that,
upon completion of the term of his employment agreement, the Company will waive
any early retirement reduction factor that would otherwise apply to Mr. Ridgway
in determining the annual retirement pension to which he would then be entitled
under the non-qualified pension plan of the Company (which is expected to be
similar to the Supplemental Executive Benefit Pension Plan formerly maintained
by PPC).
The Company also has entered into employment agreements with Terrance C.Z.
Egger and James V. Maloney that became effective upon consummation of the
Merger. Mr. Egger is currently employed as the General Manager of the
Post-Dispatch, and Mr. Maloney is currently employed as the Secretary of the
Company. Each of these agreements is for a term of three years, and each
agreement includes salary and bonus opportunities that are substantially similar
to what was formerly provided by PPC, except that the agreement with Mr. Egger
includes a provision for a restricted stock grant that would vest if his
employment with the Company continues until the end of the three-year term.
Nicholas G. Penniman IV ceased to serve as an executive officer of the
Company and PPC on March 16, 1999 and as a director of the Company and PPC on
March 18, 1999. The Company and Mr. Penniman have entered into a consulting
agreement under which Mr. Penniman will provide advisory and consulting services
to the Company until March 31, 2000 and will receive compensation from the
Company at substantially the same level as was provided to him by PPC. Upon
completion of Mr. Penniman's advisory and consulting services, the Company will
waive any early retirement reduction factor that would otherwise apply in
determining the annual retirement pension to which Mr. Penniman would then be
entitled.
Pursuant to the terms of the late Joseph Pulitzer Jr.'s employment
agreement, PPC paid, and the Company has assumed the obligation to pay, Emily
Rauh Pulitzer, as the beneficiary of Joseph Pulitzer Jr.'s deferred compensation
balance, a monthly annuity of $15,000 (including interest). The annuity payments
to Mrs. Pulitzer are expected to terminate in 2003.
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EXECUTIVE COMPENSATION
The Company was a wholly-owned subsidiary of PPC in 1998 and did not
conduct operations or separately compensate its executives in 1998, except, as
discussed below, in the case of Robert C. Woodworth. The following Summary
Compensation Table shows the compensation paid each of the last three fiscal
years to the eight most highly compensated executive officers of PPC for 1998:
PULITZER PUBLISHING COMPANY
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK AWARDS SARS(6) PAYOUTS COMPENSATION(7)
POSITION YEAR SALARY($) BONUS($) ($) ($) (#) ($) ($)
------------------ ---- --------- -------- ------------ ------------ -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer.......... 1998 $978,154 $851,796 $0 $ 0 0 $0 $26,905
Chairman of the Board, 1997 918,115 554,972 0 0 0 0 37,951
President and Chief 1996 850,000 597,676 0 0 0 0 6,135
Executive Officer
Robert C. Woodworth.......... 1998 0 400,000(1) 0 0 0 0 0
President and Chief 1997 0 0 0 0 0 0 0
Executive Officer 1996 0 0 0 0 0 0 0
Ken J. Elkins(2)............. 1998 449,654 213,098 0 0 0 0 22,936
Senior Vice President- 1997 420,000 206,273 0 0 35,000 0 26,716
Broadcasting Operations 1996 390,000 220,326 0 0 32,000 0 15,077
Nicholas G. Penniman IV(3)... 1998 339,538 147,183 0 0 0 0 11,721
Senior Vice President- 1997 324,435 167,779 0 0 17,500 0 14,617
Newspaper Operations 1996 304,000 139,880 0 0 15,000 0 5,500
Ronald H. Ridgway............ 1998 339,385 153,684 0 0 0 0 11,023
Senior Vice President- 1997 318,950 154,856 0 0 27,500 0 13,259
Finance 1996 281,000 158,505 0 0 20,000 0 5,464
John C. Kueneke(3)........... 1998 249,804 90,632 0 0 0 0 5,462
Executive Vice President 1997 233,000 87,496 0 0 8,000 0 3,945
Pulitzer Broadcasting 1996 212,827 91,593 0 0 4,000 0 0
Company
C. Wayne Godsey(4)........... 1998 249,804 88,032 0 0 0 0 5,462
Executive Vice President 1997 233,000 84,349 0 0 8,000 0 5,260
Pulitzer Broadcasting 1996 217,000 91,843 0 0 4,000 0 4,818
Company
Terrance C.Z. Egger.......... 1998 212,308 74,400 0 11,588(5) 0 0 4,768
Vice President 1997 174,327 68,250 0 13,134(5) 5,000 0 3,074
1996 121,731 61,750 0 3,465(5) 3,000 0 61,379
</TABLE>
- ---------------
(1) Reflects the payment to Mr. Woodworth of $200,000 as a signing bonus
pursuant to the terms of Mr. Woodworth's employment agreement with the
Company and $200,000 to compensate him for lost bonus opportunities with
his previous employer.
(2) Resigned as a director and executive officer of Pulitzer Broadcasting
Company, a wholly-owned subsidiary of PPC which conducted PPC's radio and
television broadcasting operations until the Merger.
(3) Resigned as executive officer of PPC on March 16, 1999.
(4) Resigned as a director and executive officer of Pulitzer Broadcasting
Company on February 16, 1999.
(5) Income related to the vesting of stock grants issued while employed by TNI
Partners, which, as agent for the Company and Gannett Co., Inc., is
responsible for advertising and circulation, printing and delivery and
collection of the revenues of The Arizona Daily Star and the Tuscon
Citizen.
(6) Stock options have been adjusted for 1996 to reflect the impact of a common
stock and Class B common stock split in the form of a 33.3% stock dividend,
declared by PPC's Board of Directors on September 12, 1996.
(7) Includes (i) PPC's contribution to the PPC Retirement Savings Plan, in the
amount of $5,600, $5,600, $5,600, $5,600, $5,462, $5,462 and $4,768,
respectively, in the cases of Messrs. Pulitzer, Elkins, Penniman, Ridgway,
Kueneke, Godsey and Egger, (ii) income assessed which was related to split
dollar insurance of $21,305, $7,836, $6,121 and $5,423, in the cases of
Messrs. Pulitzer, Elkins, Penniman, and Ridgway, respectively, (iii) PPC's
15
<PAGE> 19
payment of an annual auto allowance to Ken Elkins of $9,500 in 1998, 1997
and 1996 and (iv) PPC's payment of moving expenses for Terrence C. Z. Egger
of $61,379 in 1996.
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants in fiscal year 1998 to executives of PPC or the
Company.
The following table provides information on option/SAR exercises in fiscal
1998 by the named executive officers of PPC and the value of such officers'
unexercised options/SARs at December 31, 1998:
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1998 OPTION VALUES
<TABLE>
<CAPTION>
EXERCISES DURING YEAR FISCAL YEAR-END
- ---------------------------------------------------------- ------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY
SHARES (SHARES)(1) OPTIONS/SARS($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer......... 0 $ 0 0 0 $ 0 $ 0
Ken J. Elkins............... 30,000 2,160,603 156,332 34,000 8,951,063 1,039,254
Nicholas G. Penniman IV..... 18,333 1,382,267 92,501 16,666 5,279,619 506,545
Ronald H. Ridgway........... 0 0 157,499 25,000 9,693,052 749,379
John C. Kueneke............. 10,666 429,371 0 6,667 0 194,267
C. Wayne Godsey............. 13,201 923,292 29,467 9,334 1,600,223 331,118
Terrance C.Z. Egger......... 3,222 160,432 3,778 4,333 140,267 127,929
</TABLE>
- ---------------
(1) Computed based upon the difference between closing price of PPC's common
stock on December 24, 1998, the last business day of PPC's 1998 fiscal year,
and the exercise price.
Immediately prior to the Merger, PPC cashed out and terminated all options
then outstanding under PPC's 1986 and 1994 stock option plans (the "PPC Option
Plans"), whether or not vested. The amount paid by PPC in respect of the
termination of an outstanding PPC stock option equaled the difference between
the exercise price of the option and the average daily closing price of PPC's
common stock for the 10 trading days ending 2 trading days immediately prior to
the closing of the Merger. The amounts paid on March 18, 1999 to each of the
Named Executives under the immediately foregoing table were: Ken J. Elkins
($8,758,000); Terrance C.Z. Egger ($216,000); Nicholas G. Penniman IV
($5,079,000); Ronald H. Ridgway ($9,261,000, a portion of which was deferred);
John C. Kueneke ($151,000); and C. Wayne Godsey ($1,680,000).
PPC Retirement Savings Plan. In connection with the Merger, the Company
assumed sponsorship of the Pulitzer Publishing Company Retirement Savings Plan
(the "Retirement Savings Plan"). The Retirement Savings Plan is a qualified
profit sharing plan under Section 401(a) of the Code with a cash or deferred
arrangement covered by Section 401(k) of the Code. Participants' elective
deferrals are made through payroll deductions and are subject to the annual
401(k) limit which, for 1999, is $10,000. The Company makes annual matching
contributions (limited to 2% of pay) with respect to 50% of a participating
executive's elective contributions. In addition, the Company makes a $50 monthly
profit sharing contribution for each participating executive. Account balances
attributable to broadcasting employees who participated in the Retirement
Savings Plan before the Merger will be transferred to a similar plan maintained
for their benefit by Hearst-Argyle.
