<PAGE> 1
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE E.W. SCRIPPS COMPANY
- - - --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THE E.W. SCRIPPS COMPANY
- - - --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
(4) Proposed maximum aggregate value of transaction:
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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(LOGO)
THE E.W. SCRIPPS COMPANY
1105 N. MARKET STREET
WILMINGTON, DELAWARE 19801
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 1994
------------------
Notice is hereby given that the Annual Meeting of the Stockholders of The
E.W. Scripps Company (the "Company") will be held at The Westin Hotel,
Cincinnati, Ohio, on Tuesday, May 10, 1994 at 10:00 a.m., local time, for the
following purposes:
1. To elect nine persons to serve as directors for the ensuing year.
2. To amend the Company's Long-Term Incentive Plan to reserve 750,000
additional shares of Class A Common Stock for issuance under the Plan, to
comply with new federal tax law, to provide for the grant of stock
appreciation rights independent of options, to add certain provisions
relating to acceleration and exercise of options following termination of
employment, and to make certain technical changes to the Plan.
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on March 29, 1994 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
By order of the Board of Directors.
M. DENISE KUPRIONIS,
Secretary
March 31, 1994
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE> 3
THE E.W. SCRIPPS COMPANY
1105 N. MARKET STREET
WILMINGTON, DELAWARE 19801
------------------
PROXY STATEMENT
1994 ANNUAL MEETING
MAY 10, 1994
This statement, which together with the accompanying notice, proxy, and
Annual Report is being mailed to stockholders on or about March 31, 1994, is
furnished in connection with the solicitation of proxies for use at the Annual
Meeting of Stockholders of The E.W. Scripps Company, a Delaware corporation (the
"Company"), to be held on Tuesday, May 10, 1994.
The close of business on March 29, 1994, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
meeting.
On March 1, 1994, the Company had outstanding 54,584,093 shares of Class A
Common Stock, $.01 par value per share ("Class A Common Stock"), and 20,174,833
shares of Common Voting Stock, $.01 par value per share ("Common Voting Stock").
Holders of Class A Common Stock are entitled to elect the greater of three or
one-third of the directors of the Company but are not entitled to vote on any
other matters except as required by Delaware law. Holders of Common Voting Stock
are entitled to elect all remaining directors and to vote on all other matters
requiring a vote of stockholders. Each share of Class A Common Stock and Common
Voting Stock is entitled to one vote upon matters on which such class of stock
is entitled to vote.
PROPOSAL 1:
ELECTION OF DIRECTORS
A Board of nine directors is to be elected, three by the holders of Class A
Common Stock voting separately as a class and six by the holders of Common
Voting Stock voting separately as a class. In the election, the nominees
receiving the greatest number of votes will be elected. All directors will hold
office until the next Annual Meeting of Stockholders and until their respective
successors are elected and qualified.
Each proxy for Class A Common Stock executed and returned by a holder of
such stock will be voted for the election of the three directors hereinafter
shown as nominees for such class of stock, unless otherwise indicated on such
proxy. Each proxy for Common Voting Stock executed and returned by a holder of
such stock will be voted for the election of the six directors hereinafter shown
as nominees for such class of stock, unless otherwise indicated on such proxy.
Although the Board of Directors does not contemplate that any of the nominees
hereinafter named will be unavailable for election, in the event that any such
nominee is unable to serve, the proxies will be voted for the remaining nominees
and for such other person(s), if any, as the Board may propose.
The following table sets forth certain information as to each of the
nominees for election to the Board of Directors.
1
<PAGE> 4
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR OCCUPATIONS/BUSINESS DIRECTOR
NAME AGE EXPERIENCE FOR PAST FIVE YEARS SINCE
- - - --------------------------- --- ----------------------------------------------------------- --------
<S> <C> <C> <C>
NOMINEES FOR ELECTION BY HOLDERS OF CLASS A COMMON STOCK
Daniel J. Meyer(1) 57 Chairman since January 1, 1991, Chief Executive Officer 1988
since April 24, 1990, President and Chief Operating Officer
from November 1987 through April 1990, Executive Vice
President/Finance & Administration from November 1986 to
November 1987, and Vice President/Finance and
Administration from March 1977 to November 1986, of
Cincinnati Milacron Inc. (a manufacturer of metal working
and plastics processing machinery and systems).
Nicholas B. Paumgarten 48 Managing Director of Morgan Guaranty Trust Company of New 1988
York since February 10, 1992 (an investment banking firm);
Managing Director of Dillon, Read & Co. Inc. from March 19,
1991 through February 9, 1992 (an investment banking firm);
Managing Director from 1981 through March 18, 1991 of The
First Boston Corporation (an investment banking firm).
David R. Huhn 56 Retired; President of McAlpin's, a subsidiary of Mercantile 1991
Stores Co., Inc. from October 16, 1991 through February 3,
1994; Chairman and Chief Executive Officer from September
1989 through October 15, 1991, and Executive Vice President
from July 1988 through August 1989, of Mercantile Stores
Co., Inc.; and President from January 1972 through June
1988 of McAlpin's.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON VOTING STOCK
John H. Burlingame(2) 60 Executive Partner since 1982 of Baker & Hostetler (law 1988
firm).
William R. Burleigh 58 Executive Vice President of the Company since March 1990; 1990
Senior Vice President/Newspapers and Publishing of the Com-
pany from September 1986 to March 1990; and Vice President
and General Editorial Manager of the Company from January
1984 to September 1986.
Lawrence A. Leser(3) 58 President and Chief Executive Officer of the Company since 1977
July 1985.
Charles E. Scripps(4) 74 Chairman of the Board of Directors of the Company since 1946
1953.
Paul K. Scripps(5) 48 Chairman and Editorial Director since December 1989, Vice 1986
Chairman and Editorial Director from December 1988 through
December 3, 1989, Vice President, Editorial Director from
1986 to December 1988, and Associate Editorial Director
from 1975 to 1986, of John P. Scripps Newspapers, a
subsidiary of the Company.
Robert P. Scripps(6) 76 A Director of the Company since 1949. 1949
</TABLE>
- - - ---------------
(1) Mr. Meyer is a director of Cincinnati Milacron Inc., Star Bank Corporation
(bank holding company) and Hubbell Incorporated (manufacturer of wiring and
lighting devices).
(2) Mr. Burlingame is a director of Scripps Howard Broadcasting Company and a
Trustee of The Edward W. Scripps Trust.
(3) Mr. Leser is a director and the President of Scripps Howard Broadcasting
Company and a director of Union Central Life Insurance Company and KeyCorp
(bank holding company).
(4) Mr. Charles E. Scripps is a director of Scripps Howard Broadcasting Company.
Mr. Scripps is the brother of Robert P. Scripps and Chairman of the Board of
Trustees of The Edward W. Scripps Trust.
(5) Mr. Paul K. Scripps serves as a director of the Company pursuant to an
agreement between The Edward W. Scripps Trust and John P. Scripps. See
"Certain Transactions -- John P. Scripps Newspapers."
(6) Mr. Robert P. Scripps is a Trustee of The Edward W. Scripps Trust and the
brother of Charles E. Scripps.
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<PAGE> 5
COMMITTEES
The Board of Directors of the Company has an Executive Committee, an Audit
Committee and a Compensation Committee.
Charles E. Scripps, Lawrence A. Leser and John H. Burlingame are the
members of the Executive Committee. The Executive Committee exercises all powers
of the Board in the management of the business and affairs of the Company
between Board meetings, except the power to fill vacancies on the Board or its
committees. The Executive Committee held two meetings and acted by unanimous
written consent five times during 1993. Each member of the Executive Committee
attended both meetings.
Daniel J. Meyer, Nicholas B. Paumgarten and David R. Huhn are the members
of the Audit Committee, which nominates the independent auditors each year,
reviews the audit plans of both the internal and independent auditors, evaluates
the adequacy of and monitors compliance with corporate accounting policies, and
reviews the Company's annual financial statements. The internal and independent
auditors have unrestricted access to the Audit Committee. The Audit Committee
held two meetings during 1993. Each member of the Audit Committee attended both
meetings.
