LEE ENTERPRISES, INCORPORATED
400 Putnam Building
215 N. Main Street
Davenport, IA 52801-1924
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 25, 2000
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 January 25, 2000, at 9:00 AM, for the following purposes:
(1) To elect three directors for terms of three years, and one director for
a term of one year; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed December 1, 1999 as the record date for
the determination of stockholders entitled to notice of and to vote at the
meeting.
It is important that your shares be represented whether or not you plan to
attend. You may vote by marking, signing and dating the enclosed proxy card and
returning it in the postage paid envelope. Stockholders may also vote by
telephone or via the Internet. If you attend the meeting, you may withdraw your
proxy at that time and vote your shares in person.
/s/ C. D. Waterman III, Secretary
Davenport, Iowa
December 27, 1999
<PAGE>
LEE ENTERPRISES, INCORPORATED
2000 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of the Company to be voted at the annual
meeting of stockholders to be held at the offices of the Company on Tuesday,
January 25, 2000, at 9:00 a.m., for the purposes set forth in the 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, 1999, together with a copy of the Company's Annual Report for the
fiscal year ended September 30, 1999.
PROXIES
Your vote is very important. For this reason, the Board of Directors is
requesting that you use the enclosed Proxy Card to vote your shares. If the
accompanying proxy is executed, the shares represented by the proxy will be
voted as specified below. You may also vote your shares by delivering your proxy
by telephone or via the Internet.
If a broker, bank or other nominee holds your Common Stock, you will
receive instructions from them that you must follow in order to have your shares
voted. If you hold certificate(s) in your own name as a holder of record, you
may vote your Common Stock or Class B Common Stock by signing, dating and
mailing the Proxy Card in the postage paid envelope provided. Of course, you can
always come to the meeting and vote your shares in person.
You may revoke the proxy before the meeting, whether delivered by
telephone, Internet or through the mail, by using the telephone voting
procedures, the Internet voting procedures or by mailing a signed instrument
revoking the proxy to: C. D. Waterman III, Corporate Secretary, Lee Enterprises,
Incorporated, 400 Putnam Building, 215 N. Main St., Davenport, IA 52801-1924; to
be effective, a mailed revocation must be received by the Secretary on or before
January 24, 2000. A stockholder may also attend the meeting in person, withdraw
the proxy and vote in person.
VOTING PROCEDURES
Stockholders of record at the close of business on December 1, 1999
will be entitled to vote at the meeting or any adjournment thereof. As of
December 1, 1999, there were 33,314,738 shares of Common Stock and 10,966,544
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
represented at the meeting is required to act 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
other than the election of directors 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 be
considered as present and entitled to vote, but will have no effect on the vote,
with 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 or by using the telephone
or Internet voting procedures. All properly executed proxies 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
on a Proxy Card 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 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.
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 2003, and
one director is to be elected for a one-year term expiring at the annual meeting
of stockholders in 2001. Each of the individuals named below is a nominee of the
Nominating Committee of the Board of Directors. Mr. Vittert and Mr. Guerin are
presently directors whose current terms expire January 25, 2000. Mr. Mayer's
current term expires in 2001, but he is nominated to serve with the class whose
terms expire at the 2003 annual meeting to conform with the Company's
Certificate of Incorporation and By-Laws. Lloyd G. Schermer and Charles E.
Rickershauser, Jr., directors of the Company since 1959 and 1990 respectively,
are retiring at the annual meeting and will not stand for re-election. The Board
of Directors does not currently plan to fill one vacancy and, effective as of
the annual meeting date, the number of directors will be reduced to eleven.
