LEE ENTERPRISES, INCORPORATED
400 Putnam Building
215 N. Main Street
Davenport, IA 52801-1924
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 1, 1996
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Lee Enterprises, Incorporated, a
Delaware corporation (the "Company"), will be held in the second floor
conference room of the offices of the Company, 215 N. Main Street, Davenport,
Iowa, on February 1, 1996, at 9:00 A.M., for the following purposes:
(1) To elect three directors for terms of three years,
and one director for a term of one year;
(2) To consider and act upon a proposal to establish
an Annual Incentive Bonus Program for Key Executives;
(3) To consider and act upon a proposal to amend the
1990 Long Term Incentive Plan;
(4) To consider and act upon a proposal to amend and
extend the 1977 Employee Stock Purchase Plan;
(5) To consider and act upon a proposal to adopt the
1996 Stock Plan for Non-Employee Directors; and
(6) To transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed December 8, 1995 as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting.
You are invited to attend this meeting; however, if you do not expect
to attend in person you are urged to execute and return immediately the enclosed
proxy, which is solicited by management. You may revoke your proxy and vote in
person should you attend the meeting.
C. D. Waterman III, Secretary
Davenport, Iowa
December 27, 1995
<PAGE>
LEE ENTERPRISES, INCORPORATED
1996 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Lee Enterprises, Incorporated (the
"Company"), to be voted at the annual meeting of the stockholders of the Company
to be held on Thursday, February 1, 1996, or at any adjournment thereof, for the
purposes set forth in the foregoing Notice of Annual Meeting.
The principal executive offices of the Company are located at 400
Putnam Building, 215 N. Main Street, Davenport, Iowa 52801. This proxy statement
and the enclosed form of proxy are being mailed to stockholders on or about
December 27, 1995, together with a copy of the Company's Annual Report for the
fiscal year ended September 30, 1995.
VOTING PROCEDURES
Stockholders of record at the close of business on December 8, 1995
will be entitled to vote at the meeting or any adjournment thereof. As of
December 8, 1995, there were 34,223,986 shares of Common Stock and 13,169,862
shares of Class B Common Stock outstanding. Each share of Common Stock is
entitled to one vote at the meeting; each share of Class B Common Stock is
entitled to ten votes at the meeting.
The presence, in person or by proxy, of a majority of the voting power
of Common Stock and Class B Common Stock of the Company issued and outstanding
and entitled to vote is necessary to constitute a quorum at the Annual Meeting.
The affirmative vote of the holders of a plurality of the voting power of Common
Stock and Class B Common Stock represented in person or by proxy at the Annual
Meeting is required to elect directors, and the affirmative vote of the holders
of a majority of the voting power of Common Stock and Class B Common Stock is
required to act on Proposals 2, 3, 4 and 5 as more fully set forth in this Proxy
Statement and on any other matter properly brought before the meeting.
Abstentions from voting will be included for purposes of determining
whether the requisite number of affirmative votes are received on any matters
submitted to the stockholders for vote and, accordingly, will have the same
effect as a vote against such matters. If a broker indicates on the proxy that
it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote, and will have no effect on the vote, in respect to that matter.
<PAGE>
In voting by proxy with regard to the election of directors,
stockholders may vote in favor of all nominees, withhold their votes as to all
nominees or withhold their votes as to specific nominees. Stockholders should
specify their choices on the accompanying proxy card. All properly executed
proxy cards delivered by stockholders to the Company and not revoked will be
voted at the Annual Meeting in accordance with the directions given. If no
specific instructions are given with regard to the matters to be voted upon, the
shares represented by a signed proxy card will be voted "FOR" the election of
all directors and the approval of Proposals 2, 3, 4 and 5 as more fully set
forth in this Proxy Statement. If any other matters properly come before the
Annual Meeting, the persons named as proxies will vote upon such matters
according to their judgment.
Any stockholder delivering a proxy has the power to revoke it at any
time before it is voted by giving written notice to the Secretary of the
Company, by executing and delivering to the Secretary a proxy card bearing a
later date or by voting in person at the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Three directors are to be elected at the annual meeting to hold office
for three year terms expiring at the annual meeting of stockholders in 1999, and
one director is to be elected for a one year term expiring at the annual meeting
of stockholders in 1997. Each of the individuals named below is a nominee of the
Nominating Committee of the Board of Directors; each is presently a director
whose current term expires February 1, 1996.
<PAGE>
Proxies will be voted for the election of these nominees unless the
stockholder giving the proxy withholds such authority. If as a result of
circumstances not now known any of such nominees shall be unable to serve as a
director, proxies will be voted for the election of such other person as
management may select. Information about the nominees and directors continuing
in office is set forth below:
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
Principal .............. Proposed Director
Nominee .................................... Occupation Age Term Since
- ------- -------------------- --- -------- --------
<S> <C> <C> <C> <C>
Rance E .................................... President, Crain 57 3 years 1990
Crain ...................................... Communications (2) (1999)
Richard D .................................. President and Chief 53 3 years 1986
Gottlieb ................................... Executive Officer (1) (1999)
Phyllis .................................... Retired (2)(4) 65 3 years 1977
Sewell ..................................... (1999)
Richard W .................................. Consultant and Retired 72 1 year 1982
Sonnenfeldt ................................ Chief Executive Officer (1997)
of NAPP Systems Inc. (3)
</TABLE>
DIRECTORS CONTINUING IN OFFICE
<TABLE>
Principal Remaining Director
Director Occupation Age Term Since
- -------- ---------------- --- --------- --------
<S> <C> <C> <C> <C>
Andrew E. Newman ........................ Chairman and CEO, 51 2 years 1991
Race Rock Interna- (1998)
tional (2)
Ronald L ................................ Vice President- 57 2 years 1986
Rickman ................................. Newspapers (1998)
Lloyd G ................................. Chairman of the 69 2 years 1959
Schermer ................................ Board (1) (1998)
J. P. Guerin ............................ Investor (1)(3) 66 1 year 1985
(1997)
Charles E ............................... Chairman of the Board, 67 1 year 1990
Rickershauser, Jr. PS Group, Inc. (3)(4) (1997)
Mark Vittert ............................ Investor (2)(4) 47 1 year 1986
(1997)
<FN>
(1) Member of Executive Committee
(2) Member of Executive Compensation Committee
(3) Member of Audit Committee
(4) Member of Nominating Committee
</FN>
</TABLE>
<PAGE>
Mr. Crain is the President and Editorial Director of Crain
Communications, a diversified publishing company with its
principal offices in Chicago, IL.
Mr. Gottlieb was elected Chief Executive Officer of the
Company on May 11, 1991, and prior thereto served as President
and Chief Operating Officer.
Until July, 1988, Mrs. Sewell was a Senior Vice President
of Federated Department Stores. Mrs. Sewell is also a director
of Pitney Bowes Inc., Stamford, CT and SYSCO Corporation,
Houston, TX.
From September 1, 1987 to September 28, 1990, Mr. Sonnenfeldt held the
position of Chairman of the Board and Chief Executive Officer of NAPP Systems
Inc., a subsidiary of the Company. He is a director of Solar Outdoor Lighting
Co., Stuart, FL and TRIDEX Corporation, Westport, CT. He is also a member of the
Council on Foreign Relations, the American Council on Germany, and is a Fellow
of the IEEE.
Mr. Newman is Chairman and CEO of Race Rock International,
St. Louis, MO. He was Chairman of Edison Brothers Stores, Inc., until April
1995. He is a director of Dave & Buster's Inc., Dallas, TX; and Boatmen's
Bancshares, Edison Brothers Stores, and Sigma-Aldrich Corporation, all of St.
Louis, MO. On November 3, 1995, Edison Brothers Stores filed a petition for
reorganization under Chapter XI of the United States Bankruptcy Code in the
United States Bankruptcy Court in Wilmington, Delaware. Further proceedings are
still pending.
For more than the past 5 years, Mr. Rickman has been Vice
President-Newspapers of the Company.
Mr. Schermer was Chairman and Chief Executive Officer of
the Company until May 11, 1991 when, upon his recommendation, the
Board of Directors elected Mr. Gottlieb as Chief Executive
Officer.
Mr. Guerin is Vice-Chairman of Daily Journal Company, Los
Angeles, CA and a director of PS Group, Inc., San Diego, CA and
Chairman of Tapestry Films and Mitchum Securities Corp., Los
Angeles, CA.
Mr. Rickershauser is Chairman of the Board of PS Group,
Inc., San Diego, CA. He is also a director of City National
Corporation and of The Vons Companies, Inc., Los Angeles, CA.
Mr. Vittert is a private investor and a director of
Munsingwear, Inc., Minneapolis, MN and Dave and Buster's, Inc.,
Dallas, TX.
<PAGE>
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors met 5 times in fiscal 1995.
The Company's Audit Committee met 3 times in fiscal 1995; its functions
are to review the scope, timing and other considerations relative to the
independent auditors' annual examination of financial statements, and the
adequacy of internal control and the internal audit functions; and to evaluate
the performance of external and internal auditors and the Company's accounting
and financial departments. In addition, the Committee reviews professional
services provided by the Company's independent auditors, in general, prior to
rendering of such services, and the possible effect of any nonaudit-related
services upon the independence of the Company's independent auditors.
The Company's Nominating Committee met one time in fiscal year 1995;
its functions are to consider and recommend to the Board all nominees for
possible election and re-election to the Board, and to consider all matters
relating to the size, composition and governance of the Board and the general
subject matter, size and composition of Board committees. The Nominating
Committee will consider nominees recommended by the stockholders.
Recommendations should be sent to Charles E. Rickershauser, Jr., Chairman,
Nominating Committee, c/o the Company, at the address shown on the cover of this
Proxy Statement.
The Company's Executive Compensation Committee met 3 times in fiscal
1995; its functions are to administer the Company's 1962 Deferred Compensation
Unit Plan, the Supplementary Benefit Plan, the 1982 Incentive Stock Option Plan
and the 1990 Long Term Incentive Plan; to establish salary ranges and salaries,
bonus formulae and bonuses, and participation in other benefit plans or
programs, for elected officers; to determine employment terminations involving
payment to any individual in excess of $150,000, and to approve employment
contracts for executives extending beyond one year; and to approve the position
description, performance standards and Key Result Areas for Bonus Criteria for
the Chief Executive Officer of the Company and to measure his performance
thereunder. In addition, the Committee recommends to the Board of Directors
significant employee benefit programs and bonus or other benefit plans affecting
individuals on the executive payroll other than elected officers.
No incumbent director attended fewer than 75% of the aggregate of (1)
the total number of meetings of the Board of Directors and (2) the total number
of meetings held by all committees of the Board on which he or she served during
1995.
COMPENSATION OF DIRECTORS
No Company employee receives any remuneration for acting as a director.
In fiscal 1995 Messrs. Newman, Vittert, Crain, Rickershauser, Guerin, Schermer
and Sonnenfeldt and Mrs. Sewell were paid a $24,400 annual retainer, $1,000 for
each Board meeting attended and $700 for each Committee meeting attended.
Committee chairmen were also paid $3,000 extra as an annual retainer for acting
as such. Mr. Schermer received an additional stipend of $50,000 for his services
as Chairman of the Board. Directors engaged to provide consultative services are
compensated at the rate of $1,500 per diem. The Company in fiscal 1995 also paid
to Mr. Sonnenfeldt $60,000 for consultative services rendered to the Company and
its subsidiary, NAPP Systems Inc. No other non-employee director was paid
additional compensation for consultative services in fiscal 1995.
The Board of Directors has authorized non-employee directors, prior to
the beginning of any Company fiscal year, to elect to defer receipt of all or
any part of compensation a director might earn during such year. Amounts so
deferred will be paid to the director upon his or her ceasing to be a director
or upon attaining any specified age between 60 and 70, together with interest
thereon at the average rate of interest earned by the Company on its invested
funds during each year. Alternatively, directors may elect to have deferred
compensation credited to a "rabbi trust" established by the Company with an
independent trustee, which administers the investment of amounts so credited for
the benefit and at the direction of the trust beneficiaries until their accounts
are distributed under the deferred compensation plan.
In November, 1995 the Board of Directors adopted the Stock
Plan for Non-Employee Directors, which is more fully described in Proposal
5 in this Proxy Statement, in lieu of an increase or the annual cash retainer.
Upon stockholder approval, non-employee directs will receive an annual grant of
500 shares of Common Stock, and may elect to receive all or 50% of the cash
retainer and meeting fees described above in Common Stock of
the Company.
The Company also matches, on a dollar-for-dollar basis up to
$5,000 annually, charitable contributions made by directors.