Charles E. Scripps, Daniel J. Meyer and David R. Huhn are the members of
the Compensation Committee, which establishes the overall compensation policy of
the Company, determines compensation of senior management and administers the
Company's Long-Term Incentive Plan. Mr. Meyer replaced Mr. John H. Burlingame as
a member of the committee effective August 6, 1993. The Compensation Committee
held four meetings during 1993 and executed two unanimous written actions during
1993. Each member of the Compensation Committee attended all of such Committee's
meetings.
The Board held four meetings during 1993. Each current director of the
Company attended all of the meetings held during 1993 by the Board.
COMPENSATION OF DIRECTORS
During 1993, each director elected by the holders of the Class A Common
Stock received an annual fee of $22,000, an additional $2,000 for each meeting
that he attended of the Board of Directors or a committee thereof on which he
served, and an additional $3,000 for each committee of which he was chairman.
Directors elected by the holders of the Common Voting Stock do not receive any
compensation for services as directors or committee members.
Pursuant to an employment agreement with the Company, Mr. Scripps received
an annual salary of $420,000 during 1993 for his services as Chairman of the
Board of Directors. See "Certain Transactions -- Other Transactions."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to persons
known to management to be the beneficial owners, as of March 1, 1994, of more
than five percent of the Company's outstanding Class A Common Stock or Common
Voting Stock. Unless otherwise indicated, the persons named in the table have
sole voting and investment power with respect to all shares shown therein as
being beneficially owned by them.
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<PAGE> 6
<TABLE>
<CAPTION>
COMMON
NAME AND ADDRESS CLASS A VOTING
OF BENEFICIAL OWNER COMMON STOCK PERCENT STOCK PERCENT
- - - ---------------------------------------- ------------ ------- ---------- -------
<S> <C> <C> <C> <C>
The Edward W. Scripps Trust(1) 32,610,000 59.7% 16,040,000 79.5%
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Jack R. Howard(2) 2,252,800 4.1% 1,652,000 8.2%
c/o Scripps Howard, Inc.
Attn: Secretary
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Paul K. Scripps and 189,097 .3% 1,616,113 8.0%
John P. Scripps Trust(3)
525 C Street
Suite 306
San Diego, California
Wellington Management Company(4) 3,567,390 6.5% -0- -0-
75 State Street
Boston, Massachusetts
</TABLE>
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(1) Under the Trust Agreement establishing The Edward W. Scripps Trust (the
"Trust"), the Trust must retain voting stock sufficient to ensure control of
the Company until the final distribution of the Trust estate unless earlier
stock dispositions are necessary for the purpose of preventing loss or
damage to such estate. The Trustees of the Trust are Charles E. Scripps,
Robert P. Scripps and John H. Burlingame. The Trust will terminate upon the
death of the last to survive of four persons specified in the Trust, the
youngest of whom is 70 years of age. Upon the termination of the Trust,
substantially all of its assets (including all the shares of capital stock
of the Company held by the Trust) will be distributed to the grandchildren
of Robert Paine Scripps (a son of Edward W. Scripps), of whom there are 28,
or their children. Certain of these grandchildren have entered into an
agreement among themselves, other cousins and the Company which will
restrict transfer and govern voting of shares of Common Voting Stock to be
held by them upon termination of the Trust and distribution of the Trust
estate. See "Certain Transactions -- Scripps Family Agreement."
(2) The shares listed for Mr. Howard consist of 1,936,000 shares of Class A
Common Stock and 170,000 shares of Common Voting Stock held in an
irrevocable trust established for the benefit of Mr. Howard and his wife and
of which Mr. Howard and his wife are the sole trustees; 67,800 shares of
Class A Common Stock and 1,482,000 shares of Common Voting Stock held in two
trusts of which Mr. Howard is the sole trustee and that were established by
Mr. Howard's parents for the benefit of Mr. Howard's sister; and 249,000
shares of Class A Common Stock owned by Mr. Howard's wife. Mr. Howard
disclaims any beneficial interest in these shares except those held in the
irrevocable trust.
(3) See footnote 6 to the table under "Security Ownership of Management."
(4) Wellington Management Company ("Wellington"), an investment advisory firm,
has filed a Schedule 13G with the Securities and Exchange Commission with
respect to the Company's Class A Common Stock. According to the Schedule 13G
for the year ended December 31, 1993, the shares listed in the table are
owned by various clients of Wellington, which possesses investment or voting
power with respect to such shares pursuant to the provisions of investment
advisory agreements with such clients.
SECURITY OWNERSHIP OF MANAGEMENT
The following information is set forth with respect to the shares of the
Company's Class A Common Stock and Common Voting Stock beneficially owned as of
March 1, 1994, by each director and each nominee for election as a director of
the Company and by all directors and executive officers of the Company as a
group. Unless otherwise indicated, the persons named in
4
<PAGE> 7
the table have sole voting and investment power with respect to all shares shown
therein as being beneficially owned by them.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL COMMON
OR NUMBER OF PERSONS CLASS A VOTING
IN GROUP COMMON STOCK PERCENT STOCK PERCENT
- - - ------------------------------- ------------ ------- ---------- -------
<S> <C> <C> <C> <C>
William R. Burleigh(1) 28,340 * -- --
John H. Burlingame(2) 0 -- -- --
Lawrence A. Leser(3) 43,123 * -- --
Daniel J. Meyer 300 * -- --
Nicholas B. Paumgarten(4) 3,250 * -- --
Charles E. Scripps(2)(5) 44,700 * -- --
Paul K. Scripps(6) 189,097 * 1,616,113 8.0%
Robert P. Scripps(2) 0 -- -- --
David R. Huhn(7) 300 * -- --
Daniel J. Castellini(8) 25,937 * -- --
F. Steven Crawford(9) 13,190 * -- --
Paul F. Gardner(10) 15,000 -- -- --
All directors and executive
officers as a group
(15 persons)(11) 32,976,839 60.4% 17,656,113 87.5%
</TABLE>
- - - ---------------
* Shares owned represent less than one percent of the outstanding shares of such
class of stock.
(1) The shares listed for Mr. Burleigh do not include 90,000 shares of Class A
Common Stock underlying exercisable options held by him.
(2) This person is a Trustee of the Trust and has the power, together with the
other Trustees of the Trust, to vote and dispose of the 32,610,000 shares
of Class A Common Stock and the 16,040,000 shares of Common Voting Stock of
the Company held by the Trust. Messrs. Charles E. Scripps and Robert P.
Scripps have a life income interest in the Trust. Mr. Burlingame disclaims
any beneficial interest in the shares held by the Trust.
(3) The shares listed for Mr. Leser include 5,500 shares of Class A Common
Stock owned by his wife and 840 shares of Class A Common Stock owned by
certain of his children. Mr. Leser disclaims any beneficial interest in
these shares. The shares listed do not include 145,500 shares of Class A
Common Stock underlying exercisable options held by Mr. Leser.
(4) The shares listed for Mr. Paumgarten include 2,000 shares of Class A Common
Stock held in trusts for the benefit of Mr. Paumgarten's sons, and 850
shares owned by his wife. Mr. Paumgarten is the sole trustee of the
aforesaid trusts. Mr. Paumgarten disclaims beneficial ownership of the
shares held in such trusts and the shares owned by his wife.
(5) The shares listed for Mr. Charles E. Scripps include 300 shares of Class A
Common Stock owned by his wife. Mr. Scripps disclaims any beneficial
interest in these shares.
(6) The shares listed for Mr. Paul K. Scripps include 119,520 shares of Common
Voting Stock and 400 shares of Class A Common Stock held in various trusts
for the benefit of certain relatives of Paul K. Scripps and 100 shares of
Class A Common Stock owned by his wife. Mr. Scripps is a trustee of the
aforesaid trusts. Mr. Scripps disclaims beneficial ownership of the shares
held in such trusts and the shares owned by his wife. The shares listed
also include 1,445,453 shares of Common Voting Stock and 188,497 shares of
Class A Common Stock held by five trusts of which Mr. Scripps is a trustee.
Mr. Scripps is the sole beneficiary of one of such trusts, holding 349,018
shares of Common Voting Stock and 47,124 shares of Class A Common Stock. He
disclaims beneficial ownership of the shares held in the other four trusts.
5
<PAGE> 8
(7) The shares listed for Mr. Huhn are held jointly with his wife.
