<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 Under 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 10, 2000
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
17, 2000, at the St. Louis Art Museum Auditorium, Forest Park, 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 B directors of the Company to three-year terms expiring in 2003, (ii)
the proposal to approve an amendment to the Pulitzer Inc. 1999 Employee Stock
Purchase Plan and (iii) the ratification of the appointment of the firm of
Deloitte & Touche LLP as independent auditors of the Company for the 2000 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
complete, sign, date and return the enclosed proxy in the enclosed envelope or
that you register your vote by telephone or on the Internet by following the
instructions on your proxy card 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 10, 2000
The Annual Meeting of Stockholders of Pulitzer Inc. will be held at the St.
Louis Art Museum Auditorium, Forest Park, St. Louis, Missouri 63110 on
Wednesday, May 17, 2000, at 10:00 A.M., Central Daylight Time, for the following
purposes:
1. To elect three Class B directors to three-year terms expiring in
2003.
2. To consider and vote upon a proposal to approve an amendment to the
Pulitzer Inc. 1999 Employee Stock Purchase Plan.
3. To ratify the appointment of the firm of Deloitte & Touche LLP as
independent auditors of the Company for the 2000 fiscal year.
4. 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 March 31, 2000 will be
entitled to notice of and to vote at the meeting or any adjournment thereof. A
list of these 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 enclosed envelope or register their vote by telephone or on
the Internet by following the instructions on the proxy card. No postage is
required if the proxy card is 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 17, 2000, 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 that will come before the meeting.
Proxies for use at the meeting were first mailed to stockholders on or
about April 10, 2000, 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, or you may vote your shares by telephone or on the Internet by
following the instructions on your proxy card (except under the limited
circumstances in which telephonic or Internet voting is not available).
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, by
voting in person at the meeting, by changing their vote on the Internet or by
using the telephone voting procedures. Shares represented by executed and
unrevoked proxies will be voted in accordance with the choice or instructions
specified thereon. If no selections are made, the proxies will be voted for the
election of the three persons nominated as Class B directors of the Company, for
a proposal to approve an amendment to 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 2000 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 the proposal to
amend 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 a proposal to approve an
amendment to 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 March 31, 2000 are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. The Company had outstanding on March 31, 2000, 8,005,931 shares of
Common Stock, each of which is entitled to one vote upon matters presented at
the meeting, and 14,117,306 shares of Class B Common Stock, each of which is
entitled to ten votes upon matters presented at the meeting. As of March 31,
2000, 13,381,196 shares of Class B Common Stock are 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 B directors, for the proposal
to approve an amendment to 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 2000 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."
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<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 March 31,
2000, (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)............................ -- -- 13,381,196 94.8% 89.7%
Emily Rauh Pulitzer(2)(3)............. -- -- 6,310,932 44.7% 42.3%
Michael E. Pulitzer(2)(4)(5).......... 46,600 -- 3,338,991 23.7% 22.4%
David E. Moore(2)(6).................. 1,695 -- 3,665,652 26.1% 24.7%
James M. Snowden, Jr.(7).............. 6,666 * -- -- **
William Bush(8)....................... 3,000 -- -- -- --
Alice B. Hayes(8)..................... 3,000 -- -- -- --
Ronald H. Ridgway(2) (9).............. 47,731 * -- -- **
Ken J. Elkins(7)...................... 21,029 * -- -- **
Robert C. Woodworth(2) (10)........... 46,600 -- -- -- **
Mark G. Contreras(11)................. 9,100 -- -- -- **
Terrance C.Z. Egger(12)............... 13,294 * -- -- **
Gabelli Asset Management, Inc.(13)
One Corporate Center
Rye, New York 10580-1434.............. 1,885,304 23.5% -- -- **
Lazard Freres & Co. LLC(14)
30 Rockefeller Plaza
New York, New York 10020.............. 575,600 7.2% -- -- **
All directors and officers as a group
(13 persons)(2)(15)................. 204,493 * 13,335,575 94.5% 89.5%
</TABLE>
- ---------------
+ Unless otherwise indicated, the address of each person or entity named in
the table is c/o Pulitzer Inc., 900 North Tucker Boulevard, St. Louis,
Missouri 63101.
* 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 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, MO 63101.
(2) Excludes shares that may be deemed to be beneficially owned solely as a
trustee of the Pulitzer Inc. Voting Trust.
(3) Includes 5,940,293 shares held in trusts. These shares are beneficially
owned by Mrs. Pulitzer.
(4) Includes 3,254,146 shares held in trusts and 37,780 shares held in a
private foundation. These shares are beneficially owned by Mr. Pulitzer.
Also includes 47,065 shares held in trust for the benefit of the wife of
Michael E. Pulitzer. Mr. Pulitzer disclaims beneficial ownership of these
shares.
(5) Includes 46,600 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
(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 516,442 shares held in trusts. These shares are
beneficially owned by Mr. Moore.
(7) Includes 3,000 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
(8) Represents shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
(9) Includes 18,690 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
3
<PAGE> 7
(10) Represents shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
(11) Includes 9,000 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
(12) Includes 5,934 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof and 6,020 shares of
restricted stock granted under the 1999 Pulitzer Inc. Key Employees'
Restricted Stock Purchase Plan, subject to a three-year vesting condition.
(13) This figure is based on information set forth in Amendment No. 13 to
Schedule 13D, dated March 24, 2000, filed by Gabelli Asset Management, Inc.
and certain entities affiliated with Gabelli Asset Management, Inc. with
the Securities and Exchange Commission. The Schedule 13D states that (i)
Gabelli Funds, LLC has the sole power to vote, or direct the vote of, and
the sole power to dispose, or direct the disposition of, 235,000 of such
shares, (ii) GAMCO Investors, Inc. has the sole power to vote, or direct
the vote of, 1,617,304 of such shares and the sole power to dispose, or
direct the disposition of, 1,640,304 of such shares and (iii) Gemini
Capital Management Ltd. has the sole power to vote, or direct the vote of,
and the sole power to dispose, or direct the disposition of, 10,000 of such
shares.