<PAGE>
EQUITY SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of December 8, 1995 as to
each person known by the Company to own beneficially more than five (5%) percent
of the Common Stock or Class B Common Stock of the Company.
<TABLE>
Percent Class B Percent
Beneficial Owner Common Stock of Class Common Stock of Class
- ---------------- ------------ -------- ------------ --------
<S> <C> <C> <C> <C>
Journal Limited ................................ 3,293,286 9.6% -- --
Partnership
4230 So. 33rd Street
Lincoln, NE 68506
New England .................................... 991,000 6.29% -- --
Investment Co
c/o Reich & Tang
Asset Management, L.P
600 Fifth Avenue
8th Floor
New York, NY 10020
Lloyd G. Schermer (1) .......................... 643,428 1.88% 1,183,186 8.98%
c/o Lee Enterprises,
Incorporated
215 N. Main Street
Davenport, IA 52801
Betty A. Schermer (2) .......................... 472,272 1.38% 1,079,954 8.20%
c/o Lee Enterprises,
Incorporated
215 N. Main Street
Davenport, IA 52801
<FN>
(1) Includes (i) 80,322 Common and 455,028 Class B Common shares owned by a
trust as to which Lloyd G. Schermer retains sole voting and investment powers;
(ii) 277,254 Common shares subject to acquisition within 60 days by the exercise
of outstanding stock options; (iii) 9,924 Common and 30,210 Class B Common
shares held by a charitable foundation as to which Lloyd G. Schermer has shared
voting and investment power; (iv) 348,838 Class B Common shares held by a
charitable trust as to which Lloyd G. Schermer has sole voting and shared
investment power; and (v) 110,020 Common and 110,020 Class B Common shares held
by a trust and 165,908 Common and 239,090 Class B Common shares held by a
charitable trust as to which Lloyd G. Schermer shares voting and investment
powers. Lloyd G. Schermer disclaims beneficial ownership of 285,852 Common and
728,158 Class B Common shares listed above, and of the Common and Class B Common
shares beneficially owned by Betty A. Schermer listed above and described in
footnote (2) below.
(2) Includes (i) 296,440 Common and 761,338 Class B Common shares owned by
trusts under which Betty A. Schermer has sole voting and investment powers; (ii)
165,908 Common and 239,090 Class B Common shares owned by a charitable trust as
to which Betty A. Schermer shares voting and investment powers, but disclaims
all beneficial ownership; and (iii) 9,924 Common and 30,210 Class B Common
shares held by a charitable foundation as to which Betty A. Schermer has shared
voting and investment power, but disclaims all beneficial ownership. Betty A.
Schermer also disclaims beneficial ownership of all Common and Class B Common
shares beneficially owned by Lloyd G. Schermer listed and described in footnote
(1) above.
</FN>
</TABLE>
<PAGE>
The following table sets forth information as to the Common Stock and Class
B Common Stock of the Company beneficially owned as of December 8, 1995 by each
director, each of the named executive officers listed in the Summary
Compensation Table below, and by all directors and executive officers as a
group:
<TABLE>
Name and
Address of Percent Class B Common Percent
Beneficial Owner Common Stock of Class Stock of Class
- ---------------- ------------ -------- -------------- --------
<S> <C> <C> <C> <C>
Larry L. Bloom (2).................... 13,040 * 0 0
1021 Carriage Place Drive
Bettendorf, IA 52722
Rance E. Crain ...................... 2,000 * 0 0
220 E. 42nd Street
Room 930
New York, NY 10017
Richard D. Gottlieb (1)(2)............. 510,472 1.492% 124,170 *
11 Deer Hill Road
Pleasant Valley, IA 52767
J. P. Guerin (1)....................... 0 0 106,814 *
55 S. Grand Ave
34th Floor
Los Angeles, CA 90024
Andrew E. Newman ...................... 2,000 * 0 0
501 N. Broadway
St. Louis, MO 63102
Charles E ............................. 2,000 * 0 0
Rickershauser, Jr
355 S. Grand Ave
34th Floor
Los Angeles, CA 90071
Ronald L. Rickman (2) ................. 289,756 * 79,746 *
3265 Woodcrest Drive
Bettendorf, IA 52722
Lloyd G. Schermer (1)(2) .............. 939,868 2.746% 1,993,840 15.139%
c/o Lee Enterprises,
Incorporated
400 Putnam Building
215 N. Main Street
Davenport, IA 52801
Gary N. Schmedding (1)(2) ............. 176,650 * 9,064 *
5743 Lewis Court
Bettendorf, IA 52722
Phyllis Sewell ........................ 1,900 * 2,900 *
7716 Pinemeadow
Cincinnati, OH 45224
Richard W. Sonnenfeldt ................ 1,800 * 200 *
4 Secor Drive
Port Washington, NY 11050
Mark Vittert .......................... 2,000 * 0 0
750 S. Price Road
Ladue, MO
Floyd Whellan (1)(2) .................. 141,956 * 0 0
6401 Utica Ridge Road
Bettendorf, IA
All present executive officers ........ 2,199,173 6.341% 2,317,138 17.591%
and directors as a group (17)
* Less than one (1%) percent of the class.
<PAGE>
<FN>
(1) The following directors and officers disclaim beneficial ownership of
the following shares, included above, not owned personally by them or
held for their benefit: Schermer, 758,124 Common Stock, 1,808,112 Class
B Common Stock; Gottlieb, 22,804 Common Stock, 32,584 Class B Common
Stock; Guerin, 2,850 Class B Common Stock; and Schmedding, 40 Common
Stock.
(2) This table includes the following shares subject to acquisition within
60 days by the exercise of outstanding stock options: Schermer, 277,254
Common Stock; Gottlieb, 426,266 Common Stock; Rickman, 239,736 Common
Stock; Schmedding, 147,092 Common Stock; Whellan, 123,118 Common Stock;
and Bloom, 8,340 Common Stock.
</FN>
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
The following tables and discussion summarize the compensation which
the Company paid for services rendered in all capacities for the fiscal year
ended September 30, 1995 to the chief executive officer of the Company and to
each of the four other most highly compensated executive officers of the
Company. All share and share price data, including stock option and restricted
stock information, is stated to give effect to a two-for-one stock split
declared November 9, 1995 to stockholders of record on November 20, 1995,
pursuant to which shares were distributed as of December 8, 1995.
Summary Compensation Table
<TABLE>
Annual Compensation Long Term Compensation (1)
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name and Annual Restricted Other
Principal Compen- Stock Stock LTIP Compen-
Position Year Salary($) Bonus($) sation($) Awards($) Options(#) Payouts($) sation($)
-------- ---- --------- -------- --------- ---------- ---------- ---------- ---------
(3) (4) (6) (7)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard D. Gottlieb ............................ 1995 $460,000 $360,000 $ 5,000 $112,000 47,906 541,420 $ 94,092
President and ................................. 1994 421,000 315,750 0 96,600 40,000 478,827 165,302
Chief Executive Officer ....................... 1993 390,000 240,000 0 83,200 35,600 98,410 211,681
Ronald L. Rickman .............................. 1995 304,400 188,728 5,000 60,000 20,000 351,948 55,194
Vice-President-Newspapers ..................... 1994 289,920 176,851 0 51,750 20,000(5) 341,750 100,994
1993 270,400 170,352 0 56,800 31,200 64,077 154,962
Gary N. Schmedding ............................. 1995 237,900 198,667 5,000 60,000 20,000 169,791 48,463
Vice-President-Broadcast ...................... 1994 220,240 165,180 0 51,750 20,000(5) 242,098 107,623
1993 206,000 119,975 0 35,000 20,800 43,509 78,539
Floyd Whellan .................................. 1995 166,200 76,480 5,000 20,000 6,000 200,049 25,391
Vice-President - .............................. 1994 166,200 66,480 0 17,250 6,000 170,308 51,010
Human Resources ............................... 1993 160,200 52,800 0 16,000 6,800 37,972 51,734
Larry L. Bloom (2).............................. 1995 216,300 141,802 2,500 40,000 15,000 0 39,126
Vice President - Finance ....................... 1994 206,000 136,240 72,087 34,500 15,000 0 31,728
and Chief Financial Officer1993 ................ 73,790 65,256 0 11,200 6,400 0 0
<FN>
(1) The Executive Compensation Committee of the Company meets each November
following the conclusion of the Company's fiscal year to determine
among other things, the amount of the annual bonus to be awarded and
the long term compensation grants to be made, if any, for the fiscal
year just concluded.
The Summary Compensation Table includes the value of shares of
restricted stock and the number of stock option shares granted by the
Executive Compensation Committee under the Company's 1990 Long Term
Incentive Plan in each of the years indicated for the corresponding
fiscal year.
(2) Mr. Bloom joined the Company in May, 1993. Mr. Bloom was
paid additional compensation in 1994 in accordance with the
Company's Relocation Policy to compensate him for certain
costs and expenses incurred in connection with his
relocation to the Company's corporate office.
<PAGE>
(3) Represents matching payments made by the Company to charitable
organizations designated by the executive officer.
(4) The amounts shown represent shares of restricted stock in
the following amounts granted to the named individuals in
1993, 1994 and 1995, respectively: Mr. Gottlieb, 5,200,
5,600, and 5,600 shares; Mr. Rickman, 3,550, 3,000 and 3,000
shares; Mr. Schmedding, 2,250, 3,000 and 3,000 shares; Mr.
Whellan, 1,000, 1,000 and 1,000 shares; and Mr. Bloom, 2,000
and 2,000 shares. The restricted stock awarded in 1993,
1994 and 1995 will vest on the third anniversary of the
grant date. Holders of restricted stock are entitled to
receive all cash dividends paid in respect thereof during
the restricted period. At September 30, 1995, the number
and market value of shares of restricted stock (including
those awarded in November, 1995 but excluding those shares
described in paragraph (6)(b) below) held by each of the named
executive officers were as follows: Mr. Gottlieb, 16,400
shares ($355,675); Mr. Rickman, 9,550 shares ($207,116); Mr.
Schmedding, 8,250 shares ($178,922); Mr. Whellan, 3,000
shares ($65,063); and Mr. Bloom, 4,700 shares ($101,931).
(5) Includes replacement (reload) options awarded at exercise of
non-qualified options with payment made with restricted
stock; the replacement options were awarded to the
following executive officers: (a) 1993 Mr. Rickman 7,000 shares; and
Mr. Schmedding, 5,400 shares, (b) 1995 Mr. Gottlieb 7,906 shares.
(6) The amounts shown represent the aggregate of (a) cash
distributions to the named individuals under the Company's
1990 Long Term Incentive Plan in 1993, 1994, and 1995 for
the three year performance cycles ending in those years;
(b) the value at September 30, 1995 of restricted stock
awarded in November, 1992 and vesting in November, 1995 for
Mr. Gottlieb ($230,669), Mr. Rickman ($121,714), Mr.
Schmedding ($93,492), and Mr. Whellan ($73,100); and
(c) payments in 1994 and 1995 to distribute accrued deferred
compensation account balances at September 30, 1994 and 1995
payable under the phaseout of the 1962 Deferred Compensation
Unit Plan (discontinued in 1989). The 1994 and 1995
deferred compensation distributions, respectively, to the
named executive officers and included in column (h) were as
follows: Mr. Gottlieb, $15,270 and 310,751; Mr. Rickman,
$25,991 and 230,234; Mr. Schmedding, $26,473 and 76,299; and
Mr. Whellan, $10,100 and 126,948.
(7) The amounts shown represent contributions by the Company on
behalf of the named individuals to the Company's Retirement
Account Plan and Supplemental Retirement Account, which as
to the named executive officers in 1995 were as follows:
Mr. Gottlieb, $94,092; Mr. Rickman, $55,194; Mr. Schmedding,
$48,463; Mr. Whellan, $25,391; and Mr. Bloom, $39,126.