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 the
Board of Directors may select. Information about the nominees and directors
continuing office is set forth below:
<TABLE>
NOMINEES FOR ELECTION AS DIRECTORS
Principal Proposed Director
Nominee Occupation Age Term Since
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William E. Mayer Partner, 59 3 years 1998
Development Capital (2003)
(3) (4)
Gregory P. Schermer Vice President- 45 3 years ---
Interactive Media (2003)
Mark Vittert Investor (2) (4) 51 3 years 1986
(2003)
J.P. Guerin Investor (1) (3) 70 1 year 1985
(2001)
<PAGE>
DIRECTORS CONTINUING IN OFFICE
Principal Remaining Director
Director Occupation Age Term Since
- ------------------------------------------------------------------------------------------------
Rance E. Crain President, Crain 61 2 years 1990
Communications (2) (2002)
Richard D. Gottlieb President and 57 2 years 1986
Chief Executive (2002)
Officer (1)
Mary E. Junck Executive Vice 2 years 1999
President and Chief (2002)
Operating Officer 51
Phyllis Sewell Retired (1) (2) (4) 69 2 years 1977
(2002)
Andrew E. Newman Chairman and CEO, 55 1 year 1991
Race Rock (2001)
International (2)
Gordon D. Prichett Partner, Cairnwood 58 1 year 1998
Cooperative and (2001)
Department Chairman,
Babson College (3)
Ronald L. Rickman Retired President- 61 1 year 1986
Publishing Group (2001)
<FN>
(1) Member of Executive Committee
(2) Member of Executive Compensation Committee
(3) Member of Audit Committee
(4) Member of Nominating Committee
</FN>
</TABLE>
Mr. Mayer is a partner in Development Capital, LLC, a private investment
firm, New York, NY. He is also a director of Johns Manville Corporation,
Hambrecht & Quist Group, and a trustee of the Colonial Mutual Funds.
Mr. Schermer was elected Vice President-Interactive Media in November,
1997. From 1989 through November 1997 he was, and continues to serve as,
Corporate Counsel of the Company.
Mr. Vittert is a private investor and a director of PremiumWear,
Minneapolis, MN and Dave & Buster's Inc., Dallas, TX.
Mr. Guerin is Vice-Chairman of Daily Journal Company, Los Angles, CA and of
PS Group Holdings, Inc., San Diego, CA.
Mr. Crain is the President and Editorial Director of Crain Communications,
a diversified publishing company with its principal offices in Chicago, IL.
Mr. Gottlieb has been President and Chief Executive Officer of the Company
for more than the past 5 years.
Ms. Junck was elected Executive Vice President in May 1999. From May 1996
to April 1999 she was Executive Vice President of The Times Mirror Company and
President of Eastern Newspapers. She was named Publisher and Chief Executive
Officer of The Baltimore Sun in 1993.
Mrs. Sewell is a director of Pitney Bowes Inc., Stamford, CT and SYSCO
Corporation, Houston, TX.
Mr. Newman is Chairman and Chief Executive Officer of Race Rock
International, St. Louis, MO. He was Chairman of Edison Brothers Stores, Inc.
until April 1995. He is a director of Sigma-Aldrich Corporation, St. Louis, MO.
On November 3, 1995, Edison Brothers Stores, Inc. filed a petition for
reorganization under Chapter XI of the United States Bankruptcy Code in
Wilmington, Delaware. On September 26, 1997, following confirmation of its
reorganization plan, the proceedings were terminated.
<PAGE>
Mr. Prichett is a partner in Cairnwood Cooperative, a private investment
group, of Boston, MA. He is also Chairman of Mathematics, Statistics and
Information Systems at Babson College, Babson Park, MA.
Mr. Rickman was elected President-Publishing Group of the Company on
November 18, 1997, and retired on May 31, 1999. For more than 5 years prior
thereto, he was Vice President-Newspapers of the Company.
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors met six times in fiscal 1999.
The Company's Audit Committee met three times in fiscal 1999; its functions
include review of the scope, timing and other considerations relative to the
independent auditors' annual audit of financial statements and the adequacy of
internal control and the internal audit functions, and evaluation of 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 two times in fiscal year 1999; 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 Mark Vittert, 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 three times in fiscal
1999; its functions are to administer the Company's Retirement Account and
Supplementary Benefit Plans 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 review 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
1999.