(14) This figure is based on information set forth in the Schedule 13G dated
January 28, 2000, filed by Lazard Freres & Co. LLC with the Securities and
Exchange Commission. The Schedule 13G states that Lazard Freres & Co. LLC
has the sole power to vote, or direct the vote of, 534,600 of such shares,
and the sole power to dispose, or direct the disposition of, 575,600 of
such shares.
(15) Includes 143,275 shares which may be acquired upon the exercise of options
granted under the Pulitzer Inc. 1999 Stock Option Plan which are
exercisable within 60 days of the date hereof.
VOTING TRUST
Stockholders of the Company holding 13,381,196 shares of Class B Common
Stock, representing approximately 89.7% 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 have received from the Voting Trust one or more
certificates ("Voting Trust Certificates") evidencing their interest in the
shares so deposited.
The current trustees of the Voting Trust are 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 transfers, including, without
limitation, sales that are exempt from the registration requirements of the
Securities Act of 1933, as amended, sales that meet the volume and manner of
sale requirements of Rule 144 promulgated thereunder and sales that 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.
PROPOSAL NUMBER ONE
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
B Directors are to be elected at the Annual Meeting. Unless otherwise specified,
the enclosed proxy will be voted in favor of William Bush, Michael E. Pulitzer
and Ronald H. Ridgway, to serve until the 2003 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 B 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(1) SINCE(1) IN
------------------- -------------------------- ------------- -------- -------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS
CLASS B DIRECTORS
William Bush; 53............... Director -- 1999 2000
Michael E. Pulitzer; 70(2)..... Director; Chairman of the Board 1999 1998 2000
Ronald H. Ridgway; 61.......... Director; Senior Vice President -- 1999 1998 2000
Finance
DIRECTORS CONTINUING IN OFFICE
CLASS C DIRECTORS
Ken J. Elkins; 62.............. Director -- 1999 2001
Alice B. Hayes; 62............. Director -- 1999 2001
David E. Moore; 76(2).......... Director -- 1999 2001
CLASS A DIRECTORS
Emily Rauh Pulitzer; 66(2)..... Director -- 1999 2002
James M. Snowden, Jr.; 56...... Director -- 1999 2002
Robert C. Woodworth; 52........ Director; President and Chief Executive 1999 1999 2002
Officer
OTHER EXECUTIVE OFFICERS
Mark G. Contreras; 38.......... Vice President 1999 -- --
Terrance C.Z. Egger; 42........ Vice President 1999 -- --
James V. Maloney; 50........... Secretary 1999 -- --
</TABLE>
- ---------------
(1) Any service as a director of or employment by PPC is discussed individually
in the biographies that follow this table.
(2) Michael E. Pulitzer and David E. Moore are cousins, and Michael E. Pulitzer
is the brother-in-law of Emily Rauh Pulitzer.
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. The Company has retained, and 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 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. Mr. Pulitzer has
entered into an employment and consulting agreement with the Company, which
includes an agreement by the Company to use its best efforts to cause Mr.
Pulitzer to be a member of its Board of Directors. Mr. Pulitzer is a director of
Hearst-Argyle Television, Inc. ("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 to that, 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.
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<PAGE> 9
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.
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 is a director of Scripps Bank of La Jolla, California and a
director of Jack in the Box Inc.
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, pursuant to which the
Company has agreed to use its best efforts to cause Mr. Moore to be a member of
its Board of Directors.
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.
Mrs. Pulitzer has entered into a consulting agreement with the Company, pursuant
to which the Company has agreed to use its best efforts to cause Mrs. Pulitzer
to be a member of its Board of Directors.
JAMES M. SNOWDEN, JR. has been an Executive Vice President of Huntleigh
Securities Corporation 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. The
Company has retained, and intends to retain in the future, Huntleigh Securities
Corporation as a financial advisor in connection with such financial matters as
it deems appropriate.
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.
MARK G. CONTRERAS has served as a Vice President of the Company and Senior
Vice President of Pulitzer Community Newspapers, Inc., a wholly-owned
subsidiary, since March 1999. Prior to joining the Company, Mr. Contreras worked
for Knight-Ridder, Inc. as publisher and president of The Times Leader in
Wilkes-Barre, Pennsylvania.
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. Mr. Egger has served as Publisher of the St. Louis Post-Dispatch (the
"Post-Dispatch") since July 1999, and served as General Manager of the
Post-Dispatch from March 1996 until November 1999. Prior to joining Pulitzer,
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 May 18, 1999 and
served as Director of Shareholder Relations for PPC from June 1987 until March
18, 1999.
During 1999, the Board of Directors of the Company held nine meetings and
acted three times by unanimous written consent. Each director attended more than
seventy-five percent (75%) of the Board meetings held during the period he or
she served as a director.
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<PAGE> 10
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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. The Company believes that during the 1999 fiscal year, the
officers, directors and holders of more than 10% of the Company's Common Stock
and Class B Common Stock complied with all Section 16(a) filing requirements,
except that each of Michael E. Pulitzer, Robert C. Woodworth, Ronald H. Ridgway,
James V. Maloney, Jon H. Holt, Terrance C.Z. Egger, Mark G. Contreras and Cole
C. Campbell (a then Trustee under the Voting Trust) inadvertently did not file
on a timely basis a report required by Section 16(a) relating to his receipt of
an award on December 17, 1999 of stock options under the Pulitzer Inc. 1999
Stock Option Plan.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has 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, which met one time and acted one time by unanimous written consent
during 1999, 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.
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, which met four times
during 1999, renders advice with respect to compensation matters, administers,
among other things, the Annual Incentive Compensation Plan, 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. In
addition to Michael E. Pulitzer and Robert C. Woodworth, the other members of
this Committee are David E. Moore, William Bush and James M. Snowden, Jr.