</FN>
</TABLE>
<PAGE>
Option Grants In Last Fiscal Year
<TABLE>
Individual Grants
(a) (b) (c) (d) (e) (f)
% of Total
Options Grant
Options Granted to Exercise Date
Name Granted Employees Price Expiration Present
In Fiscal Year ($/Sh) Date Value($)
(1) (2)
---- ------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Richard D. Gottlieb .................... 40,000 17.0% $ 20 08-Nov-05 $259,896
7,906 (3) 3.4% 20 11-Nov-00 92,975
Ronald L. Rickman ...................... 20,000 8.5% 20 08-Nov-05 129,360
Gary N. Schmedding ..................... 20,000 8.5% 20 08-Nov-05 129,360
Floyd Whellan .......................... 6,000 2.6% 20 08-Nov-05 38,808
Larry L. Bloom ......................... 15,000 6.4% 20 08-Nov-05 97,608
<FN>
(1) The options granted to the named individuals were determined by the
Executive Compensation Committee in November, 1995 following review
of each individual's performance in fiscal year 1995, and become
exercisable in installments of 30% of the original grant on each of
the first and second anniversaries of the grant date and 40% on the
third anniversary. All options are for Common Stock and have an
exercise price equal to the closing market price of the stock on
the grant date. The lesser of 25% or the maximum number of shares
permitted by law are designated as incentive stock options, and the
balance are non-qualified options. All options were granted under
the Company's 1990 Long Term Incentive Plan, the provisions of
which, among other things, allow an optionee exercising an option
to satisfy the exercise price and withholding tax obligations by
electing to have the Company withhold shares of stock otherwise
issuable under the option with a fair market value equal to such
obligations. The Plan also permits an optionee exercising an
option to satisfy the exercise price by delivering previously
awarded restricted stock or previously owned Common Stock. The
limitations accompanying the restricted stock remain in effect and
apply to the corresponding number of shares issued upon the stock
option exercise until they lapse according to their original terms.
(2) The "grant date present value" is a hypothetical value determined
under the Black-Scholes Option Pricing Model. It is one of the methods
permitted by the Securities and Exchange Commission for estimating the
present value of options. The Company's stock options are not
transferrable, and the actual value of the stock options that an
executive officer may realize, if any, will depend on the excess of
the market price on the date of exercise over the exercise price. The
Black-Scholes Option Pricing Model is based on assumptions as to
certain variables such as the volatility of the Company's stock price
and prevailing interest rates, so there is no assurance that an
individual will actually realize the option values presented in this
table.
(3) Replacement (reload) option awarded at exercise of a non-qualified
option with payment made with restricted stock. The exercise price
of the replacement option is the closing market price of the
Company's Common Stock on the award date, and the replacement
option has a term equal to the remaining term of the option
exercised.
</FN>
</TABLE>
<PAGE>
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Value Options at Options at
Acquired On Realized FY End (#) FY End ($)
Name Exercise (#) ($) Exercisable/ Exercisable/
Unexercisable Unexercisable
(1) (2) (3) (4)
---- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C>
Richard D. Gottlieb 40,000 $ 457,500 387,492 $3,200,652
128,920 566,233
Ronald L. Rickman 40,000 335,000 214,476 1,836,037
68,940 308,596
Gary N. Schmedding 10,000 91,684 126,872 1,087,145
60,380 258,861
Floyd Whellan 7,960 35,323 111,678 922,284
24,360 115,248
Larry L. Bloom 0 0 2,520 16,733
33,880 127,730
<FN>
(1) All options are for Common Stock and were granted under the
Company's 1982 Incentive Stock Option Plan or the 1990 Long
Term Incentive Plan.
(2) Market value of underlying securities at exercise date minus
the exercise price.
(3) Options granted under the Company's 1990 Long Term Incentive Plan
become exercisable in three installments over a period of three years
from the date of grant. The number of unexercisable options shown
includes those granted by the Executive Compensation Committee in
November, 1995 for the
fiscal year just concluded.
(4) Market value of underlying securities at September 30, 1995
($21.69), minus the exercise price.
</FN>
</TABLE>
Long Term Incentive Plans - Awards in Last Fiscal Year
The Executive Compensation Committee decided in January, 1993 to
cancel, as to executive officers of the Company, outstanding performance units
awarded for three year performance cycles ending in 1993 and 1994. The Committee
recognized that such termination would have an adverse financial impact for the
Company's executive officers, and determined in November, 1993 and 1994 to pay
each executive officer, in cash, a discretionary amount equal to one-half of the
value of performance units earned at the end of the 1993 and 1994 cycles. Each
executive officer named in the Summary Compensation Table (except Mr. Bloom, who
was not affected by the Committee's decision) received payment in cash, the
amount of which is shown in column (h) of the Table.
The Committee further determined in November, 1992 not to make any
performance unit awards in future fiscal years under the Company's Long Term
Incentive Plan. The Committee made its decisions after careful examination of
the Plan, the award of performance units thereunder, and the relationship
between award performance and the compensation objectives of the Committee for
executive officers of the Company. The Committee does not intend to make
performance unit awards during fiscal year 1996.
<PAGE>
Pension Plans
Under the Company's Retirement Account and Supplementary Benefit Plans,
the Company matches employee contributions up to 5% of employee compensation
and, in addition, contributes 6.2% of a participant's total compensation plus an
additional 5.7% of such compensation in excess of $60,600. These retirement
plans are defined contribution plans and were adopted in 1980 to replace the
Company's Pension Plan, a defined benefit plan. The Company and employee
contributions are invested and the total amount standing to each employee's
credit is paid following his or her retirement. The amounts credited in fiscal
1995 under the Retirement Account and Supplementary Benefit Plans to the
accounts of the persons listed in the Summary Compensation Table were as
follows: Mr. Gottlieb, $94,092; Mr. Rickman, $55,194; Mr. Schmedding, $48,463;
Mr. Whellan, $25,391; and Mr. Bloom, $39,126.
The Company's Pension Plan was superseded in 1980 by the
Retirement Account Plan. Annual benefits under the Pension Plan
payable upon retirement at age 65 to the individuals listed in
the Summary Compensation Table are as follows: Mr. Gottlieb,
$none; Mr. Rickman, $11,574; Mr. Schmedding, $1,376; Mr. Whellan,
none; and Mr. Bloom, none.
Executive Agreements
The Company is obliged under written agreements to pay to Messrs.
Gottlieb, Rickman, Schmedding and Whellan a multiple of three times the
executive officer's base salary in the event of termination of his employment
without cause. The Company determined in 1991 not to enter into such agreements
in the future with its executive officers.
Performance Presentation
The following graph compares the yearly percentage change in the
cumulative total shareholder return of the Company, the Standard & Poor's (S &
P) 500 Stock Index, and the S & P Publishing/Newspapers Index, in each case for
the five years ending September 30, 1995. Total shareholder return is measured
by dividing (a) the sum of (i) the cumulative amount of dividends declared for
the measurement period, assuming dividend reinvestment and (ii) the difference
between the issuer's share price at the end and the beginning of the measurement
period, by (b) the share price at the beginning of the measurement period.
The (S & P) 500 Stock Index includes 500 U.S. companies in the
industrial, transportation, utilities and financial sectors and
is weighted by market capitalization. The S & P
Publishing/Newspapers Index, which is also weighted by market
capitalization, includes the following six publishing companies:
Gannett Co., Inc., Knight-Ridder, Inc., The New York Times
Company, The Times Mirror Company, Dow Jones & Company, Inc. and
Tribune Company.
Report of the Executive Compensation Committee of the
Board of Directors on Executive Compensation
<PAGE>
The Committee
The Executive Compensation Committee of the Board of Directors (the
"Committee") is composed of four independent outside directors. No executive
officer of the Company is a member of the Board of Directors of any company with
which a member of the Committee is affiliated. The Board of Directors has
delegated to the Committee the authority to review, consider and determine the
compensation of the Company's executive officers and other key executive
employees and, in accordance with Rule 16b-3 of the Exchange Act, make the final
determination regarding awards of stock options, restricted stock, and other
stock-based awards to such persons.
Compensation Policies
The Committee operates on the principle that the compensation of the
Company's executive management, including its Chief Executive Officer and the
other executive officers named in the Summary Compensation Table, should be
competitive with compensation of executive management at comparable companies
but should not be at the top of any range derived from such comparisons. The
Committee also follows a policy of basing a significant portion of the cash
compensation of senior executive officers on the operating performance of the
Company, and of other members of the executive management team on the
performance of the enterprises units or functions over which they exercise
significant management responsibility. The Committee's policies are designed to
assist the Company in attracting and retaining qualified executive management by
providing competitive levels of compensation that integrate the Company's annual
and long term performance goals, reward strong corporate performance, and
recognize individual initiative and achievements. The Committee also believes
that stock ownership by management and stock-based performance compensation
arrangements are beneficial in the linking management's and stockholders'
interests in the enhancement of stockholder value.
The Company's executive compensation program is comprised of three
elements: (1) base salary; (2) annual incentive bonus; and (3) long term
incentive compensation.
Base Salary
Salary levels for executive management are set so as to reflect the
duties and level of responsibilities inherent in the position, and to reflect
competitive conditions in the lines of business in which the Company is engaged
in the geographic areas where services are being performed. Comparative salaries
paid by other companies in the industries and locations where the Company does
business are considered in establishing the salary for a given position. The
Company participates annually in the Towers Perrin Media Industry Compensation
Survey, which is widely used in its industry and gives relevant compensation
information on executive positions. The Company strives to place fully competent
and highly performing executives at or above the median level of compensation,
as reported annually in the Towers Survey.
<PAGE>
The Towers Survey provides annual compensation analyses for executives
in the media industry based on revenues, industry segments including publishing
and broadcasting, and market type and size. The statistical information,
including revenues and compensation levels, provided by survey participants is
utilized by the Towers Survey to develop statistical equations based on
revenues, industry segments and markets. These equations, along with other data,
are used by the Company to determine the median and other levels of compensation
of the executive management of media companies with profiles comparable to that
of the Company. Base salaries for executives named in the Summary Compensation
Table are reviewed annually by the Committee taking into account the competitive
level of pay as reflected in the Towers Survey. In setting base salaries, the
Committee also considers a number of factors relating to the particular
executive, including individual performance, level of experience, ability and
knowledge of the job. Base salaries were increased in 1995 for executive
management by 8.3% on a composite basis. The Committee believes the base salary
levels are reasonable and necessary to retain these key employees.
Annual Incentive Bonus Program
The purpose of the annual incentive bonus program is to motivate and
reward executive management so that they consistently achieve specific financial
targets, and are compensated for the accomplishment of certain non-financial
objectives. These targets and objectives are reviewed and approved by the
Committee annually in conjunction with its review of the Company's strategic and
operating plans. A target bonus level, stated as a percent of year end salary,
is established for each member of the executive management team, other than
executive officers, by the executive officer exercising responsibility over an
enterprise unit or function. For executive officers other than the Chief
Executive Officer, the bonus level and achievement targets are determined by the
Chief Executive Officer and approved by the Committee. Similarly, the Committee
determines the annual bonus opportunity and performance objectives of the Chief
Executive Officer. While the annual incentive bonus awards for executives other
than the Chief Executive Officer are generally approved upon the recommendation
of the Chief Executive Officer, the Committee retains the right to adjust the
recommended bonus awards to reflect its evaluation of the Company's overall
performance.
Long Term Incentive Plan
Under the Company's Long Term Incentive Plan, the Committee is
authorized, in its discretion, to grant stock options, restricted stock awards,
and performance units payable in cash or restricted stock of the Company, in
such proportions and upon such terms and conditions as the Committee may
determine. The Committee meets in November of each year to evaluate the
performance of the Company for the preceding fiscal year and determine the
annual incentive bonus and long term incentive awards of executive management of
the Company, for the fiscal year just ended. In November, 1995 the Committee
made the following determinations with respect to long term compensation for the
Company's executive management.
Performance Unit Awards
As noted above, performance unit awards made in 1990 and 1991 for the
three year cycles ending in 1993 and 1994 were cancelled, as to executive
officers, by the Committee in January, 1993. The Committee agreed to permit
completion of the three year cycles and related performance unit awards
previously made for persons other than executive officers, but made no
performance unit awards for the three year cycles commencing in fiscal years
1993 and 1994. The Committee has considered and will continue to consider, in
addition to objective performance criteria, certain non-quantitative factors
including the accomplishment of specific goals established by the Board of
Directors and the Committee in connection with long term compensation to
executive officers for 1995 and succeeding years.
<PAGE>
Stock Option Grants
The number of stock options granted to each executive officer in 1995
was determined by dividing a specified dollar amount for the grant by a
hypothetical fair market value of the stock option as of the grant date, based
upon the Black-Scholes Option Pricing Model. The more responsible the executive
officer's position, the greater the dollar amount of the grant. All stock
options granted have an exercise price equal to the fair market value of the
Common Stock at time of grant. In order to assure the retention of high level
executives and to tie the compensation of those executives to the creation of
long term value for shareholders, the Committee provided that these stock
options generally vest in specified portions over a three year period.