COMPENSATION OF DIRECTORS
No Company employee receives any remuneration for acting as a director. In
fiscal 1999 Messrs. Crain, Guerin, Mayer, Newman, Prichett and Vittert, and Mrs.
Sewell were paid a $24,400 annual retainer, $1,000 for each Board meeting
attended, $700 for each Committee meeting attended and $350 for each special
telephone meeting. Committee chairs were also paid $3,000 extra as an annual
retainer for acting as such. In fiscal 1999 Mr. Rickman received a pro rata
share of the $24,400 annual retainer and fees for each meeting attended
following his retirement from the Company on May 31, 1999. Mr. Schermer received
an additional stipend of $50,000 for his services as Chairman of the Board.
Directors engaged to provide consultative services are normally compensated at
the rate of $1,500 per diem. No non-employee director was paid additional
compensation for consultative services in fiscal 1999, except Mr. Prichett, who
received $4,500 for such services.
In February 1996 the stockholders of the Company adopted the Stock Plan for
Non-Employee Directors. Under the plan, non-employee directors 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.
<PAGE>
The Board of Directors has authorized non-employee direct- ors, prior to
the beginning of any Company fiscal year, to elect to defer receipt of all or
any part of the 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.
The Company also matches, on a dollar-for-dollar basis up to $5,000
annually, charitable contributions made by directors.
EQUITY SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of December 1, 1999 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.
Percent Class B Percent
Beneficial Owners Common Stock of Class Common Stock of Class
- --------------------------------------------------------------------------------
Ariel Capital Management, 5,259,765 15.78% ---- ----
Inc.
307 North Michigan Avenue
Chicago, IL 60601
Harris Associates, L.P. 3,803,559 11.42% ---- ----
Two North LaSalle St.
Suite 500
Chicago, IL 60602
Lloyd G. Schermer (1) 220,242 .66% 1,182,586 10.78%
3676 E. Placita Lindura
Tucson, AZ 85718
Betty A. Schermer (2) ---- ---- 1,171,354 10.68%
3676 E. Placita Lindura
Tucson, AZ 85718
Gregory P. Schermer (3) 266,034 .80% 583,780 5.32%
c/o Lee Enterprises,
Incorporated
400 Putnam Bldg.
215 N. Main St.
Davenport, IA 52801-1924
(1) Includes (i) 110,222 Common and 403,028 Class B Common shares owned by a
trust as to which Lloyd G. Schermer retains sole voting and investment
powers; (ii) 82,210 Class B Common shares held by a charitable foundation
as to which Lloyd G. Schermer has shared voting and investment power; (iii)
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 (iv) 110,020
Common and 110,020 Class B Common shares held by a trust and 238,490 Class
B Common shares held by a charitable foundation as to which Lloyd G.
Schermer shares voting and investment powers. Lloyd G. Schermer disclaims
beneficial ownership of 110,020 Common and 779,558 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.
<PAGE>
(2) Includes (i) 850,654 Class B Common shares owned by trusts under which
Betty A. Schermer has sole voting and investment powers; (ii) 238,490 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) 82,210 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.
(3) Includes (i) 55,010 Common and 55,010 Class B Common shares held by a trust
with respect to which Gregory P. Schermer has beneficial ownership but no
voting or investment power; and (ii) 6,000 Class B Common shares owned by
his spouse, 2,000 Common and 6,000 Class B Common shares held by a trust
for the benefit of his minor son, and 4,000 Class B Common shares held by a
trust for the benefit of a minor daughter, as to which Gregory P. Schermer
disclaims all beneficial ownership and exercises no voting or investment
power.