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 the whole Board of Directors,
who, if he or she is not a director, shall be an advisory member. The Executive
Committee, which did not meet during 1999, exercises the power and authority of
the 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, the other member of this Committee is David E. Moore.
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, which met two times during 1999, 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 expenses 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
signatories 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.
The Company's Nominating Committee consists of two or more directors who
are designated by resolution adopted by a majority of the whole Board. This
Committee, which acted one time by unanimous
7
<PAGE> 11
written consent during 1999, 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 stockholders'
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 or 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 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.
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 he or she 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, the other members of this Committee are
William Bush, Ken J. Elkins, Alice B. Hayes, David E. Moore, Emily Rauh Pulitzer
and James M. Snowden, Jr.
DIRECTOR COMPENSATION
Compensation for non-employee directors of the Company is set at $10,000
per year. In addition, each non-employee director receives $1,000 for each
meeting of the Board of Directors or any of its committees he or she attends in
person or by telephone, a $1,500 travel allowance if he or she attends in
person, and a per diem payment of $300 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.
Pursuant to 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, have been and will automatically be granted thereunder 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 date following each Annual
Meeting of Stockholders, commencing with the 1999 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. In 1999 and presently, the
non-employee directors eligible to participate in the Pulitzer Inc. 1999 Stock
Option Plan are Dr. Hayes and Messrs. Bush, Elkins and Snowden.
8
<PAGE> 12
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 was paid at
an annual rate of $147,000 in 1999, and Mr. Moore will be paid at an annual rate
of $156,000 in 2000. The consulting agreement provides for automatic renewals
unless terminated by either party not later than December 1 of any calendar
year.
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 was paid at an annual rate
of $147,000 for the year 1999, and Mrs. Pulitzer will be paid at an annual rate
of $156,000 in 2000. The consulting agreement provides for automatic renewals
unless terminated by either party not later than December 1 of any calendar
year.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The philosophy of the Company's executive compensation policy is to have
programs which enable the Company to attract and retain key executives and
promote improved corporate performance and which are directly linked to
increasing stockholder value. The following guidelines have been established to
carry out the Company'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
the Company.
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 periodic review by the
Compensation Committee.
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 intend to participate in
decisions relating to their own compensation. The Committee has and intends,
from time to time in the future, to utilize the services of independent
compensation consultants.
EXECUTIVE COMPENSATION PROGRAM
The Company's regular executive compensation program is comprised of the
following three key components:
Base Salary -- Base salaries for the executives named in the compensation
tables (the "Named Executives") are reviewed annually by the Compensation
Committee, which takes into account competitive pay levels by making comparisons
with other media companies. The Company participates 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 covers more than 70 media companies that
voluntarily participate, including all of the companies in the S&P
Publishing-Newspaper Index. The Committee also considers (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
performance, including operating cash flow, after tax cash flow, net income and
earnings per share, without emphasizing any specific aspect. Excluding the
office of Michael E. Pulitzer as Executive Chairman, for which there is no
readily available survey data, collectively, the salaries of the other
9
<PAGE> 13
four Named Executives are above the 75th percentile for similar executives as
reported in the survey. The Committee believes that the base salary levels are
reasonable and necessary to retain these key employees.
Annual Incentive Compensation -- The criterion for bonuses is 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 Committee at the beginning of the year. The Committee
believes that the Company's operating cash flow performance will be reflected in
stockholder values over the long term. Operating cash flow goals established for
the St. Louis Post-Dispatch (the "Post-Dispatch"), other publishing segments and
the consolidated Company are used as performance measurements depending upon the
area(s) of responsibility of the Named Executives. Actual operating cash flows
for 1999 as a percentage of the goals established for the various performance
measurements ranged from 99% to 109%. As a result, for 1999, the Named
Executives as a group were awarded incentive bonuses of approximately 59% of
their combined stated base salaries.
Stock Compensation -- Stock compensation for the Company is comprised
primarily of stock options and restricted stock grants. These programs provide
key executives with an opportunity to increase their ownership of Company stock,
thereby aligning the executives' interests more closely with those of the
Company's stockholders. The Compensation Committee is responsible for
administering the Company's stock option and restricted stock plans. Grant
levels are 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 is placed on corporate performance in
determining grant levels.
Grants made under the stock option and restricted stock plans for 1999 to
the Named Executives are reflected in the compensation table. 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. In April 1999 and,
again, in December 1999, the Company granted options to all of the Named
Executives. In general, the April 1999 grants were intended to make up for the
PPC option grants that would otherwise have been made in the normal course at
the end of 1998 or in early 1999, and the December 1999 grants were made in the
normal course. The April 1999 option grant to Mr. Woodworth and a concomitant
grant of restricted stock units were made in accordance with the requirements of
the Company's employment agreement with Mr. Woodworth. Mr. Egger received a
third option grant in 1999, in connection with his promotion to Publisher of the
Post-Dispatch. He also received a restricted stock award, subject to a
three-year vesting condition, in April 1999, pursuant to his employment
agreement with the Company. All of the stock options were granted with an
exercise price equal to the closing market price of the Common Stock on the
dates of the grants, are subject to vesting conditions and, unless forfeited or
terminated sooner, expire ten years from the grant dates. The aggregate value of
the stock options granted to Messrs. Pulitzer, Woodworth, Ridgway, Egger and
Contreras, viewed on the basis of a single year grant, was above the 75th
percentile of the value of long-term incentive grants for similar executives as
reported in the survey.
TRANSACTION 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 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 certain of
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 and
Ronald H. Ridgway, each of them became entitled to a retention award equal to
$900,000, $600,000 and $450,000, respectively, on March 18, 1999. The agreements
with these individuals 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
10
<PAGE> 14
and $675,000, respectively. In addition, Terrance C.Z. Egger received a
transaction completion bonus of $200,000 upon consummation of the Merger. The
agreement for Mr. Elkins also provided for a cash separation payment of
approximately $1,796,000. All of the amounts payable to Michael E. Pulitzer, and
a significant portion of the amounts payable to Ronald H. Ridgway, were
deferred.