Restricted Stock Awards
In November, 1995, the Committee granted to executive officers and
other key employees awards of restricted stock, which represent shares of the
Common Stock and which the recipient cannot sell or otherwise transfer until the
applicable restriction period lapses. The number of shares of restricted stock
awarded is generally determined by dividing a specified dollar amount for the
target award by the fair market value of the Company's Common Stock on the date
such awards are approved. The number of shares then determined is reviewed by
the Committee and may be increased or decreased to reflect a number of criteria
including, but not limited to, the Company's past operating performance, the
individual executive's role in accomplishment of the Company's operating
objectives, and that individual's potential for long term growth and
contribution to the Company's strategic objectives. Restricted stock awards are
also intended to increase the ownership of executives in the Company, through
which the value of long term stockholder ownership and growth can be enhanced.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to certain
executive officers in any taxable year beginning on or after January 1, 1994.
Performance-based compensation and payments in respect of binding obligations
entered into prior to February 17, 1993 are not subject to the deduction limit
if certain requirements are met. As more fully described in Proposals 2
and 3 below, the Company currently intends to structure the performance-based
portion of the compensation of its executive officers in a manner that
complies with Section 162(m).
Compensation of Chief Executive Officer
The Committee determined the 1995 base salary for the Company's Chief
Executive Officer, Richard D. Gottlieb, in a manner consistent with the base
salary guidelines applied to executive officers of the Company as described
above. The annual bonus paid to Mr. Gottlieb for 1995 was based upon a
subjective evaluation of the performance of the Company in relation to past
years and the performance of comparable media companies, and to a lesser extent,
his accomplishment of certain non-financial performance objectives. In making
that evaluation, the Committee gave particular weight to the consistently high
performance of the Company in relation to its peers in revenue growth, operating
income growth, and operating cash flow growth, which contributed in 1994 and
1995 to record levels of revenue, operating income and operating cash flow. When
examining the performance of peer group companies for the current and past three
years, the Committee found the Company's performance, overall and in its primary
business segments of newspaper publishing and broadcasting, to be equal to or
better than the median performance of its peer group in all categories.
The Committee made long term compensation awards of stock options and
restricted stock to Mr. Gottlieb in 1995 by applying the same criteria described
for the determination of such awards to other executive officers of the Company.
The Committee did not consider past stock options and restricted stock grants to
Mr. Gottlieb in determining the amount of his 1995 grants. The Committee did
consider the consistently exceptional performance of the Company, as more
particularly described above, in the final determination of such grants.
<PAGE>
Executive Compensation Committee Participation
The current members of the Executive Compensation Committee
are Phyllis Sewell, Chairman, Mark Vittert, Rance E. Crain and
Andrew E. Newman.
PROPOSAL 2
APPROVAL OF ANNUAL INCENTIVE BONUS PROGRAM
FOR KEY EXECUTIVES
Under section 162(m), which was added to the Internal Revenue Code of
1993, in order for compensation in excess of $1,000,000 for any taxable year
paid to a person named in the Summary Compensation Table and employed by the
Company on the last day of the taxable year to be deductible by the Company,
such compensation must qualify as "performance-based". The Executive
Compensation Committee (the "Committee") has adopted terms, subject to
stockholder approval, under which annual cash incentive compensation to be paid
to named executive officers subject to section 162(m) would be performance-based
for purposes of exemption from the limitations of section 162(m). The terms
adopted by the Committee are as follows:
- The class of persons covered consists of those key executives of the
Company who are from time to time members of the CEO Executive Group
(or successor designation, or other successor group of executives, if
any) and such other executive officers as are from time to time
designated by the Committee.
- The performance criteria for the annual incentive bonus
program to covered executives for performance years 1997 and
thereafter will be limited to objective tests based on one
or more of the following: earnings, cash flow, customer
satisfaction, revenues, financial growth, return and margin
ratios, market performance, and total shareholder return,
any of which may be measured either in absolute terms or as
compared to another company or companies. Use of any other
criterion will require ratification by stockholders if
failure to obtain such approval would jeopardize the tax
deductibility of future incentive payments.
- In administering the incentive program and determining
incentive awards, the Committee will not have the
flexibility to pay a covered executive more than the
incentive amount indicated by his or her attainment under
the applicable payment schedule. The Committee will have
the flexibility, based on its business judgment, to reduce
this amount.
- There will be a maximum individual annual cash incentive
amount limit equal to 100% of the annual base salary of any
covered executive for any performance year. This annual
incentive payment maximum will not be increased without
ratification by stockholders if failure to obtain such
approval could result in future annual incentive payments
not being tax deductible.
<PAGE>
It should be noted that while the Committee's intent is to prevent
section 162(m) from limiting the deductibility of annual incentive compensation
payments, final regulations and guidance for section 162(m) have not been
adopted by the Internal Revenue Service. For this reason, and because of
possible unforeseen future events, it is impossible to be certain that all
annual incentive compensation paid by the Company to named executive officers
will be tax deductible. The foregoing shall not preclude the Committee from
making other compensation payments under different terms even if they do not
qualify for tax deductibility under section 162(m).
Hypothetical Payments Based On 1995 Results
As discussed above, awards under the terms adopted by the Committee
will be based upon performance goals to be established with respect to fiscal
1997 and future years. No incentive compensation under these terms has yet been
earned by any covered executive, since the performance periods have not yet
commenced. Accordingly, the amount of annual incentive compensation to be paid
in the future to the Company's current or future named executive officers
subject to section 162(m) cannot be determined at this time, since actual
amounts will depend on actual performance measured against the attainment of the
Committee's pre-established performance goals and on the Committee's discretion
to reduce such amounts. The annual incentive compensation actually earned in
fiscal 1995 by the named executive officers is included in the Summary
Compensation Table on page , and the Committee believes that amounts in excess
of $1 million qualify for tax deductibility by the Company under existing law
and applicable regulations. In fiscal 1996 and thereafter, the Company will not
be entitled to a deduction to the extent that the aggregate of salary and bonus
payments and the value of restricted stock awards vesting in that year exceeds
$1 million to a named executive officer. Had this proposal been in effect for
1995, and for 1996, the Committee believes that Section 162(m) would not have
affected the compensation paid as reported in the Summary Compensation Table on
page for the named executive officers in 1995, and will not affect
anticipated compensation for 1996.
The affirmative vote of a majority of the voting power of all Common
Stock and Class B Common Stock present in person or by proxy, voting as a single
class, a quorum being present, will be required for the approval of the
foregoing proposal.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE
THE ANNUAL INCENTIVE BONUS PROGRAM FOR KEY EXECUTIVES.
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE 1990 LONG TERM INCENTIVE PLAN
TO PRESERVE THE TAX DEDUCTIBILITY OF CERTAIN PLAN COMPENSATION
The Company is proposing an amendment to the Company's 1990 Long Term
Incentive Plan (the "LTIP"), which was approved by the stockholders in
1990, to conform the LTIP to the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as discussed below, by placing an annual limit on the
maximum aggregate number of shares available for stock options that may be
granted to any participant under the LTIP. Certain of the material terms of the
LTIP are described above and the specific terms and conditions of the LTIP are
set forth in the full text of the LTIP included as Exhibit A to this Proxy
Statement. The attention of the stockholders is directed to that Exhibit so they
may acquaint themselves fully with all of the terms and conditions of the LTIP.
The Board of Directors has determined that the appropriate annual award
limitation is 200,000 shares of the Company's Common Stock. The text of the
amendment is contained in the second sentence of Section 2.1, Authority of
Committee, in the LTIP.
Section 162(m) of the Internal Revenue Code and the proposed
regulations (the "Regulations") issued thereunder by the Internal Revenue
Service generally disallow a tax deduction to public companies for compensation
over $1 million paid to certain executive officers in any taxable year beginning
on or after January 1, 1994. Performance-based compensation will not be subject
to the deduction limit if certain requirements are met. Stock options generally
are deemed to be performance-related compensation if certain criteria have been
met by the plan under which they are issued, including a limit on the number of
stock options which may be granted to any individual during a specified period.
In addition, prior to the payment of any awards, the plan must be approved by a
vote of a company's stockholders. Adoption of this amendment does not reflect a
material change in the LTIP or the Company's current compensation policies and
practices but merely brings the plan into compliance with Section 162(m) and the
Regulations.
The affirmative vote of a majority of the voting power of all Common
Stock and Class B Common Stock present in person or by proxy, voting as a single
class, a quorum being present, will be required for the approval of the
foregoing proposal. The amendment to the LTIP becomes effective upon its
approval by the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AMENDMENT OF THE LTIP TO
PLACE A 200,000 ANNUAL LIMIT ON THE MAXIMUM AGGREGATE NUMBER OF SHARES AVAILABLE
FOR OPTIONS THAT MAY BE GRANTED TO ANY PARTICIPANT.
<PAGE>
PROPOSAL 4
APPROVAL OF AMENDED AND RESTATED
1977 EMPLOYEE STOCK PURCHASE PLAN
In 1977 the stockholders approved the Company's 1977 Employee Stock
Purchase Plan (the "ESPP") and authorized it to be funded with 2,400,000 shares
(adjusted for stock dividends and splits). At the 1987 annual meeting the
stockholders approved an amendment authorizing an additional 1,000,000 shares
of Common Stock to be sold under the ESPP.
As of April 30, 1995, only 218,000 shares (after adjustment for
the 1995 stock split) were available and it is estimated that at least
110,000 shares will be used in the 1995-96 offering. If the program is to
continue, it is necessary to authorize additional shares of Common Stock for
future use.
First Chicago Trust Company of New York ("First Chicago") has been
designated by the Company as its agent to administer the Plan for participants,
maintain records, send statements of account to participants and perform other
duties relating to the ESPP. First Chicago will hold for safekeeping the shares
purchased for participants until termination of participation in the ESPP or
receipt of a written request from a participant for all or part of his or her
shares. Certificates will not be issued to participants for shares credited to
their account unless they so request of the Company in writing or until a
participant's account is terminated. Shares purchased under the ESPP and held by
First Chicago will be registered in its name or the name of one of its nominees
as agent for participants in the ESPP. If First Chicago should resign or
otherwise cease to act as Plan administrator, the Company will make such other
arrangements as it deems appropriate for the administration of the ESPP.
Under the ESPP, Common Stock is offered for purchase by eligible
employees who elect to participate. The Company grants options to purchase such
stock at a price equal to 85% of the market value of the stock on the date of
grant of such options (the "grant date"), or 85% of such value on the date the
options expire (the "exercise date"), which is not more than one year from the
date of grant. Participants pay for such stock through periodic payroll
deductions which must be not less than $5 per week nor more than 15% of a
participant's base pay earned in the payroll period.
If participation is not terminated as explained below, at the Exercise
Date participants will be issued the number of shares of Common Stock (including
fractional shares) which can be purchased at the purchase price for the amount
accumulated in their payroll deduction accounts during the option period.
Participants in the ESPP may also have cash dividends on all of their
shares automatically reinvested through First Chicago's purchase of the
Company's Common Stock on the open market. The purchase price of shares
purchased by First Chicago for participants will be the amount paid on the open
market, rather than a price which is the lesser of 85% of the Grant Date market
value or 85% of the Exercise Date market value. No commission or service charge
is paid by participants in connection with purchases of Company Common Stock
with reinvested dividends under the ESPP.
<PAGE>
Directors and elected officers of the Company are not eligible to
participate in the ESPP, nor are employees who directly or indirectly own 5% or
more of the Company's stock, employees who have been employed less than one
year, or part-time employees. All other employees of the Company and of the
Company's eligible subsidiaries (50% or more owned by the Company) are eligible
to join.
The Company has made 18 offerings under the ESPP. The price at which
shares have been sold each year has ranged from $1.96 to $14.90. It is proposed
that 1,400,000 shares of Common Stock be authorized to be sold under the ESPP in
the future; this should last approximately 10 years based on prior rates of
subscription.
Federal Tax Consequences
Under the Internal Revenue Code, participants in the ESPP will not
realize taxable income either on the Grant Date or the Exercise Date. If shares
purchased under the ESPP are disposed of more than two (2) years after the Grant
Date, participants will realize ordinary income equal to the lesser of (a) the
excess of the fair market value of the shares over the option price on the Grant
Date, or (b) the excess of the sale price of the shares (or the fair market
value if disposed of by gift or a death) over the purchase price. Moreover, if
the shares are sold, long-term capital gain or loss will be realized equal to
the difference between the selling price and the purchase price of the shares
after such purchase price has been increased by any amount required to be
realized as ordinary income.
If the shares are disposed of prior to two (2) years after the Grant
Date, participants will realize ordinary income equal to the difference between
the price paid for the shares and their fair market value on the Exercise Date.
Additionally, if the shares are sold, capital gain or loss will be realized
equal to the difference between the selling price and the purchase price of the
shares after such purchase price has been increased by the amount required to be
realized as ordinary income. Whether such capital gain or loss is long-term or
short-term depends on whether the shares are held for more or less than one
year.