The following table sets forth information as to the Common Stock and
Class B Common Stock of the Company beneficially owned as of December 1, 1999 by
each director and nominee, each of the named executive officers listed in the
Summary Compensation Table below, and by all directors and executive officers as
a group:
Name and
Address of Percent Class B Common Percent
Beneficial Owner Common Stock of Class Stock of Class
- --------------------------------------------------------------------------------
Larry L. Bloom (2) 61,019 * --- ---
Colleen B. Brown (2) 7,000 * --- ---
Rance E. Crain 8,469 * --- ---
Richard D. Gottlieb (1)(2) 447,029 1.34% 123,856 1.13%
J. P. Guerin (1) 2,000 * 106,814 *
Mary E. Junck 7,230 * --- ---
William E. Mayer 1,378 * --- ---
Andrew E. Newman 4,000 * --- ---
Gordon D. Prichett 2,600 * --- ---
Charles E. 4,000 * --- ---
Rickershauser, Jr. (3)
Ronald L. Rickman (2) 133,746 * 79,746 *
Lloyd G. Schermer (1)(2) 220,242 * 2,033,240 18.54%
(3)
Gregory P. Schermer (2) 266,034 * 583,780 5.32%
Phyllis Sewell 3,900 * 2,900 *
Greg R. Veon 76,353 * 5,804 *
Mark Vittert 4,000 * --- ---
All present executive 1,326,324 3.98% 2,942,169 26.83%
officers and directors
as a group (21)
* Less than one (1%) percent of the class.
<PAGE>
(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: G. Schermer, 57,010 Common Stock, 71,010 Class B Common
Stock; L. Schermer, 110,020 Common Stock, 1,630,212 Class B Common Stock;
Gottlieb, 19,808 Common Stock, 33,873 Class B Common Stock; and Guerin,
2,850 Class B Common Stock.
(2) This table includes the following shares of Common Stock subject to
acquisition within 60 days by the exercise of outstanding stock options:
Gottlieb - 355,850; Rickman - 49,847; G. Schermer - 10,562; Bloom - 49,722;
Brown - 3,000; Junck - 0; and Veon - 48,240.
(3) Directors who are retiring when their current terms expire January 25,
2000.
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, 1999 to the chief executive officer of the Company and to
each of the four other most highly compensated executive officers of the
Company. Messrs. Rickman and Schmedding, who retired May 31, 1999 and June 30,
1999, respectively, are also included because their 1999 compensation would have
placed them among the named executive officers if employed at the end of the
fiscal year.
<TABLE>
Summary Compensation Table
Long Term Compensation (1)
-------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------- ------------------------- --------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Principal Position Year Salary($) Bonus($) Other Stock LTIP All Other
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard D. Gottlieb 1999 $581,400 $174,420 $5,000 $116,000 25,000 $82,075 $123,595
Chief Executive Officer 1998 570,000 85,500 5,000 76,132 17,500 157,850 106,881
1997 535,500 250,000 5,000 111,000 26,794 (5) 148,750 129,022
Mary E. Junck (2) 1999 153,333 125,000 0 144,690 25,000 0 0
Chief Operating Officer
Ronald L. Rickman 1999 355,400 65,000 5,000 0 18,136 (5) 174,838 55,924
President-Publishing 1998 69,000 5,000 50,981 10,500 84563 66,067
Group (Retired) 1997 335,000 157,450 5,000 74,370 15,000 79,688 79,496
Larry L. Bloom 1999 264,700 87,351 5,000 29,000 12,000 29,313 55,358
Sr. Vice 1998 257,000 64,250 4,000 35,347 11,122 (5) 56,375 50,392
And Chief Financial 1997 247,000 123,620 4,000 51,615 10,000 53,125 58,907
Officer
Colleen B. Brown (2) 1999 250,000 50,000 0 29,000 10,000 0 4,312
President -Broadcast 1998 62,500 0 0 81,570 10,000 0 0
Group
Greg R. Veon 1999 197,800 63,596 1,350 29,000 15,000 29,313 40,038
Vice President- 1998 192,000 48,000 800 23,791 7,000 28,188 36,661
Publishing 1997 184,000 80,960 0 34,688 8,000 49,513 41,050
Gary N. Schmedding 1999 211,716 25,000 5,000 0 0 104,444 31,642
President-Broadcast 1998 278,000 69,500 5,000 23,112 7,000 84,563 54,829
Group (Retired) 1997 278,000 30,580 5,000 33,300 8,000 79,688 48,422
<FN>
(1) The Executive Compensation Committee of the Company meets 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.