DEFERRAL OF COMPENSATION
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, the Company may not 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 Compensation
Committee gives consideration to the net cost to the Company (including, for
this purpose, the potential limitation on deductibility of executive
compensation). Deferred compensation is not taken into account in applying the
deduction limitations. Accordingly, to lessen the likelihood that a portion of
Michael E. Pulitzer's, Robert C. Woodworth's or any other senior executive's
compensation for any year would not be deductible, the Company may require,
among other things, that payment of a portion of a senior executive's bonus and
other compensation be deferred. The Company deferred a total of $476,735 of Mr.
Pulitzer's 1999 compensation and $389,016 of Mr. Woodworth's 1999 compensation.
In addition, the Company assumed deferred compensation obligations to Michael E.
Pulitzer and Ronald H. Ridgway arising prior to and in connection with the
Transactions. The deferral amounts, together with earnings credited thereon,
constitute unsecured obligations of the Company and will generally be paid or
begin being paid following termination of employment with the Company. Although
no assurance can be given, 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.
COMPENSATION OF THE EXECUTIVE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER
The Company entered into an employment and consulting agreement dated June
1, 1999 with Michael E. Pulitzer, pursuant to which Mr. Pulitzer will serve as
Executive Chairman of the Company until May 31, 2002 (unless sooner terminated
by agreement), and, thereafter, as non-executive Chairman and senior advisor
through May 31, 2006. Mr. Pulitzer is entitled to salary at an annual rate of
$980,000 for his services as Executive Chairman, and to an annual
consulting/advisory fee of $700,000 for his services as senior advisor to the
Company. While he is employed as Executive Chairman, Mr. Pulitzer is eligible
for a target incentive bonus opportunity of at least 40% of his salary. The
bonus award for 1999 was 50% of his salary. Mr. Pulitzer's formula benefit under
the Company's Supplemental Executive Benefit Pension Plan was increased from 40%
to 50% of pay in conjunction with his execution of the employment and consulting
agreement. His formula benefit will be increased to 55% following the
termination of his employment as Executive Chairman for any reason other than
termination by him without "good reason" or termination by the Company for
"cause." If Mr. Pulitzer dies before May 31, 2006, his surviving spouse (if any)
will be entitled to monthly payments equal to 50% of the advisory fee he would
have received if he had lived. The Company utilized the services of an
independent compensation consultant to develop the compensation package which
was negotiated with Mr. Pulitzer.
On April 7, 1999 and December 17, 1999, Michael E. Pulitzer received stock
option grants for 139,800 shares and 75,000 shares, respectively, of Common
Stock. The Company used the services of an independent compensation consultant
in determining the number of shares covered by the stock option grants to Mr.
Pulitzer.
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 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 at least $575,000 and an annual incentive bonus target of 100% of
salary. Mr. Woodworth was also entitled to receive and, on April 7, 1999, did
receive an initial stock option grant for 139,800 shares and a one-time
restricted stock unit award for 25,080 shares, both of which are subject to
certain vesting and other conditions.
11
<PAGE> 15
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 his option
and restricted stock unit awards. On December 17, 1999, Mr. Woodworth received a
stock option grant for 100,000 shares of Common Stock. The Company utilized the
services of an independent compensation consultant to develop the compensation
package which was negotiated with Mr. Woodworth and to fix the number of shares
covered by his December 17, 1999 option grant. Mr. Woodworth was also awarded an
incentive bonus for 1999 equal to his target of $575,000, of which $389,016 was
deferred.
Michael E. Pulitzer, Robert C. Woodworth, William Bush, David E. Moore and
James M. Snowden, Jr. comprise the Compensation Committee of the Board of
Directors of the Company and, except for Mr. Woodworth, comprised the
Compensation Committee of the Board of Directors of PPC. 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, 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 advisor 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 a financial advisor in connection with such financial matters as it deems
appropriate.
David E. Moore, a member of the Company's Compensation Committee, is a
party to a consulting agreement with the Company, pursuant to which the Company
paid Mr. Moore at an annual rate of $147,000 in 1999 and will pay Mr. Moore at
an annual rate of $156,000 in 2000. The consulting agreement with the Company
provides for automatic renewals.
William Bush, a member of the Company's Compensation Committee, is a
partner in Fulbright & Jaworski L.L.P. The Company intends to retain Fulbright &
Jaworski L.L.P. in the future as attorneys in connection with such legal matters
as it deems appropriate.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a discussion of David E. Moore and Emily Rauh Pulitzer's consulting
agreements with the Company, see "Management -- Director Compensation."
For discussion of Michael E. Pulitzer's employment and consulting agreement
and Robert C. Woodworth's employment agreement with the Company, see
"Compensation Committee Report on Executive Compensation -- Compensation of the
Executive Chairman and the Chief Executive Officer."
The Company entered into an employment agreement with Ronald H. Ridgway for
the period beginning June 1, 1999 and ending August 31, 2001. Mr. Ridgway is
entitled to receive an annual base salary of at least
12
<PAGE> 16
$360,000 and an annual incentive bonus target of at least 40% of salary (which
has been increased to 50% for fiscal year 2000). If Mr. Ridgway continues his
employment with the Company through August 31, 2001 (or if his employment is
terminated earlier by the Company for reasons other than "cause" or by Mr.
Ridgway for "good reason"), then, among other things, Mr. Ridgway will be deemed
to have retired at his normal retirement date for purposes of his entitlement to
retiree benefits and he will be entitled to an unreduced benefit from the
Company's Supplemental Executive Benefit Pension Plan.