Cash dividends and other distributions on shares of stock held on
behalf of participants by First Chicago will be subject to the same income tax
treatment that would apply had the participants received the distribution
directly. For example, cash dividends received by First Chicago will be taxable
to participants as ordinary dividend income. The participants will recognize no
tax consequences resulting from the purchase of shares on their behalf by First
Chicago and will have tax basis in these shares equal to the amount paid for
them.
Participants may voluntarily terminate participation in the ESPP, and
participants whose employment with the Company or a designated subsidiary is
terminated for reasons other than retirement, disability or death shall
automatically cease to participate in the ESPP. In either event the balance in
such participant's deduction account shall be paid to him or her and any Company
Common Stock purchased in a previous ESPP offering shall, upon written
notification from the participant, be transferred to the participant and any
fractional shares shall be paid to the participant in cash. Participants who
voluntarily terminate participation shall forfeit any right to participate in
the next succeeding stock offering, if any, under the ESPP. If a participant's
employment is terminated due to retirement, disability or death, the participant
or his or her beneficiary or legal representative will be entitled to elect to
have the balance in his or her deduction account either paid in cash or applied
toward purchase of Company stock and any Company Common Stock purchased in a
previous Plan offering, upon written notification from the participant, shall be
transferred to the participant and any fractional shares shall be paid to the
participant in cash. Except as stated, participants may withdraw any amounts
withheld by payroll deduction in the ESPP.
<PAGE>
The foregoing summary does not contain all of the details of the
Employee Stock Purchase Plan and is qualified by and expressly subject to, the
specific terms and conditions of the ESPP itself as set forth in Exhibit B to
this Proxy Statement. The attention of the stockholders is directed to that
Exhibit so they may acquaint themselves fully with all of the terms and
conditions of the ESPP.
The Board of Directors believes that the ESPP is important as an
incentive to increased stock ownership by its eligible employees and that the
continuation of the Plan is in the best interests of the Company and its
stockholders. The affirmative vote of a majority of the voting power of all
Common Stock and Class B Common Stock present in person or by proxy, voting as a
single class, a quorum being present, will be required for approval of the ESPP,
as amended and restated herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE AMENDED AND RESTATED 1977 EMPLOYEE STOCK PURCHASE
PLAN.
PROPOSAL 5
APPROVAL OF 1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
The Board of Directors of the Company believes that adoption of the
Company's 1996 Stock Plan for Non-Employee Directors (the "Stock Plan") will
encourage non-employee directors to increase their ownership of shares of the
Company's Common Stock and thereby link their interests more closely with the
interests of the other stockholders of the Company. Adoption of the Stock Plan
will also assist the Company in attracting and retaining non-employee directors
of outstanding ability and in providing compensation opportunities which are
competitive with those of other major corporations. Equally important, adoption
of the Stock Plan will enable these directors to participate in the long term
growth and financial success of the Company.
In furtherance of these goals, stockholders are being asked to approve
the adoption of the Stock Plan and to authorize the Board of Directors to
reserve for the Stock Plan an aggregate of 50,000 shares of the Company's Common
Stock (as such number may be adjusted for stock splits and dividends and certain
other corporate changes in accordance with the Stock Plan). The Stock Plan will
have no expiration date except that awards may not be granted in excess of the
50,000 shares of Common Stock which have been reserved for award. The following
summary sets forth the principal features of the Stock Plan, which is qualified
in its entirety by the complete text of the Stock Plan set forth in Exhibit C to
this Proxy Statement.
Awards may be granted only to non-employee directors of the Company.
Awards may not be granted to any person who is an employee of the Company or of
any subsidiary of the Company.
An award of 500 shares of the Company's Common Stock will be made
automatically to each non-employee director on the first business day of June of
each year, beginning on June 3, 1996. No consideration will be paid by a
participant upon award of the shares. A non-employee director who is elected by
the Board of Directors to fill a vacancy or newly created directorship between
annual meetings of stockholders will automatically receive 500 shares of Common
Stock on the first business day of the fourth month after the date on which he
or she takes office.
Non-employee directors will also have the right to elect in writing to
receive all or fifty percent (50%) of the compensation described above in
"Compensation of Directors", which would otherwise be payable in cash, in shares
of Common Stock, commencing with the effective date of the Plan. The number of
shares so awarded will be determined by dividing the amount of the compensation
to be paid by the closing price of the Company's Common Stock as reported for
New York Stock Exchange-Composite Transactions on the trading day immediately
preceding the date of payment and rounding to the nearest whole number.
Elections under this section must be made at least six months prior to the date
on which the stock payment is to be made. A non-employee director's election
will remain in effect from year to year until changed by the participant. A
change in an election must be made at least six months in advance of the
effective date of the change.
<PAGE>
The Stock Plan will be administered by the Chief Executive Officer of
the Company (the "Administrator"), who will be authorized to interpret the
Plan but have no authority with respect to the selection of directors to receive
awards, the number of shares subject to the Plan or each grant thereunder, or
the price or timing of awards to be made except as provided below. The
Administrator shall have no authority to increase materially the benefits under
the Stock Plan. The Administrator may amend, suspend or terminate the Stock Plan
as he or she shall deem advisable but may not amend the Stock Plan without
further approval of the stockholders if such approval is required by law, and
may not amend the Stock Plan provisions relating to the amount, price, and
timing of awards more than once every six months other than to comport with
changes in the Internal Revenue Code of 1986, the Employee Retirement Income
Security Act of 1974, or the rules and regulations thereunder. The
determinations of the Administrator are final, binding and conclusive upon all
persons. Adjustments shall be made in the number and kind of shares subject to
the Stock Plan for stock splits or stock dividends.
Federal Tax Consequences
The non-employee directors will be considered to have earned directors'
compensation at the time of the stock awards. The amount of taxable compensation
will equal the fair market value of the shares on the date awarded. This
treatment applies to minimum awards and elective awards of Common Stock.
Other Information
If the Stock Plan had been in effect during the year ended September 30, 1995,
the following table sets forth the benefits that would have been received by the
8 persons eligible to participate in the Stock Plan.
Dollar Number
Name Value($) of Units
- ---- -------- --------
Non-Executive
Director Group $ (1) 4,000
---------
(1) Based on the closing price of the Common Stock on December
8, 1995.
The affirmative vote of a majority of the voting power of all Common
Stock and Class B Common Stock present in person or by proxy, voting as a single
class, a quorum being present, will be required for the approval of the
foregoing proposal. The Stock Plan becomes effective upon its approval by the
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ADOPT THE
1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS.
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of McGladrey & Pullen, LLP, Certified Public Accountants,
has been designated by the Board of Directors of the Company to audit the
financial statements of the Company, its divisions and subsidiaries, for the
fiscal year to end September 30, 1996. Said firm has audited the Company's
accounts since 1960 and is considered to be well qualified.
Representatives of McGladrey & Pullen will be present at the 1996
annual meeting and will be afforded the opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 annual
meeting of the Company must be received by the Company for inclusion in its
proxy statement and form of proxy relating to that meeting by August 15, 1996.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires the Company's directors and executive officers and persons who own more
than ten percent of the Company's Common Stock or Class B Common Stock to file
initial reports of ownership and reports of changes in that ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Specific due
dates for these reports have been established, and the Company is required to
disclose in its proxy statement any failure to file by these dates during the
Company's 1995 fiscal year.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that all filing requirements applicable to its executive
officers and directors were satisfied.
OTHER MATTERS
The Management of the Company knows of no matters to be presented at
the meeting other than those set forth in the Notice of Annual Meeting. However,
if any other matters properly come before the meeting, your proxy, if signed and
returned, will give discretionary authority to the persons designated in it to
vote in accordance with their best judgment.
The cost of the solicitation of proxies will be borne by the Company.
In addition to solicitation by mail, some of the officers and regular employees
of the Company may, without extra remuneration, solicit proxies personally or by
telephone or telegraph. The Company may also request brokerage houses, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of stock held of record and will reimburse such persons for their expenses. The
Company has retained Morrow & Co., Inc. to aid in the solicitation of proxies,
for which the Company will pay an amount which it is estimated will not exceed
$7,000 plus expenses.
/s/ Richard D. Gottlieb
-------------------------------------
RICHARD D. GOTTLIEB
President and Chief Executive Officer
LEE ENTERPRISES, INCORPORATED
PROXY FOR ANNUAL MEETING--FEBRUARY 1, 1996
COMBINED PROXY FOR COMMON STOCK AND CLASS B COMMON STOCK
Lloyd G. Schermer and Richard D. Gottlieb, or either of them, each with
power of substitution, are authorized to vote all shares of Common Stock and
Class B Common Stock which the undersigned is entitled to vote at the annual
meeting of stockholders of Lee Enterprises, Incorporated to be held February 1,
1996 and at any adjournment thereof, on the following matters.
Management recommends a vote FOR:
1. ELECTION OF DIRECTORS
--- FOR all nominees listed below (except as marked to
--- the contrary below).
--- WITHHOLD AUTHORITY to vote for all nominees listed
--- below.
Nominee Term
------- -------
Rance E. Crain 3 years
Richard D. Gottlieb 3 years
Phyllis Sewell 3 years
Richard W. Sonnenfeldt 1 year
2. Approval of the Company's Annual Incentive Bonus Program
for Key Executives as described in Proposal 2 in the Proxy
Statement;
3. To amend the Company's 1990 Long Term Incentive Plan as
described in Proposal 3 in the Proxy Statement;
4. To amend and extend the Company's 1977 Employee Stock
Purchase Plan as described in Proposal 4 in the Proxy Statement;
5. To approve the Company's 1996 Stock Plan for Non-Employee
Directors; and
6. In their discretion, upon such other matters as may prop
erly come before the meeting.
(Continued and to be signed on reverse side)
<PAGE>
THIS PROXY IS SOLICITED BY MANAGEMENT. EVERY
PROPERLY SIGNED PROXY WILL BE VOTED AS
DIRECTED. UNLESS OTHERWISE DIRECTED, PROXIES
WILL BE VOTED FOR ITEMS 1 THROUGH 5, INCLUSIVE,
AND IN THE DISCRETION OF MANAGEMENT IN CONNECTION
WITH ITEM 6.
DATED: , 199 . ------------------------------------
----------- --
Signature
-------------------------------------
Signature
(PLEASE sign exactly as your name appears hereon. Executors, administrators,
trustees, custodians, etc. should give full title. If shares are registered in
joint names, each owner should sign.)
EXHIBIT A
LEE ENTERPRISES, INCORPORATED
1990 LONG-TERM INCENTIVE PLAN
Section 1: GENERAL PROVISIONS
1.1 Purposes
The purposes of the 1990 Long-Term Incentive Plan (the "Plan") of Lee
Enterprises, Incorporated (the "Company") are to promote the interests of the
Company and its stockholders by (i) attracting and retaining executives and
other key employees of outstanding ability; (ii) strengthening the Company's
capability to develop, maintain and direct a competent management team; (iii)
motivating executives and other key employees, by means of performance-related
incentives, to achieve longer-range performance goals; (iv) providing incentive
compensation opportunities which are competitive with those of other major
corporations; and (v) enabling such employees to participate in the long-term
growth and financial success of the Company.
1.2 Definitions
"Affiliate" - means any corporation or other entity (i) which is not a
Subsidiary but as to which the Company possesses a direct or indirect ownership
interest and has representation on the board of directors or any similar
governing body; and (ii) which is designated by the Board of Directors as an
"Affiliate" for purposes of this Plan.
"Award" - means a grant or award under Sections 2 through 4, inclusive,
of the Plan.
"Board of Directors" - means the board of directors of the
Company.
"Code" - means the Internal Revenue Code of 1986 as amended from time
to time.
"Committee" - means the Executive Compensation Committee of
the Board of Directors.
"Common Stock" - means the Common Stock, $2.00 par value, of the
Company, which may be authorized and unissued shares or may be reacquired shares
of such Common Stock.
"Corporation" - means the Company, its divisions,
Subsidiaries and Affiliates.
"Disability Date" - means the date on which a Participant is deemed
disabled under the employee benefit plans of the Corporation applicable to the
Participant.
"Disinterested Person" - has the meaning set forth in Rule 16b-3(d)(3)
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor definition adopted by the Commission.
"Employee" - means any key employee of the Corporation.
"Fair Market Value" - means, as the Committee shall determine, either
(i) the average of the high and low prices of the Common Stock, or (ii) the
closing price of the Common Stock, on the date on which it is to be valued
hereunder as reported for New York Stock Exchange-Composite Transactions.