<PAGE>
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) Ms. Junck became an employee and executive officer of the Company on
May 11, 1999. At the time of her employment, Ms. Junck received a
$100,000 hiring bonus, a restricted stock award of 5,000 shares, and a
stock option grant of 25,000 shares. Ms. Brown became an employee of
the Company on June 25, 1998 and an executive officer on July 1, 1999.
At the time of her employment, Ms. Brown received a restricted stock
award of 3,000 shares and a stock option grant of 10,000 shares. The
long-term incentive awards were made by the Executive Compensation
Committee to compensate Ms. Junck and Ms. Brown, in part, for
comparable benefits from their previous employers lost upon employment
by the Company.
(3) Represents matching payments made by the Company to charitable
organization designated by the executive officer.
(4) The amounts shown represent shares of restricted stock in the following
amounts granted to the named individuals in 1997, 1998 and 1999,
respectively and their aggregate market value (including November 1999
awards) at September 30, 1999:
</FN>
</TABLE>
<TABLE>
1997 1998 1999 Market Value at
Award Award Award Total September 30, 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard D. Gottlieb 2,800 4,000 4,000 10,800 $295,650
Mary E. Junck --- --- 5,000(2) 5,000 136,875
Ronald L. Rickman 2,680 1,875 --- Vested upon retirement
Gary N. Schmedding 1,200 850 --- Vested upon retirement
Greg R. Veon 1,250 875 1,000 3,125 85,547
Larry L. Bloom 1,860 1,300 1,000 4,160 113,880
Colleen B. Brown --- 3,000(2) 1,000 4,000 109,500
<FN>
(5) Includes replacement (reload) options awarded at exercise of
non-qualified options to Mr. Gottlieb in 1997: 1,794 shares; Mr. Bloom
in 1998: 4,122 shares; and Mr. Rickman in 1999: 18,136.
(6) The amounts shown represent the value at the end of the fiscal year of
restricted stock awarded three years prior thereto and vesting within
60 days after the end of the fiscal year or upon retirement from
employment with the Company.
(7) The amounts shown represent contributions by the Company on behalf of
the named individuals to the Company's Retirement Account Plan and
Supplemental Retirement Account.
</FN>
</TABLE>
<PAGE>
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants
(c)
% of Total (f)
Options Granted (d) (e) Grant Date
(a) (b) To Employees in Exercise Expiration Present
Name Options Granted Fiscal Year Price ($/Sh) Date Value($)
(1) (2)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard D. Gottlieb 25,000 9.3% $ 29.938 10-Nov-09 $220,500
Mary E. Junck 25,000 9.3% 28.938 09-May-09 202,800
Ronald L. Rickman 1,436 (3) 0.5% 28.750 07-Nov-00 4,400
3,206 (3) 1.2% 28.750 19-Nov-01 13,400
3,789 (3) 1.4% 28.750 17-Nov-02 19,400
3,367 (3) 1.3% 28.750 02-Nov-03 20,000
6,338 (3) 2.4% 28.750 29-May-04 42,300
Gary N. Schmedding 0 0.0% ---- ---- 0
Greg R. Veon 15,000 5.6% 29.938 10-Nov-09 132,000
Larry L. Bloom 12,000 4.5% 29.938 10-Nov-09 105,600
Colleen B. Brown 10,000 3.7% 29.938 10-Nov-09 88,000
<FN>
(1) The options granted to the named individuals were determined by the
Executive Compensation Committee following review of each individual's
performance in fiscal year 1999, 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 awarded 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 using
certain assumptions specified under the Black-Scholes Option Pricing Model.
The range of assumptions used in calculating the values are as follows:
</FN>
</TABLE>
Factor May Options November Options Replacement Options
- --------------------------------------------------------------------------------
Dividend Yield 2.07% 2.00% 2.09%
Volatility 18.45% 18.50% 18.45%
Risk-Free Interest Rate 5.86% 6.19% 5.46% - 5.97%
Expected life (years) 8 8 1.4 - 5.4
The Company's stock options are not transferable, are subject to a risk of
forfeiture, 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.