(8) The shares listed for Mr. Castellini include 1,000 shares of Class A Common
Stock owned by his wife. Mr. Castellini disclaims any beneficial interest
in these shares. The shares listed for Mr. Castellini do not include 61,000
shares of Class A Common Stock underlying exercisable options held by him.
(9) The shares listed for Mr. Crawford do not include 24,000 shares of Class A
Common Stock underlying exercisable options held by him.
(10) The shares listed for Mr. Gardner do not include 12,500 shares of Class A
Common Stock underlying options held by him which become 100% exercisable
on April 1, 1994.
(11) The shares listed include 32,610,000 shares of Class A Common Stock and
16,040,000 shares of Common Voting Stock of the Company owned by the Trust.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON COMPENSATION
INTRODUCTION
This report is submitted by the current members of the Compensation
Committee, Messrs. Daniel J. Meyer, Charles E. Scripps and David R. Huhn. Mr.
Meyer joined the Committee on August 6, 1993, replacing Mr. John H. Burlingame
as chairman. The Committee makes decisions on the compensation of the Company's
senior executives. All Committee actions are reviewed by the full Board.
PHILOSOPHY
The E.W. Scripps Company has a compensation policy, endorsed by the Board
of Directors, for senior officers and certain other executives. This policy is
designed to accomplish three goals. First, the policy is designed to attract a
well qualified management team. Second, the compensation policy supports a
pay-for-performance program designed to motivate executives to achieve target
operating results set forth in the Company's strategic plan and to reward them
for accomplishing these targets. Finally, the policy is designed to retain a
competent management team, which is critical to the Company's long-term success.
The compensation program is comprised primarily of cash compensation,
including salary and annual bonus, and grants of restricted stock and
non-qualified stock options under the Company's 1987 Long-Term Incentive Plan.
Additionally, the Company's compensation philosophy serves to strengthen and
reinforce the Company's Statement of Purpose. The Company believes its
compensation policy is fair to both its employees and its shareholders and is
competitive within the industry.
THE E.W. SCRIPPS COMPANY'S STATEMENT OF PURPOSE
The Company aims at excellence in the products and services it produces and
responsible service to the communities in which it operates. The Company's
purpose is to continue to engage in successful, growing enterprises in the
fields of information and entertainment. The Company intends to expand, to
develop and acquire new products and services, and to pursue new market
opportunities. Its focus shall be long-term growth for the benefit of our
shareholders and employees.
DESCRIPTIONS OF THE COMPONENTS OF THE COMPENSATION PROGRAM
BASE SALARY
The Company participates annually in the Towers Perrin Media Industry
Compensation Survey (the "Survey") which is widely used in its industry and
gives relevant compensation
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<PAGE> 9
information on executive positions. The Company strives to place fully competent
and high performing executives at the median level of compensation no later than
two to three years after attaining their position. The 75th percentile may be in
reach for exceptional performers. Additionally, to evaluate the appropriateness
of the Company's compensation program, the Committee consults with an
independent executive compensation consultant from Sibson & Company, Inc.
The Survey provides compensation analyses for executives in the media
industry based on revenues, industry segments (e.g., publishing, broadcasting,
cable) and market type and size. The statistical information, including revenues
and compensation levels, provided by survey participants is utilized by the
Survey to develop statistical equations based on revenues, industry segments and
markets. These equations, along with other data, are used by the Company to
determine the median and other levels of compensation of executives of media
companies with profiles comparable to those of the Company.
In deciding if an annual base salary increase is appropriate for a specific
individual, consideration is given to several factors including: a qualitative
review of the individual's contributions to the Company during the year and over
the course of his employment by the Company; his expected future performance;
the performance of the Company during the year; and information received from
the Survey and from the Company's compensation consultant. In determining
eligibility for base salary increases, the Company considers overall corporate
performance during the year, i.e., operating profit and cash flow figures, as
opposed to specific measures of corporate performance.
Mr. Lawrence A. Leser, President and Chief Executive Officer, received a
2.4% salary increase in 1993 based on an evaluation of his performance which was
detailed in last year's Compensation Committee report. Effective January 1,
1994, Mr. Leser's annual salary was increased to $650,000, a 3.2% increase over
his 1993 annual base pay. According to the Survey, Mr. Leser's salary places him
between the median and the 75th percentile for his job position. This level is
justified based upon his exceptional performance in dealing with many complex
issues. At the request of the Board of Directors, Mr. Leser has placed a high
priority on strategic planning. During 1993 he created the Company's
entertainment division. This new division includes the launching of a new cable
network and the development of a production company which will acquire, create,
develop, and produce television products. Additionally, in accordance with the
Company's strategic plan, Mr. Leser oversaw the sale of two newspapers, four
radio stations and one television station. Mr. Leser continues to formulate and
implement policies designed to position the Company in the rapidly changing
information and entertainment industries. In determining Mr. Leser's base salary
for 1994, some weight was also given to the fact that he has been in his current
position since 1985 and has been an officer of the Company since 1968.
Four senior executives report directly to Mr. Leser. Two of these
executives were also granted salary increases effective January 1, 1994. These
increases were based on a recommendation by the President, the Survey results,
consultation with the compensation consultant and a review of individual
performance during 1993. The remaining two executives were determined to be at
the appropriate salary level for their position and did not receive a base
salary increase for 1994.
ANNUAL BONUS
The purpose of the annual bonus plan is to motivate and reward executives
so that they consistently achieve specific financial targets. This incentive is
a pay-for-performance essential which aids in maximizing shareholder value. The
bonus is payable on an annual basis, although executives may elect to defer
payment of the bonus until retirement. Financial goals for 1993 focused on a
comparison of actual operating cash flow vs. planned operating cash flow.
7
<PAGE> 10
For calendar year 1993, Mr. Leser's annual bonus plan deviated from past
practice in that, in order to emphasize his concentration on strategic
direction, his plan was not based upon defined financial performance targets.
His effectiveness as a manager was evaluated by the Compensation Committee based
upon a review of the Company's overall results and upon an analysis of his
individual performance. For 1994, his performance will again be evaluated based
upon specific performance measurements.
On December 16, 1993, the Compensation Committee reviewed the 1993 bonus
plans for the senior executives. It was noted that the broadcasting division
would make its 1993 operating plan and that the cable division, had it not been
for cable re-regulation, would have made its 1993 operating plan. Although it
was expected that several individual newspaper properties would make their 1993
plan, the newspaper division, as a whole, was expected to reflect a substantial
variance from plan. According to Mr. Leser's 1993 bonus plan, he was eligible
for a target bonus of 60% of his annual base salary, or $378,000. After
considering the anticipated year-end financial results and Mr. Leser's strategic
accomplishments during the year, it was determined that Mr. Leser should receive
a 1993 annual bonus in the amount of $250,000. This amount represented
approximately 65% of his target bonus opportunity, or 40% of his annual base
salary. This represents a fair reflection of the Company's consolidated
performance.
The other named executives include Mr. Burleigh, who was eligible for a
target bonus of 50% of his salary; and Messrs. Castellini, Gardner, and
Crawford, who were each eligible for a target bonus of 40% of their salary. Mr.
Gardner and Mr. Crawford, head of the broadcasting and cable divisions,
respectively, were awarded their full target bonus. Mr. Castellini received 65%
of his target bonus opportunity and Mr. Burleigh received 50% of his target
bonus opportunity.
LONG-TERM INCENTIVES
The Committee endorses the position that stock ownership by management and
stock-based performance compensation arrangements are beneficial in aligning
management's and shareholders' interest in the enhancement of shareholder value.
In 1987, the Company adopted a Long-Term Incentive Plan (the "Plan"). Eligible
participants include the senior executives and selected corporate executive
managers and key employees at the Company's operating units. Although the Plan
allows for several different types of stock-based awards, to date only two types
of awards have been granted: 1) stock options, which represent a right to
purchase shares of the Company's Class A Common Stock at the fair market value
per share as of the date the option is granted, and 2) restricted stock, which
represents shares of Class A Common Stock of the Company which the recipient
cannot sell or otherwise dispose of until the applicable restriction period
lapses and which are subject to forfeiture.
Restricted Stock. Generally executives receive restricted stock awards
with a three-year vesting period when they first attain an executive position.
When executives are promoted to new positions or assume additional
responsibility, they may be granted additional restricted stock awards. The
grants are intended to increase management's ownership interest in the Company.