The Company also has entered into a three year employment agreement with
Terrace C.Z. Egger that became effective upon consummation of the Merger. Mr.
Egger is currently employed as the Publisher of the Post-Dispatch. Mr. Egger is
entitled to receive an annual base salary of at least $240,000 and an annual
incentive bonus target of at least 40% of salary, starting January 1, 1999
(which has been increased to 50% for fiscal year 2000). Pursuant to the
agreement, Mr. Egger received a restricted stock award of 6,020 shares of Common
Stock which will not vest until March 17, 2002.
Pursuant to the terms of the late Joseph Pulitzer Jr.'s employment
agreement, 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 $15,000 (including interest). The annuity payments to Mrs.
Pulitzer are expected to terminate in 2003.
For a discussion of the retention awards and transaction completion bonuses
received from PPC by certain of the Named Executives, as well as Ken J. Elkins,
see "Compensation Committee Report on Executive Compensation -- Transaction
Bonus Program."
For a discussion of the cashout and termination of all options then
outstanding under PPC's 1986 and 1994 stock option plans, and the amounts paid
in connection therewith to certain of the Named Executives, as well as Ken J.
Elkins, see "Option Grants in Last Fiscal Year."
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<PAGE> 17
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the compensation paid
(inclusive of deferred amounts that would have been paid) to the five most
highly compensated executive officers of the Company for 1999 (i) by PPC during
the period between December 28, 1998 and March 18, 1999 and by the Company
during the balance of fiscal year 1999 and (ii) by PPC during its fiscal years
1998 and 1997:
PULITZER INC.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK AWARDS SARS PAYOUTS COMPENSATION(5)
POSITION YEAR SALARY($) BONUS($) ($) ($) (#) ($) ($)
------------------ ---- --------- -------- ------------ ------------ -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer.......... 1999 998,846 483,085 0 0 214,800 0 3,019,250
Chairman of the Board 1998 978,154 851,796 0 0 0 0 26,905
1997 918,115 554,972 0 0 0 0 37,951
Robert C. Woodworth.......... 1999 566,154 575,581 0 1,000,000(3) 239,800 0 238,435
President and Chief 1998 0 400,000(1) 0 0 0 0 0
Executive Officer 1997 0 0 0 0 0 0 0
Ronald H. Ridgway............ 1999 366,231 142,351 0 0 106,070 0 10,397,271
Senior Vice 1998 339,385 153,684 0 0 0 0 11,023
President-Finance
1997 318,950 154,856 0 0 27,500 0 13,259
Terrance C.Z. Egger.......... 1999 284,443 131,393 0 240,000(4) 67,800 0 438,661
Vice President 1998 212,308 74,400 0 0 0 0 16,356
1997 174,327 68,250 0 0 5,000 0 16,208
Mark G. Contreras............ 1999 186,058 197,735(2) 0 0 47,000 0 108,423
Vice President 1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
</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) Includes a signing bonus of $85,000.
(3) Reflects the grant of 25,080 restricted stock units valued at a closing
market price of $39.875 per share on April 7, 1999, the date of the award.
The award will fully vest (if at all) on January 1, 2002. The Company will
pay Mr. Woodworth dividend equivalents related to his restricted stock
units according to the terms of the Company's normal dividend declarations.
As of December 31, 1999, these units represent the only restricted units
credited to Mr. Woodworth and had an aggregate value of approximately
$1,011,000 based on the closing market price of the Company's Common Stock
of $40.3125 per share on December 31, 1999.
(4) Reflects the grant of 6,020 shares of restricted stock valued at a closing
market price of $39.875 per share on April 7, 1999, the date of the award.
The award will fully vest (if at all) on March 17, 2002. The Company will
pay Mr. Egger dividends on his restricted shares according to the terms of
the Company's normal dividend declarations. As of December 31, 1999, these
shares represent the only restricted stock holdings of Mr. Egger and had an
aggregate value of approximately $243,000 based on the closing market price
of the Company's Common Stock of $40.3125 per share on December 31, 1999.
(5) Includes (i) income related to the cashout by PPC of unexercised stock
options of $9,260,750 and $215,677, respectively, in the cases of Messrs.
Ridgway and Egger in connection with the Merger, (ii) PPC's payment of
transaction completion and retention awards as a result of the Merger of
$2,990,000, $1,125,000 and $200,000, respectively, in the cases of Messrs.
Pulitzer, Ridgway and Egger, (iii) contributions to the Pulitzer Retirement
Savings Plan, in the amount of $5,600, $5,600 and $5,600, respectively, in
the cases of Messrs. Pulitzer, Ridgway and Egger, (iv) imputed income
related to life insurance of $23,650 and $5,921, respectively, in the cases
of Messrs. Pulitzer and Ridgway, (v) payment of moving expenses of $230,911
and $108,423, respectively, in the cases of Messrs. Woodworth and
Contreras, (vi) the Company's payment to Mr. Woodworth of dividend
equivalents aggregating $7,524 with respect to his restricted stock unit
award, (vii) the Company's payment of cash dividends aggregating $1,834 on
restricted stock held by Mr. Egger and (viii) income related to the vesting
of stock grants issued prior to 1997 in the amount of $15,550, $11,588 and
$13,134 for 1999, 1998 and 1997, respectively, in the case of Mr. Egger.
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<PAGE> 18
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option exercises in fiscal 1999
by the named executive officers of the Company and the value of such officers'
unexercised options at December 31, 1999:
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
EXERCISES DURING YEAR FISCAL YEAR-END
- ----------------------------------------------------------- ------------------------------------------------------------
(A) (B) (C) (D) (E)
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY
SHARES (SHARES)(1) OPTIONS($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Pulitzer.......... 0 0 0 214,800 0 0
Robert C. Woodworth.......... 0 0 0 239,800 0 0
Ronald H. Ridgway............ 0 0 0 106,070 0 0
Terrance C. Z. Egger......... 0 0 0 67,800 0 0
Mark G. Contreras............ 0 0 0 47,000 0 0
</TABLE>
- ---------------
(1) Computed based upon the difference between the closing price of the
Company's Common Stock on December 26, 1999, the last business day of the
Company's 1999 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, 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
average daily closing price of PPC's common stock for the 10 trading days ending
two trading days immediately prior to the closing the Merger. The amounts paid
on March 18, 1999 to each of the Named Executives under the immediately
foregoing table were: Terrance C. Z. Egger ($216,000) and Ronald H. Ridgway
($9,261,000, a portion of which was deferred). The amount paid to Ken J. Elkins
on March 18, 1999 was $8,758,000.