PPC Pension Plan. In connection with the Merger, the Company assumed
sponsorship of the Pulitzer Publishing Company Pension Plan (the "Pension
Plan"). The Pension Plan is a qualified defined benefit plan under Section
401(a) of the Code. In general, the Pension Plan covers only non-union
employees, including the Company's executive officers. (The Company also assumed
sponsorship of the Joseph Pulitzer Pension Plan, which covers certain union and
other present or retired employees not covered by the Pension Plan.) The Pension
Plan provides for payment of a monthly retirement income which, expressed as a
single life annuity
16
<PAGE> 20
beginning at normal retirement age (later of age 65 or the completion of five
years of participation), is approximately equal to the sum of (i) 1.5% of
monthly earnings for each year of service up to 25 years, (ii) 1% of monthly
earnings for each year of service beyond 25 years, (iii) .5% of monthly earnings
in excess of "covered compensation" for each year of service up to a total of 35
years (subject to certain limitations), and (iv) the benefit, if any, earned
under a predecessor plan as of December 31, 1988. Generally, monthly earnings
means the monthly average of an employee's base earnings in the specified years,
covered compensation means base compensation with respect to which social
security benefits are earned, and service includes prior service with PPC.
Pension Plan benefits become vested upon completion of five years of service. A
covered employee may retire with reduced benefits after attaining age 55 and
completing five years of service. Assets and liabilities of the Pension Plan
attributable to the broadcasting employees who participated in the Pension Plan
before the Merger will be transferred to a similar plan maintained by
Hearst-Argyle for the benefit of those employees.
Total estimated annual retirement benefits for Michael E. Pulitzer, Robert
C. Woodworth, Ken J. Elkins, Nicholas G. Penniman IV, Ronald H. Ridgway, John C.
Kueneke, C. Wayne Godsey and Terrance C.Z. Egger under the Pension Plan,
assuming they had all continued service at their most recent levels of
compensation and retirement at age 65 (or at the present date if older than 65),
are $72,205, $40,503, $71,776, $70,306, $65,607, $46,535, $62,018, and $74,440,
respectively. The following table shows the estimated annual pension payable
under the Pension Plan to persons retiring at age 65. The table reflects the
fact that the benefits provided by the Pension Plan's formula are subject to
certain limitations under the Code.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS
ANNUAL FOR YEARS OF SERVICES INDICATED
COMPENSATION -----------------------------------------------
AT RETIREMENT 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- ------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$150,000.................. $30,216 $35,950 $40,263 $41,447 $42,109
200,000.................. 41,115 49,035 55,062 56,915 58,074
250,000.................. 45,521 60,694 69,861 72,384 74,039
300,000.................. 45,521 60,694 75,868 87,041 90,004
350,000.................. 45,521 60,694 75,868 87,041 98,215
400,000.................. 45,521 60,694 75,868 87,041 98,215
450,000.................. 45,521 60,694 75,868 87,041 98,215
500,000.................. 45,521 60,694 75,868 87,041 98,215
</TABLE>
Supplemental Executive Benefit Pension Plan. Before the Merger, PPC
maintained the Pulitzer Publishing Company Supplemental Executive Benefit
Pension Plan (the "Supplemental Plan"), an unfunded defined benefit plan which
provided for the payment of a minimum annual retirement income to executive
officers and other designated highly compensated employees, taking into account
employer provided benefits earned under PPC's Retirement Savings Plan and
Pension Plan. The retirement pension earned by a Supplemental Plan participant,
expressed as an annual single life annuity beginning at the participant's normal
retirement date (age 65 and 10 years of service), was equal to 40% of the
participant's final three-year average compensation multiplied by a fraction,
the numerator of which is the number of the participant's years of credited
service, and the denominator of which is 25. The amount of the benefit, as so
determined, was payable by PPC to the extent it was not covered by the
employer-provided benefits payable to the participant under PPC's Retirement
Savings Plan and Pension Plan. Participants became vested in their Supplemental
Plan benefits after the completion of ten years of service. Vested participants
who retired between age 55 and 65 could elect to begin receiving reduced annual
payments before age 65. The early retirement reduction factor could be waived in
specific cases and, subject to certain conditions, will be waived in the cases
of Ken J. Elkins and Nicholas G. Penniman IV. Subject to certain conditions, the
Supplemental Plan also provided for the payment of a 50% survivor annuity to the
surviving spouse of a deceased participant. In accordance with the Merger
Agreement, the Company assumed the Supplemental Plan liabilities for all covered
non-broadcasting employees and for certain broadcasting employees (including
Ken. J. Elkins) who did not transfer to Hearst-Argyle. The Supplemental Plan (or
a variation thereof) will be continued by the Company.
17
<PAGE> 21
The following table shows the estimated annual pension benefits that would
be payable under the existing Supplemental Plan formula, without regard to
offsets for employer-provided benefits payable under the Pension Plan and the
Retirement Savings Plan to persons retiring at age 65 in the specified
compensation and years-of-service classifications. The Supplemental Plan benefit
is the difference between the total benefit shown in the following table and the
employer-provided benefit earned under the Pension Plan and the Retirement
Savings Plan. Total estimated annual retirement benefits for Michael E.
Pulitzer, Robert C. Woodworth, Ken J. Elkins, Nicholas G. Penniman IV, Ronald H.
Ridgway, John C. Kueneke, C. Wayne Godsey and Terrance C.Z. Egger under the
Supplemental Plan, assuming continued service at their current levels of
compensation and retirement at 65 (or at the present date if older than 65), are
$505,656, $211,359, $172,174, $109,342, $103,770, $23,381, $44,883 and $0,
respectively.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS
FINAL THREE- FOR YEARS OF SERVICE INDICATED
YEAR AVERAGE ----------------------------------------------------
COMPENSATION 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$150,000............. $ 36,000 $ 48,000 $ 60,000 $ 60,000 $ 60,000
200,000............. 48,000 64,000 80,000 80,000 80,000
250,000............. 60,000 80,000 100,000 100,000 100,000
300,000............. 72,000 96,000 120,000 120,000 120,000
350,000............. 84,000 112,000 140,000 140,000 140,000
400,000............. 96,000 128,000 160,000 160,000 160,000
450,000............. 108,000 144,000 180,000 180,000 180,000
500,000............. 120,000 160,000 200,000 200,000 200,000
</TABLE>
Deferred Compensation Plan. PPC maintained a deferred compensation plan
(the "Deferred Compensation Plan") pursuant to which its senior executive
officers were required to defer annual incentive compensation to the extent
necessary to avoid the $1 million executive compensation deduction limitation of
Section 162(m) of the Code. The Deferred Compensation Plan also permitted
eligible executives to make elective deferrals of annual bonus awards. Amounts
deferred under the Deferred Compensation Plan were credited with interest based
on the one-year treasury bill rate in effect at the beginning of each year. At
the time of the Merger, Michael E. Pulitzer was the only participant in the
Deferred Compensation Plan. In connection with the Merger, the Company assumed
the obligations of PPC under the Deferred Compensation Plan, as well as
additional Merger-related compensation obligations of PPC to Michael E. Pulitzer
and Ronald H. Ridgway, the payment of which was deferred at the time of the
Merger. The total amount of the deferred compensation obligations to Messrs.
Pulitzer and Ridgway is approximately $5,206,000 and $1,863,000, respectively.
These compensation deferrals represent an unsecured obligation of the Company,
bear interest at an agreed upon rate and, in general, will be paid or begin
being paid following the date of the termination of a participating executive's
employment with the Company. The employment agreement between the Company and
Mr. Robert C. Woodworth provides for the deferral of a portion of bonus and
other compensation that would otherwise be payable to Mr. Woodworth. It is
anticipated that the Company will formalize the existing deferral arrangements
and make provision for future deferrals (for Mr. Woodworth and others) pursuant
to a new deferred compensation plan.
Split Dollar Life Insurance Arrangements. In December 1996, PPC established
so-called split dollar life insurance arrangements in connection with life
insurance policies issued on the lives of Michael E. Pulitzer, Ken J. Elkins,
Nicholas G. Penniman IV and Ronald H. Ridgway. In accordance with the Merger
Agreement, the assets and liabilities attributable to these arrangements were
assumed by the Company. These arrangements require the Company to make annual
premium deposits to the policies and give the Company an economic interest in
the policies. It is anticipated that the Company will make annual contributions
to these arrangements (subject to future recoupment in whole or in part) of
approximately $739,000 for up to nine more years. The Company is entitled to
receive the value of its interest in each policy upon the death of the insured
executive or, if applicable, the death of the survivor of the executive and his
spouse. The Company's interest in each policy is secured by a collateral
assignment of the policy.
18
<PAGE> 22
Other Insurance Benefits. PPC provided an insurance benefit program to
certain of its executive officers and key employees with group life, accidental
death and dismemberment and long-term disability insurance coverage in addition
to the group life and accidental death and dismemberment insurance coverage
maintained by the Company for all its employees. The executive group life
insurance benefit was based upon a multiple of pay, subject to a maximum death
benefit of $250,000. Upon retirement, the executive group life insurance
coverage was reduced to $50,000. The accidental death and dismemberment coverage
equaled the amount of the group life insurance benefit and terminated upon
retirement. PPC's long-term disability insurance coverage provided a salary
replacement equal to 60% of total compensation, subject to a maximum monthly
benefit payment of $10,000. Benefits were payable after the ninetieth day of
total disability and continued for the duration of the disability or until age
65. Executives who became disabled after age 60 were entitled to reduced
benefits. Benefits were integrated with other sources of disability income, such
as Social Security Disability Income.