When awarding the shares of restricted stock, consideration is not given to the
total number of shares of restricted stock outstanding.
Of the named executives, only Mr. Gardner and Mr. Crawford received
restricted stock awards in 1993. Both awards were given in recognition of
superior performance and an assumption of increased responsibilities.
Stock Options. The Committee believes that stock option grants are a
valuable motivating tool and provide a long-term incentive to management. Annual
stock option grants reinforce long-term goals by providing the proper nexus
between the interests of management and the interests of the Company's
shareholders.
8
<PAGE> 11
In determining the number of stock options to be granted to senior
executives in 1993, the Committee asked its compensation consultant to provide a
recommendation. Among other things, the consultant noted that the Company had an
interest in increasing management's ownership interest in the Company, which has
only been publicly held since 1988. He reviewed past option awards to the
Company's executives and reviewed option awards that were granted to executives
in the industry and in other major corporations. Based on the consultant's
analysis, option awards for 1993 were substantially larger than had been granted
in the past. The awards were based on a multiple of base pay, using six times
salary for the President and Chief Executive Officer. This guideline resulted in
Mr. Leser being awarded an option to purchase 140,000 shares.
To further align management's interest with that of the shareholders, the
Committee granted the shares, which will be exercisable one year after the grant
date, at stepped-up exercise prices. As a result, 70,000 shares, 50% of Mr.
Leser's award, shall be exercisable at $26.44 per share, the fair market value
on December 16, 1993, the date of the grant. The remaining shares shall be
exercisable as follows: 35,000 shares, 25% of his award, shall be exercisable at
$30; and the final 25% of his award, 35,000 shares, shall be exercisable at $34.
The other named executives received option awards based on the same
guidelines that were used to determine Mr. Leser's award. However, these awards
were based on a proportionally lesser multiple of base salary which reflects
respective organizational levels. Specifically, Mr. Burleigh received an award
equal to five times his base salary and the three senior vice presidents were
granted an option award based on four times salary. These awards will be
exercisable one year after the grant date, using the same stepped-up exercise
price formula that was used when granting Mr. Leser's award.
The compensation tables which follow are intended to better enable our
shareholders to understand the compensation practices of the Company. We invite
shareholder comments, which may be sent to the Company's Secretary, M. Denise
Kuprionis.
The Compensation Committee
Daniel J. Meyer, Chairman
Charles E. Scripps
David R. Huhn
9
<PAGE> 12
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding the compensation
earned by, paid to and awarded to the Company's Chief Executive Officer, and
each of the Company's four other most highly compensated executive officers,
during each of the Company's last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS
------------------------ PAY-OUTS ALL
RESTRICTED SECURITIES -------- OTHER
NAME AND ANNUAL COMPENSATION STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL ---------------------- AWARD(S) OPTIONS/ PAYOUTS SATION
POSITION YEAR SALARY($) BONUS($) ($)(1) SARS (#) ($) (2) ($) (3)
- - - -------------------------- ---- --------- -------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles E. Scripps, 1993 $420,000 0 0 0 0 0
Chairman of the Board 1992 410,000 0 0 0 0 0
of Directors(4) 1991 410,000 0 0 0 0 0
Lawrence A. Leser, 1993 630,000 $250,000 0 140,000 $76,003 $7,075
President and Chief 1992 615,000 369,000 0 31,500 119,616 6,866
Executive Officer 1991 615,000 194,000 $207,871 90,000 58,937 0
William R. Burleigh, 1993 400,000 100,000 0 75,000 21,600 7,075
Executive Vice 1992 380,000 190,000 0 16,000 33,600 6,866
President 1991 380,000 72,000 107,012 60,000 13,482 0
Daniel J. Castellini, 1993 325,000 85,000 0 48,000 26,208 7,075
Senior Vice President/ 1992 312,000 124,800 0 11,000 37,632 6,866
Finance and Admini- 1991 312,000 67,000 70,312 40,000 25,949 0
stration
F. Steven Crawford, 1993 225,000 90,000 132,200 33,000 35,314 6,750
Senior Vice President/ 1992 180,334 57,591 121,550 8,000 47,222 5,410
Cable(5)
Paul F. Gardner, 1993 225,000 120,000 413,925 56,500 0 6,000
Senior Vice President/
Broadcasting(6)
</TABLE>
- - - ---------------
(1) The aggregate number and value of restricted stock holdings for each named
executive officer as of the end of 1993 were as follows: Mr. Leser held
8,683 shares with a value of $238,262; Mr. Burleigh held 4,470 shares with a
value of $122,657; Mr. Castellini held 2,937 shares with a value of $80,591;
Mr. Crawford held 12,805 shares with a value of $351,369; Mr. Gardner held
15,000 shares with a value of $411,600. Dividends were paid during 1993 on
the shares of restricted stock held by each named executive officer at a
rate of eleven cents per share per quarter.
(2) Represents compensation paid pursuant to the Company's Medium Term Bonus
Plan. This Plan terminated in 1991. The final vesting period, with respect
to contingent awards outstanding under the Plan, was December 1993.
(3) Represents compensation paid pursuant to the Company's Media Savings and
Thrift Plan.
(4) Charles E. Scripps does not participate in any bonus or long-term incentive
plans of the Company other than its pension plan.
(5) Mr. Crawford assumed the position of Senior Vice President/Cable on
September 2, 1992.
(6) Mr. Gardner assumed the position of Senior Vice President/Broadcasting on
April 1, 1993.
10
<PAGE> 13
OPTION/SAR GRANTS IN 1993
The following table sets forth certain information regarding options for
shares of Class A Common Stock granted in 1993 under the Incentive Plan to the
named executives who participate therein.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------- POTENTIAL REALIZABLE
% OF VALUE AT
NUMBER TOTAL ASSUMED ANNUAL
OF OPTIONS/SARS RATES OF
SECURITIES GRANTED STOCK PRICE
UNDERLYING TO EXERCISE APPRECIATION FOR
OPTIONS/SARS EMPLOYEES OR BASE EXPIRA- OPTION TERM
GRANTED IN PRICE TION ------------------------
NAME (#) (1) 1993(2) ($/SH) DATE 5%($) 10%($)
- - - ----------------------- ------- --------- -------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Leser 70,000 10.49% $26.44 2003 $1,164,000 $2,950,000
35,000 5.24% $30.00 2003 457,000 1,350,000
35,000 5.24% $34.00 2003 317,000 1,210,000
William R. Burleigh 37,500 5.62% $26.44 2003 624,000 1,580,000
18,750 2.81% $30.00 2003 245,000 723,000
18,750 2.81% $34.00 2003 170,000 648,000
Daniel J. Castellini 24,000 3.60% $26.44 2003 399,000 1,011,000
12,000 1.80% $30.00 2003 157,000 463,000
12,000 1.80% $34.00 2003 109,000 415,000
F. Steven Crawford 16,500 2.47% $26.44 2003 274,000 695,000
8,250 1.24% $30.00 2003 108,000 318,000
8,250 1.24% $34.00 2003 75,000 285,000
Paul F. Gardner 22,000 3.30% $26.44 2003 366,000 927,000
11,000 1.65% $30.00 2003 144,000 424,000
11,000 1.65% $34.00 2003 100,000 380,000
12,500 1.87% $28.75 2003 226,000 573,000
</TABLE>
- - - ---------------
(1) All of these options will be 100% exercisable on and after December 16,
1994, with the exception of Mr. Gardner's option award of 12,500 shares,
exercisable at $28.75, which will be exercisable on and after April 1, 1994.
(2) Options for 667,500 shares were granted to employees in 1993.
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND FY-END OPTION/SAR VALUES
The following table sets forth certain information regarding the number and
value of options for shares of Class A Common Stock held by the named executives
at December 31, 1993. None of these executives exercised any options in 1993.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED
OPTIONS/SARS AT 12/31/93 IN-THE-MONEY
(#) OPTIONS AT 12/31/93 ($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------ ------------------------- -------------------------
<S> <C> <C>
Lawrence A. Leser 145,500/152,000 $ 951,195/184,720
William R. Burleigh 90,000/85,000 $ 595,600/133,100
Daniel J. Castellini 61,000/53,000 $ 400,650/ 71,800
F. Steven Crawford 24,000/37,000 $ 141,060/ 54,740
Paul F. Gardner 0/56,500 $ 0/ 22,000
</TABLE>
11
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Class A Common Stock, assuming an initial investment of $100 as of
December 31, 1988, and based on the market prices at the end of each year and
assuming reinvestment of dividends, with the cumulative total return of the
Standard & Poor's Composite-500 Stock Index and an index based on a group of
peer communications media companies.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) S&P 500 Scripps Media Index
<S> <C> <C> <C>
1988 100 100 100
1989 132 142 123
1990 127 103 97
1991 166 149 116
1992 179 155 133
1993 197 175 152
</TABLE>
- - - ---------------
(1) The companies in the peer group index are A.H. Belo Corporation, Gannett Co.