<PAGE>
"Normal Retirement Date" - has the meaning set forth in the pension or
retirement plan of the Corporation applicable to the Participant, or such other
date as may be mutually agreeable upon in writing by the Committee and the
Participant.
"Participant" - means an Employee who is selected by the Committee to
receive an Award under the Plan.
"Performance Cycle" or "Cycle" - means a period of three (3) years, or
such other period of years selected by the Committee, during which performance
is measured for the purpose determining the extent to which an award of
Performance Units has been earned.
"Performance Goals" - mean the objectives established by the Committee
for a Performance Cycle, for the purpose of determining the extent to which
Performance Units which have been contingently awarded for such Cycle are
earned.
"Performance Unit" - means a fixed or variable dollar denominated unit
contingently awarded under Section 3 of the Plan.
"Restricted Period" - means a period of three (3) years, or such other
period of years selected by the Committee, during which a grant of Restricted
Stock may be forfeited to the Company.
"Restricted Stock" - means shares of Common Stock contingently granted
to a Participant under Section 4 of the Plan.
"Subsidiary" - means any corporation in which the Company
possesses directly or indirectly fifty percent (50%) or more of the total
combined voting power of all classes of its stock having voting power;
provided that with respect to incentive Stock options granted hereunder,
the term "subsidiary" shall be as defined in Section 425(f) or any successor
provision of the Code.
1.3 Administration
The Plan shall be administered by the Committee, which shall at all
times consist of three (3) or more members, each of whom shall be a
Disinterested Person. The Committee shall have sole and complete authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the operation of the Plan as it shall from time to time deem
advisable, and to interpret the terms and provisions of the Plan. The Committee
may delegate to one or more executive officers of the Company the power to make
Awards to Participants who are not executive officers or directors of the
Company, provided the Committee shall fix the maximum amount of such Awards for
the group and a maximum amount for any one Participant. The Committee's
decisions are binding upon all parties.
1.4 Eligibility
All Employees who have demonstrated significant management potential or
who have contributed, or are deemed likely to contribute, in a substantial
measure to the successful performance of the Corporation, as determined by the
Committee, are eligible to be Participants in the Plan.
<PAGE>
1.5 Shares Reserved
(a) There shall be reserved for issuance pursuant to the Plan a total
of two million (2,000,000) shares of Common Stock, together with any shares that
were available for grant under the Company's 1982 Incentive Stock Option Plan as
of October 1, 1989 and any shares that, after such date, would have, but for
Section 1.14(a) below, otherwise become available for grant under the terms of
such plan by reason of forfeitures or otherwise. In the event that (i) a stock
option expires or is terminated unexercised as to any shares covered thereby, or
(ii) shares are forfeited for any reason under the Plan, such shares shall
thereafter be again available for issuance pursuant to the Plan. In the event
that a stock option is surrendered for payment pursuant to Section 1.6(a)(ii)
hereof, the shares covered by the stock option shall not thereafter be available
for issuance pursuant to the Plan.
(b) In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the Committee
shall make such substitution or adjustment, if any, as it deems to be equitable
to accomplish fairly the purposes of the Plan and to preserve the intended
benefits of the Plan to the Participants and the Corporation, as to the number
(including the number specified in Section 1.5(a) above) or kind of shares of
Common Stock or other securities issued or reserved for issuance pursuant to the
Plan, including the number of outstanding stock options, the option prices
thereof, and the number of outstanding Awards of other types.
1.6 Change of Control
(a) In order to maintain the Participants' rights in the event of a
Change of Control or Potential Change of Control of the Company, as hereinafter
defined, the Board of Directors, in its sole discretion, may, in addition to and
notwithstanding anything to the contrary contained in the Plan, either at the
time an Award is made hereunder or at any time prior to or upon the occurrence
of a Change of Control or Potential Change of Control (i) provide for the
accelerated exerciseability or vesting of, or the full or partial lapse of
restrictions on, each Award outstanding at the time of such Change of Control or
Potential Change of Control event; (ii) provide for the payment in respect of
such Awards of cash equal to the amount which could have been attained upon the
exercise or realization of such rights had such Awards been then currently
exercisable or payable; (iii) make such adjustment or proration to the Awards
then outstanding as the Board of Directors deems appropriate to reflect such
transaction or event; or (iv) cause the Awards then outstanding to be assumed,
or new rights substituted therefor, by the surviving corporation in such change.
The Board of Directors may, in its discretion, include such further provisions
and limitations in any agreement entered into with respect to an Award as it may
deem equitable and in the best interests of the Corporation.
(b) For the purposes of this Section 1.6, a "Change of Control" shall
be deemed to have occurred if: (i) any person (as defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act") and as used in Sections 13(d) and 14(d) thereof), excluding the Company,
it Subsidiaries, and any employee benefit plan sponsored or maintained by the
Company or its Subsidiaries (including any trustee of such plan acting as
trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange
Act (a "Person"), becomes beneficial owner of shares of the Company having at
least twenty percent (20%) of the total number of shares which entitle such
Person to vote for the election of directors of the Company (the "Voting
Shares"); (ii) the stockholders of the Company shall approve any merger or other
business combination of the Company, sale of the Company's assets or a
combination of the foregoing transactions (a "Transaction") other than a
Transaction involving only the Company and one or more of its Subsidiaries or
<PAGE>
Affiliates, or a Transaction immediately following which the stockholders of the
Company immediately prior to the Transaction continue to have a majority of the
voting power in the resulting entity excluding for this purpose any stockholder
owning directly or indirectly more than ten percent (10%) of the shares of the
other company involved in the merger; or (iii) within any twenty-four (24) month
period beginning after February 8, 1990, the persons who were directors of the
Company immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at least
a majority of the Board of Directors or the board of directors of any successor
to the Company, provided that any director who was not a director as of February
8, 1990 shall be deemed to be an Incumbent Director if such director was elected
to the Board of Directors by, or on the recommendation of or with the approval
or, at least two-thirds of the directors who then qualified as Incumbent
Directors either actually or by prior operation of this Section 1.6(b)(iii).
(c) For the purposes of this Section 1.6, a Potential Change of Control
shall be deemed to have occurred if: (i) a Person commences a tender offer for
at least twenty percent (20%) of the Voting Shares; (ii) approval of any
Transaction (excluding any Transaction that is excluded for purposes of Section
1.6(b)(ii) above) is requested of stockholders; (iii) proxies for the election
of directors of the Company are solicited by anyone other than the Company; or
(iv) any other event occurs which is deemed to be a Potential Change of Control
by the Board of Directors.
(d) Notwithstanding the foregoing, no Change of Control or Potential
Change of Control shall be deemed to have occurred for purposes of the Plan with
respect to an Employee by reason of any actions or events in which such Employee
participates in a capacity other than in his or her capacity as an Employee (or
as a director of the Company, where applicable).
1.7 Withholding
The Corporation shall have the right to deduct from all amounts paid in
cash (whether under this Plan or otherwise) any taxes required by law or other
amounts authorized by a Participant to be withheld therefrom. In the case of
payments of Awards in the form of Common Stock, at the Committee's discretion
the Participant may be required to pay to the Corporation the amount of any
taxes required to be withheld with respect to such Common Stock, or, in lieu
thereof, the Corporation shall have the right to retain (or the Participant may
be offered the opportunity to elect to tender) the number of shares of Common
Stock whose Fair Market Value on the date such taxes are required to be withheld
equals the amount required to be withheld.
<PAGE>
1.8 Nontransferability
No Award shall be assignable or transferable, and no right or interest
of any Participant shall be subject to any lien, obligation or liability of the
Participant, except by will or the laws of descent and distribution.
1.9 No Right to Employment
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Corporation. Further, the Corporation expressly
reserves the right at any time to dismiss a Participant free from any liability,
or from any claim under the Plan, except as provided herein or in any agreement
entered into with respect to an Award.
1.10 Construction of the Plan
The validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of Delaware, without
regard to conflict of law principles.
1.11 Amendment
(a) The Board of Directors may amend, suspend or terminate the Plan or
any portion thereof and any Award hereunder at any time, provided that no
amendment shall be made without stockholder approval which shall (i) increase
(except as provided in Section 1.5(b) hereof) the total number of shares
reserved for issuance pursuant to the Plan; (ii) change the class of Employees
eligible to be Participants; (iii) decrease the minimum option prices stated
herein (other than to change the manner of determining Fair Market Value to
conform to any then applicable provision of the Code or regulations thereunder);
(iv) extend the expiration date of the Plan as it applies to incentive stock
options; or (v) withdraw the administration of the Plan from a committee
consisting of three or more members, each of whom is a Disinterested Person.
Notwithstanding anything to the contrary contained herein, the Committee may
amend the Plan in such manner as may be necessary so as to have the Plan conform
with applicable law and rules and regulations thereunder.
(b) The Committee with the Participant's consent may amend, modify or
terminate any outstanding Award at any time prior to payment or exercise in any
manner not inconsistent with the terms of the Plan, including without
limitation, to change the date or dates as of which (i) a stock option becomes
exercisable; (ii) a Performance Unit is deemed earned; (iii) or a Restricted
Stock becomes nonforfeitable; or (iv) to cancel and reissue an Award under such
different terms and conditions as it determines appropriate.
1.12 Dividends, Equivalents and Voting Rights; Cash Payments
Awards may provide the Participant with (i) dividends or dividend
equivalents and voting rights prior to either vesting or earnout; and (ii) to
the extent determined by the Committee, cash payments in lieu of or in addition
to an Award.
1.13 Effective Date
The Plan shall be effective on October 1, 1989, subject to ratification
by the stockholders of the Company. No incentive stock options may be granted
under the Plan after October 1, 1999.
1.14 Prior Plans
Upon the effectiveness of the Plan:
(a) No further grants shall be made under the 1982 Incentive Stock
Option Plan. At the discretion of the Committee and subject to the consent of
the participants thereunder, any prior grants that were made under such plan
shall be covered by the terms and conditions of this Plan.
(b) No awards shall be made under the 1978 Performance Share Plan,
which Plan shall be terminated.
(c) No further awards shall be made under the Deferred Compensation
Unit Plan, which Plan shall be terminated, and benefits thereunder shall be
distributed as determined by the Committee. During the period of distribution,
benefits under such plan may continue to accrue in respect to awards made prior
to the termination of such plan in the discretion of the Committee.
<PAGE>
Section 2: STOCK OPTIONS
2.1 Authority of Committee
Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom stock options shall be
granted, the number of shares to be covered by each stock option and the
conditions and limitations, if any, in addition to those set forth in Section
2.3 hereof, applicable to the exercise of the stock option. The number of shares
of Common Stock with respect to which stock options may be granted to any
Participant during any fiscal year shall not exceed 100,000 (subject to
adjustment as provided in Section 1.5(b) hereof). The Committee shall have the
authority to grant stock option that are intended to be, and qualify as,
incentive stock options under Section 422A of the Code, or to grant
non-qualified stock options, or to grant both types of stock options, except
that incentive stock options can only be granted to Participants who are
Employees of the Company or a Subsidiary. In the case of incentive stock
options, the terms and conditions of such grants shall be subject to and comply
with such grant and vesting limitations as may be prescribed by Section 422A(d)
of the Code, as from time to time amended, and any implementing regulations.
2.2 Option Price
The Committee shall establish the option price at the time each stock
option is granted, which price shall not be less than 100% of the Fair Market
Value of the Common Stock on the date of grant in the case of incentive stock
options or 50% of the Fair Market Value in the case of non-qualified stock
options. The option price shall be subject to adjustment in accordance with the
provisions of Section 1.5(b) hereof.
2.3 Exercise of Options
(a) The Committee may determine that any stock option shall become
exercisable in installments and may determine that the right to exercise such
stock option as to such installments shall expire on different dates or on the
same date. Incentive stock options may not be exercisable later than ten years
after their date of grant.
(b) In the event a Participant ceases to be an Employee with the
consent of the Committee, or upon the occurrence of his or her death, Normal
Retirement Date (or, if approved in writing by the Committee, his or her actual
retirement date) or Disability Date, his or her stock options shall be
exercisable at any time prior to a date established by the Committee at the date
of grant. Except as otherwise provided by the Committee, if a Participant ceases
to be an Employee for any other reason, his or her rights under all stock
options shall terminate no later than the thirtieth (30th) day after such
cessation of employment.
(c) Each stock option shall be confirmed by a stock option
agreement executed by the Company and by the Participant. The option price
of each share as to which an option is exercised shall be paid in full at the
time of such exercise. Such payment shall be made in cash, by tender of shares
of Common Stock owned by the Participant valued at Fair Market Value as of the
date of exercise, subject to such limitations on the tender of Common Stock as
the Committee may impose, or by a combination of cash and shares of Common
Stock. In addition, the Committee may provide the Participant with assistance in
financing the option price and applicable withholding taxes, on such terms and
conditions as it determines appropriate.