<PAGE>
(3) Replacement (reload) options awarded at exercise of incentive and
non-qualified options with payment made with previously owned Common Stock.
The exercise price of a replacement option is the closing market price of
the Company's Common Stock on the award date, and a replacement option has
a term equal to the remaining term of the options exercised or such shorter
term as determined by the Executive Compensation Committee.
<TABLE>
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year End Option Values
(a) (b) (c) (d) (e)
Value Of
Number Of Unexercised In-
Unexercised Options the-Money Options
Shares at FY End (#) at FY End ($)
Acquired On Value Exercisable Exercisable/
Name Exercise Realized /Unexercisable Unexercisable
(#) (1) ($) (2) (3) (4)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard D. Gottlieb 80,000 $1,070,000 335,100 $4,107,377
68,000 63,406
Mary E. Junck ---- ---- 0 0
25,000 ----
Ronald L. Rickman 195,876 2,717,574 28,636 38,625
26,500 42,156
Gary N. Schmedding 30,000 365,625 157,652 1,982,177
16,600 29,013
Greg R. Veon 7,000 93,625 40,740 466,885
30,600 27,075
Larry L. Bloom ---- ---- 41,622 303,375
29,000 24,184
Colleen B. Brown ---- ---- 0 0
20,000 1,870
<FN>
(1) All options are for Common Stock and were granted under the Company's 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 1999 for the
fiscal year just concluded.
(4) Market value of underlying securities at September 30, 1999 ($27.375),
minus the exercise price.
</FN>
</TABLE>
<PAGE>
Benefit Plans and Retirement Programs
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 $72,600. 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
1999 under the Retirement Account and Supplementary Benefit Plans to the
accounts of the person listed in the Summary Compensation Table are listed in
column (i) thereto.
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 follows:
Mr. Rickman, $11,574; and Mr. Schmedding, $1,367.
Executive Agreements
The Company is obliged under written agreements to pay to Messrs.
Gottlieb and Veon a multiple of three times the executive officer's base salary
in the event of termination of his employment without cause. The Company decided
in 1991 not to enter into such agreements in the future with its executive
officers.
Change-of-Control Employment Agreements
In 1998 the Board of Directors approved employment agreements between
the Company and its executive officers, including each of the named executive
officers, which become effective upon a change of control or in the event of a
termination of employment in anticipation of a change of control. The agreements
extend for three years, but renew annually for a new three year period unless
the Company gives prior notice of termination. The agreements provide that each
such officer is to remain an employee for a three-year period following a change
of control of the Company (the "Employment Period"). During the Employment
Period, the officer is entitled to (i) an annual base salary, payable monthly in
an amount at least equal to his or her highest monthly base salary during the
year prior to the change of control, (ii) an annual bonus in an amount at least
equal to his or her highest annual bonus in the three years prior to the change
of control, and (iii) continued participation in the Company's incentive,
savings, retirement and welfare benefit plans. The officer also is entitled to
payment of expenses and fringe benefits to the extent paid or provided to (a)
such officer prior to the change of control or (b) other peer executives of the
Company.