Inc., Knight-Ridder, Inc., Multimedia, Inc., The New York Times Company,
Times Mirror Company, Tribune Company, and The Washington Post Company. The
index is weighted based on market capitalization at December 31, 1988. The
companies included in the peer group were approved by the Compensation
Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Daniel J. Meyer, Charles E. Scripps and David R. Huhn are the members of
the Company's compensation committee.
Mr. Scripps is Chairman of the Company's Board of Directors and is a member
of the Board of Directors of Scripps Howard Broadcasting Company ("SHBC"), which
is the Company's 86% owned subsidiary, and Chairman of the Board of Directors of
Scripps Howard, Inc. ("SHI"), which is a wholly-owned subsidiary of the Company.
Mr. Scripps is also a member of SHBC's compensation committee and its executive
committee. He is also a member of the executive committee of SHI.
Mr. Lawrence A. Leser, President and Chief Executive Officer and a director
of the Company, is also President and Chief Executive Officer of SHI and SHBC,
and a member of the SHI and SHBC Boards of Directors and the executive
committees of each.
Mr. Scripps and a partnership in which he has an interest are parties to
certain agreements with the Company described elsewhere herein. See "Certain
Transactions--Other Transactions."
12
<PAGE> 15
Mr. Meyer and Mr. Huhn also serve as directors of SHI and are both members
of the compensation and audit committees of the Company.
Until August 1993, Mr. Burlingame served as Chairman of the Company's
Compensation Committee. Mr. Burlingame is the Executive Partner of Baker &
Hostetler, which is general counsel to the Company and The Edward W. Scripps
Trust (the "Trust"). Baker & Hostetler performed legal services for the Company
and the Trust during 1993 and is expected to perform such services in 1994. In
1993, the Company and the Trust paid $7,628,143 in legal fees to Baker &
Hostetler.
In 1993, Mr. Scripps and Mr. Burlingame served as trustees of the Trust and
will continue to do so in 1994. The Trust is the controlling shareholder of the
Company. As trustees, Mr. Scripps and Mr. Burlingame have the power, together
with the other trustee, to vote and dispose of the 32,610,000 shares of Class A
Common Stock and 16,040,000 shares of Common Voting Stock of the Company held by
the Trust. Mr. Scripps has a life income interest in the Trust. Mr. Burlingame
disclaims any beneficial interest in the shares held by the Trust. See "Security
Ownership of Certain Beneficial Owners."
PENSION PLAN
The Company's executive officers and substantially all other non-union
employees of the Company are participants in a non-contributory defined benefit
pension plan maintained by the Company (the "Pension Plan"). Contributions to
the Pension Plan are based on separate actuarial computations for each business
unit and are made by the business unit compensating the particular individual.
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- - - ---------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 300,000............ $ 55,000 $ 74,000 $ 92,000 $111,000 $129,000
400,000............ 74,000 99,000 124,000 148,000 173,000
500,000............ 93,000 124,000 155,000 186,000 217,000
600,000............ 112,000 149,000 186,000 223,000 261,000
700,000............ 130,000 174,000 217,000 261,000 304,000
800,000............ 149,000 199,000 249,000 298,000 348,000
900,000............ 168,000 224,000 280,000 336,000 392,000
1,100,000............ 187,000 249,000 311,000 373,000 436,000
</TABLE>
The above table shows the annual normal retirement benefits which, absent
the maximum benefit limitations (the "Benefit Limitations") imposed by Section
415(b) of the Internal Revenue Code of 1986, as amended (the "Code"), would be
payable pursuant to the Pension Plan upon retirement at age 65 (based upon the
1994 social security integration level under the Pension Plan), pursuant to a
straight life annuity option, for employees in the compensation ranges specified
and under various assumptions with respect to average final annual compensation
and years of credited services.
In general, the Benefit Limitations limit the annual retirement benefits
that may be paid pursuant to the Pension Plan to $118,800 (subject to further
cost-of-living increases promulgated by the United States Secretary of the
Treasury). The Company supplements payments under the Pension Plan with direct
pension payments equal to the amount, if any, by which the benefits that
otherwise would be payable under the Pension Plan exceed the benefits that are
permitted to be paid under the Benefit Limitations. Annual normal retirement
benefits are computed at the rate of 1% of average final annual compensation up
to the applicable social security integration level plus 1.25% of average final
annual compensation in excess of the social security integration level,
multiplied by the employee's years of credited service. An employee's benefits
are actuarially adjusted if paid in a form other than a life annuity.
13
<PAGE> 16
An employee's average final compensation is the average annual amount of
his pensionable compensation (generally salary and bonus, excluding any
compensation pursuant to the Medium Term Bonus Plan, the Media Savings & Thrift
Plan and any other annual or long-term compensation reflected in the Summary
Compensation Table) for service during the five consecutive years within the
last ten years of his employment for which his total compensation was greatest.
The employee's years of credited service equal the number of years of his
employment with the Company (subject to certain limitations). As of December 31,
1993, the years of credited service of the individuals named in the cash
compensation table are as follows: Mr. Scripps -- 52; Mr. Leser -- 26; Mr.
Burleigh -- 37; Mr. Castellini -- 23; Mr. Crawford -- 10; Mr. Gardner -- 9.
CERTAIN TRANSACTIONS
SCRIPPS FAMILY AGREEMENT
General. The Company and certain persons and trusts are parties to an
agreement (the "Scripps Family Agreement") restricting the transfer and
governing the voting of shares of Common Voting Stock that such persons and
trusts may acquire or own at or after the termination of the Trust. Such persons
and trusts (the "Signatories") consist of certain grandchildren of Robert Paine
Scripps who are beneficiaries of the Trust, descendants of John P. Scripps, and
certain trusts of which descendants of John P. Scripps are trustees and
beneficiaries. Robert Paine Scripps and John P. Scripps were sons of the founder
of the Company.
If the Trust were to have terminated as of March 1, 1994, the Signatories
would have held in the aggregate approximately 83% of the outstanding shares of
Common Voting Stock as of such date.
Once effective, the provisions restricting transfer of shares of Common
Voting Stock under the Scripps Family Agreement will continue until twenty-one
(21) years after the death of the last survivor of the descendants of Robert
Paine Scripps and John P. Scripps alive when the Trust terminates. The
provisions of the Scripps Family Agreement governing the voting of Common Voting
Stock will be effective for a ten (10) year period after termination of the
Trust and may be renewed for additional ten (10) year periods pursuant to
Delaware law and certain provisions set forth in the Agreement.
Transfer Restrictions. No Signatory will be able to dispose of any shares
of Common Voting Stock (except as otherwise summarized below) without first
giving other Signatories and the Company the opportunity to purchase such
shares. Signatories will not be able to convert shares of Common Voting Stock
into shares of Class A Common Stock except for a limited period of time after
giving other signatories and the Company the aforesaid opportunity to purchase
and except in certain other limited circumstances.
Signatories will be permitted to transfer shares of Common Voting Stock to
their lineal descendants or trusts for the benefit of such descendants, or to
any trust for the benefit of such a descendant, or to any trust for the benefit
of the spouse of such descendant or any other person or entity. Descendants to
whom such shares are sold or transferred outright, and trustees of trusts into
which such shares are transferred, must become parties to the Scripps Family
Agreement or such shares shall be deemed to be offered for sale pursuant to the
Scripps Family Agreement. Signatories will also be permitted to transfer shares
of Common Voting Stock by testamentary transfer to their spouses provided such
shares are converted to Class A Common Stock and to pledge such shares as
collateral security provided that the pledgee agrees to be bound by the terms of
the Scripps Family Agreement. If title to any such shares subject to any trust
is transferred to anyone other than a descendant of Robert Paine Scripps or John
P. Scripps, or if a person who is a descendant of Robert Paine Scripps or John
P. Scripps acquires outright any such shares held in trust but is not or does
not become a party to the Scripps Family Agreement, such shares shall be deemed
to be offered for sale pursuant to the Scripps
14
<PAGE> 17
Family Agreement. Any valid transfer of shares of Common Voting Stock made by
Signatories without compliance with the Scripps Family Agreement will result in
automatic conversion of such shares to Class A Common Stock.
