UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarter Ended March 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 1-6227
Lee Enterprises, Incorporated
A Delaware Corporation I.D. #42-0823980
215 N. Main Street, Davenport, Iowa 52801
Phone: (319) 383-2100
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ x ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Class Outstanding at March 31, 2000
- --------------------------------------- -----------------------------
Common stock, $2.00 par value 33,298,232
Class "B" Common Stock, $2.00 par value 10,845,006
<PAGE>
PART I. FINANCIAL INFORMATION
Item. 1.
LEE ENTERPRISES, INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
<TABLE>
Three Months Ended Six Months Ended
March 31, March 31,
--------------------------------------------
2000 1999 2000 1999
--------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Operating revenue:
Advertising ................................. $ 62,040 $ 59,812 $132,173 $129,187
Circulation ................................. 19,972 20,661 40,184 41,626
Other ....................................... 17,003 14,315 33,055 28,270
Equity in net income of associated companies 1,958 1,736 4,248 3,978
--------------------------------------------
100,973 96,524 209,660 203,061
--------------------------------------------
Operating expenses:
Compensation costs .......................... 38,328 36,103 78,009 74,187
Newsprint and ink ........................... 8,997 9,107 18,010 19,935
Depreciation ................................ 3,577 3,370 7,053 6,712
Amortization of intangibles ................. 3,734 3,464 7,470 6,889
Other ....................................... 25,307 24,173 51,731 50,038
--------------------------------------------
79,943 76,217 162,273 157,761
--------------------------------------------
Operating income ..................... 21,030 20,307 47,387 45,300
--------------------------------------------
Nonoperating (income) expenses, net
Financial (income) .......................... (609) (235) (1,663) (1,451)
Financial expense ........................... 2,758 2,986 6,143 7,252
Other, primarily (gain) on sale of properties 218 - - (18,031) - -
--------------------------------------------
2,367 2,751 (13,551) 5,801
--------------------------------------------
Income from continuing operations
before taxes on income ............... 18,663 17,556 60,938 39,499
Income taxes ................................... 6,926 6,549 22,805 14,670
--------------------------------------------
Income from continuing operations .... 11,737 11,007 38,133 24,829
--------------------------------------------
Discontinued operations:
Income from discontinued operations,
net of income tax effect ................. 590 961 4,738 6,778
Gain on disposal of operations, net of
income tax effect ........................ 1,274 - - 1,274 - -
--------------------------------------------
1,864 961 6,012 6,778
--------------------------------------------
Net income ........................... $ 13,601 $ 11,968 $ 44,145 $ 31,607
============================================
Average outstanding shares:
Basic ....................................... 44,098 44,246 44,132 44,257
Diluted ..................................... 44,423 44,859 44,527 44,851
Earnings per share:
Basic:
Income from continuing operations ........ $ 0.27 $ 0.25 $ 0.86 $ 0.56
Income from discontinued operations ...... 0.04 0.02 0.14 0.15
---------------------------------------------
Net income ............................. $ 0.31 $ 0.27 $ 1.00 $ 0.71
=============================================
Diluted:
Income from continuing operations ........ $ 0.27 $ 0.25 $ 0.85 $ 0.55
Income from discontinued operations ...... 0.04 0.02 0.14 0.15
---------------------------------------------
Net income ............................. $ 0.31 $ 0.27 $ 0.99 $ 0.70
=============================================
Dividends per share ............................ $ 0.16 $ 0.15 $ 0.32 $ 0.30
=============================================
</TABLE>
<PAGE>
LEE ENTERPRISES, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
March 31, September 30,
ASSETS 2000 1999
- ---------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents ............................................................ $ 38,836 $ 10,536
Accounts receivable, net ............................................................. 37,979 68,560
Newsprint inventory .................................................................. 2,383 3,625
Other ................................................................................ 8,856 19,822
Net assets of discontinued operations ................................................ 170,179 - -
--------------------
Total current assets ....................................................... 258,233 102,543
Investments .......................................................................... 33,183 32,145
Property and equipment, net .......................................................... 118,299 139,203
Intangibles and other assets ......................................................... 283,208 405,622
--------------------
$692,923 $679,513
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .................................................................. $ 65,920 $ 79,448
Long-term debt, less current maturities .............................................. 185,000 187,005
Deferred items ....................................................................... 62,799 58,731
Stockholders' equity ................................................................. 379,204 354,329
--------------------
$692,923 $679,513
====================
</TABLE>
<PAGE>
LEE ENTERPRISES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
2000 1999
- ----------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Six Months Ended March 31:
Cash Provided by Operating Activities:
Net income .................................................. $ 44,145 $ 31,607
Adjustments to reconcile net income to net cash provided
by operations:
Depreciation and amortization ............................. 20,537 19,150
Gain on sale of properties ................................ (18,439) - -
Distributions in excess of earnings of associated companies 1,184 1,650
Other balance sheet changes ............................... 17,536 (1,151)
-------------------
Net cash provided by operating activities ............... 64,963 51,256
-------------------
Cash (Required for) Investing Activities:
Purchase of property and equipment .......................... (18,359) (16,301)
Acquisitions ................................................ (8,075) (2,147)
Proceeds from sale of assets ................................ 8,775 - -
Other ....................................................... (42) (127)
-------------------
Net cash (required for) investing activities ............ (17,701) (18,575)
-------------------
Cash Provided by (Required for) Financing Activities:
Purchase of common stock .................................... (6,214) (2,265)
Cash dividends paid ......................................... (7,071) (6,654)
Principal payments on long-term debt ........................ - - (25,000)
Principal payments on short-term notes payable, net ......... (6,000) - -
Other ....................................................... 323 156
-------------------
Net cash (required for) financing activities ............ (18,962) (33,763)
-------------------
Net increase (decrease) in cash and cash equivalents .... 28,300 (1,082)
Cash and cash equivalents:
Beginning ................................................... 10,536 16,941
-------------------
Ending ...................................................... $ 38,836 $ 15,859
===================
</TABLE>
<PAGE>
LEE ENTERPRISES, INCORPORATED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
Note 1. Basis of Presentation
The information furnished reflects all adjustments, consisting of normal
recurring accruals, which are, in the opinion of management, necessary to a fair
presentation of the financial position as of March 31, 2000 and the results of
operations for the three- and six-month periods ended March 31, 2000 and 1999
and cash flows for the six-month periods ended March 31, 2000 and 1999.