It is anticipated that the Company will offer a similar insurance benefit
program to that of PPC.
For a discussion of employment and other agreements with the Named
Executives, see "Compensation Committee Report on Executive
Compensation -- Chief Executive Officer Compensation" and "Compensation
Committee Interlocks and Insider Participation -- Certain Relationships and
Related Transactions."
19
<PAGE> 23
STOCK PERFORMANCE GRAPH
The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
(PPC, S&P 500, S&P PUBLISHING (NEWSPAPER) INDEX)
PULITZER PUBLISHING COMPANY
RELATIVE MARKET PERFORMANCE
TOTAL RETURN 1993-1998
<TABLE>
<CAPTION>
PULITZER PUBLISHING S&P PUBLISHING
COMPANY S & P 500 COMPOSITE (NEWSPAPER)-INDEX
------------------- ------------------- -----------------
<S> <C> <C> <C>
'12/93' 100 100 100
'12/94' 113.65 101.32 92.38
'12/95' 171.28 139.4 116.39
'12/96' 224.31 171.4 147.98
'12/97' 307.04 228.59 241.23
'12/98' 427.56 293.91 249.68
</TABLE>
The total cumulative return on investment (change in the year-end stock
price plus reinvested dividends) for each of the periods for PPC, the S&P 500
Composite and the S&P Publishing (Newspaper) Index is based on the stock price
or composite index at the end of fiscal 1993.
The above graph compares the performance of PPC with that of the S&P 500
Composite and the S&P Publishing (Newspaper) Index with the investment weighted
on market capitalization. Companies included in the S&P Publishing (Newspaper)
Index are: (i) Dow Jones & Company, Inc., (ii) Gannett Co., Inc., (iii)
Knight-Ridder, Inc., (iv) The New York Times Company, (v) The Times Mirror
Company and (vi) Tribune Company. The Company's Common Stock began trading on
the New York Stock Exchange, Inc. under the symbol "PTZ" on March 19, 1999.
20
<PAGE> 24
APPROVAL OF THE PULITZER INC.
1999 KEY EMPLOYEES' RESTRICTED STOCK PURCHASE PLAN
The Board of Directors of the Company has adopted, subject to stockholder
approval at the Company's 1999 Annual Meeting of Stockholders, the Pulitzer Inc.
1999 Key Employees' Restricted Stock Purchase Plan (the "Restricted Stock
Plan").
The Company's Board of Directors believes that the Restricted Stock Plan
will enhance the ability of the Company to attract, motivate and retain key
personnel and will thereby serve the best interests of the Company and it
stockholders.
The principal features of the Restricted Stock Plan are summarized below.
This summary is qualified in its entirety by the provisions of the Restricted
Stock Plan, a copy of which is attached hereto as Appendix A.
The Restricted Stock Plan permits the issuance of shares of the Company's
Common Stock to present and future officers and other key employees and
personnel of the Company and its subsidiaries, which, for this purpose, shall be
deemed to include any entity in which the Company has an ownership interest,
directly or indirectly, of at least 50%. Shares may not be issued under the
Restricted Stock Plan to directors of the Company who are not also employees of
the Company and/or a subsidiary. Subject to appropriate adjustment for stock
dividends or other capital changes, the aggregate number of shares which may be
issued under the Restricted Stock Plan is limited to 500,000.
The Restricted Stock Plan will be administered by the Compensation
Committee of the Board of Directors of the Company. Subject to the provisions of
the Restricted Stock Plan, the Compensation Committee will determine whether,
when and to whom awards will be made. The Compensation Committee will also
determine the terms and conditions of each award, including, for example, the
purchase price of shares (which may not be less than par value) and the vesting
or other conditions to which shares acquired under the Restricted Stock Plan
will be subject. The Restricted Stock Plan may be amended or terminated at any
time by the Board of Directors, subject, however, to stockholder approval in the
case of certain material enhancements such as an increase in the aggregate
number of shares available under the Restricted Stock Plan.
In general, unless an early income recognition election is made, the
recipient of restricted stock under the Restricted Stock Plan will realize
ordinary income as and when the restrictions lapse equal to the then difference
between the fair market value of the stock and the amount paid therefor by the
recipient. Also, subject to the executive compensation deduction limitations of
Section 162(m) of the Code, the Company will generally be entitled to a
deduction corresponding to the ordinary income realized by the recipient.
Shares to be issued under the Restricted Stock Plan shall be available
either from authorized but unissued shares or from shares of Common Stock
reacquired by the Company. If approved by the Company's stockholders at the 1999
Annual Meeting of Stockholders, the Restricted Stock Plan will be effective as
of October 28, 1998 and will, unless terminated earlier by the Board of
Directors, terminate on October 28, 2008.
21
<PAGE> 25
The following table sets forth the restricted Common Stock awards to
officers and other key employees of the Company under the Restricted Stock Plan
on April 7, 1999, subject to stockholder approval of the Restricted Stock Plan:
NEW PLAN BENEFITS
1999 PULITZER INC. KEY EMPLOYEES' RESTRICTED STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION(1) VALUE($)(2) NUMBER OF UNITS(3)
- ------------------------------------------------------------ ----------- ------------------
<S> <C> <C>
Michael E. Pulitzer(4)...................................... * *
Chairman of the Board
Robert C. Woodworth......................................... 1,000,000 25,080(5)
President and Chief Executive Officer
Ronald H. Ridgway........................................... * *
Senior Vice President-Finance
Terrance C.Z. Egger......................................... 240,000 6,020(6)
Vice President
James V. Maloney............................................ * *
Secretary
Executive Group............................................. 1,240,000 31,100
Non-Executive Director Group................................ N/A N/A
Non-Executive Officer Employee Group........................ * *
</TABLE>
- ---------------
* The number of restricted shares, if any, which might be awarded in the future
is not determinable at this time.
(1) Ken J. Elkins, Nicholas G. Penniman IV, John C Kueneke and C. Wayne Godsey
are not included in this table because they are no longer employees of the
Company or its subsidiaries.
(2) Based on a value of $39.875 per share, the closing price of the Common
Stock on the New York Stock Exchange on April 7, 1999, the date of the
awards.
(3) Subject to approval of the Restricted Stock Plan by the stockholders of the
Company.
(4) Served as President and Chief Executive Officer of the Company until
December 31, 1998.
(5) The Company has credited these restricted shares to the account of Mr.
Woodworth, subject to certain conditions including a three year vesting
requirement.
(6) The Company has awarded these restricted shares to Mr. Egger, subject to a
three year vesting requirement.
The affirmative vote of a majority of the aggregate voting power of the
Company's outstanding shares of Common Stock and Class B Common Stock, voting
together as a single class, present in person or represented by proxy and
entitled to vote at the Annual Meeting of Stockholders is required for approval
of the Restricted Stock Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE PULITZER INC. 1999 KEY EMPLOYEES' RESTRICTED STOCK PURCHASE PLAN.
22
<PAGE> 26
APPROVAL OF THE PULITZER INC.
1999 STOCK OPTION PLAN
The Board of Directors of the Company has adopted, subject to stockholder
approval at the Company's 1999 Annual Meeting of Stockholders, the Pulitzer Inc.
1999 Stock Option Plan (the "Plan").
The Company's Board of Directors believes that the Plan will enhance the
Company's ability to attract, motivate and retain key personnel and will thereby
serve the best interests of the Company and its stockholders.
The principal features of the Plan are summarized below. This summary is
qualified in its entirety by the provisions of the Plan, a copy of which is
attached hereto as Appendix B.
The Plan permits the granting of options to purchase shares of the
Company's Common Stock to (a) present and future officers and other key
employees and personnel of the Company and its subsidiaries, which, except as
otherwise specified in the Plan, shall include any entity in which the Company
has an ownership interest, directly or indirectly, of at least 50%, and (b)
non-employee directors. Options to purchase 3,000 shares of Common Stock will
automatically be granted to each non-employee director (other than directors who
beneficially own 1% or more of any class of capital stock of the Company) on the
day following each annual meeting of the Company's stockholders commencing with
the 1999 Annual Meeting of Stockholders. Subject to adjustment to reflect stock
dividends and other capital changes, a total of 3,000,000 shares of Common Stock
may be issued under the Plan of which no more than 200,000 shares shall be
issuable to non-employee directors under the automatic grant feature. The
maximum number of shares covered by options granted to an employee in any
calendar year may not exceed 200,000.
The Plan will be administered by the Compensation Committee of the Board of
Directors of the Company. Subject to the provisions of the Plan, the committee,
acting in its sole and absolute discretion, will have the authority to grant
options under the Plan, to interpret the provisions of the Plan, to fix and
interpret the provisions of option agreements made under the Plan, to supervise
the administration of the Plan, and to take such other actions as may be
necessary or desirable in order to carry out the provisions of the Plan. Payment
for shares acquired upon the exercise of an option may be made (as determined by
the committee) in cash and/or such other form of payment as may be permitted
under the option agreement, including, without limitation, previously-owned
shares of the Company's Common Stock and installment payments under the
optionee's promissory note. Options granted to employees may be designated as
"incentive stock options" eligible for favorable income tax treatment under the
Code. In general, the option exercise price per share may not be less than 85%
of the fair market value per share on the date the option is granted (100% of
fair market value in the case of "incentive stock options"). All options must
expire no later than ten years from the date of grant, and, except as otherwise
permitted by the committee, no option may be exercised more than 60 days after
termination of the optionee's service (or, if the optionee's service is
terminated by reason of retirement, disability or death, three years
thereafter). Options automatically granted to non-employee directors will
generally continue to be exercisable for three years following the date of the
optionee's termination of service as a member of the Board of Directors.