Voting Provisions. The Scripps Family Agreement provides that the Company
will call a meeting of the Signatories prior to each annual or special meeting
of the stockholders of the Company held after termination of the Trust (each
such meeting hereinafter referred to as a "Required Meeting"). At each Required
Meeting, the Company will submit for decision by the Signatories, each matter,
including election of directors, that the Company will submit to its
stockholders at the annual meeting or special meeting with respect to which the
Required Meeting has been called. Each Signatory will be entitled, either in
person or by proxy, to cast one vote for each share of Common Voting Stock owned
of record or beneficially by him on each matter brought before the meeting. Each
Signatory will be bound by the decision reached with respect to each matter
brought before such meeting, and, at the related meeting of the stockholders of
the Company, will vote his shares of Common Voting Stock in accordance with
decisions reached at the meeting of the Signatories.
JOHN P. SCRIPPS NEWSPAPERS
In connection with the merger in 1986 of the John P. Scripps Newspaper
Group ("JPSN") into a wholly owned subsidiary of the Company (the "JPSN
Merger"), the Company and The Edward W. Scripps Trust entered into certain
agreements discussed below.
JPSN Board Representation Agreement. The Edward W. Scripps Trust and John
P. Scripps entered into a Board Representation Agreement dated March 14, 1986 in
connection with the JPSN Merger. Under this agreement, the surviving adult
children of Mr. Scripps who are stockholders of the Company have the right to
designate one person to serve on the Company's Board of Directors so long as
they continue to own in the aggregate 25% of the sum of (i) the shares issued to
them in the JPSN Merger and (ii) the shares received by them from John P.
Scripps' estate. In this regard, The Edward W. Scripps Trust has agreed to vote
its Common Voting Stock in favor of the person designated by John P. Scripps'
children. Pursuant to this agreement, Paul K. Scripps currently serves on the
Company's Board of Directors and is a nominee for election at the Annual
Meeting. The Board Representation Agreement terminates upon the earlier of the
termination of The Edward W. Scripps Trust or the completion of a public
offering by the Company of Common Voting Stock.
Stockholder Agreement. The former stockholders of the John P. Scripps
Newspaper Group, including John P. Scripps and Paul K. Scripps, entered into a
Stockholder Agreement with the Company in connection with the JPSN Merger. This
agreement restricts to certain transferees the transfer of Common Voting Stock
received by such stockholders pursuant to the JPSN Merger. These restrictions on
transfer will terminate on the earlier of the termination of The Edward W.
Scripps Trust or completion of a public offering of Common Voting Stock. Under
the agreement, if a stockholder has received a written offer to purchase 25% or
more of his shares of Common Voting Stock, the Company has a "right of first
refusal" to purchase such shares on the same terms as the offer. On the death of
any of these stockholders, the Company is obligated to purchase from the
stockholder's estate a sufficient number of shares of the common stock of the
Company to pay federal and state estate taxes attributable to all shares
included in such estate; this obligation expires in 2006. Under certain other
circumstances, such as bankruptcy or insolvency of a stockholder, the Company
has an option to buy all shares of common stock of the Company owned by such
stockholder. Under the agreement, stockholders owning 25% or more of the
outstanding shares of Common Voting Stock issued pursuant to the JPSN Merger may
require the Company to register shares of Common Voting Stock (subject to the
right of first refusal mentioned above) under the Securities Act of 1933 for
sale at the stockholders' expense in a public offering. In addition, the former
stockholders of the John P. Scripps Newspaper Group will be entitled, subject to
certain conditions, to include shares of Common Voting Stock (subject to the
right of first refusal) that they own in any registered public offering of
shares of
15
<PAGE> 18
the same class by the Company. The registration rights expire three years from
the date of a registered public offering of shares of Common Voting Stock.
OTHER TRANSACTIONS
The Company has an agreement with Charles E. Scripps dated December 24,
1959 pursuant to which he serves as Chairman of the Board of Directors of the
Company. This agreement has been regularly extended since 1959 for consecutive
one-year terms upon the mutual agreement of the Company and Mr. Scripps. Under
the agreement, Mr. Scripps's salary was $420,000 in 1993 and remains at $420,000
for 1994.
Mr. Scripps, Mr. Robert P. Scripps, and Mr. Howard are general partners in
Jefferson Building Partnership (the "Jefferson Partnership") which was formed in
1984. Disclosure of the partnership was made at the time the Company made an
initial public offering of its shares of Class A Common Stock on June 29, 1988.
The Albuquerque Publishing Company, which is the Company's 50% owned partnership
that operates The Albuquerque Tribune under a joint operating agreement, leases
the facilities for The Albuquerque Tribune from a partnership controlled in part
by the Jefferson Partnership. This lease terminates in 2004. Total rent under
the lease for 1993 was approximately $1,826,938. The Albuquerque Publishing
Company has an option to purchase the property that is exercisable until 2034.
The purchase price will be equal to 7.7 times the basis rent for the lease year
in which the property is purchased. The parties to the Albuquerque joint
operating agreement lease the land on which the Albuquerque facilities are
situated to the Jefferson Partnership under a lease terminating in 2034 and
providing for rent of $150,000 per year, subject to certain adjustments for
inflation. The Jefferson Partnership has subleased the land to the Albuquerque
Publishing Company as part of the facilities lease arrangement described above.
Mr. Nicholas B. Paumgarten is a Managing Director of J.P. Morgan & Co.
Incorporated ("J.P. Morgan"). Morgan Guaranty Trust Company of New York (an
affiliate of J.P. Morgan) is a lender to the Company under its Competitive
Advance/Revolving Credit Agreement. Another affiliate of J.P. Morgan, J.P.
Morgan Securities Inc., performed investment banking services for the Company
during 1993 and is expected to perform investment banking services for the
Company in the current year.
In December 24, 1993, The Edward W. Scripps Trust loaned the Company the
sum of $29,000,000 at an interest rate of 3.25%. The Company repaid the note in
January 18, 1994 with interest of $65,451.39.
PROPOSAL 2
AMENDMENTS TO THE COMPANY'S LONG-TERM INCENTIVE PLAN TO RESERVE
750,000 ADDITIONAL SHARES OF CLASS A COMMON STOCK FOR ISSUANCE UNDER
THE PLAN, TO COMPLY WITH NEW FEDERAL TAX LAW, TO PROVIDE FOR THE GRANT
OF STOCK APPRECIATION RIGHTS INDEPENDENT OF OPTIONS, TO ADD CERTAIN
PROVISIONS RELATING TO ACCELERATION AND EXERCISE OF OPTIONS FOLLOWING
TERMINATION OF EMPLOYMENT, AND TO MAKE CERTAIN TECHNICAL CHANGES TO
THE PLAN.
GENERAL
There will be submitted at the Annual Meeting for action by the holders of
Common Voting Stock amendments to the Company's 1987 Long-Term Incentive Plan
(the "Plan") to reserve for issuance under the Plan an additional 750,000 shares
of Class A Common Stock of the Company, to comply with new federal tax law
explained below, to provide for the grant of stock appreciation rights
independent of options, to add certain provisions relating to acceleration and
exercise of options following termination of employment, and to make certain
technical
16
<PAGE> 19
changes to the Plan. The proposed amendments have been approved by the
Compensation Committee and the Board of Directors of the Company.
The Board believes that the continued use of stock-related benefits as part
of the Company's compensation package is of great importance in promoting the
growth and continued success of the Company and is thus a substantial benefit to
the Company and its stockholders. The Company cannot succeed without the ability
to attract and retain talented executives, skilled managers and other employees.
The Board of Directors believes that the Plan is an effective recruiting tool,
as well as a means of promoting long-term commitment to the Company.
Reservation of Additional Shares of Class A Common Stock. The Plan
presently provides for the issuance of 2,500,000 shares of Class A Common Stock.