Note 2. Investment in Associated Companies
Condensed operating results of Madison Newspapers, Inc. (50% owned) and other
unconsolidated associated companies are as follows (dollars in thousands):
Three Six
Months Ended Months Ended
March 31, March 31,
---------------- ----------------
2000 1999 2000 1999
---------------- ----------------
Revenues ................................... $23,825 $21,660 $48,097 $45,250
Operating expenses, except
depreciation and amortization ........... 17,213 15,487 33,503 31,114
Income before depreciation and amortization,
interest, and taxes ..................... 6,612 6,173 14,594 14,136
Depreciation and amortization .............. 720 756 1,441 1,549
Operating income ........................... 5,892 5,417 13,153 12,587
Financial income ........................... 638 363 1,035 686
Income before income taxes ................. 6,530 5,780 14,188 13,273
Income taxes ............................... 2,613 2,285 5,692 5,316
Net income ................................. 3,917 3,495 8,496 7,957
Note 3. Cash Flows Information
The components of other balance sheet changes are:
Six Months Ended
March 31,
-----------------
2000 1999
-----------------
(In Thousands)
Decrease in receivables ................................ $ 5,104 $ 244
Decrease in inventories and other ...................... 2,201 1,347
(Decrease) in accounts payable, accrued expenses and
unearned income ..................................... (911) (3,556)
Increase in income taxes payable ....................... 2,594 163
Other, primarily deferred items ........................ 8,548 651
-----------------
$17,536 $(1,151)
=================
<PAGE>
Note 4. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share (in thousands except per share amounts):
<TABLE>
Three Months Six Months
Ended March 31, Ended March 31,
------------------- -------------------
2000 1999 2000 1999
------------------- -------------------
<S> <C> <C> <C> <C>
Numerator:
Income applicable to common shares:
Income from continuing operations ................ $ 11,737 $ 11,007 $ 38,133 $ 24,829
Income from discontinued operations .............. 1,864 961 6,012 6,778
-----------------------------------------
$ 13,601 $ 11,968 $ 44,145 $ 31,607
=========================================
Denominator:
Basic-weighted average common shares
outstanding ...................................... 44,098 44,246 44,132 44,257
Dilutive effect of employee stock options .......... 325 613 395 594
-----------------------------------------
Diluted outstanding shares ..................... 44,423 44,859 44,527 44,851
=========================================
Basic earnings per share:
Income from continuing operations .................. 0.27 0.25 0.86 0.56
Income from discontinued operations ................ 0.04 0.02 0.14 0.15
-----------------------------------------
Net income ..................................... 0.31 0.27 1.00 0.71
=========================================
Diluted earnings per share:
Income from continuing operations .................. 0.27 0.25 0.85 0.55
Income from discontinued operations ................ 0.04 0.02 0.14 0.15
-----------------------------------------
Net income ..................................... 0.31 0.27 0.99 0.70
=========================================
</TABLE>
Note 5. Sale of Assets
On October 1, 1999 the Company sold substantially all the assets used in, and
liabilities related to, the publication, marketing, and distribution of two
daily newspapers and the related specialty and classified publications in
Kewanee, Geneseo, and Aledo, Illinois and Ottumwa, Iowa in exchange for
$9,300,000 of cash and a daily newspaper and specialty publications in Beatrice,
Nebraska.
Note 6. Reclassification
Certain items on the statement of income for the quarter ended and six-month
period ended March 31, 1999 have been reclassified with no effect on net income
or earnings per share, to be consistent with the classifications adopted for the
quarter and six-month periods ended March 31, 2000.
Note 7. Discontinued operations
On March 1, 2000, the Company decided to discontinue the operations of the
Broadcast division. On May 7, 2000 the Company entered into an agreement to sell
certain of their broadcasting properties, consisting of eight network-affiliated
and seven satellite television stations, to Emmis Communications Corporation.
The purchase price is approximately $562,500,000. The sale is subject to various
conditions, including Hart-Scott-Rodino clearance and approval by the Federal
Communications Commission, and other customary contingencies for a transaction
of this nature. The sale is anticipated to be completed later this year.
<PAGE>
The income from discontinued operations consist of the following:
Three Six
Months Ended Months Ended
-------------- ----------------
March 31, March 31,
-------------- ----------------
2000 1999 2000 1999
--------------------------------
Income from discontinued operations
through March 1, 2000 .................... $1,147 $1,846 $ 8,218 $11,653
Income from measurement date to
March 31, 2000 ........................... 2,178 - - 2,178 - -
--------------------------------
3,325 1,846 10,396 11,653
Income taxes ................................ 1,461 885 4,384 4,875
--------------------------------
$1,864 $ 961 $ 6,012 $ 6,778
================================
At March 31, 2000, the assets and liabilities of the Broadcast division
consisted of the following:
Assets:
Accounts receivable, net ................................. $ 23,611
Program rights and other ................................. 4,799
Property and equipment, net .............................. 30,498
Intangibles and other assets ............................. 122,719
--------
181,627
--------
Liabilities:
Current liabilities ...................................... 10,457
Deferred items ........................................... 991
--------
11,448
--------
Net assets of discontinued operations ....................... $170,179
========
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Selected operations information is as follows (dollars in thousands, except per
share data):
<TABLE>
Three Months Six Months
Ended Ended
March 31, March 31,
---------------- Percent ---------------- Percent
2000 1999 Increase 2000 1999 Increase
------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before depreciation
and amortization, interest and
taxes (EBITDA): *
Publishing locations ........... $31,443 $30,474 3.2% $68,979 $66,194 4.2%
Corporate ...................... (3,102) (3,333) 6.9 (7,069) (7,293) 3.1
---------------------------------------------------
$28,341 $27,141 4.4% $61,910 $58,901 5.1%
===================================================
Operating income:
Publishing locations ........... $24,462 $24,025 1.8% $55,095 $53,302 3.4%
Corporate ...................... (3,432) (3,718) 8.3 (7,708) (8,002) 3.7
-------------------------------------------------
$21,030 $20,307 3.6% $47,387 $45,300 4.6%
=================================================
Capital expenditures:
Publishing locations ........... $ 8,275 $ 5,184 $15,600 $10,777
Broadcasting ................... 784 2,247 1,971 5,142
Corporate ...................... 319 - - 788 382
---------------- ----------------
$ 9,378 $ 7,431 $18,359 $16,301
================ ================
<FN>
* EBITDA is not a financial performance measurement under generally accepted
accounting principles (GAAP), and should not be considered in isolation or as
a substitute for GAAP performance measurements. EBITDA is also not reflected
in our consolidated statement of cash flows, but it is a common and
meaningful alternative performance measurement for comparison to other
companies in our industry.
</FN>
</TABLE>
QUARTER ENDED MARCH 31, 2000
PUBLISHING
Exclusive of acquisitions and dispositions, publishing advertising revenue
increased $2,000,000, 3.4%. Advertising revenue from local merchants increased
$116,000, .4%, as a result of a late Easter. Local "run-of-press" advertising
decreased $(76,000), (.3%). Local preprint revenue increased $191,000, 2.3%.
Classified advertising revenue increased $1,491,000, 7.0%, primarily in the
employment and automotive categories. Circulation revenue decreased $(313,000),
(1.6%), as a result of a decrease in units.
Other revenue consists of revenue from commercial printing, products delivered
outside the newspaper (which include activities such as target marketing and
special event production) and editorial service contracts with Madison
Newspapers, Inc.
<PAGE>
Other revenue by category is as follows:
Three Months
Ended March 31,
-----------------
2000 1999
-----------------
(In Thousands)
Commercial printing ...................................... $ 5,630 $ 5,690
New revenue* ............................................. 7,360 5,913
Editorial service contracts .............................. 2,572 2,396
Acquisitions and dispositions since September 31, 1998 ... 1,441 316
-----------------
$17,003 $14,315
=================
* Includes internet/online, niche publications, books, and other events
and promotions.
The following table sets forth the percentage of revenue of certain items in the
publishing operations.
Three
Months Ended
March 31,
---------------
2000 1999
---------------
Revenue ...................................................... 100.0% 100.0%
---------------
Compensation costs ........................................... 36.1 35.9
Newsprint and ink ............................................ 8.9 9.4
Other operating expenses ..................................... 23.8 23.1
---------------
68.8 68.4
---------------
Income before depreciation, amortization, interest and taxes . 31.2 31.6
Depreciation and amortization ................................ 6.9 6.7
---------------
Operating margin wholly-owned properties ..................... 24.3% 24.9%
===============
QUARTER ENDED MARCH 31, 2000
Exclusive of the effects of acquisitions and dispositions, costs other than
depreciation and amortization increased $2,788,000, 4.4%. Compensation expense
increased $1,426,000, 4.3%, due primarily to an increase in average compensation
rates. Newsprint and ink costs decreased $(401,000), (4.5)%, due primarily to
lower prices paid for newsprint. Other operating costs, exclusive of
depreciation and amortization, increased $1,763,000, 8.3%. Approximately
one-half of the increase resulted from insurance cost savings in 1999 which did
not reoccur in 2000.