(d) Stock options granted under the Plan may include the right to
acquire an Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option
grant contains an AO, and if a Participant pays all or part of the purchase
price of the option with shares of Common Stock held by the Participant for at
least one (1) year, then upon exercise of the option the Participant shall be
granted the additional option to purchase, at the Fair Market Value as of the
date of the AO grant, the number of shares of Common Stock equal to the number
of whole shares of Common Stock used by the Participant in payment of the
purchase price and the number of whole shares of Common Stock, if any, withheld
by the Company as payment for applicable withholding taxes. An AO may be
exercised no earlier than one (1) year after its grant and no later than the
date of expiration of the option to which the AO is related.
<PAGE>
(e) Stock options may be exercised during the option term (as specified
in the option agreement) by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, either by check, note or
such other type of instrument as may be determined from time to time to be
acceptable by the Committee or in accordance with procedures established by the
Committee. As determined by, or in accordance with procedures established by,
the Committee, in its sole discretion, at or after grant, payment in full or in
part may also be made in the case of the exercise of a non-qualified stock
option in the form of Restricted Stock subject to an Award hereunder (based, in
each case, on the Fair Market Value of the common Stock on the date the option
is exercised, as determined by the Committee). If payment of the option exercise
price of a non-qualified stock option is made in whole or in part in the form of
Restricted Stock, such Restricted Stock (and any replacement shares relating
thereto) shall remain (or be) restricted, as the case may be, in accordance with
the original terms of the Restricted Stock award in question, and any additional
Common Stock received upon the exercise shall be subject to the same forfeiture
restrictions, unless otherwise determined by, or in accordance with procedures
established by, the Committee, in its sole discretion, at or after grant.
Section 3: PERFORMANCE UNITS
3.1 Authority of Committee
The Committee shall have sole and complete authority to determine the
Employees who shall receive Performance Units and the number of such
Performance Units for each Performance Cycle, and to determine the duration of
each Performance Cycle and the value of each Performance Unit. There may be more
than one Performance Cycle in existence at any one time, and the duration of
Performance Cycles may differ from each other.
3.2 Performance Goals
The Committee shall establish Performance Goals for each Cycle on the
basis of such criteria and to accomplish such objectives as the Committee may
from time to time select. During any Cycle, the Committee may adjust the
Performance Goals for such Cycle as it deems equitable in recognition of unusual
or non-recurring events affecting the Corporation or changes in applicable tax
laws or accounting principles.
3.3 Terms and Conditions
The Committee shall determine the number of Performance Units which
have been earned on the basis of performance in relation to the established
Performance Goals. Performance Units may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as herein provided, during the
Performance Cycle. Payment of Performance Units shall be in (i) cash or (ii)
shares of Restricted Stock in such proportions as the Committee shall determine.
3.4 Termination of Employment
A Participant must be an Employee at the end of a Performance Cycle in
order to be entitled to payment of Performance Units in respect of such Cycle;
provided, however, that in the event a Participant ceases to be an Employee with
the written consent of the Committee before the end of such Cycle, or upon the
occurrence of his or her death, his or her Normal Retirement Date (or, if
approved in writing by the Committee, his or her actual retirement date) or
Disability Date prior to the end of such Cycle, the Committee, in its discretion
and after taking into consideration the performance of such Participant and the
performance of the Corporation during the Cycle, may authorize payment to such
Participant (or his or her legal representative) with respect to some or all of
the Performance Units deemed earned for that Cycle.
<PAGE>
Section 4: RESTRICTED STOCK
4.1 Authority of Committee
Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Employees to whom shares of Restricted
Stock shall be granted, the number of shares of Restricted Stock to be granted
to each Participant, the duration of the Restricted Period during and the
conditions under which the Restricted Stock may be forfeited to the Company, the
purchase price, if any, to be paid by a Participant for such Restricted Stock,
and the terms and conditions of the Award in addition to those contained in
Section 4.2 Such determinations shall be made by the Committee at the time of
the grant.
4.2 Terms and Conditions
Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as provided in Section 2.3(e), during
the Restricted Period. Certificates issued in respect of shares of Restricted
Stock shall be registered in the name of the Participant and deposited by him or
her, together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver such certificates
to the Participant or his or her legal representative.
4.3 Termination of Employment
Unless otherwise provided by the Committee at the time of the grant of
Restricted Stock, in the event a Participant voluntarily terminates his or her
employment with the Corporation during the Restricted Period, or upon the
occurrence of his or her death, during the Restricted Period, Normal Retirement
Date (or, if approved in writing by the Committee, his or her actual retirement
date) or Disability Date during the Restricted Period, the restrictions imposed
hereunder shall lapse with respect to such shares of Restricted Stock. In the
event a Participant ceases to be an Employee for any other reason during the
Restricted Period, unless otherwise provided by the Committee, all shares of
Restricted Stock shall thereupon be forfeited to the Company.
EXHIBIT B
AMENDED AND RESTATED
LEE ENTERPRISES, INCORPORATED
1977 EMPLOYEES' STOCK PURCHASE PLAN
This Stock Purchase Plan (herein called "Plan") provides eligible
employees of Lee Enterprises, Incorporated, a Delaware corporation (herein
called "Company"), and its Designated Subsidiaries, an opportunity to purchase
Common Stock of the Company through payroll deductions. The Plan is intended to
qualify as an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended, hereinafter called the Code.
1. DEFINITIONS.
(a) Subsidiary. A "Subsidiary" is a corporation 50% or more of
the outstanding voting stock or voting power of which at the
time of the granting of an option under the Plan is
beneficially owned directly or indirectly by the Company.
(b) Designated Subsidiary. A "Designated Subsidiary" is
a subsidiary of the Company whose Eligible Employees
shall be authorized to participate in the Plan by the
Board of Directors of the Company.
(c) Eligible Employee. An "Eligible Employee" is an employee
of the Company or of a Designated Subsidiary, except an
employee (i) who has been employed by the Company and/or a
Designated Subsidiary less than one year as of the Grant Date;
or (ii) whose employment is twenty hours or less per week or
not more than five months in any calendar year; or (iii) who
on a Grant Date is an elected officer or director of the
Company; or (iv) who immediately after a Grant Date owns 5% or
more of the total combined voting power or value of all
classes of stock of the Company.
Prior service by an employee with a company whose assets and
business relating to such employment have been acquired by the
Company or a Designated Subsidiary shall, if so determined by
the Board of Directors of the Company, be deemed to constitute
employment with the Company or such Designated Subsidiary for
the purposes of subparagraph 1(c) (i) hereof.
(d) Participant. A "Participant" is an Eligible
Employee who elects to participate in the Plan.
(e) Offering. An "Offering" is the grant of options to
Participants to purchase Common Stock of the Company in
accordance with the provisions of the Plan during a prescribed
period of time not in excess of one year.
(f) Grant Date. The "Grant Date" shall be the date fixed by
the Board of Directors for the commencement of an Offering
under the Plan, or if no sale of the Company's Common Stock is
recorded on the New York Stock Exchange-Composite Transaction
Tape on that date, then on the next succeeding date on which
there is a sale.
(g) Exercise Date. The "Exercise Date" with respect to any
Offering is the expiration date of such Offering or if no sale
of the Company's Common Stock is recorded on the New York
Stock Exchange-Composite Transaction Tape on that date, then
the last preceding day on which
there was a sale.
<PAGE>
(h) Exercise Price. The "Exercise Price" of each Offering
shall be established by the Board of Directors but in no event
shall be less than the lesser of 85% of the fair market value
of a share of Common Stock of the Company on the Grant Date or
85% of the fair market value of such share on the Exercise
Date; neither shall the Exercise Price be less than the par
value of such shares. The fair market value per share on any
Grant Date or Exercise Date, as the case may be, shall be the
average between the highest and lowest quoted selling price
per share of the Company's Common Stock as recorded on the New
York Stock Exchange-Composite Transaction Tape on each such
date.
(i) Basic Compensation. The "Basic Compensation" of each
Participant for each payroll period is the regular straight
time compensation earned during such payroll period, before
any deductions or withholdings, but excluding overtime,
bonuses, amount paid as reimbursement of expenses and other
additional compensation.
2. SHARES AVAILABLE FOR PURCHASE. The Company will make
available 1,400,000 shares of its Common Stock for
purchase under the Plan from authorized but unissued shares or
from shares reacquired from time to time.
3. OFFERINGS. The Board of Directors shall fix the date of each
Offering under the Plan, the number of shares to be offered
under each Offering, the Exercise Price and the period of
time, not more than twelve months, during which the Offering
is to remain in effect. No new Offering shall become effective
until the prior Offering has expired.
4. PARTICIPATION-PAYROLL DEDUCTIONS. (a) An Eligible
Employee may become a Participant by completing an
authorization for a payroll deduction on the form
provided by the Company and filed with his or her
payroll office prior to the Grant Date of the
applicable Offering.
(b) At least thirty days prior to the Grant Date the Company
shall notify the Eligible Employees of that date and furnish
them with the required authorization form.
(c) At the time a Participant files his or her authorization
for payroll deduction he or she shall elect to have deductions
made from his or her pay on each pay day during the time that
he or she is a Participant in an Offering at a rate not less
than $5.00 per week nor more than 15% of the Basic
Compensation which he or she is entitled to receive on such
pay day.
(d) All payroll deductions made for a Participant shall be
deposited in the Company's general corporate account and shall
not bear interest. A Participant may not make any separate
cash payment into such account or change the amount of the
deduction at any time during the period of the Offering. The
Company will maintain complete records showing the amount of
payroll deductions of each Participant.
(e) Payroll deductions for a Participant shall commence on the
first pay date following the Grant Date and shall end on the
last pay date prior to the Exercise Date to which the payroll
deduction authorization is applicable unless he or she elects
to discontinue deductions as provided in paragraph 6.
(f) No employee of the Company or a Designated Subsidiary may
be granted an option hereunder which would permit the
employee's rights to purchase stock under this Plan and all
other stock purchase plans (as defined in the Code) of the
Company and its subsidiaries to accrue at a rate which exceeds
$25,000 (or such other maximum as may be prescribed from time
to time by the Code) of fair market value of such stock
(determined at the time the option is granted) for each
calendar year in which any such option granted to such
employee is outstanding at any time.
<PAGE>
5. GRANTING OF OPTIONS-PURCHASE OF SHARES. (a) If a
Participant has filed his or her authorization for a
payroll deduction as above provided, the Participant
shall be granted an option on the Grant Date of an
Offering for as many full or fractional shares as he or
she will be able to purchase at the Exercise Price of
such Offering with the payroll deductions credited to
his or her account during the period of participation
in that Offering; provided, however, that if the total
number of shares to be purchased by all Participants in
such Offering shall exceed the number of shares
available for sale through such Offering, a pro rata
allocation of the available shares shall be made among
all Participants in the Offering based on the amount of
their respective payroll deductions up to the Exercise
Date of the Offering.
(b) Purchase of shares shall be made automatically on the
Exercise Date of an Offering. On such date, the Participant's
account shall be charged for the amount of the Exercise Price
of the number of whole and fractional shares that can be
purchased with the credit balance in his or her account.
(c) Cash dividends and other cash distributions
received by a Participant with respect to the shares
held on behalf of a Participant by the Plan
administrator will be credited pro rata to the account
of a Participant in accordance with his or her interest
in the shares with respect to which the dividends or
distributions are paid or made, and will be applied, as
soon as practicable after receipt thereof by the Plan
administrator, to the purchase on the open market of
additional shares of the Company's Common Stock, and
such shares will be credited to the account of each
electing Participant in a pro rata manner. Stock
splits or dividends paid in the Company's Common Stock will be
allocable to a Participant in whole shares and in fractional
shares, as determined by the Plan administrator, in accordance
with his or her interest in the shares with respect to which
the stock dividend is paid or the stock split relates.
If a Participant desires not to have the cash dividends and
other cash distributions received on his or her Common Stock
reinvested in the Common Stock of the Company, the Participant
shall notify the Company by completing the form provided by
the Company and filed with his or her payroll office. After
receipt of such notice, all cash dividends when declared and
received by the Company's Plan administrator will be credited
to such Participant in proportion to the number of shares,
including fractional shares, held by the Company's Plan
administrator for such Participant's account on the dividend
record date. Checks will then be issued to such Participant in
accordance with the Company's dividend payment policies for
its stockholders.