As of March 1, 1994, awards for 355,614 restricted shares and options for
2,020,075 shares had been granted to executive officers and key employees of the
Company. Taking into account forfeitures under the Plan, 285,831 shares of Class
A Common Stock are available for issuance in the future under the Plan. If
Proposal Two is approved by the holders of Common Voting Stock, an additional
750,000 shares of Class A Common Stock will be reserved for issuance under the
Plan, which, together with the 2,500,000 shares already subject to the Plan,
would represent an amount equal to approximately 6% of the shares of Class A
Common Stock currently outstanding.
The closing sale price of the Class A Common Stock on the New York Stock
Exchange on March 1, 1994, was $28.07. At that date, the aggregate market value
of the additional 750,000 shares proposed to be reserved for purposes of the
Plan was $21,052,500, and the aggregate market value of the 1,832,912 shares
currently subject to restricted shares and options awarded under the Plan to
date was $51,449,840.
No awards relating to the increase in shares have been made under the
Long-Term Incentive Plan. If the proposed amendment is approved by the holders
of Common Voting Stock, the Company's Compensation Committee will from time to
time consider awards for key employees of the Company under the Long-Term
Incentive Plan. Such decisions regarding awards are in the Compensation
Committee's sole discretion. Thus, the employees receiving awards and the terms
of such awards are not determinable at this time.
In addition to reserving an additional 750,000 shares of Class A Common
Stock for issuance under the Plan, the Board of Directors has approved certain
other amendments to the Plan. These amendments (i) are made to comply with new
federal tax law discussed below, (ii) would provide for the grant of stock
appreciation rights independently of options, (iii) would add provisions
relating to acceleration and exercise of options following termination of
employment and (iv) would make certain technical changes to the Plan. The Board
of Directors believes that these amendments will provide the Compensation
Committee with additional flexibility in fulfilling the purposes of the Plan and
will add additional benefit options that are common among publicly held
corporations comparable to the Company.
Amendments Relating to New Federal Tax Law. If Proposal Two is approved by
the holders of Common Voting Stock, the maximum number of shares of Class A
Common Stock with respect to which options, stock appreciation rights,
restricted stock or performance units, or any combination thereof, may be
granted under the Plan to any employee would be limited in any one calendar year
to 500,000 shares. The Plan currently contains no such limit. While the
Compensation Committee has no present intention to grant options, stock
appreciation rights, restricted stock or performance units to any individual in
an amount which may reach this limit, the Board of Directors believes this
modification to the Plan will satisfy one of the requirements imposed by
amendments to the Internal Revenue Code of 1986 (the "Code") as amended by the
Omnibus Budget Reconciliation Act of 1993 ("OBRA"). See "Federal Tax
Consequences" below. Additionally, if Proposal Two is approved, the Compensation
Committee will be authorized to appoint a subcommittee, the members of which it
will designate and which shall be composed solely of outside directors as
defined by the Code and OBRA. Any such committee shall possess and exercise all
of the powers of the Compensation Committee, keep full records and accounts of
17
<PAGE> 20
its proceedings and transactions and report all such transactions to the
Compensation Committee and the Board of Directors.
Stock Appreciation Rights. If Proposal Two is approved, the Compensation
Committee will be authorized to grant stock appreciation rights ("SARs") under
the Plan independently of stock options. The Plan currently allows the
Compensation Committee to grant SARs only in tandem with options. An independent
SAR will entitle an employee to receive, with respect to each share of Class A
Common Stock as to which the SAR is exercised, the excess of the Fair Market
Value (as defined in the Plan) of one share of such stock on the date of
exercise over its Fair Market Value on the date the independent SAR was granted.
An independent SAR will become exercisable at such time or times, and on such
conditions as the Compensation Committee may specify, except that no such SAR
will become exercisable during the first six months following the date on which
it was granted. Each independent SAR will be exercised automatically on the last
day prior to its expiration date. Payment of the amount to which an employee is
entitled upon the exercise of an independent SAR shall be made in cash or shares
of Class A Common Stock, or in a combination thereof, as the Compensation
Committee shall determine. To the extent that payment is made in shares, the
shares will be valued at their Fair Market Value on the day of exercise of the
independent SAR.
This amendment is intended to provide the Compensation Committee with
greater flexibility. The Company has no intention at this time to grant stock
appreciation rights.
Acceleration and Exercise of Options after Termination of Employment. If
Proposal Two is approved, the Plan will be amended to (i) allow retired
employees a period of five years following retirement to exercise options and
SARs outstanding at the time of retirement; (ii) to allow the Compensation
Committee to accelerate the vesting of any option or SAR held by an employee who
retires or whose employment is otherwise terminated for any reason other than
Cause (as defined in the Plan) and (iii) to provide that upon a Change in
Control (as defined in the Plan) of the Company, there will be an automatic
acceleration of the vesting of any outstanding option or SAR as of the date of
the Change in Control.
At present, the Plan permits retired employees a period of two years to
exercise options outstanding and fully vested at the date of retirement. If
Proposal Two is approved, all options outstanding as of May 10, 1994, under the
Plan shall have the benefit of the new five-year post-retirement exercise
period, including options currently exercisable and held by retirees. As is
currently provided under the Plan, in no event will any option or SAR be
exercisable beyond its expiration date. For example, if an employee holds an
option with four years remaining on its term at retirement, such employee will
have four years (not five) to exercise that option.
Under the Plan as currently in effect, an employee who retires or whose
employment is otherwise terminated forfeits any option or SAR that he has not
held for at least one year prior to cessation of his employment. If Proposal Two
is approved, the Compensation Committee will have the discretion to accelerate
the vesting of any unvested option or SAR (i.e., an option or SAR held less than
one year) at the time of any employee's cessation of employment for any reason
other than Cause.
The Plan also presently provides that options and SARs held less than one
year at the time of a Change in Control of the Company are automatically
forfeited. If Proposal Two is approved, there will be an automatic acceleration
of the vesting of any outstanding option or SAR upon a Change in Control of the
Company. Thus all options and SARs outstanding at the date of a Change in
Control will become fully exercisable in accordance with the Plan regardless of
how long an employee has held such option or SAR.
Technical Changes. If Proposal Two is approved, certain technical changes
will be made in the Plan.
First, the definition of "Retirement" under the Plan would be modified to
include termination of employment with the approval of the Compensation
Committee. The Plan currently
18
<PAGE> 21
defines "Retirement" as "retirement" under the Company's Pension Plan or
termination of employment "on retirement" with the approval of the Compensation
Committee. The proposed technical change would delete the words "on retirement"
and thus clarify that the Compensation Committee has the discretion to treat
termination of one's employment as retirement whether or not such termination
would be regarded as retirement for purposes of the Pension Plan.
Second, the current Plan would be modified to clarify that members of the
Compensation Committee may participate in option or other stock-based plans as
permitted from time to time by law. Applicable law, including regulations of the
Securities and Exchange Commission, currently permits members of compensation
committees to participate in stock-based plans the awards under which are
determined by formula and not individual or committee discretion. This proposed
change to the Plan merely comports with applicable law.
Third, the exercise price of an option would be determined by reference to
the Fair Market Value of one share of Class A Common Stock on only the date the
option is granted, and the Compensation Committee would no longer have the
discretion to use the date on which the option first becomes exercisable as an
alternative date on which the exercise price is determined. All of the options
granted to date under the Plan have exercise prices based on Fair Market Value
on the date of grant. The Board of Directors believes that it is unnecessary to
give the Compensation Committee the flexibility of setting the exercise price by
reference to the date on which an option first becomes exercisable in light of
the fact that the Compensation Committee has never used this provision and the
fact that it has the authority to set the exercise price of an option (or
portion thereof) at a price higher than Fair Market Value on the date of grant.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following is a summary of the federal income tax consequences of
transactions under the Plan.
Incentive Stock Options. No taxable income is realized by the optionee
upon the grant or exercise of an incentive stock option. If Class A Common Stock
is issued to an optionee pursuant to the exercise of an incentive stock option,
and if no disqualifying disposition of such stock is made by such optionee
within two years after the date of grant or within one year after the transfer
of such shares to such optionee, then (a) upon the sale of such stock a
long-term capital gain or loss will be realized in an amount equal to the
difference between the option price and the amount realized by the optionee and
(b) no deduction will be allowed to the Company for federal income tax purposes.