DISCONTINUED OPERATIONS, BROADCASTING
Exclusive of the effects of a local marketing agreement (LMA) contract
termination, net revenue increased $935,000, 3.6%, as political advertising
increased $558,000 to $579,000 and local/regional/national advertising increased
$930,000, 4.0%. Production revenue and revenues from other services increased
$107,000, 5.6%. Network compensation decreased by $(641,000).
Exclusive of the disposition, compensation costs increased $189,000, 1.5%.
Programming costs for the quarter increased $426,000, 19.7%, primarily due to
higher costs of new programming. Other operating expenses, exclusive of
depreciation and amortization, decreased $1,420,000, (19.7)%, due to reduction
in travel, bad debts, outside services, sales and audience promotion expenses.
<PAGE>
NONOPERATING INCOME AND INCOME TAXES
Interest on deferred compensation arrangements for executives and others is
offset by financial income earned on the invested funds held in trust. Financial
income and interest expense increased by $260,000 in 2000, as a result of these
arrangements.
Income taxes were 37.1% and 37.3% of pretax income from continuing operations
for the quarters ended March 31, 2000 and 1999, respectively.
SIX MONTHS ENDED MARCH 31, 2000
PUBLISHING
Exclusive of acquisitions and dispositions, publishing advertising revenue
increased $2,455,000, 2.0%. Advertising revenue from local merchants decreased
$(700,000), (1.0)%. Local "run-of-press" advertising decreased $(1,212,000),
(2.3)%, as a result of decreased spending and a shift to preprint advertising by
large retailers. Local preprint revenue increased $511,000, 2.7%. Classified
advertising revenue increased $2,512,000, 5.9%, as a result of a 11.6% increase
in advertising inches primarily in employment and automotive categories, offset
by lower average rates. Circulation revenue decreased $(713,000), (1.8)% as a
result of a decrease in units.
SIX MONTHS ENDED MARCH 31, 2000
Other revenue consists of revenue from commercial printing, products delivered
outside the newspaper (which include activities such as target marketing and
special event production) and editorial service contracts with Madison
Newspapers, Inc.
Other revenue by category and by property is as follows:
Six Months Ended
March 31,
----------------
2000 1999
----------------
(In Thousands)
Commercial printing .................................... 11,287 11,905
New revenue * .......................................... 14,500 11,100
Editorial service contracts ............................ 4,868 4,593
Acquisitions and dispositions since September 30, 1998 . 2,370 672
----------------
$33,025 $28,270
================
* Includes internet/online, niche publications, books, and other events
and promotions.
The following table sets forth the percentage of revenue of certain items in the
publishing operations.
Six Months Ended
March 31,
----------------
2000 1999
----------------
Revenue .................................................... 100.0% 100.0%
---------------
Compensation costs ......................................... 35.2 34.8
Newsprint and ink .......................................... 8.6 9.8
Other operating expenses ................................... 23.3 22.8
---------------
67.1 67.4
===============
Income before depreciation, amortization, interest and taxes 32.9 32.6
Depreciation and amortization .............................. 6.6 6.3
---------------
Operating margin wholly-owned properties ................... 26.3% 26.3%
===============
<PAGE>
Exclusive of the effects of acquisitions, costs other than depreciation and
amortization increased $2,997,000, 2.3%. Compensation expense increased
$2,464,000, 3.6%, due primarily to an increase in average compensation rates.
Newsprint and ink costs decreased $(2,460,000), (12.6)%, due primarily to lower
prices paid for newsprint. Other operating costs, exclusive of depreciation and
amortization, increased $2,993,000, 6.8%, due to higher technology and promotion
expenses. Approximately one-third of the increase resulted from insurance cost
savings in 1999 that did not reoccur in 2000.
SIX MONTHS ENDED MARCH 31, 2000
DISCONTINUED OPERATIONS, BROADCASTING
Exclusive of the effects of the LMA contract termination, revenue decreased
$(1,952,000), (3.2)%, as political advertising decreased $(4,328,000), (77.7)%
and local/regional/national advertising increased $3,199,000, 6.5%. Production
revenue and revenues from other services increased $115,000, 3.0%. Network
compensation decreased by $(1,152,000).
Exclusive of the disposition, compensation costs increased $235,000, .9%.
Programming costs increased $851,000, 19.6%, primarily due to higher costs of
new programming. Other operating expenses, exclusive of depreciation and
amortization, decreased $1,282,000, (8.9)%, due to reduction in travel, bad
debts, outside services, sales and audience promotion expenses.
NONOPERATING INCOME AND INCOME TAXES
Interest expense decreased due to payments on long-term debt and changes in the
deferred compensation arrangements as previously discussed which increased
financial income and interest expense by $832,000 in 2000.
Income taxes were 37.5% and 37.1% of pretax income from continuing operations
for the six-months ended March 31, 2000 and 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations, which is the Company's primary source of liquidity,
generated $64,963,000 for the six month period ended March 31, 2000. Available
cash balances, cash flow from operations, and bank lines of credit provide
adequate liquidity. Covenants related to the Company's credit agreement are not
considered restrictive to operations and anticipated stockholder dividends.
SAFE HARBOR STATEMENT
The Private Securities Litigation Reform Act of 1995 provides a "Safe Harbor"
for forward-looking statements. This report contains certain information which
may be deemed forward-looking that is based largely on the Company's current
expectations and is subject to certain risks, trends, and uncertainties that
could cause actual results to differ materially from those anticipated. Among
such risks, trends, and uncertainties are changes in advertising demand,
newsprint prices, interest rates, regulatory rulings, availability of quality
broadcast programming at competitive prices, changes in the terms and conditions
of network affiliation agreements, quality and ratings of network over-the-air
broadcast programs, legislative or regulatory initiatives affecting the cost of
delivery of over-the-air broadcast programs to the Company's customers, and
other economic conditions and the effect of acquisitions, investments, and
dispositions on the Company's results of operations or financial condition. The
words "believe," "expect," "anticipate," "intends," "plans," "projects,"
"considers," and similar expressions generally identify forward-looking
statements. Readers are cautioned not to place undue reliance on such
forward-looking statements, which are as of the date of this report. Further
information concerning the Company and its businesses, including factors that
potentially could materially affect the Company's financial results, is included
in the Company's annual report on Form 10-K. The Company does not undertake to
publicly update or revise its forward-looking statements.
<PAGE>
LEE ENTERPRISES, INCORPORATED
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of the Company was held on January 25, 2000.
b) William E. Mayer and Mark Vittert were re-elected directors and
Gregory P. Schermer was elected director for three-year terms
expiring at the 2003 annual meeting. J.P. Guerin was re-elected as
a director for a one-year term expiring at the 2001 annual
meeting. Directors whose terms of office continued after the
meeting include: Rance E. Crain, Richard D. Gottlieb, Mary E.
Junck, Phyllis Sewell, Andrew E. Newman, Ronald L. Rickman, and
Gordon D. Prichett.
(c) Votes were cast of which 5,502,735 were voted in person and the
remaining votes were cast by proxy as follows:
Vote For Withheld
-------------------------------
William E. Mayer 117,088,573 712,824
Gregory P. Schermer 112,264,202 5,537,195
Mark Vittert 117,096,531 704,866
J.P. Guerin 117,056,423 744,974
Abstentions and broker non-votes were not significant.