Pulitzer Retirement Savings Plan. The Pulitzer Retirement Savings Plan (the
"Retirement Savings Plan") is a qualified profit sharing plan under Section
401(a) of the Code, and contains a qualified cash or deferred arrangement as
described under Section 401(k) of the Code. The Retirement Savings Plan is
funded through the Company's contributions and participating employees' elective
401(k) deferrals. Generally, employees may defer through payroll deductions up
to 16% of their regular salary (10% if annual salary equals or exceeds $66,000,
subject to adjustment each year), but not more than the annual 401(k) limit
which, for 2000, is $10,500. The Company makes annual matching contributions
(limited to 2% of pay) with respect to a participating executive's elective
contributions. In addition, the Company makes a $50 monthly profit sharing
contribution for each participating executive.
Pulitzer Inc. Pension Plan. The Pulitzer Inc. 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 Pension Plan provides for payment of a monthly
retirement income which, expressed as a single life annuity 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.
15
<PAGE> 19
Total estimated annual retirement benefits for Michael E. Pulitzer, Robert
C. Woodworth, Ronald H. Ridgway, Terrance C.Z. Egger and Mark G. Contreras under
the Pension Plan, assuming they all continue service at their most recent levels
of compensation and retire at age 65 (or at the present date if older than 65),
are $83,554, $42,993, $66,331, $78,617, and $81,548, 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................. $30,063 $35,746 $40,008 $41,141 $ 41,752
200,000................. 40,962 48,831 54,807 56,609 57,717
250,000................. 48,368 61,917 69,606 72,078 73,682
300,000................. 48,368 64,490 80,613 87,546 89,647
350,000................. 48,368 64,490 80,613 92,485 104,358
400,000................. 48,368 64,490 80,613 92,485 104,358
450,000................. 48,368 64,490 80,613 92,485 104,358
500,000................. 48,368 64,490 80,613 92,485 104,358
</TABLE>
Supplemental Executive Benefit Pension Plan. The Pulitzer Inc. Supplemental
Executive Benefit Pension Plan (the "Supplemental Plan") is an unfunded defined
benefit plan which provides 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 the 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), is 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 formula percentage for
Michael E. Pulitzer is 50% and, pursuant to his employment and consulting
agreement, will increase to 55% following the termination of his employment as
the Company's Executive Chairman. The amount of a participant's benefit, as so
determined, is payable by the Company to the extent it is not covered by the
employer-provided benefits payable to the participant under the Retirement
Savings Plan and Pension Plan. Participants become vested in their Supplemental
Plan benefits after the completion of ten years of service. Vested participants
who retire between age 55 and 65 may elect to begin receiving reduced annual
payments before age 65. The early retirement reduction factor may be waived in
specific cases and, subject to certain conditions, will be waived upon the
retirement of Ronald H. Ridgway. 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.
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 Ronald H. Ridgway, Terrance C.Z. Egger and Mark G.
Contreras under the Supplemental Plan,
16
<PAGE> 20
assuming continued service at their current levels of compensation and
retirement at 65 (or at the present date if older than 65), are $681,924,
$205,711, $117,943, $18,086, and $0, respectively.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS FOR YEARS OF SERVICE INDICATED
FINAL THREE-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. The Company maintains a deferred compensation plan
(the "Deferred Compensation Plan") pursuant to which its senior executive
officers have been and may be required to defer annual 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
permits eligible executives to make elective compensation deferrals. Amounts
deferred under the Deferred Compensation Plan are credited with earnings
currently based on the one-year treasury bill rate in effect at the beginning of
each year. It is anticipated that, in the future, earnings credits will be based
on investment elections made by participants and that the Company's obligations
to pay the deferral amounts plus earnings credits will be funded through a
trust. Michael E. Pulitzer, Robert C. Woodworth and Ronald H. Ridgway are the
Named Executives who currently participate in the Deferred Compensation Plan. As
of December 26, 1999, the total amount of the deferred compensation obligations
to Messrs. Pulitzer, Woodworth and Ridgway is approximately $5,885,303,
$389,016, and $1,931,415, respectively. These compensation deferrals represent
an unsecured obligation of the Company and, in general, will be paid or begin
being paid following termination of employment with the Company.
Split Dollar Life Insurance Agreements. In December 1996, PPC entered into
so-called split dollar life insurance agreements in connection with life
insurance policies issued on the lives of Michael E. Pulitzer, Ken J. Elkins and
Ronald H. Ridgway. In accordance with the Merger Agreement, these agreements and
the related collateral assignments, were assumed by and assigned to the Company.
As currently in force, these agreements require the Company to make annual
premium deposits to the policies and give the Company an economic interest in
the policies. In 1999, the Company made premium payments pursuant to these
agreements (subject to recoupment in whole or in part) of $822,700, and it is
anticipated that the Company will make annual premium payments under these
agreements (subject to future recoupment in whole or in part) of $660,000 for up
to eight more years and of $375,000 in the year thereafter. 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.