The Plan may be amended or terminated at any time by the Board of
Directors, subject, however, to stockholder approval in the case of certain
material enhancements such as an increase in the number of shares available
under the Plan. No options may be granted under the Plan after October 28, 2008.
An optionee will not realize taxable income upon the grant of an option. In
general, the holder of an option which does not qualify as an "incentive stock
option" (within the meaning of Section 422 of the Code) will realize ordinary
income when the option is exercised equal to the excess of the value of the
stock over the exercise price (i.e., the option spread), and the Company will
receive a corresponding deduction, subject to the executive compensation
deduction limitation of Section 162(m) of the Code. If the optionee is subject
to the six-month restrictions on sale of Common Stock under Section 16(b) of the
Securities Exchange Act of 1934, the optionee generally will recognize ordinary
income on the date the restrictions lapse, unless an early income recognition
election is made. Upon a later sale of the stock, the optionee will realize
capital gain or loss
23
<PAGE> 27
equal to the difference between the selling price and the sum of the exercise
price plus the amount of ordinary income realized on the exercise.
The holder of an "incentive stock option" will not realize taxable income
upon the exercise of the option (although, on exercise, the option spread is an
item of tax preference income potentially subject to the alternative minimum
tax). If the stock acquired upon exercise of the "incentive stock option" is
sold or otherwise disposed of within two years from the option grant date or
within one year from the exercise date, then, in general, gain realized on the
sale is treated as ordinary income to the extent of the ordinary income that
would have been realized upon exercise if the option had not been an incentive
stock option, and the Company receives a corresponding deduction, subject to the
executive compensation deduction limitation of Section 162(m) of the Code. Any
remaining gain is treated as capital gain. If the stock is held for at least two
years from the grant date and one year from the exercise date and the optionee
is employed by the Company (or its subsidiaries) at all times beginning on the
date of grant and ending on the date three months (or, in the case of
disability, one year) prior to the exercise date, then all gain or loss realized
upon the sale will be capital gain or loss and the Company will not be entitled
to a deduction. A special basis adjustment is applied to reduce the gain for
alternative minimum tax purposes.
It is possible that compensation realized under the Plan by certain
executive officers will not be deductible by the Company by reason of the
executive compensation deduction limitation of Section 162(m) of the Code.
The Plan is not qualified under Section 401(a) of the Code.
The following table sets forth information relating to the options granted
under the Plan on April 7, 1999, subject to stockholder approval of the Plan:
NEW PLAN BENEFITS
1999 PULITZER INC. STOCK OPTION PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE
NAME AND POSITION(1) ($)(2) NUMBER OF UNITS(3)
- ------------------------------------------------------------ ------------ ------------------
<S> <C> <C>
Michael E. Pulitzer(4)...................................... 1,500,000 139,800
Chairman of the Board
Robert C. Woodworth......................................... 1,500,000 139,800
President and Chief Executive Officer
Ronald H. Ridgway........................................... 602,000 56,070
Senior Vice President -- Finance
Terrance C.Z. Egger......................................... 191,000 17,800
Vice President
James V. Maloney............................................ 95,000 8,900
Secretary
Executive Group............................................. 3,888,000 362,370
Non-Executive Director Group................................ * *
Non-Executive Officer Employee Group........................ 1,460,000 136,117
</TABLE>
- ---------------
* Options to purchase shares of Common Stock, if any, which might be granted
in the future are not determinable at this time.
(1) Ken J. Elkins, Nicholas G. Penniman IV, John C Kueneke and C. Wayne Godsey
are not included in this table because they are no longer employees of the
Company or its subsidiaries.
(2) These grants were made on April 7, 1999, subject to approval of the Plan by
the Company's stockholders. The exercise price per share is $39.875 (the
closing price on the grant date). The dollar values shown represent the
values of the grants calculated pursuant to the Black-Scholes formula.
(3) Subject to approval of the Plan by the stockholders of the Company.
(4) Served as President and Chief Executive Officer of the Company until
December 31, 1998.
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<PAGE> 28
The affirmative vote of a majority of the aggregate voting power of the
Company's outstanding shares of Common Stock and Class B Common Stock, voting
together as a single class, present in person or represented by proxy and
entitled to vote at the Annual Meeting of Stockholders is required for approval
of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE PULITZER INC. 1999 STOCK OPTION PLAN.
APPROVAL OF THE PULITZER INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors of the Company has adopted, subject to stockholder
approval at the Company's 1999 Annual Meeting of Stockholders, the Pulitzer Inc.
1999 Employee Stock Purchase Plan (the "Employee Purchase Plan").
The Company's Board of Directors believes that the Employee Purchase Plan
will encourage broader stock ownership by employees who might not otherwise own
Common Stock and who, as owners of Common Stock, will have a greater incentive
to contribute to the profitability and long term growth of the Company.
The principal features of the Employee Purchase Plan are summarized below.
This summary is qualified in its entirety by the provisions of the Employee
Purchase Plan, a copy of which is attached hereto as Appendix C.
The Employee Purchase Plan allows eligible employees to authorize payroll
deductions for the periodic purchase of the Company's Common Stock at a price
generally equal to 85% of the Common Stock's fair market value.
In general, all employees of the Company and its subsidiaries are eligible
to participate in the Employee Purchase Plan after completing at least one year
of employment (including for this purpose pre-merger employment with PPC). For
purposes of the Employee Purchase Plan, a subsidiary is any corporation at least
50% of the stock of which is owned directly or indirectly by the Company.
Non-employee directors are not eligible to participate in the Employee Purchase
Plan.
Subject to appropriate adjustment for stock splits and other capital
changes, the Company may sell a total of 300,000 shares of its Common Stock
under the Employee Purchase Plan. Shares sold under the Employee Purchase Plan
may be authorized and unissued or held by the Company in its treasury. The
Company may purchase shares for resale under the Employee Purchase Plan.
Participation in the Employee Purchase Plan is completely voluntary.
Employees who choose to enroll in the Employee Purchase Plan must designate the
portion of their base cash compensation (limited to 10%) to be withheld during
each Employee Purchase Plan offering period. Unless changed, an offering period
is each three-month calendar quarter. If the Employee Purchase Plan is approved
by the Company's stockholders, it is anticipated that the first offering period
will be the calendar quarter beginning July 1, 1999. An employee's payroll
deductions will be adjusted downward or refunded to the extent necessary to
ensure that he or she will not purchase during any calendar year Common Stock
that has a fair market value greater than $25,000 (determined under the rules of
the Internal Revenue Service).
The amount of an employee's payroll deductions under the Employee Purchase
Plan will be credited to a bookkeeping account maintained in the employee's
name. At the end of each offering period, the amount credited to a participant's
account will be applied to the purchase of shares of Common Stock from the
Company at a price equal to 85% of the fair market value of the Common Stock at
that time.
An employee may elect to terminate his or her participation during an
offering period. An employee's participation will automatically terminate upon
the termination of his or her employment with the Company and its subsidiaries.
Upon termination of participation, payroll deductions will cease and the amount
credited to the participant's account (representing previous uninvested payroll
deductions) will be paid in cash to the participant (or the participant's
beneficiary). A participant who voluntarily withdraws from the Employee
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<PAGE> 29
Purchase Plan during an offering period may re-enroll for any subsequent
offering period for which he or she is an eligible employee.
The Employee Purchase Plan will be administered by the Compensation
Committee of the Board of Directors. Subject to the provisions of the Employee
Purchase Plan, the Compensation Committee, acting in its sole and absolute
discretion, will have full power and authority to construe, interpret and apply
the terms of the Employee Purchase Plan. The Board of Directors may amend or
terminate the Employee Purchase Plan at any time, subject to stockholder
approval in the case of amendments changing the class of persons eligible to
participate in or increasing the number of shares of Common Stock which may be
sold under the Employee Purchase Plan.
The Employee Purchase Plan is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Code. Amounts withheld
from an employee's pay under the Employee Purchase Plan will be taxable as
ordinary income. No income is realized by an employee upon the purchase of
shares at the end of an offering period. A participant may realize ordinary
income upon a sale or other disposition of shares acquired under the Employee
Purchase Plan. In general, if the sale or other distribution occurs more than
two years after the beginning of the offering period in which the shares were
acquired, then gain (if any) realized will be treated as ordinary income in an
amount up to the amount of the 15% purchase price discount. The balance of the
gain, if any, will be treated as long-term capital gain. If the sale or other
disposition occurs within said two-year period, then the employee will realize
ordinary income equal to the 15% purchase price discount and the amount of the
ordinary income will be added to the employee's cost basis for the purpose of
determining the capital gain or loss realized on the sale or other disposition.
The Company will be entitled to a deduction equal to the ordinary income
realized by an employee who sells or otherwise disposes of shares acquired under
the Employee Purchase Plan within two years after the purchase date.
The Employee Purchase Plan is not qualified under Section 401(a) of the
Code.
It is not possible at this time to determine who may elect to participate
in the Employee Purchase Plan. Such election will be made by each eligible
participant. Michael E. Pulitzer is not eligible to participate in the Employee
Purchase Plan.