(d) Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(e) Exhibits
(3) Bylaws
(10) Employment agreement
(27) Financial data schedule
(f) Report on Form 8-K: None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEE ENTERPRISES, INCORPORATED
DATE May 15, 2000 /s/ G. C. Wahlig
------------------------ --------------------------------------
G. C. Wahlig, Chief Accounting Officer
BY-LAWS
OF
LEE ENTERPRISES, INCORPORATED
(A Delaware corporation)
Effective January 25, 2000
ARTICLE I
OFFICES
SECTION 1. Principal Office. The principal office shall be at
229 South State Street, in the City of Dover, County of Kent, State of Delaware,
and the name of the resident agent in charge thereof is THE PRENTICE-HALL
CORPORATION SYSTEM, INC.
SECTION 2. Other Offices. The corporation may also have an
office or offices at such other place or places, within or without the State of
Delaware, as the Board of Directors may from time to time designate or the
business of the corporation require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 1. Annual Meetings. An annual meeting of the
stockholders of the corporation shall be held at such time and place within or
without the State of Delaware as may be determined by the Board of Directors,
and as shall be designated in the notice of said meeting, for the purpose of
electing directors and for the transaction of such other proper business, notice
of which was given in the notice of the meeting.
SECTION 2. Nomination of Directors and other business.
(a) Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors. Nominations of
persons for election as directors may be made at a meeting of stockholders only
(x) by or at the direction of the Board of Directors, (y) by any person or
persons authorized to do so by the Board or (z) by any stockholder of the
corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 2. Such
nomination, other than those made by or at the direction of the Board or by
persons authorized by the Board, shall be made pursuant to timely notice in
writing to the Chairman of the Nominating Committee of the Board of Directors.
Such stockholder's notice of a proposed nomination shall set forth, as to each
person whom the stockholder proposes to nominate for election or re-election as
a director, (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii) the
class and number of shares of capital stock of the corporation which are
beneficially owned by the person, and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as now or hereafter amended; and as to the stockholder giving the
notice, (v) the name and record address of such stockholder and (vi) the class
and number of shares of the corporation which are beneficially owned by such
stockholder. The corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the corporation to determine
the eligibility of such proposed nominee to serve as director. No person shall
be eligible for election as a director of the corporation unless nominated in
accordance with the procedures set forth herein and unless qualified under the
other provisions of these bylaws. If the Chairman of the meeting determines that
a nomination was not made in accordance with the foregoing procedure, he or she
shall so declare to the meeting and the defective nomination shall be
disregarded.
<PAGE>
(b) To be properly brought before any annual or special
meeting of stockholders, business must be either (x) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board,
(y) otherwise properly brought before the meeting by or at the direction of the
Board, or (z) otherwise properly brought before the meeting by a stockholder. In
addition to any other applicable requirements, for business to be properly
brought before a meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the corporation. A
stockholder's notice to the Secretary shall set forth with respect to each
matter the stockholder proposes to bring before the meeting (i) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (ii) the name and record
address of the stockholder proposing such business, (iii) the class and number
of shares of the corporation which are beneficially owned by the stockholder,
and (iv) any material interest of the stockholder in such business.
Notwithstanding anything in these bylaws to the contrary, no business shall be
conducted at any meeting of stockholders except in accordance with the
procedures set forth in this Section 2, provided, however, that nothing in this
Section 2 shall be deemed to preclude discussion by any stockholder of any
business properly brought before the meeting. If the Chairman of the meeting
determines that such business was not properly brought before the meeting in
accordance with the foregoing procedure, he or she shall so declare to the
meeting, and any such business not properly brought before the meeting shall not
be transacted.
(c) To be timely, a stockholder's notice of nomination or
other business must be delivered to, or mailed and received at, the principal
executive offices of the corporation, as to the annual meeting of stockholders,
not later than the date fixed annually by the Board of Directors and set forth
in the proxy statement for the preceding annual meeting. As to any other meeting
such notice shall be given not less than 40 days nor more that 65 days prior to
the meeting; provided, however, that in the event that less than 45 days' notice
or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 15th day following the day on which such
notice of the date of the special meting was mailed or such public disclosure
was made, whichever first occurs.
SECTION 3. Special Meetings. Special meetings of the
stockholders may be held at such time and place within or without the State of
Delaware as may be designated in the notice of said meeting, upon call of the
Board of Directors, the Chairman of the Board, or the President.
SECTION 4. Notice of Meetings and Adjourned Meetings. Unless
otherwise provided by law, written notice of any meeting of the stockholders
stating the place, date, hour and purpose or purposes of the meeting shall be
given not less than ten (10) nor more than fifty (50) days before the date of
the meeting to each stockholder entitled to vote at such meeting. If mailed,
notice shall be deemed for all purposes to have been given when deposited in the
United States mail, postage prepaid, directed to the stockholder at the address
of the stockholder as it appears on the records of the corporation. An affidavit
of the Secretary or an Assistant Secretary or of the transfer agent of the
corporation that the notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, provided that if the
adjournment is for more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
SECTION 5. Record Date for Determination of Stockholders. In
order that the corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the stock record books of the corporation shall not be closed, but the Board of
Directors shall fix, in advance, a record date, which shall not be more than
sixty (60) nor less than ten (10) days before the date of such meeting, nor more
than sixty (60) days prior to any other action.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
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SECTION 6. Quorum. Except as otherwise provided by law or the
Certificate of Incorporation a quorum of all meetings of stockholders shall
consist of the holders of record of stock representing a majority of the voting
power of all classes of the Corporation, issued and outstanding, entitled to
vote at the meeting, present in person or by proxy. For purposes of the
foregoing, two or more classes or series of stock shall be considered a single
class if the holders thereof are entitled to vote together as a single class at
the meeting. In the absence of a quorum at any meeting or any adjournment
thereof, a majority of the voting power of those present in person or by proxy
and entitled to vote may adjourn such meeting from time to time. At any
adjourned meeting at which a quorum is present any business may be transacted
which might have been transacted at the meeting as originally called.
SECTION 7. Organization. Meetings of the stockholders shall be
presided over by the Chairman of the Board, or if he or she is not present, by
the President. If neither the Chairman of the Board nor the President is
present, a Vice President shall preside. In the absence or inability to act of
all of the officers listed in this Section, a person designated by the Chairman
of the Board shall preside. The Secretary of the corporation, or an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present, the meeting shall choose any person
present to act as secretary of the meeting.
SECTION 8. Voting. Except as provided in Section 9(a) or as
otherwise provided by law, each stockholder entitled to vote at any meeting of
stockholders shall be entitled to such number of votes as is specified, in
respect of the class or series of capital stock held by such stockholder, in the
corporation's Restated Certificate of Incorporation. Any vote of stock of the
corporation may be given by the stockholder entitled thereto in person or by his
or her proxy appointed by an instrument in writing, subscribed by such
stockholder or his or her attorney thereto authorized and delivered to the
Secretary of the meeting; provided, however, that no proxy shall be voted on
after three (3) years from its date unless said proxy provides for a longer
period. Except as otherwise required by law or the Restated Certificate of
Incorporation or these By-Laws, or in electing directors, all matters coming
before any meeting of the stockholders shall be decided by the vote of a
majority of the voting power of all classes of stock of the corporation present
in person or by proxy at such meeting and entitled to vote thereat, a quorum
being present. At all elections of directors the voting may, but need not be, by
ballot and a plurality of the votes cast thereat shall elect.
SECTION 9(a). Voting of Shares by Aliens. No more than twenty
percent (20%) of the outstanding shares of stock of the corporation entitled to
vote on any matter submitted to stockholders (including the election of
directors) shall be voted, directly or indirectly, by or for the account of all
aliens as a group. All references herein to "alien" shall include the
representatives, associates and affiliates of such alien. The term "alien",
"representative", "associate", and "affiliate" shall be defined as set forth in
Subdivision (J) to Article FOURTH of the Restated Certificate of Incorporation
of the corporation.