If during the Employment Period, the officer's employment is terminated
other than for "Cause" or disability or the officer terminates his or her
employment for "Good Reason", including a detrimental change in responsibilities
or a reduction in salary or benefits, the officer will be entitled to the
following benefits: (i) all accrued and unpaid compensation; (ii) a severance
payment equal to three times the sum of such officer's (a) annual base salary,
and (b) highest recent annual bonus; (iii) payment equal to the retirement
contribution that the officer would have been eligible to receive from the
Company under the terms of the Company's Retirement Account Plan and
Supplemental Retirement Account (or successor plan or program then in effect),
determined as if the officer were fully vested thereunder and had continued
(after the date of termination) to be employed for an additional three years at
the officer's highest recent annual compensation for purposes of determining the
basic contributions and supplemental contributions; (iv) the amount of any
forfeited benefits under the Company's Savings Plan; and (v) any legal fees and
expenses incurred by the officer in asserting legal rights in connection with
the agreement. The officer shall also be entitled to continued welfare benefits
for three years and outplacement services. Subject to certain limits on
payments, the agreement also requires tax "gross-up" payments to the officer to
mitigate any excise tax imposed on the officer under Sections 280G and 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), and any penalties
and interest in connection with a change of control. These payments would be in
addition to awards of restricted stock, stock options and stock appreciation
rights or amounts payable in lieu thereof under the Company's 1990 Long Term
Incentive Plan which, in the event of a change of control and subject to certain
limitations contained in the agreements, provides for early exercise and vesting
and issuance or payment of such awards. The officer is entitled to receive such
amounts in a lump-sum payment within 30 days of termination.
<PAGE>
A change of control includes certain mergers and acquisitions,
liquidation or dissolution of the Company, changes in the membership of the
Company's Board of Directors and acquisition of securities of the Company.
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, 1999 (with 1994 as the measurement point).
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 data points used for the omitted graph were as follows:
<TABLE>
1994 1995 1996 1997 1998 1999
----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lee ........................... $100.00 $128.69 $138.65 $175.53 $163.50 $176.10
S&P Publishing/Newspapers-Index $100.00 $122.57 $159.04 $240.87 $234.99 $335.46
S&P 500 ....................... $100.00 $129.74 $156.12 $219.27 $239.10 $304.74
</TABLE>
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 The Tribune Company.
Report of the Executive Compensation Committee of the Board of
Directors on Executive Compensation
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 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 achievement. The Committee also believes
that stock ownership by management and stock-based performance compensation
arrangements are beneficial in the linking of management's and stockholders'
interest 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.
<PAGE>
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 (the "Towers 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 the median level of
compensation, as reported annually in the Towers Survey.
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. These factors are considered subjectively in the aggregate
and none of the factors is accorded a specific weight. Base salaries were
increased in 1999 for executive management by 8.2% 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 annual base
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 Incentives
Under the Company's 1990 Long Term Incentive Plan, the Committee is
authorized, in its discretion, to grant stock options and restricted stock
awards in such proportions and upon such terms and conditions as the Committee
may determine. The Committee meets following the end of each year to evaluate
the performance of the Company for the preceding fiscal year and determine long
term incentive awards of executive management of the Company for the fiscal year
just ended. Under the Plan, grants to executives are based on criteria
established by the Committee, including responsibility level, base salary,
current market practice and the market price of the Company's stock at the time
of grant. The number of stock options and/or restricted shares then determined
is reviewed by the Committee and may be increased or decreased to reflect the
criteria noted above, 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. Grant guidelines
for stock options and restricted stock are established for all participants
(including the chief executive officer) with the objective of providing a target
total compensation opportunity, including base salary and the target annual
incentive bonus, equal to the median of the peer group. Depending on stock price
performance and Company performance, actual total compensation for any given
year could be at, above or below the median of the peer group. The number of
options or restricted shares previously granted to or held by an executive is
not a factor in determining individual grants.
<PAGE>
The number of stock options granted to each executive officer in 1999
was determined by dividing a specified dollar amount of the target award 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. All stock options
granted have an exercise price equal to the fair market value of the Common
Stock at time of grant and are exercisable within a 10 year period. 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 stockholders, the
Committee has provided that stock options generally vest in specified portions
over a three year period.
The awards of restricted stock to executive officers and other key
employees in 1999 represent shares of Common Stock which the recipient cannot
sell or otherwise transfer until the applicable restriction period lapses. The
number of shares of restricted stock awarded was determined by dividing a
specified dollar amount of the target award by the fair market value of the
Company's Common Stock on the date the awards are approved. 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. The Company has structured 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 1999 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 1999 was based upon a
subjective evaluation of the performance of the Company in relation to past
years and the performance of comparable media companies, as well as his
accomplishment of certain non-financial performance objectives and the
successful initiation of several long-term and strategic initiatives which the
Committee believes will be of significant benefit to the Company in the future.