The affirmative vote of a majority of the aggregate voting power of the
Company's outstanding shares of Common Stock and Class B Common Stock, voting
together as a single class, present in person or represented by proxy and
entitled to vote at the Annual Meeting of Stockholders is required for approval
of the Employee Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE PULITZER INC. 1999 EMPLOYEE STOCK PURCHASE PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Although the by-laws of the Company do not require the submission of the
selection of independent auditors to the stockholders for approval, the Board of
Directors considers it desirable that its appointment of independent auditors be
ratified by the stockholders. Deloitte & Touche LLP served as the independent
auditors for PPC and will serve in that capacity for the Company for the 1999
fiscal year. The Board of Directors will ask the stockholders to ratify the
appointment of this firm as independent auditors for the Company at the Annual
Meeting.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if he or she desires to do
so, and will be available to respond to appropriate questions from the
stockholders.
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<PAGE> 30
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 2000
Annual Meeting of Stockholders of the Company must be received by the Company no
later than December 21, 1999, for inclusion in the Board of Directors' proxy
statement and form of proxy relating to such meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
meeting. However, if any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their best judgment. The prompt return of your proxy will be
appreciated. Therefore, whether or not you expect to attend the meeting, please
sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
JAMES V. MALONEY
Secretary
Dated: April 19, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, WILL BE SENT WITHOUT CHARGE TO
ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: PULITZER INC., ATTN: JAMES V.
MALONEY, SECRETARY, 900 NORTH TUCKER BOULEVARD, ST. LOUIS, MISSOURI 63101.
27
<PAGE> 31
APPENDIX A
PULITZER INC.
1999 KEY EMPLOYEES' RESTRICTED STOCK PURCHASE PLAN
1. Purpose. The purpose of the Pulitzer Inc. 1999 Key Employees'
Restricted Stock Purchase Plan (the "Plan") is to enable Pulitzer Inc. (the
"Company") and its stockholders to secure the benefits of incentives inherent in
common stock ownership by present and future officers and other key employees
and personnel of the Company and its subsidiaries, which, for purposes hereof,
shall be deemed to include any entity in which the Company has an ownership
interest, directly or indirectly, of at least 50% (a "Subsidiary").
2. Stock Subject to the Plan. Subject to the provisions of Section 6
hereof, the Company may issue and sell a total of 500,000 shares of its common
stock, $.01 par value (the "Common Stock"), pursuant to the Plan. Such shares
may be either authorized and unissued or held by the Company in its treasury. If
shares issued and sold hereunder are repurchased by the Company in accordance
with the provisions hereof or of the applicable restricted stock purchase
agreements, then such shares shall again be available for issuance under the
Plan.
3. Administration. The Plan will be administered by a committee (the
"Committee") consisting of at least two directors appointed by and serving at
the pleasure of the Board of Directors of the Company (the "Board"). Subject to
the provisions of the Plan, the Committee, acting in its sole and absolute
discretion, will have full power and authority to make awards under the Plan, to
interpret the provisions of the Plan, to fix and interpret the provisions of
restricted stock purchase agreements made under the Plan, to supervise the
administration of the Plan, and to take such other action as may be necessary or
desirable in order to carry out the provisions of the Plan. A majority of the
members of the Committee will constitute a quorum. The Committee may act by the
vote of a majority of its members present at a meeting at which there is a
quorum or by unanimous written consent. The decision of the Committee as to any
disputed question, including questions of construction, interpretation and
administration, will be final and conclusive on all persons. The Committee will
keep a record of its proceedings and acts and will keep or cause to be kept such
books and records as may be necessary in connection with the proper
administration of the Plan. The Company shall indemnify and hold harmless each
member of the Committee and any employee or director of the Company or a
Subsidiary to whom any duty or power relating to the administration or
interpretation of the Plan is delegated from and against any loss, cost,
liability (including any sum paid in settlement of a claim with the approval of
the Board), damage and expense (including legal and other expenses incident
thereto) arising out of or incurred in connection with the Plan, unless and
except to the extent attributable to such person's fraud or wilful misconduct.
4. Eligibility. Shares of Common Stock may be issued and sold under the
Plan to present and future officers and other key employees and personnel of the
Company or a Subsidiary. Common Stock may not be issued or sold under the Plan
to directors of the Company who are not also employees of the Company and/or a
Subsidiary. Subject to the provisions of the Plan, the Committee may from time
to time select the persons to whom Common Stock will be offered hereunder, and
will fix the number of shares covered by each such offer and establish the terms
and conditions thereof, including, without limitation, the purchase price, and
vesting and other restrictions on any shares to be acquired pursuant to said
offer.
5. Terms and Conditions of Restricted Stock Awards. Each restricted stock
award made and accepted under the Plan will be evidenced by a restricted stock
purchase agreement approved by the Committee. Each restricted stock award will
be subject to the terms and conditions set forth in this section and such
additional terms and conditions not inconsistent with the Plan as the Committee
deems appropriate.
(a) Purchase Price. The purchase price of shares of Common Stock issued
and sold under this Plan may not be less than the par value thereof on the date
of their issuance and sale.
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<PAGE> 32
(b) Restrictions. The Committee shall determine if, the extent to which
and the manner in which shares of Common Stock issued or sold pursuant to the
Plan shall be subject to vesting and/or other conditions and restrictions.
Unless the Committee determines otherwise, with respect to each restricted stock
award made hereunder, the Company shall have the right, but not the obligation,
to reacquire all or a portion of the shares of Common Stock acquired pursuant to
the award for an amount equal to the price paid therefor if the applicable
vesting or other conditions or restrictions are not satisfied within the time or
in the manner specified in the award. The recipient of a restricted stock award
may be required to agree that all Common Stock acquired by him or her pursuant
to the Plan is acquired for investment purposes and not for the purpose of
resale or other distribution thereof.
(c) Transferability. Shares of Common Stock issued and sold hereunder and
subject to reacquisition by the Company may not be sold, assigned, transferred,
disposed of, pledged or otherwise hypothecated by the holder thereof other than
to the Company in accordance with the restricted stock purchase agreement
applicable thereto. Any attempt to do any of the foregoing without the
committee's prior agreement shall be null and void, and, unless the Committee
determines otherwise, shall result in the immediate forfeiture of such shares of
Common Stock.
(d) Other Provisions. The Committee may impose such other conditions with
respect to the issuance and sale of Common Stock under the Plan as it may deem
necessary or advisable, including, without limitation, any conditions relating
to the application of federal or state securities, tax or other laws.
6. Capital Changes. The aggregate number and class of shares for which
awards may be made under the Plan shall be adjusted proportionately or as
otherwise appropriate to reflect any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or consolidation of
shares or any like capital adjustment, or the payment of any stock dividend,
and/or to reflect a change in the character or class of shares covered by the
Plan arising from a readjustment or recapitalization of the Company's capital
stock.
7. Amendment and Termination. The Board may amend or terminate the Plan.
Except as otherwise provided in Section 6 hereof, any amendment which would
increase the aggregate number of shares of Common Stock as to which awards may
be made under the Plan or modify the class of persons eligible to receive awards
under the Plan shall be subject to the approval of the Company's stockholders.
No amendment or termination of the Plan may affect adversely the terms of any
outstanding award or restricted stock purchase agreement without the written
consent of the holder. The Committee may amend the terms of any award or
restricted stock purchase agreement made hereunder at any time and from time to
time (e.g., to accelerate vesting upon a change of control), provided, however,
that any amendment which would adversely affect the rights of the holder under
his or her award or agreement may not be made without the holder's prior written
consent.
8. No Rights Conferred. Nothing contained herein will be deemed to give
any individual any right to receive an award under the Plan or to be retained in
the employ or service of the Company or any Subsidiary.
9. Governing Law. The Plan and each award and agreement made hereunder
shall be governed by the laws of the State of Delaware.
10. Decisions and Determinations of Committee to be Final. Any decision
or determination made by the Board pursuant to the provisions hereof and, except
to the extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final and binding.
11. Term of the Plan. The Plan shall be effective as of the date on which
it is adopted by the Board, subject to the approval of the stockholders of the
Company within one year from the date of adoption by the Board. The Plan will
terminate on the date ten years after the date of adoption, unless sooner
terminated by the Board. The rights of any individual to whom shares of Common
Stock are issued and sold hereunder shall not be affected solely by reason of
the termination of the Plan and shall continue to be governed by the terms of
the applicable restricted stock grant or restricted stock purchase agreement (as
then in effect or thereafter amended) and the Plan.
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<PAGE> 33
APPENDIX B
PULITZER INC.
1999 STOCK OPTION PLAN
1. Purpose. The purpose of the Pulitzer Inc. 1999 Stock Option Plan (the
"Plan") is to enable Pulitzer Inc. (the "Company") and its stockholders to
secure the benefit of the incentives inherent in common stock ownership by (a)
present and future officers and other key employees and personnel of the Company
and its subsidiaries, which, except as otherwise specified herein, shall include
any entity in which the Company has an ownership interest, directly or
indirectly, of at least 50% (a "Subsidiary"), and (b) Non-Employee Directors
(within the meaning of Section 6(a) hereof).