Other Insurance Benefits. The Company provides an insurance benefit program
to certain of its executive officers and key employees with group life,
accidental death and dismemberment and long-term liability 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 is based upon a multiple of pay, subject to a maximum
death benefit of $250,000. Upon retirement, the executive group life insurance
coverage is reduced to $50,000. The accidental death and dismemberment coverage
equals the amount of the group life insurance benefit and terminates upon
retirement. The Company's long-term disability insurance coverage provides a
salary replacement equal to 60% of total compensation, subject to a maximum
monthly benefit payment of $10,000. Benefits are payable after the ninetieth day
of total disability and continue for the duration of the disability or until age
65. Executives who became disabled after age 60 are entitled to reduced
benefits. Benefits are integrated with other sources of disability income, such
as Social Security Disability Income.
For a discussion of employment and other agreements with the Named
Executives, see "Compensation Committee Report on Executive
Compensation -- Compensation of the Executive Chairman and the Chief Executive
Officer" and "Compensation Committee Interlocks and Insider
Participation -- Certain Relationships and Related Transactions."
17
<PAGE> 21
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 CUMULATIVE TOTAL RETURN
(PULITZER INC., S&P 500 INDEX, S&P PUBLISHING (NEWSPAPER) INDEX)
PULITZER INC.
RELATIVE MARKET PERFORMANCE
TOTAL RETURN MARCH 19, 1999-DECEMBER 31, 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
QUARTERS ENDING
------------------------------------
COMPANY/INDEX BASE MAR 99 JUN 99 SEP 99 DEC 99
- ------------- PERIOD ------ ------ ------ ------
19 MARCH 99
-----------
<S> <C> <C> <C> <C> <C>
PULITZER INC................................. 100 95.15 114.65 107.63 95.82
S&P 500 INDEX................................ 100 99.01 105.98 99.37 114.15
S&P PUBLISHING (NEWSPAPER)-INDEX............. 100 96.65 114.40 118.13 138.30
</TABLE>
The total cumulative return on investment (change in the year-end stock
price plus reinvested dividends) beginning on March 19, 1999, when the Company's
Common Stock was first traded on the New York Stock Exchange, and for each
calendar quarter ended thereafter for the Company, the S&P 500 Index and the S&P
Publishing (Newspaper) Index is based on the stock price or composite index at
March 19, 1999.
The above graph compares the performance of the Company with that of the
S&P 500 Index 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.
18
<PAGE> 22
PROPOSAL NUMBER TWO
APPROVAL OF AN AMENDMENT TO THE PULITZER INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
On January 21, 2000, the Board of Directors unanimously adopted, subject to
stockholder approval at the 2000 Annual Meeting of Stockholders, an amendment to
the Pulitzer Inc. 1999 Employee Stock Purchase Plan (the "Employee Purchase
Plan"). The amendment eliminates the requirement that employees complete one
year of employment with the Company or its subsidiaries in order to become
eligible to participate in the Employee Purchase Plan. The amendment also
incorporates the Internal Revenue Code requirements for stockholder approval of
subsequent Employee Purchase Plan amendments. In effect, the Board of Directors
would be allowed to modify eligibility conditions without stockholder approval
unless the modifications would affect the corporations (or class of
corporations) whose employees are eligible to participate in the Employee
Purchase Plan.
The principal features of the Employee Purchase Plan, as modified by the
amendment, are summarized below. The full text of the Employee Purchase Plan,
including the proposed amendment thereto, is set forth in Appendix A to the
Proxy Statement and the following discussion is qualified by reference thereto.
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. The closing
price of the Company's Common Stock on April 3, 2000 was $39.9375.
In general, all employees of the Company and its subsidiaries are eligible
to participate in the Employee Purchase Plan. If the proposal to approve the
amendment is approved, employees will become eligible when they are hired
(instead of having to complete at least one year of employment as was the case
prior to the amendment). For this purpose, a subsidiary is any corporation at
least 50% of the stock of which is owned directly or indirectly by the Company.
Non-employee directors and employees of non-corporate affiliates 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. An employee's payroll deductions are
adjusted downward or refunded to the extent necessary to ensure that he or she
does 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 is credited to an account maintained in the employee's name. At the end of
each offering period, the amount credited to a participant's account is 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 automatically terminates upon the
termination for any reason of his or her employment with the Company and its
subsidiaries. Upon termination of participation, payroll deductions cease and
the amount credited to the participant's account (representing previous
uninvested payroll deductions) is paid in cash to the participant (or the
participant's beneficiary). A participant who voluntarily withdraws from the
Employee 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 is administered by the Compensation Committee.
Subject to the provisions of the Employee Purchase Plan, the Compensation
Committee, acting in its sole and absolute discretion, has full power and
authority to construe, interpret and apply the terms of the Employee Purchase
Plan. The Board
19
<PAGE> 23
of Directors may amend or terminate the Employee Purchase Plan at any time.
Stockholder approval is required for amendments that increase the number of
shares of Common Stock that may be sold under the Employee Purchase Plan. If the
proposed Employee Purchase Plan amendment is approved, future amendments that
modify corporations (or class of corporations) whose employees are eligible to
participate will also be subject to stockholder approval. Prior to the proposed
amendment, the Employee Purchase Plan provided that any amendment that modified
the class of persons eligible to participate in the Employee Purchase Plan would
be subject to the approval of the Company's stockholders.
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 constitute ordinary
income as if such amounts had been paid outright to the employee. No income is
realized by an employee at the end of an offering period when shares of Common
Stock are purchased with the amount in the employee's payroll deduction account.
Income or loss is realized when shares acquired under the Employee Purchase Plan
are sold or otherwise disposed of by the employee. In general, if the sale or
other distribution occurs more than two years after the date the shares are
purchased, then gain realized on the sale or other disposition in an amount up
to the 15% purchase price discount will be taxable as ordinary income and 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 gain
realized will be treated as ordinary income in an amount up to the excess of the
fair market value of the shares at the end of the offering period (i.e., when
the shares are acquired) in which they were acquired over the purchase price
paid for the shares, and the Company will be entitled to a corresponding
deduction. The remaining gain, if any, will be treated as capital gain.