The Committee made long term compensation awards of stock options and
restricted stock to Mr. Gottlieb in 1999 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 1999 grants. The Committee did
consider the 1999 performance of the Company, as more particularly described
above, in the final determination of such grants.
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.
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, 2000. 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 2000
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.
<PAGE>
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders with regard to nominees for the Board of
Directors or other matters intended to be presented at the 2001 annual meeting
of the Company must be received by the Company to be considered for inclusion in
its proxy statement and form of proxy relating to that meeting by September 1,
2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 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 1999 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, electronic transmission, facsimile or by telegram. 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 that it has 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--JANUARY 25, 2000
COMBINED PROXY FOR COMMON STOCK AND CLASS B COMMON STOCK
The undersigned hereby appoints Richard D. Gottlieb, J. P. Guerin, and
Phyllis Sewell, and each of them, the attorneys and proxies of the undersigned
with full power of substitution to vote as indicated herein, all the Common
shares, and Class B Common shares of Lee Enterprises, Incorporated held of
record by the undersigned on December 1, 1999, at the annual meeting of
stockholders to be held on January 25, 2000, or any postponements or
adjournments thereof, with all the powers the undersigned would possess if then
and there personally present.
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not
mark any boxes if you wish to vote in accordance with
the Board of Directors' recommendations. The above-named
proxies cannot vote your shares unless you sign and return this card.
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
ALL STOCKHOLDERS ARE URGED TO VOTE THEIR PROXY AS EARLY AS POSSIBLE.
PARTICIPANTS HOLDING SHARES THROUGH ANY OF THE COMPANY'S
EMPLOYEE BENEFIT PLANS ARE URGED TO VOTE THEIR SHARES
NO LATER THAN JANUARY 20, 2000 IN ORDER TO
ENSURE COMPLETE VOTING BY THE APPLICABLE PLAN ADMINISTRATOR.
PLEASE SEE REVERSE SIDE FOR INFORMATION ON VOTING
YOUR PROXY BY TELEPHONE OR INTERNET.
<PAGE>
Please mark your
Votes as in this
Example.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. EVERY PROPERLY SIGNED PROXY
WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, PROXIES WILL BE VOTED FOR
ITEM 1 AND IN THE DISCRETION OF MANAGEMENT IN CONNECTION WITH ITEM 2.
The Board of Directors Recommends a vote FOR:
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS 2. In their discretion, upon such other
matters as may properly come before
the meeting.
For Against Abstain
FOR all nominees [ ] WITHHOLD [ ] 01 William E. Mayer [ ] [ ] [ ]
listed above AUTHORITY 02 Gregory P. Schermer
(except as marked to vote for all 03 Mark Vittert
to the contrary nominees listed 04 J.P. Guerin
below). above.
</TABLE>
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
Receipt of Notice of Annual Meeting of
Stockholders and the related Proxy
Statement is hereby acknowledged.
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.)
--------------------------------, 2000
SIGNATURE(S) DATE
--------------------------------, 2000
SIGNATURE(S) DATE
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
Dear Stockholder:
We encourage you to take advantage of two new and convenient ways by which you
can vote your shares. You can vote your shares electronically by telephone or
via the Internet, which eliminates the need to return the proxy card.
Vote by Telephone: To vote your shares by telephone, use a touch-tone telephone
and call the following toll-free number: 1-877-PRX-VOTE, 24 hours a day, 7 days
a week. Insert the Control Number printed in the box above, just below the
perforation. Follow the simple recorded instructions.
Vote by Internet: To vote via the Internet, go to web site www.
eproxyvote.com/lee. Insert the Control Number printed in the box above, just
below the perforation, and then follow the simple instructions. Please be aware
that if you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be responsible.
The Internet and telephone voting facilities will be available until midnight on
January 24, 2000, the day before the Annual Meeting.
Do Not Return The Proxy Card If You Are Voting By Telephone Or The Internet