2. Stock Subject to the Plan. Subject to the provisions of Section 7(a)
hereof, the Company may issue and sell a total of 3,000,000 shares of its common
stock, $.01 par value (the "Common Stock"), pursuant to the Plan, of which no
more than 200,000 shares shall be issuable pursuant to Section 6 (relating to
nondiscretionary grants to Non-Employee Directors). Such shares may be either
authorized and unissued or held by the Company in its treasury. The maximum
option grant which may be made in any calendar year to any employee of the
Company or a Subsidiary shall not cover more than 200,000 shares. New options
may be granted under the Plan with respect to shares of Common Stock which are
covered by the unexercised portion of an option which terminates or expires by
its terms, by cancellation or otherwise.
3. Administration. The Plan will be administered by a committee (the
"Committee") consisting of at least two directors appointed by and serving at
the pleasure of the Board of Directors of the Company (the "Board"). Subject to
the provisions of the Plan, the Committee, acting in its sole and absolute
discretion, will have full power and authority to grant options under the Plan,
to interpret the provisions of the Plan, to fix and interpret the provisions of
option agreements made under the Plan, to supervise the administration of the
Plan, and to take such other action as may be necessary or desirable in order to
carry out the provisions of the Plan. A majority of the members of the Committee
will constitute a quorum. The Committee may act by the vote of a majority of its
members present at a meeting at which there is a quorum or by unanimous written
consent. The decision of the Committee as to any disputed question, including
questions of construction, interpretation and administration, will be final and
conclusive on all persons. The Committee will keep a record of its proceedings
and acts and will keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the Plan. The Company
shall indemnify and hold harmless each member of the Committee and any employee
or director of the Company or of a Subsidiary to whom any duty or power relating
to the administration or interpretation of the Plan is delegated from and
against any loss, cost, liability (including any sum paid in settlement of a
claim with the approval of the Board), damage and expense (including legal and
other expenses incident thereto) arising out of or incurred in connection with
the Plan, unless and except to the extent attributable to such person's fraud or
wilful misconduct. Notwithstanding anything to the contrary herein contained,
the Board shall be responsible for administering the provisions hereof in
connection with nondiscretionary options granted pursuant to Section 6 hereof
and all references herein to the Committee shall be deemed to refer to the Board
with respect to any such option grant.
4. Eligibility. Options may be granted under the Plan to present and
future officers and other key employees or other personnel of the Company or a
Subsidiary. Options may be granted to Non-Employee Directors only in accordance
with Section 6 hereof. Subject to the provisions of the Plan, the Committee may
from time to time select the persons to whom options will be granted, and will
fix the number of shares covered by each such option and establish the terms and
conditions thereof (including, without limitation, the exercise price,
restrictions on the exercisability of the option and/or on the disposition of
the shares of Common Stock issued upon exercise thereof, and whether or not the
option is to be treated as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (an "Incentive
Stock Option").
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<PAGE> 34
5. Terms and Conditions of Options. Each option granted under the Plan
will be evidenced by a written agreement in a form approved by the Committee.
Subject to the provisions hereof, including, without limitation, the provisions
of Section 6, each such option will be subject to the terms and conditions set
forth in this paragraph and such additional terms and conditions not
inconsistent with the Plan as the Committee deems appropriate.
(a) Option Exercise Price. In the case of an Incentive Stock Option, the
exercise price per share may not be less than the fair market value of a share
of Common Stock on the date the option is granted (110% in the case of an
Incentive Stock Option granted to an employee who, at the time the option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of a subsidiary of the Company within
the meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended
(a "ten percent shareholder")); and, in the case of an option that is not an
Incentive Stock Option, the exercise price per share may not be less than 85% of
the fair market value of a share of Common Stock on the date the option is
granted. For purposes hereof, the fair market value of a share of Common Stock
on any date shall be equal to the closing price per share as published by a
national securities exchange on which shares of Common Stock are traded on such
date or, if there is no sale on such date, on the next preceding date on which
shares of Common Stock are traded.
(b) Option Period. The period during which an option may be exercised
will be fixed by the Committee and will not exceed ten years from the date the
option is granted (five years in the case of an Incentive Stock Option granted
to a "ten percent shareholder").
(c) Exercise of Options. No option will become exercisable unless the
person to whom the option is granted remains in the continuous employ or service
of the Company or a Subsidiary for at least six months (or for such other period
as the Committee may designate) from the date the option is granted. The
Committee will determine and will set forth in the option agreement any vesting
or other restrictions on the exercisability of the option, subject to earlier
termination of the option as may be required hereunder, and any vesting or other
restrictions on shares of Common Stock acquired pursuant to the exercise of the
option. An option may be exercised by transmitting to the Company, in a manner
prescribed or approved by the Committee, (1) a written notice specifying the
number of shares to be purchased, and (2) payment of the exercise price,
together with the amount, if any, deemed necessary by the Company to enable the
Company or a Subsidiary, as the case may be, to satisfy its income tax
withholding obligations with respect to such exercise unless other arrangements
acceptable to the Company are made with respect to the satisfaction of such
withholding obligations. Subject to the provisions of applicable law, the
Company may agree to retain and withhold a number of shares of Common Stock
sufficient to reimburse the Company for all or part of its withholding tax
obligation.
(d) Payment of Exercise Price. The purchase price of shares of Common
Stock acquired pursuant to the exercise of an option granted under the Plan may
be paid in cash and/or such other form of payment as may be permitted under the
option agreement, including, without limitation, previously-owned shares of
Common Stock and installment payments under the optionee's promissory note.
(e) Rights as a Stockholder. No shares of Common Stock will be issued in
respect of the exercise of an option granted under the Plan until full payment
therefor has been made (and/or provided for if all or a portion of the purchase
price is being paid in installments). The holder of an option will have no
rights as a stockholder with respect to any shares covered by an option until
the date a stock certificate for such shares is issued to him or her. Except as
otherwise specifically provided herein, no adjustments shall be made for
dividends or distributions of other rights for which the record date is prior to
the date such stock certificate is issued.
(f) Nontransferability of Options. Unless the Committee determines
otherwise, (1) no option shall be assignable or transferrable except upon the
optionee's death to a beneficiary designated by the optionee in accordance with
procedures established by the Committee or, if no designated beneficiary shall
survive the optionee, pursuant to the optionee's will or by the laws of descent
and distribution; and (2) during an optionee's lifetime, options may be
exercised only by the optionee or the optionee's guardian or legal
representative. The Committee may permit the inter vivos transfer of an
optionee's options, if at all, to any
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<PAGE> 35
member of the optionee's immediate family or to a trust created for the benefit
of any such person, on such terms and conditions as the Committee deems
appropriate.
(g) Termination of Employment or Other Service. If an optionee ceases to
be employed by or to perform services for the Company and any Subsidiary, then,
unless terminated sooner under the provisions hereof or of the optionee's option
agreement, and unless determined otherwise by the Committee acting in its sole
discretion, (a) if such termination of employment occurs by reason of the
optionee's death, disability, retirement after age 65 or voluntary retirement
with the consent of the Company before age 65, then the optionee's outstanding
options will be fully vested and may be exercised within three years from the
date of the termination of employment or service, and, at the end of such
three-year period, any unexercised outstanding options will terminate; and (b)
if the optionee's employment or service is terminated for any reason other than
the optionee's death, disability, retirement after age 65 or voluntary
retirement with the consent of the Company before age 65, then the optionee's
outstanding options, to the extent then otherwise vested and exercisable, may be
exercised within sixty days from the date of such termination of employment or
service and, at the end of such sixty-day period, any unexercised vested and
outstanding options will terminate, and the optionee's nonvested outstanding
options will terminate upon the optionee's termination of employment or service.
(h) Other Provisions. The Committee may impose such other conditions with
respect to the exercise of options, including, without limitation, any
conditions relating to the application of federal or state securities laws, as
it may deem necessary or advisable.
6. Grant of Options to Non-Employee Directors.
(a) Definition. For all purposes hereof, the term "Non-Employee Director"
means any member of the Board who is not also an employee of the Company or a
Subsidiary.
(b) Nondiscretionary Grants. An option to purchase 3,000 shares of Common
Stock will automatically be granted to each Non-Employee Director on the day
following each annual meeting of the Company's stockholders. Notwithstanding the
foregoing, no option may be granted to a Non-Employee Director who, on the date
the option would otherwise be granted, beneficially owns (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) 1%
or more of the Common Stock of the Company or of any other class of capital
stock of the Company.
(c) Terms and Conditions of Nondiscretionary Option
Grants. Notwithstanding anything to the contrary contained herein, in the case
of an option granted to a Non- Employee Director under this Section, (1) the
exercise price per share shall be equal to the fair market value of a share of
Common Stock on the date the option is granted; (2) unless sooner terminated,
the option will expire on the date ten years from the date the option is
granted; (3) unless amended pursuant to Section 8 hereof, the option will not be
exercisable (and will thereupon expire) if the optionee's service as a director
ends for any reason other than death or disability prior to the annual meeting
of the Company's stockholders next following the date as of which the option is
granted; (4) the purchase price of shares of Common Stock acquired pursuant to
the exercise of the option shall be payable in cash or by personal check or with
previously-owned shares of Common Stock, or a combination thereof; and (5)
unless sooner terminated hereunder, the option will continue to be exercisable
for three years following the date of the optionee's termination of service as a
member of the Board.
(d) General. It is intended that options granted under this Section shall
constitute nondiscretionary options granted under a "formula plan" within the
meaning and for the purposes of Rule 16b-3. The provisions of the Plan and of
any option agreement made in connection with options granted under this Section
of the Plan shall be interpreted and applied accordingly.