(d) The purchase price of shares of the Company's Common Stock
purchased by the Plan administrator for a Participant in the
Plan with reinvested dividends on any dividend payment date
will be the average of the prices paid on the open market by
the Plan administrator in making such purchases, rather than
the Exercise Price.
<PAGE>
(e) The Company may, in its discretion, issue a stock
certificate representing the shares so purchased by the Plan
administrator in the name of a Participant, or if he or she so
directs, in his or her name and the name of another person as
joint tenants with right of survivorship, and deliver the
certificate to such Participant as soon as practicable after
the date purchased. Notwithstanding the foregoing, the Company
may, in its discretion, issue uncertificated stock
representing the full and fractional shares of the Company's
Common Stock purchased by or on behalf of a Participant (in
lieu of a stock certificate) on the date purchased in the name
of the Participant, or if he or she so directs, in his or her
name and the name of another person as joint tenants with the
right of survivorship, unless the Participant requests the
issuance of a stock certificate. Such authorization does not
affect shares already represented by certificates until they
are surrendered to the Company.
Upon the issuance or transfer of uncertificated shares to a
Participant, the Company shall send the Participant a written
statement containing such information required by Delaware
law, the Company's Restated Certificate of Incorporation and
the Company's By-Laws, which shall be delivered to such
Participant as soon as practical after the date of purchase.
6. TERMINATION OF PARTICIPATION IN OFFERING. A
Participant, at any time and for any reason, may
voluntarily terminate participation in an Offering
prior to the Exercise Date of the Offering by written
notice of termination delivered to his or her payroll
office. A Participant shall automatically cease to
participate in an Offering if prior to the Exercise
Date he or she shall cease to be employed by either the
Company or a Designated Subsidiary for reasons other
than retirement, disability or death. In either such
event no payroll deduction shall thereafter be made
with respect to such Participant and the cash balance
in his or her payroll deduction account shall be paid
to the Participant within 60 days thereafter and any
Company Common Stock in such Participant's account
purchased in a previous Plan offering shall, upon
written notification from the Participant, be
transferred to the Participant and any fractional
shares shall be paid to the Participant in cash. A
Participant whose participation in an Offering has been
voluntarily terminated shall forfeit any right to
participate in the next succeeding Offering, if any,
under the Plan. If a Participant's employment shall be
terminated by reason of retirement, death or disability
prior to the Exercise Date, he or she (or a designated
beneficiary, in the event of death, or if none, his or
her legal representative) shall have the right, within
90 days thereafter, to elect to have the balance in the
Participant's payroll deduction account either paid in
cash or applied toward the purchase of Company stock
and any Company Common Stock in such Participant's
account purchased in a previous Plan offering shall,
upon written notification from the Participant, be
transferred to the Participant and any fractional
shares shall be paid to the Participant in cash.
Except as above provided, no Participant may withdraw
any amounts withheld by payroll deductions, in whole or
in part.
<PAGE>
7. RIGHTS AS A STOCKHOLDER. None of the rights or privileges of a
stockholder of the Company shall exist with respect to shares
purchased under the Plan unless and until a certificate or
certificates or written statement in respect of uncertificated
shares shall have been issued to a Participant or legal
representative of his or her estate.
8. RIGHTS NOT TRANSFERABLE. Rights under this Plan are
not transferable by a Participant other than by will or
the laws of descent and distribution and are
exercisable during the Participant's lifetime only by
the Participant.
9. APPLICATION OF FUNDS. All funds received or held by the
Company under this Plan may be used for any corporate
purposes.
10. ADJUSTMENTS IN CASE OF CHANGES AFFECTING STOCK. In the
event of a recapitalization, stock dividend, stock
split or other change in capitalization affecting the
Company's present Common Stock, appropriate adjustment
may be made by the Board of Directors in the number
(including the number specified in paragraph 2) and
kind of shares and the Exercise Price of shares which
are or may become subject to options granted or to be
granted hereunder.
11. AMENDMENTS TO PLAN. The Board of Directors of the
Company, at any time, or from time to time, may amend,
suspend, or terminate this Plan, provided, however,
that except to conform the Plan to the requirements of
the Internal Revenue Code, no amendment shall be made
(i) increasing or decreasing the number of shares
authorized for this Plan (other than as provided in
Section 10), (ii) changing the formula for determining
the Exercise Price per share, or (iii) further limiting
the employees of the Company or its Subsidiaries who
may participate in this Plan.
12. VALUATIONS. All valuations hereunder shall be based
upon the New York Stock Exchange-Composite Transaction
Tape.
13. GOVERNMENTAL REGULATIONS. The Company's obligation to
sell and deliver its Common Stock under this Plan is
subject to the approval of any governmental authority
required in connection with the authorization, issuance
or sale of such stock.
14. EFFECTIVE DATE OF PLAN. The Plan became effective on
May 1, 1978.
EXHIBIT C
LEE ENTERPRISES, INCORPORATED
1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purposes
The purposes of the 1996 Stock Plan for Non-Employee Directors (the "Plan") of
Lee Enterprises, Incorporated (the "Company") are to promote the interests of
the Company and its stockholders by (i) encouraging non-employee directors to
own shares of the Company's Common Stock and thereby link their interests more
closely with the interests of the other stockholders of the Company; (ii)
attracting and retaining non-employee directors of outstanding ability; (iii)
providing incentive compensation opportunities which are competitive with those
of other major corporations; and (iv) enabling such directors to participate in
the long term growth and financial success of the Company.
2. Definitions
The following definitions shall be applicable throughout the Plan:
"Administrator"- means the Chief Executive Officer of
the Company.
"Award"- means a grant of Common Stock under Section 7
of the Plan.
"Board of Directors"- means the board of directors of
the Company.
"Cash Compensation"- means annual retainer, fees payable for serving as
Chairman of the Board of Directors or of a committee of the Board or for
attending any meetings of the Board or any committee thereof, per diem
consultation fees or other compensation payable as a non-employee director of
the Company.
"Code"- means the Internal Revenue Code of 1986 as amended from time to
time.
"Common Stock"- means the common stock of Lee Enterprises,
Incorporated, $2.00 par value.
"Company"- means Lee Enterprises, Incorporated, a
Delaware corporation, including any and all subsidiaries.
"Exchange Act"- means the Securities Exchange Act of 1934 as amended
from time to time.
"Participant"- means a non-employee director of the
Company who has been granted an Award.
<PAGE>
3. Effective Date and Duration of the Plan
The Plan shall become effective upon approval by the Company's stockholders at
the annual meeting of stockholders to be held on February 1, 1996, or any
adjournment thereof. The Plan shall terminate at such time as may be determined
by the Administrator, and no Awards shall be granted after such termination.
4. Administration
(a) Administrator. The Plan shall be administered by the Administrator subject
to the restrictions set forth in the Plan. Before any Awards are granted, the
Administrator may require Participants to execute any agreements that the
Administrator, in his discretion, shall reasonably require.
(b) Powers. Subject to the provisions of the Plan, the Administrator shall have
the full power, discretion, and authority to interpret and administer the Plan
in a manner which is consistent with the Plan's provisions, but shall have no
authority with respect to the selection of directors to receive awards, the
number of shares subject to the Plan or each grant thereunder, or the price or
timing of awards to be made except as provided in Section 9. The Administrator
shall have no authority to increase materially the benefits under the Stock
Plan.
(c) Decisions Binding. All determinations and decisions
made by the Administrator according to the provisions of the Plan
shall be final, conclusive and binding on all persons, including
the Participants, their estates and beneficiaries, and the
Company and its stockholders and employees.
5. Common Stock Awards; Shares Subject to the Plan
(a) Stock Grant Limit. Awards will be granted to Participants in the Plan in
accordance with the provisions of Section 7 below. Subject to Section 8 below,
the aggregate number of shares of Common Stock that may be issued under the Plan
shall not exceed 50,000 shares. Shares of Common Stock shall be deemed to have
been issued under the Plan only to the extent actually issued and delivered
pursuant to an Award.
(b) Stock Offered. The Common Stock to be granted
constituting an Award may be authorized but unissued Common Stock
or Common Stock previously issued and outstanding and reacquired
by the Company.
6. Eligibility
Awards may be granted only to directors of the Company who, at the time of
grant, are not employees of the Company or of any subsidiary of the Company.
Awards may not be granted to any person who is an employee of the Company or of
any subsidiary of the Company.
7. Common Stock Awards
(a) Minimum Awards of Common Stock. An Award of 500 shares of Common Stock, as
adjusted according to Section 8 below, shall be made automatically to
Participants on the first business day of June of each year, beginning on June
3, 1996. A Participant who is elected by the Board of Directors to fill a
vacancy or newly created directorship between annual meetings of stockholders
shall automatically receive 500 shares of Common Stock, as adjusted according to
Section 8 below, on the earlier of the first business day of the fourth month
after taking office or the last business day of the year in which he or she took
office.
<PAGE>
(b) Elective Payment in Common Stock. Participants shall have the right to
elect, in writing filed with the Company, to receive all or fifty percent (50%)
of their Cash Compensation payable for services rendered by them in shares of
Common Stock, commencing with the effective date of the Plan. The number of
shares shall be determined by dividing the amount of the Cash Compensation to be
paid by the closing price of the Company's Common Stock as reported for New York
Stock Exchange-Composite Transactions on the trading day immediately preceding
the date of payment and rounding to the nearest whole number. If the Company's
Common Stock is not then traded on such exchange, the determination shall be
based on the principal market where the Company's Common Stock is actively
traded as reported in the Wall Street Journal, Midwest Edition. Elections under
this section shall be made at least six months and one day prior to the date on
which payment is to be made. A Participant's election shall remain in effect
from year to year until changed by the Participant. No change in an election
shall be effective prior to at least six months and one day after the date of
the change.
(c) Payment for Stock. A Participant shall not be required to make any payment
for Common Stock received pursuant to this Plan, except to the extent otherwise
required by law.
8. Change in Capital Structure
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other corporate change, or any
distributions to the holders of Common Stock other than cash dividends, the
Administrator shall make such substitution or adjustment, if any, as he or she
deems to be equitable to accomplish fairly the purposes of the Plan and to
preserve the intended benefits of the Plan to the Participants and the Company,
as to the number, including the number specified in Section 5(a) above, or kind
of shares of Common Stock or other securities issued or reserved for issuance
pursuant to the Plan, including the number of outstanding shares of Common
Stock.
9. Amendment, Modification and Termination
The Administrator may amend, suspend or terminate the Plan as he or she shall
deem advisable but may not amend the Plan without further approval of the
stockholders if such approval is required by law, and may not amend the Plan
provisions relating to the amount, price, and timing of awards more than once
every six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, or the rules thereunder. Adjustments
shall be made in the number and kind of shares subject to the Stock Plan as
provided in Section 8 above.
10. Miscellaneous
(a) No Right to an Award. Neither the adoption of the Plan or any action of the
Administrator shall be deemed to give a director a right to an Award or any
other rights hereunder except as may be evidenced by an Award duly executed on
behalf of the Company, and then only to the extent and on the terms and
conditions expressly set forth herein. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of funds or assets to assure the payment of any Award.
(b) No Employment Rights Conferred. Nothing contained in the Plan shall (i)
confer upon any director any right with respect to continuation of service or
nomination for reelection as a director with the Company or (ii) interfere in
any way with the right to remove a director from office at any time for cause as
provided in the Company's Restated Certificate of Incorporation.
(c) Other Laws; Withholding. The Company shall not be obligated to issue any
shares of Common Stock until there has been compliance with such laws and
regulations as the Company may deem applicable. No fractional shares of Common
Stock shall be delivered. The Company shall have the right to collect cash from
Participants in an amount necessary to satisfy any Federal, state or local
withholding tax requirements. A Participant may elect to satisfy tax withholding
requirements, in whole or in part, by having the Company withhold shares of
Common Stock to satisfy the amount of taxes required to be withheld.
<PAGE>
(d) Severability. If any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
(e) Additional Compensation. Except as otherwise provided in Section 7(b) above,
shares of Common Stock granted under the Plan shall be in addition to any Cash
Compensation payable to a Participant as a result of his or her service as a
non-employee director of the Company.
(f) Requirements of Law. The granting of Awards under the Plan shall be subject
to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
(g) Governing Law. To the extent not preempted by Federal
law, the Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of
Delaware, without regard to conflict of law principles.
(h) Securities Law Compliance. With respect to any Participant subject to
Section 16 of the Exchange Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act, regardless of whether the conditions are expressly set forth in
the Plan. To the extent any provision of the Plan or action by the Administrator
fails to so comply, it shall be deemed null and void to the extent permitted by
law and deemed advisable by the Administrator.