SECTION 10. List of Stockholders. The officer who has charge
of the stock ledger of the corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 11. Inspectors of Voting. Except as otherwise provided
by statute, the Chairman of the Board or in his or her absence the President,
shall appoint one or more inspectors of voting for each meeting of stockholders.
SECTION 12. Meeting Procedures. Meetings of stockholders shall
be conducted in a fair manner but need not be governed by any prescribed rules
of order. The presiding officer's rulings on procedural matters shall be final.
The presiding officer is authorized to impose reasonable time limits on the
remarks of individual stockholders and may take such steps as such officer may
deem necessary or appropriate to assure that the business of the meeting is
conducted in a fair and orderly manner including, without limitation, to adjourn
any meeting and determine the date, time and place at which any adjourned
meeting shall be reconvened, unless otherwise determined by the Board of
Directors.
<PAGE>
ARTICLE III
DIRECTORS
SECTION 1. Powers, Number, Qualification, Term, Quorum and
Vacancies. The property, affairs and business of the corporation shall be
managed by its Board of Directors, consisting of such number as shall be fixed
from time to time by resolution adopted at a meeting of the stockholders or as
may be determined by the Board of Directors as hereinafter provided. The number
of directors shall never be less than three (3). The directors shall be divided
into three classes as nearly equal in number as possible, with the term of
office of one class expiring each year. Following expiration of terms for which
they were elected, each class of directors shall thereafter be elected for a
three-year term. The directors shall have power from time to time, and at any
time, when the stockholders as such are not assembled in a meeting, regular or
special, to increase or decrease their own number. During the intervals between
annual meetings of stockholders, any vacancy occurring in the Board of Directors
caused by resignation, removal, death or incapacity, and any newly created
directorships resulting from an increase in the number of directors, shall be
filled by a majority vote of the directors then in office, whether or not a
quorum. Each director chosen to fill a vacancy shall hold office for the
unexpired term in respect of which such vacancy occurred. Each director chosen
to fill a newly created directorship shall hold office until the next election
of the class for which such director shall have been chosen. When the number of
directors is changed, any newly created directorships or any decrease in
directorships shall be so apportioned among the classes as to make all classes
as nearly equal in number as possible. Each director shall serve until a
successor shall have been duly elected and qualified, except in the event of
resignation, removal, death or other incapacity.
Directors need not be stockholders. No alien (including the
representatives, associates and affiliates thereof) shall be eligible to serve
as a director of the corporation. The terms "alien", "representative",
"associate", and "affiliate", shall be defined as set forth in Subparagraph (J)
to Article FOURTH of the Restated Certificate of Incorporation of the
corporation.
A majority of the members of the Board of Directors then
acting, but in no event less than one-third nor less than two (2) of the number
of directors authorized, acting at a meeting duly assembled, shall constitute a
quorum for the transaction of business, but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting, without further notice, from time to time until a
quorum shall have been obtained.
SECTION 2. Meetings. Meetings of the Board of Directors shall
be held at such place within or outside the State of Delaware as may from time
to time be fixed by resolution of the Board of Directors, or as may be specified
in the notice of the meeting. Regular meetings of the Board of Directors shall
be held at such times as may from time to time be fixed by resolution of the
Board of Directors, and special meetings may be held at any time upon the call
of the Chairman of the Board or any two (2) directors by oral, telegraphic,
facsimile or other written notice duly communicated to, served on, sent, or
mailed to each director at his or her principal address as recorded in the
records of the Corporation not less than twenty-four (24) hours before such
meeting. A meeting of the Board of Directors shall be held without notice
immediately after the annual meeting of stockholders. Notice need not be given
of regular meetings of the Board of Directors held at times fixed by resolution
of the Board of Directors. Meetings may be held at any time without notice if
all the directors are present, or if at any time before or after the meeting
those not present waive notice of the meeting in writing.
<PAGE>
SECTION 3. Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or any committee
thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the Board or
committee.
SECTION 4. Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two (2) or more of the directors of the
corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it;
provided, however, that in the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or she or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.
SECTION 5. Dividends. Subject always to the provisions of the
law and the Certificate of Incorporation, the Board of Directors shall have full
power to determine whether any, and if any, what part of any, funds legally
available for the payment of dividends shall be declared in dividends and paid
to stockholders; the division of the whole or any part of such funds of the
corporation shall rest wholly within the lawful discretion of the Board of
Directors, and it shall not be required at any time, against such discretion, to
divide or pay any part of such funds among or to the stockholders as dividends
or otherwise; and the Board of Directors may fix a sum which may be set aside or
reserved over and above the capital paid in of the corporation as working
capital for the corporation or as a reserve for any proper purpose, and from
time to time may increase, diminish, and vary the same in its absolute judgment
and discretion.
SECTION 6. Removal of Directors. A director may be removed
from office at any time, but only for cause, by the affirmative vote of the
holders of a majority of the outstanding shares of stock entitled to vote for
the election of directors at a meeting of the stockholders called for that
purpose.
SECTION 7. Indemnification of officers, directors. employees
and aliens.
(a) Each officer, director, employee and agent of the
corporation and each person serving at the request of the corporation as an
officer, director, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified (including payment of
expenses in advance) by the corporation to the full extent from time to time
provided or authorized by the General Corporation Law of the State of Delaware.
This right of indemnification shall not be exclusive of other indemnification
rights to which any such person may be entitled under contract, by-law, vote of
stockholders or disinterested directors, policy of insurance or otherwise. The
subsequent provisions of this By-law shall not limit or otherwise modify the
foregoing provision.
(b) The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interest of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his or
her conduct was unlawful.
<PAGE>
(c) The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such persons shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(d) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (b) and (c), or in
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith.
(e) Any indemnification under subsections (b) and (c) (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in subsections (b) and (c).
Such determination shall be made (1) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(f) Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation as authorized in this Section. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(g) The indemnification and advance of expenses provided by or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office. The corporation shall have authority to enter into indemnification
agreements with its officers and directors, the terms of which shall be approved
by the board of directors.
(h) The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity, or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liability under the provisions of this
section.
(i) For purposes of this Section, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Section with
respect to the resulting or surviving corporation as he or she would have with
respect to such constituent corporation if its separate existence had continued.
<PAGE>
(j) For purposes of this Section, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Section. References to "actions" or "proceedings" shall include
administrative or investigative inquiries as well as suits at law or in equity.
(k) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ARTICLE IV
OFFICERS, GROUPS AND STAFF
SECTION 1. Number. The Board of Directors at its first meeting
after each annual meeting of the stockholders, or at any time thereafter, shall
elect a Chairman of the Board (acting as Chief Executive Officer), a President
(acting as Chief Operating Officer), one or more Group Presidents, one or more
Vice Presidents (the number to be determined by the Board of Directors), a
Secretary and a Treasurer. The Board of Directors may appoint from time to time
one or more Assistant Secretaries and Assistant Treasurers and such other
officers and agents as it shall deem necessary. Two or more offices, other than
that of Chairman of the Board, President and Secretary, may be held by the same
person. None of the officers need be a director or a stockholder of the
corporation.
SECTION 2. Term and Removal. Each elective officer shall hold
office until the next annual meeting of the Board of Directors, or until his or
her successor is elected and qualifies. Each appointive officer shall hold
office at the will of the Board of Directors. Any officer elected or appointed
by the Board of Directors may be removed, either with or without cause, at any
time, by the affirmative vote of a majority of the members of the Board of
Directors then in office. A vacancy in any office arising from any cause may be
filled by the Board of Directors.