7. Capital Changes, Reorganization, Sale.
(a) Adjustments Upon Changes in Capitalization. The aggregate number and
class of shares for which options may be granted under the Plan,the maximum
number of shares for which options may be granted to any individual in any
calendar year, the number and class of shares which are automatically granted
under Section 6(b), the number and class of shares covered by each outstanding
option and the exercise price
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<PAGE> 36
per share shall all be adjusted proportionately or as otherwise appropriate to
reflect any increase or decrease in the number of issued shares of Common Stock
resulting from a split-up or consolidation of shares or any like capital
adjustment, or the payment of any stock dividend, and/or to reflect a change in
the character or class of shares covered by the Plan arising from a readjustment
or recapitalization of the Company's capital stock.
(b) Cash, Stock or Other Property for Stock. Except as otherwise provided
in this Section 7(b), in the event of an Exchange Transaction (as defined
below), all optionees will be permitted to exercise their outstanding options in
whole or in part (whether or not otherwise exercisable) immediately prior to
such Exchange Transaction, and any outstanding options which are not exercised
before the Exchange Transaction will thereupon terminate. Notwithstanding the
preceding sentence, if, as part of the Exchange Transaction, the stockholders of
the Company receive capital stock of another corporation ("Exchange Stock") in
exchange for their shares of Common Stock (whether or not such Exchange Stock is
the sole consideration), and if the Board, in its sole discretion, so directs,
then all outstanding options will be converted into options to purchase shares
of Exchange Stock. The amount and price of converted options will be determined
by adjusting the amount and price of the options granted hereunder on the same
basis as the determination of the number of shares of Exchange Stock the holders
of Common Stock will receive in the Exchange Transaction and, unless the Board
determines otherwise, the vesting conditions with respect to the converted
options will be substantially the same as the vesting conditions set forth in
the original option agreement.
(c) Definition of Exchange Transaction. For purposes hereof, the term
"Exchange Transaction" means a merger (other than a merger of the Company in
which the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation,
reorganization (other than a mere reincorporation or the creation of a holding
company), liquidation of the Company or any other similar transaction or event
so designated by the Board in its sole discretion, as a result of which the
stockholders of the Company receive cash, stock or other property in exchange
for or in connection with their shares of Common Stock.
(d) Fractional Shares. In the event of any adjustment in the number of
shares covered by any option pursuant to the provisions hereof, any fractional
shares resulting from such adjustment will be disregarded, and each such option
will cover only the number of full shares resulting from the adjustment.
(e) Determination of Board to be Final. All adjustments under this
Section shall be made by the Board, and its determination as to what adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.
8. Amendment and Termination. The Board may amend or terminate the Plan,
provided, however, that no such action may affect adversely any outstanding
option without the written consent of the optionee. Except as otherwise provided
in Section 7, any amendment which would increase the aggregate number of shares
of Common Stock as to which options may be granted under the Plan or modify the
class of persons eligible to receive options under the Plan shall be subject to
the approval of the Company's stockholders. The Committee may amend the terms of
any stock option agreement made hereunder at any time and from time to time
(e.g., to accelerate vesting upon a change of control), provided, however, that
any amendment which would adversely affect the rights of the optionee may not be
made without the optionee's prior written consent.
9. No Rights Conferred. Nothing contained herein will be deemed to give
any individual any right to receive an option under the Plan or to be retained
in the employ or service of the Company or any Subsidiary.
10. Governing Law. The Plan and each option agreement shall be governed
by the laws of the State of Delaware.
11. Decisions and Determinations of Committee to be Final. Any decision
or determination made by the Board pursuant to the provisions hereof and, except
to the extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final and binding.
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12. Term of the Plan. The Plan shall be effective as of the date on which
it is adopted by the Board, subject to the approval of the stockholders of the
Company within one year from the date of adoption by the Board. The Plan will
terminate on the date ten years after the date of adoption, unless sooner
terminated by the Board. The rights of optionees under options outstanding at
the time of the termination of the Plan shall not be affected solely by reason
of the termination of the Plan and shall continue in accordance with the terms
of the option (as then in effect or thereafter amended) and the Plan.
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<PAGE> 38
APPENDIX C
PULITZER INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide eligible employees of
the Company and its Subsidiaries with a convenient way to acquire shares of the
Company's Common Stock. The Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Code, and the Plan will be interpreted
and construed accordingly.
2. Definitions. Wherever used herein, the masculine includes the
feminine, the singular includes the plural, and the following terms have the
following meanings unless a different meaning is clearly required by the
context.
(a) "Account" means the bookkeeping account established in the name of
each Participant to reflect the payroll deductions made on behalf of the
Participant.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as it now exists and
is hereafter amended.
(d) "Committee" means the administrative committee appointed by the Board
to administer the Plan.
(e) "Common Stock" means the common stock of the Company, $.01 par value
per share.
(f) "Company" means Pulitzer Inc., a Delaware corporation, and any
successor corporation.
(g) "Compensation" means the base cash compensation paid by the Company or
a Subsidiary to a Participant which is required to be reported as wages on the
Participant's Form W-2, including such additional amounts which are not
includable in gross income by reason of Sections 125, 402(e) or 402(h)(1)(B) of
the Code, and excluding any bonuses, overtime pay, expense allowances and other
irregular payments (except commissions).
(h) "Employee" means an individual who performs services for the Company
or a Subsidiary in an employer-employee relationship. For purposes of the Plan,
the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company.
Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.
(i) "Enrollment Date" means the first day of an Offering Period.
(j) "Exercise Date" means the last business day of an Offering Period.
(k) "Fair Market Value" means the closing sale price per share of the
Common Stock as published by a national securities exchange on which shares of
the Common Stock are traded on such date or, if there is no sale on such date,
on the next preceding date.
(l) "Offering Period" means the calendar quarter beginning April 1, 1999
or such later date as established by the Committee, and each calendar quarter
thereafter; provided, however, that the Committee shall have the power to change
the duration of Offering Periods and the commencement dates thereof without
stockholder approval if such change is announced to Employees at least five days
prior to the scheduled beginning of the first Offering Period resulting from
such change.
(m) "Participant" means any Employee for whom an Account is maintained
under the Plan.
(n) "Subsidiary" means a corporation 50% or more of the total combined
voting power of which is owned directly or indirectly by the Company as
described in Section 424(f) of the Code.
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<PAGE> 39
3. Stock Subject to the Plan. Subject to the provisions of Section 11
hereof, the Company may issue and sell a total of 300,000 shares of its Common
Stock pursuant to the Plan. Such shares may be either authorized and unissued or
held by the Company in its treasury. The Committee may cause the Company to
purchase previously issued and outstanding shares of Common Stock in order to
enable the Company to satisfy its obligations hereunder.
4. Administration. The Plan will be administered by a committee
consisting of at least two directors appointed by and serving at the pleasure of
the Board. Subject to the provisions of the Plan, the Committee, acting in its
sole and absolute discretion, will have full power and authority to interpret
the provisions of the Plan, to change the time covered by an Offering Period, to
supervise the administration of the Plan, and to take such other action as may
be necessary or desirable in order to carry out the provisions of the Plan. A
majority of the members of the Committee will constitute a quorum. The Committee
may act by the vote of a majority of its members present at a meeting at which
there is a quorum or by unanimous written consent. The decision of the Committee
as to any disputed question, including questions of construction, interpretation
and administration, will be final and conclusive on all persons. The Committee
will keep a record of its proceedings and acts and will keep or cause to be kept
such books and records as may be necessary in connection with the proper
administration of the Plan. The Company shall indemnify and hold harmless each
member of the Committee and any employee or director of the Company or of a
Subsidiary to whom any duty or power relating to the administration or
interpretation of the Plan is delegated from and against any loss, cost,
liability (including any sum paid in settlement of a claim with the approval of
the Board), damage and expense (including legal and other expenses incident
thereto) arising out of or incurred in connection with the Plan, unless and
except to the extent attributable to such person's fraud or wilful misconduct.
5. Eligibility and Enrollment. An Employee will be eligible to become a
Participant in the Plan on the Enrollment Date coincident with or next following
the date he or she completes one year of employment with the Company or a
Subsidiary. An eligible Employee will become a Participant for an Offering
Period by completing a Plan enrollment form authorizing payroll deductions and
filing it with the Company prior to the Offering Period. Payroll deductions for
a Participant shall commence with the first payroll and shall end with the last
payroll in the Offering Period to which such authorization is applicable, unless
sooner terminated by the Participant in accordance with the provisions hereof.
Notwithstanding any provisions of the Plan to the contrary, no Employee may be
granted the right to purchase Common Stock under the Plan if and to the extent
that:
(a) immediately after the grant, such Employee would directly or
indirectly own stock and/or hold outstanding options to purchase stock,
possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company (determined in accordance with Section
424(d) of the Code); or
(b) the Employee's right to purchase stock under all employee stock
purchase plans (within the meaning of Section 423 of the Code) of the
Company or a Subsidiary would accrue at a rate which exceeds $25,000 in
fair market value (determined at the time of grant) for each calendar year
in which such right is outstanding.