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 in the future. Such election will be made by each
eligible participant. Michael E. Pulitzer is not eligible to participate in the
Employee Purchase Plan.
As of December 26, 1999, 4,944 shares have been issued under the Plan. The
following table shows the number of shares issued under the Plan to the persons
and groups named below in the fiscal year ended December 26, 1999 and the
"Dollar Value" of those shares. The "Dollar Value" is the difference between the
fair market value of the Common Stock on the dates of purchase and the
participant's purchase price.
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR
NAME AND POSITION ISSUED VALUE
----------------- ---------------- -------
<S> <C> <C>
Michael E. Pulitzer, Chairman of the Board.................. 0 $ 0
Robert C. Woodworth, President and Chief Executive
Officer................................................... 0 0
Ronald H. Ridgway, Senior Vice President -- Finance......... 47 318
Terrance C.Z. Egger, Vice President......................... 187 1,271
Mark G. Contreras, Vice President........................... 0 0
Corporate Officers as a Group............................... 345 2,353
Non-Officer Employee Group.................................. 4,599 31,342
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO APPROVE THE AMENDMENT TO THE PULITZER INC. 1999 EMPLOYEE STOCK PURCHASE PLAN.
20
<PAGE> 24
PROPOSAL NUMBER THREE
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 the Company for its 1999 fiscal year and will serve in that
capacity for the Company for the 2000 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.
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 2001
Annual Meeting of Stockholders of the Company must be received by the Company no
later than December 8, 2000, 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. Whether or not you expect to attend the
meeting, the prompt return of your proxy in the enclosed envelope, or your vote
by telephone or on the Internet, will be appreciated.
By Order of the Board of Directors
JAMES V. MALONEY
Secretary
Dated: April 10, 2000
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.
21
<PAGE> 25
APPENDIX A
Below is the text of the Company's 1999 Employee Stock Purchase Plan as
proposed to be amended pursuant to Proposal No. 2. The language proposed to be
added to the 1999 Employee Stock Purchase Plan is set forth in bold print, and
the language proposed to be deleted is set forth in brackets.
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.
A-1
<PAGE> 26
(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.
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.
A-2
<PAGE> 27
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 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
A-3
<PAGE> 28
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 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, ANY AMENDMENT WHICH WOULD MODIFY THE
CORPORATIONS OR CLASS OF CORPORATIONS WHOSE EMPLOYEES ARE ELIGIBLE TO
PARTICIPATE IN THE PLAN OR, 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 IF AND TO THE EXTENT SUCH APPROVAL IS REQUIRED BY
APPLICABLE LAW.
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.
A-4
<PAGE> 29
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.
A-5
<PAGE> 30
PROXY
PULITZER INC.
THIS PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 17, 2000
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 March 31, 2000, at the Annual Meeting of
Stockholders to be held at 10:00 a.m., Central Daylight Time, on May 17, 2000,
at the St. Louis Art Museum Auditorium, Forest Park, St. Louis, Missouri 63110,
and at any adjournment thereof.
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the meeting.
The signor acknowledges receipt of the Notice of Annual Meeting of Stockholders
to be held on May 17, 2000, the Proxy Statement of the Company, each dated
April 10, 2000, and the Company's Annual Report for the fiscal year ended
December 26, 1999, 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.
----------------
SEE REVERSE SIDE
----------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
ELECTRONIC DELIVERY OF NEXT YEAR'S PROXY MATERIALS
Sign up to receive next year's annual report and proxy materials via the
Internet. Next year when the materials are available, we will send you an
e-mail with instructions which will enable you to receive these materials
on-line. To sign up for this optional service, visit:
http://www.econsent.com/ptz
<PAGE> 31
[X] PLEASE MARK YOUR 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 AND 3
<TABLE>
<CAPTION>
FOR all nominees listed below WITHHOLD AUTHORITY
(except as indicated to the to vote for all nominees
contrary below) listed below
<S> <C> <C>
1 PROPOSAL NO. 1 -- ELECTION OF CLASS B [ ] [ ]
DIRECTORS
NOMINEES: 01 - William Bush, 02 - Michael E. Pulitzer
and 03 - Ronald H. Ridgway.
INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's
name on the line set forth below.
</TABLE>
- ---------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
2. PROPOSAL NO. 2 -- APPROVAL OF THE [ ] [ ] [ ]
AMENDMENT TO THE PULITZER INC. 1999
EMPLOYEE STOCK PURCHASE PLAN.
FOR AGAINST ABSTAIN
3. PROPOSAL NO. 3 -- RATIFICATION OF THE [ ] [ ] [ ]
APPOINTMENT OF DELOITTE & TOUCHE LLP
AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE 2000 FISCAL YEAR.
</TABLE>
THE UNDERSIGNED HEREBY REVOKES ANY PROXY TO VOTE SHARES OF COMMON STOCK OF THE
COMPANY HERETOFORE GIVEN BY THE UNDERSIGNED.
SIGNATURE(S) ______________________________________ DATE ____________
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. EACH JOINT OWNER SHOULD SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD GIVE FULL TITLE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
PULITZER INC.
Dear Stockholder:
Pulitzer Inc. encourages you to take advantage of new and convenient ways to
vote your shares. You can vote your shares electronically through the Internet
or the telephone, 24 hours a day, 7 days a week. This eliminates the need to
return the proxy card.
To vote your shares by these means, please use the control number printed in the
box above, just below the perforation. The series of numbers that appear in the
box above must be used to access the system. To ensure that your vote will be
counted, please cast your Internet or telephone vote before 12:00 a.m. on May
16, 2000.
1. To vote over the Internet:
* Log on the Internet and go to the web site
http://www.eproxyvote.com/ptz
2. To vote by Telephone:
* On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683)
* Outside of the U.S. and Canada call 201-536-8073
Your electronic vote authorizes the named proxies in the same manner as if
you marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you
to mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