SECTION 3. Chairman of the Board. The Chairman of the Board
shall be Chief Executive Officer of the corporation, shall preside at all
meetings of the Board of Directors, and shall have general supervision of the
business, affairs and property of the corporation and over its several officers,
subject to the control of the Board of Directors. He or she shall be ex officio
a member of all standing committees, other than the Audit and Executive
Compensation Committees, and shall see that all orders and resolutions of the
Board of Directors are carried into effect. He or she shall make recommendations
to the Board of Directors with respect to corporate policies and other matters
of importance which he or she believes should be submitted for Board
consideration. He or she shall have all the powers usually vested in the office
of a general manager and chief executive officer of a corporation. He or she
shall have power to execute contracts and other documents on behalf of the
corporation, under seal or otherwise.
SECTION 4. President. In the absence of the Chairman of the
Board, the President shall preside at all meetings of the Board of Directors. He
or she shall be Chief Operating Officer reporting directly to the Chief
Executive Officer. He or she shall be responsible for daily supervision of all
business affairs of the corporation, subject to control by the Chief Executive
Officer. He or she shall have power to execute contracts and other documents on
behalf of the corporation, under seal or otherwise.
SECTION 5. Group Presidents. Each Group President shall be a
corporate officer and within the limitations placed by the policies adopted by
the Board of Directors or the Chairman of the Board, shall be the chief
operating officer of the operating group assigned and shall in general supervise
and control such business and affairs of the group and operations assigned
thereto and perform such other duties as may be prescribed from time to time by
the Chairman of the Board, the President or the Board of Directors.
SECTION 6. Vice Presidents. Each Vice President shall have
such powers and perform such duties as may be assigned to him or her by the
Chairman of the Board, the President or the Board of Directors.
<PAGE>
SECTION 7. Secretary. The Secretary shall attend all sessions
of the Board of Directors and all meetings of the stockholders and record all
votes and the minutes of all proceedings in a book to be kept for that purpose.
He or she shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors and shall perform
such other duties as may be prescribed by the Chairman of the Board, the
President or the Board of Directors. He or she shall keep in safe custody the
seal of the corporation and, when authorized to do so, affix the same to any
instrument requiring it, and when so affixed it shall be attested by his or her
signature or by the signature of the Treasurer or an Assistant Secretary.
SECTION 8. Treasurer. The Treasurer shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for monies due and payable to the corporation from any
source whatsoever and deposit all such monies in the name of the corporation in
such banks, trust companies or other depositaries as shall be selected in
accordance with the provisions of Article VI of these By-Laws; and, in general,
perform all of the duties incident to the office of Treasurer and such other
duties as shall from time to time be assigned to him or her by the Chairman of
the Board, the President or the Board of Directors.
SECTION 9. Assistant Secretaries and Assistant Treasurers.
Assistant Secretaries and Assistant Treasurers, if any, shall be appointed by
the Board of Directors and shall have such powers and shall perform such duties
as shall be assigned to them by the Chairman of the Board, the President or the
Board of Directors.
SECTION 10. Establishment of Groups. The Board of Directors or
the Chairman of the Board may cause the business of the Corporation to be
divided into one or more groups, based upon product or service, geographical
territory, character and type of operations, or upon such other basis as the
Board of Directors or the Chairman of the Board may from time to time determine
to be advisable. A group shall operate under the authority and direction of a
Group President and may operate under trade names approved for such purpose as
may be authorized by the Board of Directors or the Chairman of the Board.
Section 11. Group Officers. The Group President of a group,
after authorization by the Chairman of the Board, may appoint any number of
group officers (who shall not, by virtue of such appointment, be corporate
officers), and may remove any such group officer. Such officers shall have such
authority as may from time to time be assigned by the Group President.
Section 12. Staff Officers. The Chairman of the Board may
appoint any number of staff officers (who shall not, by virtue of such
appointment, be corporate officers), and may remove any such staff officer as
the Chairman of the Board may deem appropriate from time to time. Such officers
shall have such authority as may from time to time be assigned by the Chairman
of the Board.
ARTICLE V
CERTIFICATES OF STOCK AND UNCERTIFICATED STOCK
SECTION 1. Certificates of Shares and Uncertificated Shares.
The Board of Directors may authorize the issuance of some or all of the shares
of its common stock without certificates. The authorization does not affect
shares already represented by certificates until they are surrendered to the
corporation. Shares of stock held by or for the account of aliens (including the
representatives, associates, and affiliates thereof) shall be represented by
"Foreign Share Certificates". The terms "alien", "representative", "associate"
and "affiliate" shall be defined as set forth in Subparagraph (J) of Article
FOURTH of the Restated Certificate of Incorporation of the corporation. All such
other shares of stock shall be represented by either "Domestic Share
Certificates" or, in the case of uncertificated stock, by such written
statements issued by the corporation in respect of uncertificated shares. All
such certificates or written statements shall be in such form and design as the
Board of Directors may approve and each certificate or written statement shall
be signed by the Chairman of the Board, the President or a Vice President and
the Secretary or Assistant Secretary, and shall express on its face its number,
date of issuance, the number of shares for which and the person to whom issued.
<PAGE>
SECTION 2. Ownership, Control and Transfer of Shares. Not more
than twenty percent (20%) of the outstanding shares of stock of the corporation
shall at any time be owned or controlled, directly or indirectly, by or for the
account of all aliens as a group. Shares of stock shall be transferable on the
books of the corporation by the holder thereof in person or by duly authorized
attorney upon the surrender of the certificate representing shares to be
transferred, properly endorsed, or, in the case of uncertificated stock, by the
registration of the transfer of the uncertificated shares on the books of the
corporation by the holder thereof; provided, however, that shares of stock other
than shares represented by foreign share certificates shall be transferable to
aliens or any person holding for the account thereof only when the aggregate
number of shares of stock owned by or for the account of all aliens as a group
will not then be more than twenty percent (20%) of the number of shares
outstanding. The Board of Directors may direct that, before shares of stock
shall be transferred on the books of the corporation, the corporation may
require information as to whether the proposed transferee is an alien or will
own the stock for the account of an alien. The issuance or transfer of any of
the shares of stock at any time outstanding to an alien contrary to the
provisions of this Section shall be void. All references herein to "alien" shall
include the representatives, associates and affiliates of such alien. The terms
"alien", "representative", "affiliate", "associate", "control" and "person"
shall be defined as set forth in Subparagraph (J) to Article FOURTH of the
Restated Certificate of Incorporation of the corporation.
Transfers of shares of the capital stock of the corporation
shall be made only on the books of the corporation by the registered holder
thereof, or by his or her attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the corporation, or with a
transfer clerk or a transfer agent appointed as in Section 4 of this Article
provided, and on surrender of the certificate or certificates for such shares
properly endorsed and the payment of all taxes thereon, or, in the case of
uncertificated stock, by the registration of the transfer of the uncertificated
shares and the payment of all taxes thereon. The person in whose name shares of
stock stand on the books of the corporation shall be deemed the owner thereof
for all purposes as regards the corporation; provided that whenever any transfer
of shares shall be made for collateral security, and not absolutely, such fact,
if known to the Secretary of the corporation, shall be so expressed in the entry
of transfer. The Board may, from time to time, make such additional rules and
regulations as it may deem expedient, not inconsistent with these By-Laws,
concerning the issue, transfer, and registration of certificates for shares or
uncertificated shares of the capital stock of the corporation.
The certificates of stock or written statement in respect of
uncertificated shares shall be signed by the Chairman of the Board, the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, and sealed with the seal of the
corporation. If a certificate of stock or written statement is countersigned (1)
by a transfer agent other than the corporation or its employee, or (2) by a
registrar other than the corporation or its employee, any other signature on the
certificate or written statement may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate of stock or written statement shall have ceased to be
such officer, transfer agent or registrar before such certificate of stock or
written statement is issued, it may be issued by the corporation with the same
effect as if he or she were such officer, transfer agent or registrar at the
date of issue.