6. Payroll Deduction. At the time a Participant enrolls in the Plan, he
or she must elect the amount to be deducted from each paycheck during the
Offering Period(s) covered by the election; provided, however, that no more than
10% of a Participant's Compensation may be withheld under the Plan on any pay
date, and provided further that the Committee, acting in its discretion and in a
uniform and nondiscriminatory manner, may establish a minimum required amount or
percentage of Compensation which must be withheld during an Offering Period. All
payroll deductions made for a Participant shall be credited to the Participant's
Account. Interest shall not accrue on any amounts credited to a Participant's
Account. The rate of a Participant's contribution, once established, shall
remain in effect for all subsequent Offering Periods unless changed by the
Participant in writing at such time and in such manner as the Committee may
prescribe.
7. Purchase of Shares. On each Exercise Date, the amount credited to a
Participant's Account shall be used to purchase a whole number of shares of
Common Stock, the number of which will be determined by dividing the amount
credited to the Participant's Account by the purchase price per share. Any
amount remaining in the Participant's Account will be converted to a fractional
share unless the Committee, acting, in
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<PAGE> 40
its discretion, determines that fractional shares will not be credited to
Participants under the Plan, in which event, subject to the Participant's
continuing withdrawal right, such amount will be credited to the Participant's
Account as of the beginning of the next Offering Period. Subject to Section 11
of the Plan, the purchase price per share will be equal to 85% of the Fair
Market Value of a share of Common Stock on the Exercise Date. If the total
number of shares of Common Stock to be purchased as of an Exercise Date, when
aggregated with shares of Common Stock previously purchased for all Employees
under the Plan, exceeds the number of shares then authorized under the Plan, a
pro-rata allocation of the available shares will be made among the Participants
based upon the amounts in their respective Accounts as of the Exercise Date.
8. Discontinuance and Withdrawal of Contributions; Change of Rate of
Payroll Deductions.
(a) Discontinuance or Withdrawal. At any time during an Offering Period,
a Participant may notify the Company that he or she wishes to discontinue
contributions under the Plan. This notice shall be in writing and shall become
effective as soon as practicable following its receipt by the Company. A
Participant may elect to withdraw all, but not less than all, of the amount of
his or her Account at any time during an Offering Period except on the Exercise
Date with respect to that Offering Period. If a withdrawal is made during an
Offering Period, no further contributions will be permitted during that Offering
Period by the withdrawing Participant.
(b) Withholding Changes. At any time during an Offering Period, a
Participant may increase or decrease the rate of his or her payroll deductions
by completing or filing with the Company a new enrollment form authorizing a
change in payroll deduction rate. The Committee may, in its discretion, limit
the number of payroll deduction rate changes during any Offering Period. The
change in rate shall be effective as soon as practicable after the Company's
receipt of the new enrollment form.
9. Termination of Employment. Any Participant whose employment with the
Company and its Subsidiaries is terminated for any reason before an Exercise
Date shall thereupon cease being a Participant. The total amount credited to the
Participant's Account during the Offering. Period will be returned to the
Participant or, in the case of a deceased Participant, to the Participant's
beneficiary, as soon as practicable after the Participant's termination of
employment.
10. Rights as a Stockholder. No shares of Common Stock will be issued in
respect of the exercise of an option granted under the Plan until full payment
therefor has been made (and/or provided for if all or a portion of the purchase
price is being paid in installments). The holder of an option will have no
rights as a stockholder with respect to any shares covered by an option until
the date a stock certificate for such shares is issued to him or her. Except as
otherwise specifically provided herein, no adjustments shall be made for
dividends or distributions of other rights for which the record date is prior to
the date such stock certificate is issued.
11. Capital Changes, Reorganization, Sale.
(a) Adjustments Upon Changes in Capitalization. The number and class of
shares of Common Stock which may be issued under the Plan, as well as the number
and class of shares of Common Stock and the price per share covered by each
right outstanding under the Plan which has not yet been exercised, shall be
adjusted proportionately or as otherwise appropriate to reflect any increase or
decrease in the number of issued shares of Common Stock resulting from a
split-up or consolidation of shares or any like capital adjustment, or the
payment of a stock dividend, and/or to reflect a change in the character or
class of shares covered by the Plan arising from a readjustment or
recapitalization.
(b) Cash, Stock or Other Property for Stock. Except as otherwise provided
in this Section, in the event of an Exchange Transaction (as defined below),
each Participant will be permitted to purchase Common Stock with the balance of
his or her Account immediately prior to such Exchange Transaction, and any
amount credited to a Participant's Account which is not used to purchase Common
Stock before the Exchange Transaction will be distributed to the Participant.
Notwithstanding the preceding sentence, (1) if, as part of the Exchange
Transaction, the stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock
(whether or not such Exchange Stock is the sole consideration), and if the
Board, in its sole discretion, so directs, then the rights of
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<PAGE> 41
all Participants to purchase shares of Common Stock will be converted into
rights to purchase shares of Exchange Stock on an economically equivalent basis;
and (2) the Committee, acting in its discretion, may suspend operation of the
Plan as of any date that occurs after a contract is made which, if consummated,
would result in an Exchange Transaction and before the Exchange Transaction is
consummated.
(c) Definition of Exchange Transaction. For purposes hereof, the term
"Exchange Transaction" means a merger (other than a merger of the Company in
which the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation,
reorganization (other than a mere reincorporation or the creation of a holding
company), liquidation of the Company or any other similar transaction or event
so designated by the Board in its sole discretion, as a result of which the
stockholders of the Company receive cash, stock or other property in exchange
for or in connection with their shares of Common Stock.
(d) Fractional Shares. In the event of any adjustment in the number of
shares of Common Stock covered by any right pursuant to the provisions hereof,
any fractional shares resulting from such adjustment will be disregarded and
each such right will cover only the number of full shares of Common Stock
resulting from the adjustment.
(e) Determination of Board to be Final. All adjustments under this
Section 11 shall be made by the Board, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive.
12. Amendment and Termination. The Board may amend or terminate the Plan
at any time; provided, however, that, except as otherwise provided in Section 11
hereof, any amendment which would increase the aggregate number of shares of
Common Stock which may be issued under the Plan or modify the class of persons
eligible to participate in the Plan shall be subject to the approval of the
Company's stockholders.
13. Transferability. The rights of a Participant to purchase Common Stock
under the Plan are not assignable or transferable and may only be exercised
during the Participant's lifetime by the Participant. A Participant may file a
written designation of a beneficiary who is to receive the amount credited to
the Participant's Account in the event of the Participant's death during an
Offering Period. A Participant's beneficiary designation may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant and in the absence of a validly designated beneficiary who is living
at the time of the Participant's death, the Participant's estate will be deemed
to be his or her designated beneficiary.
14. No Rights Conferred. Nothing contained in the Plan shall be deemed to
give any individual any right to be retained in the service or employ of the
Company and its Subsidiaries or to interfere with the right of the Company and
its Subsidiaries to discharge him or her at any time.
15. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
16. Legal Requirements. The Committee may impose such other conditions
with respect to the purchase of Common Stock hereunder, including, without
limitation, any conditions relating to the application of federal or state
securities laws, as it may deem necessary or advisable.
17. Governing Law. The Plan and each option agreement shall be governed
by the laws of the State of Delaware without regard to its conflict of laws
provisions.
18. Decisions and Determinations of Committee to be Final. Any decision
or determination made by the Board pursuant to the provisions hereof and, except
to the extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final and binding.
19. Stockholder Approval. The Plan shall be effective upon its adoption
by the Board, subject to approval by the stockholders of the Company within
twelve months from the date of adoption by the Board.
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<PAGE> 42
PROXY
PULITZER INC.
THIS PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 12, 1999
Michael E. Pulitzer and David E. Moore, and each of them, as the true and lawful
attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote, as designated
below, all shares of common stock of Pulitzer Inc. (the"Company") held of
record by the undersigned on April 9, 1999, at the Annual Meeting of
Stockholders to be held at 10:00 a. m., Central Daylight Time, on May 12,1999 at
the Missouri Botanical Garden, Shoenberg Auditorium, 4344 Shaw Boulevard, St.
Louis, Missouri 63110, and at any adjournment thereof.
The signor acknowledges receipt of the Notice of Annual Meeting of Stockholders
to be held on May 12, 1999, the Proxy Statement of the Company, each dated April
19, 1999, and the Company's Annual Report for the fiscal year ended December 31,
1998, each of which has been furnished herewith.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 43
- --------------------------------------------------------------------------------
[X] Please mark your 3925
votes as in this
example.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES SET FORTH BELOW AND "FOR" PROPOSALS 2, 3, 4 AND 5.
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
1. Proposal No. 1- [ ] [ ] NOMINEES:
Election of Class Emily Rauh Pulitzer
A Directors. James M. Snowden, Jr.
and Robert C. Woodworth.
INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nomi-
nee's name on the line set forth below.
- ----------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal No. 2-Approval of the Pulitzer Inc. [ ] [ ] [ ]
1999 Key Employees' Restricted Stock
Purchase Plan.
3. Proposal No. 3-Approval of the Pulitzer Inc. [ ] [ ] [ ]
1999 Stock Option Plan.
4. Proposal No. 4-Approval of the Pulitzer Inc. [ ] [ ] [ ]
1999 Employee Stock Purchase Plan.
5. Proposal No. 5-Ratification of the appointment [ ] [ ] [ ]
of Deloitte & Touche LLP as independent
auditors of the Company for the 1998 fiscal
year.
SIGNATURE(S)____________________________________________________ DATE__________
NOTE:Please sign exactly as name appears hereon. Each joint owner should sign.
- --------------------------------------------------------------------------------
PROXY