SECTION 3. Lost, Stolen, Destroyed, or Mutilated Certificates.
No certificate for shares of stock in the corporation shall be issued in place
of any certificate alleged to have been lost, destroyed or stolen, except on
production of such evidence of such loss, destruction or theft and on delivery
to the corporation, if the Board of Directors shall so require, of a bond of
indemnity in such amount (not exceeding twice the value of the shares
represented by such certificate), upon such terms and secured by such surety as
the Board of Directors may in its discretion require.
SECTION 4. Transfer Agent and Registrar. The Board of
Directors may appoint one or more Transfer Clerks or one or more Transfer Agents
and one or more Registrars, and may require all certificates of stock to bear
the signature or signatures of any of them.
SECTION 5. Rules and Regulations. The Board of Directors shall
have power and authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the corporation.
<PAGE>
ARTICLE VI
BANK ACCOUNTS, CHECKS, LOANS, ETC.
SECTION 1. Bank Accounts and Checks. Such officers or agents
of the corporation as from time to time shall be designated by the Board of
Directors shall have authority to deposit any funds of the corporation in such
banks or trust companies as shall from time to time be designated by the Board
of Directors; and such officers or agents as from time to time shall be
designated by the Board of Directors shall have authority to withdraw from time
to time any or all of the funds of the corporation so deposited in any bank or
trust company, upon checks, drafts or other instruments or orders for the
payment of money, drawn against the account or in the name or behalf of the
corporation, and made or signed by such officers or agents; and each bank or
trust company with which funds of the corporation are so deposited is authorized
to accept, honor, cash and pay, without limit as to amount, all checks, drafts
or other instruments or orders for the payment of money, when drawn, made or
signed by officers or agents so designated by the Board of Directors, regardless
of whether the same are payable to the order of any officer or agent signing the
same, until written notice of the revocation by the Board of Directors of the
authority of such officers or agents shall have been received by such bank or
trust company. The officers of the corporation or any of them shall from time to
time certify to the banks or trust companies in which funds of the corporation
are deposited, the signatures of the officers or agents of the corporation so
authorized to draw against the same, and such signatures may include the
signature of such certifying officer or officers.
SECTION 2. Loans. Such officers or agents of the corporation
as from time to time shall be designated by the Board of Directors shall have
authority to effect loans, advances or other forms of credit at any time or
times for the corporation from such banks or trust companies as the Board of
Directors shall from time to time designate, and as security for the repayment
of such loans, advances or other forms of credit to assign, transfer, endorse
and deliver, either originally or in addition or substitution, any or all
stocks, bonds, rights and interests of any kind in or to stocks or bonds,
certificates of such rights or interests, deposits, accounts, documents covering
merchandise, bills receivable and other commercial paper and evidences of debt,
at any time held by the corporation; and for such loans, advances, or other
forms of credit to make, execute and deliver one or more notes, acceptances or
other written obligations of the corporation on such terms, and with such
provisions as to the securities including the sale or disposition thereof, as
such officers or agents shall deem proper; and also to sell to, or discount or
rediscount with, such banks or trust companies any and all commercial paper,
bills receivable, acceptances and other instruments and evidences of debt at any
time held by the corporation, and to that end to endorse, transfer and deliver
the same. The officers of the corporation or any of them shall from time to time
certify the signatures of the officers or agents so authorized, which may
include the signature of such certifying officer or officers, to each bank or
trust company so designated by the Board of Directors; and each such bank or
trust company is authorized to rely upon such certification until written notice
of the revocation by the Board of Directors of the authority of such officers or
agents shall have been received by such bank or trust company.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall begin on the first
day of October in each year and shall end on the thirtieth day of September next
following, unless otherwise determined by the Board of Directors.
ARTICLE VIII
CORPORATE SEAL
The corporate seal of the corporation shall consist of two
concentric circles, between which shall be the name of the corporation, and in
the center shall be inscribed the year of its incorporation and the words,
"Corporate Seal, Delaware".
<PAGE>
ARTICLE IX
AMENDMENTS
The By-Laws of the Corporation shall be subject to alteration,
amendment or repeal and new By-Laws not inconsistent with any provision of the
Restated Certificate of Incorporation or statute may be made, either by the
affirmative vote of the holders of record of stock representing a majority of
the voting power of all classes of stock of the Corporation present in person or
by proxy at any annual or special meeting of the Stockholders and entitled to
vote thereat, a quorum being present, or by the affirmative vote of a majority
of the whole Board, given at any regular or special meeting of the Board,
provided that notice of the proposal to so make, alter, amend or repeal such
By-Laws be included in the notice of such meeting of the Board or the
Stockholders, as the case may be. By-Laws made, altered or amended by the Board
may be altered, amended or repealed by the Stockholders at any annual or special
meeting thereof.
EMPLOYMENT AGREEMENT
AGREEMENT by and between LEE ENTERPRISES, INCORPORATED, a Delaware corporation
(the "Company") and Colleen Birdnow Brown (the "Executive"), dated as of the 1st
day of March, 2000 (the "Effective Date").
RECITAL:
The Board of Directors of the Company (the "Board"), has determined that it is
in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possible occurrence of a Business Combination (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks created by a
possible Business Combination and to encourage the Executive's full attention
and dedication to the Company currently and in the event of any Business
Combination, and to provide the Executive with compensation and benefits
arrangements upon the occurrence of a Business Combination which ensure that the
compensation and benefits expectations of the Executive will be satisfied.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Contract Period" shall mean the period commencing on the date
hereof and ending on the second anniversary of the date hereof; provided,
however, that commencing on the date two years after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the "Renewal Date"), the Contract
Period shall be automatically extended so as to terminate one year from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Contract Period shall not be so
extended.
(b) "Class B Common Stock" shall mean the Class B common stock, par
value $2.00 per share, of the Company.
(c) "Common Shares" shall mean the shares of Common Stock and Class B
Common Stock treated as one class.
(d) "Common Stock" shall mean the common stock, par value $2.00 per
share, of the Company.
2. Business Combination. For the purpose of this Agreement, a
"Business Combination" shall mean the consummation of a reorganization, merger
or consolidation, or sale or other disposition in one or more transactions
within the Contract Period, of all or substantially all of the assets of the
Company comprising the "Broadcast Segment" as described in the Company's Annual
Report on Form 10-K, excluding KMAZ-TV, El Paso, TX.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period (the "Employment Period") commencing on the Effective Date and ending on
the second anniversary of the date on which the Business Combination (or, if
more than one, on the date of the last such Business Combination) occurs (the
"Closing Date").
4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, the Executive's position, authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date.
<PAGE>
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to the annual base salary
payable, including any base salary which has been earned but deferred, to the
Executive by the Company and its affiliated companies as of the Effective Date
of this Agreement. During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used in
this Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus in cash based upon mutually agreed-upon performance objectives for
each fiscal year of the Company during the Employment Period (annualized in the
event that the Executive is not employed by the Company for the whole of such
fiscal year) (the "Annual Bonus"). Each such Annual Bonus shall be paid in one
or more installments during or no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus. The Company and the Executive agree that the Annual Bonus for the fiscal
year ending September 30, 2000 shall be the aggregate of (A) $75,000 and (B) the
incentive bonus calculated as described on Appendix 1 to this Agreement.
(iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all stock option and
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
<PAGE>
(v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of membership or club dues, and, if
applicable, use of an automobile and payment of related expenses, in accordance
with the most favorable plans, practices, programs and policies of the Company
and its affiliated companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its affiliated companies at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation (not less than four (4) weeks) in accordance with the
most favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 13(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), for a period of fifteen (15) days after a written demand for
substantial performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the manner in
which the Board or Chief Executive Officer believes that the Executive has not
substantially performed the Executive's duties;
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.
(iii) the Executive's conviction of a felony under the laws of the
United States or any state thereof.
<PAGE>
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason during the Employment Period. For purposes of this
Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position, authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(iv) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement in connection with the consummation of the Business
Combination; or
(v) the requirement that the Executive relocate, move to or work out
of a geographic location which is more than 50 miles away than her current
location.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason during the 30-day period immediately following the first anniversary
of the Effective Date shall be deemed to be a termination for Good Reason for
all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.
<PAGE>
6. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the Annual Bonus earned,
including any bonus or portion thereof which has been earned but deferred (and
annualized for any fiscal year consisting of less than twelve full months or
during which the Executive was employed for less than twelve full months), for
the current fiscal year during the Employment Period, if any, multiplied by a
fraction, the numerator of which is the number of days in the current fiscal
year through the end of the month closest to the Date of Termination, and the
denominator of which is 365, and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the "Accrued Obligations"); and
B. the amount equal to either (1) $570,000 if the Date of Termination
occurs on or prior to the Closing Date (except as provided in clause (2) below),
or (2) if the Date of Termination occurs after the Closing Date or if the
Executive's employment with the Company is terminated prior to the Closing Date,
and if it is reasonably demonstrated by the Executive that such termination of
employment was at the request of a third-party with whom the Company had
previously contracted to effect a Business Combination or otherwise arose in
connection with or anticipation of the Business Combination, the sum of the
Executive's Annual Base Salary and Annual Bonus payable for the current fiscal
year (which Annual Bonus, solely for purposes of this Section 6(a)(i)(B)(2),
shall not be less than sixty-three (63%) percent of the Executive's Annual Base
Salary) multiplied by two; and
C. an amount equal to the aggregate of the annual contributions
payable by the Company under its qualified defined contribution retirement plan
and any excess or supplemental retirement plan in which the Executive
participates in respect of any payment made under clause (B) of this Section
6(a), assuming for this purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation is that required by Section 4(b)(i)
and Section 4(b)(ii).
(ii) for one year after the Executive's Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 4(b)(iv) of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes reemployed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until one year after the Date of Termination and to have
retired on the last day of such period;
(iii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services and reimbursement for legal expenses in an
amount not to exceed $10,000, in the aggregate, the scope and provider of which
shall be selected by the Executive in her sole discretion; and
(iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
<PAGE>
(b) Incentive Plan. The Company shall vest the Executive fully under
the Company's 1990 Long Term Incentive Plan (the "Incentive Plan") in respect of
all stock options and restricted stock awards granted, outstanding and
unexercised, as if and to the full extent that a "Change of Control" had
occurred under the Incentive Plan, if the Executive is entitled to the benefits
described in Section 6 (a)(i) above. Such vesting shall occur on the earlier of
the Date of Termination or the Closing Date. The Executive shall be entitled to
exercise any non-qualified stock options for a period of three (3) years after
the date such options shall fully vest.
(c) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.
(d) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(d) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.
(e) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) her Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section
13(e), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
<PAGE>
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company or its affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the present value as of the date of the Business Combination, determined in
accordance with Sections 280G(b)(2)(ii) and 280G(d)(4) of the Code (the "Present
Value"), of the Payments does not exceed 110% of the greatest Present Value of
Payments (the "Safe Harbor Cap") that could be paid to the Executive such that
the receipt thereof would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the amounts payable to the Executive
under this Agreement shall be reduced to the maximum amount that could be paid
to the Executive such that the Present Value of the Payments does not exceed the
Safe Harbor Cap. The reduction of the comments payable hereunder, if applicable,
shall be made by reducing first the payments under Section 6(a)(i)(B), unless an
alternative method of reducing the Payments to the Safe Harbor Cap, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the
reduction of the amounts payable hereunder would not result in a reduction of
the Present Value of the Payments to the Safe Harbor Cap, no amounts payable
under this Agreement shall be reduced pursuant to this provision.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by McGladrey &
Pullen, LLP, or such other certified public accounting firm as may be designated
by the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Business Combination, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
<PAGE>
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
<PAGE>
11. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) Unless waived in writing by the Executive, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
12. Special Payments by Lee Enterprises ("Lee"). (a) Stay Bonus. If a
Business Combination occurs and Executive chooses to remain in the employ of Lee
following the consummation of the Business Combination, Lee shall pay the
Executive an amount equal to the aggregate of (i) $670,000 and (ii) the Annual
Bonus payable to Executive pursuant to Section 4(b)(ii). Fifty (50%) percent of
the amount will be payable in cash or Common Stock (valued as described below)
as the Executive may elect, within 30 days after the consummation of the
Business Combination. The remaining fifty (50%) percent shall be paid by a grant
of restricted shares of Common Stock of Lee equal to the quotient of (i) the
amount payable to the Executive in the first sentence of this Section, divided
by (ii) the average closing price of the Common Stock of Lee for the five (5)
business days immediately preceding the Closing Date. In such event this
Agreement shall terminate as of the date of receipt of such payment and, upon
termination of this Agreement, neither party shall have any obligation to the
other under the terms of this Agreement including, without limitation, the
provisions of Sections 4 and 6 hereof.
(b) Severance Payment. If a Business Combination occurs and Executive
is employed by Lee on the Closing Date of the Business Combination, but does not
chose to remain in the employ of Lee under clause (a) above, Lee shall pay the
Executive in cash an aggregate amount equal to $570,000 and the Annual Bonus
payable under Section 4(b)(ii) of this Agreement.
13. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Colleen Birdnow Brown
7 Wildhorse Road
Bettendorf, IA 52722
If to the Company:
Lee Enterprises, Incorporated
400 Putnam Building
215 N. Main Street
Davenport, Iowa 52801-1924
Attention: Chairman and CEO
With copy to:
Lane & Waterman
220 N. Main St., Ste. 600
Davenport, Iowa 52801
Attn: C. D. Waterman III
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
<PAGE>
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(iv) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Colleen Birdnow Brown
------------------------------------
Colleen Birdnow Brown
LEE ENTERPRISES, INCORPORATED
By: /s/ Richard D. Gottlieb
------------------------------------
Richard D. Gottlieb
Chairman and CEO
<PAGE>
APPENDIX 1
1. Aggregate sales price $525,000,000 or greater $70,000*
of Broadcast Group 500-524,999,999 60,000
400-499,999,999 50,000
2. Annual OCF goal 100% or greater $70,000*
99% 65,000
98% 60,000
less than 98% 50,000
3. Up to $60,000 will be awarded
based on qualitative assessment $60,000*
of sales process by CEO and COO.
TOTAL BONUS OPPORTUNITY $200,000*
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 2000 FORM 10-Q OF LEE ENTERPRISES, INCORPORATED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 38,836
<SECURITIES> 0
<RECEIVABLES> 42,455
<ALLOWANCES> 4,476
<INVENTORY> 2,383
<CURRENT-ASSETS> 258,188
<PP&E> 233,048
<DEPRECIATION> 114,749
<TOTAL-ASSETS> 692,923
<CURRENT-LIABILITIES> 65,920
<BONDS> 185,000
0
0
<COMMON> 88,286
<OTHER-SE> 290,918
<TOTAL-LIABILITY-AND-EQUITY> 692,923
<SALES> 205,412
<TOTAL-REVENUES> 209,660
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 162,273
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,143
<INCOME-PRETAX> 60,938
<INCOME-TAX> 22,805
<INCOME-CONTINUING> 38,133
<DISCONTINUED> 6,012
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,145
<EPS-BASIC> 1.00
<EPS-DILUTED> .99
</TABLE>