The excess (if any) of the fair market value of the shares on the date of
exercise over the option price, however, is includable in alternative minimum
taxable income unless the shares are disposed of in the taxable year the option
is exercised.
If Class A Common Stock acquired upon the exercise of an incentive stock
option is disposed of prior to the expiration of either holding period described
above, generally (i) the optionee realizes ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair market value
of the shares on the date of exercise (or, if less, the amount realized on the
disposition of the shares) over the option price paid for such shares and (ii)
the Company will be entitled to deduct the amount realized as ordinary income by
the optionee if the Company satisfies certain federal withholding requirements.
Any further gain (or loss) realized by the participant will be taxed as
short-term or long-term capital gain (or loss), as the case may be, and will not
result in any deduction for the Company.
Non-Qualified Stock Options. In general, with respect to Non-Qualified
Stock Options (a) no income is realized by the optionee at the time the option
is granted, (b) upon exercise of the option, the optionee realizes ordinary
income in an amount equal to the excess of the fair market value of the shares
of Class A Common Stock on the date of exercise over the option price paid for
the shares, and the Company is entitled to a tax deduction in the same amount,
and (c) at disposition of the Class A Common Stock received upon the exercise of
the option, the optionee
19
<PAGE> 22
receives, as either short-term or long-term capital gain (or loss) the
difference between the amount realized and the fair market value of the shares
on the date of exercise.
Stock Appreciation Rights. No income will be realized by an optionee in
connection with the grant of a stock appreciation right under the Plan. When the
right is exercised, the optionee will generally be required to recognize as
ordinary income in the year of exercise an amount equal to the sum of the amount
of cash and the fair market value of any shares received. The Company will be
entitled to a deduction equal to the amount included in such optionee's ordinary
income by reason of the exercise if the Company satisfies certain federal
withholding requirements. If the optionee receives Class A Common Stock upon the
exercise of a stock appreciation right, the post-exercise appreciation (or
depreciation) will be treated in the same manner as discussed above under
"Non-Qualified Stock Options."
Restricted Stock Awards. A recipient of a restricted stock award generally
will recognize ordinary income equal to the difference between the fair market
value of the restricted stock at the time the stock is transferrable or not
subject to a substantial risk of forfeiture and the consideration, if any, paid
for the stock. A recipient may elect, however, within 30 days of the date of
grant, to recognize taxable ordinary income on the date of grant equal to the
excess of the fair market value of the shares of restricted stock on such date
(determined without regard to any restrictions other than restrictions which
will never lapse) over the consideration, if any, paid for such restricted
stock. The Company generally will be entitled to a deduction equal to the amount
that is taxable as ordinary income to the recipient if the Company satisfies
certain federal withholding requirements.
Performance Units. A recipient of performance units will recognize
ordinary income when the objectives for a performance unit are satisfied. The
time at which a recipient of a performance unit will recognize ordinary income
will generally depend upon whether the recipient receives restricted or
nonrestricted stock, cash or a combination thereof. The Company generally will
be entitled to a deduction equal to the amount that is taxable as ordinary
income to the recipient.
Capital Gains. Under current law, capital gains are subject to the same
tax rates that apply to ordinary income, except the rate may not exceed 28%.
Capital losses may be utilized to offset capital gains to the extent of capital
gains, and $3,000 of capital losses in excess of capital gains ($1,500 in the
case of a married individual filing a separate return) is deductible against
other income.
To receive long-term capital gain (loss) treatment with respect to any
appreciation (depreciation) in the value of Class A Common Stock acquired
pursuant to the Plan, the participant must hold such shares for more than one
year. Shares held for one year or less will receive short-term capital gain or
loss treatment.
Dividends and Dividend Equivalents. Dividends paid on restricted stock
generally will be treated as compensation that is taxable as ordinary income to
the participant and may be deductible by the Company. If, however, the
participant makes a Section 83(b) election, the dividends will be taxable as
ordinary income to the participants, but will not be deductible by the Company.
$1,000,000 Deduction Limitation. Effective January 1, 1994, the Company
will not be entitled to deduct annual remuneration in excess of $1 million (the
"Deduction Limitation") paid to certain of its employees unless such
remuneration satisfies an exception to the Deduction Limitation, including an
exception for performance-based compensation. Thus, unless options, rights or
awards granted under the Plan satisfy an exception to the Deduction Limitation,
the Company's deduction with respect to such options, rights or awards will be
subject to the Deduction Limitation.
20
<PAGE> 23
Under proposed Treasury Regulations, compensation attributable to a stock
option, stock appreciation right, restricted stock or performance unit is deemed
to satisfy the performance-based compensation exception if:
"the grant or award . . . is made by the
compensation committee; the plan under which the
option or right . . . is granted states the maximum
number of shares with respect to which options or
rights . . . may be granted during a specified
period to any employee; and, under the terms of the
option or right . . ., the amount of compensation
the employee could receive is based solely on an
increase in the value of the stock after the date of
the grant or award . . . ."
If Proposal Two is approved by the shareholders and a compensation committee
comprised solely of two or more "outside directors" within the meaning of
Section 162(m) of the Code makes the grants, the Company's deduction with
respect to options granted under the Plan will not be subject to the Deduction
Limitation.
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the outstanding Common
Voting Stock is required to approve the proposed amendments to the Incentive
Plan. The Board of Directors recommends that holders of such stock vote FOR the
proposed amendment. It is expected that the shares of Common Voting Stock owned
by The Edward W. Scripps Trust will be voted in favor of the amendment. Proxies
for Common Voting Stock solicited by the Board will be voted FOR the proposed
amendment unless such stockholders specify a contrary choice in their proxies.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and owners of more than ten percent of the
Company's Class A Common Stock ("10% stockholders"), to file with the Securities
and Exchange Commission (the "SEC") and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of Class A Common Stock
and other equity securities of the Company. Executive officers, directors and
10% stockholders are required by SEC regulations to furnish the Company with
copies of all forms they file pursuant to Section 16(a).
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1993, all Section
16(a) filing requirements applicable to its executive officers, directors and
10% stockholders were complied with, except that one report required to be filed
by Mr. Leser reflecting the sale by his son of 25 shares of Class A Common Stock
was filed after the required filing date.
INDEPENDENT PUBLIC ACCOUNTANTS
At its February 17, 1994 meeting, the Board approved the appointment of
Deloitte & Touche as independent public accountants for the Company for the
fiscal year ending December 31, 1994. A representative of Deloitte & Touche is
expected to be present at the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any stockholder proposals intended to be presented at the Company's 1995
Annual Meeting of Stockholders must be received by the Company at 1105 N. Market
Street, Wilmington,
21
<PAGE> 24
Delaware 19801 on or before November 25, 1994, for inclusion in the Company's
proxy statement and form of proxy relating to the 1995 Annual Meeting of
Stockholders.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board of
Directors. The cost of the solicitation will be borne by the Company. The
Company may also reimburse banks, brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Company's Class A Common Stock.
The presence of any stockholder at the meeting will not operate to revoke
his proxy. A proxy may be revoked at any time, insofar as it has not been
exercised, by giving written notice to the Company or in open meeting.
The persons named in the enclosed proxy, or their substitutes, will vote
the shares represented by such proxy at the meeting. The forms of proxy for the
two respective classes of stock permit specification of a vote for persons
nominated for election as directors by each such class of stock, as set forth
under "Election of Directors" above, and the withholding of authority to vote in
the election of such directors or the withholding of authority to vote for one
or more specified nominees. The form of proxy for the Common Voting Stock
permits specification of a vote for or against, or abstention with respect to,
the proposal to amend the Incentive Plan. Where a choice has been specified in
the proxy, the shares represented thereby will be voted in accordance with such
specification. If no specification is made, such shares will be voted to elect
directors as set forth under "Election of Directors" and FOR the proposal to
amend the Incentive Plan.
Under Delaware law and the Company's Certificate of Incorporation, broker
non-votes for Class A Common Stock and abstaining votes for both Class A Common
Stock and Common Voting Stock will not be counted in favor of, or against,
election of any nominee. Under Delaware law and the Company's Certificate of
Incorporation, any shareholder who abstains from voting on the proposal to amend
the Incentive Plan will in effect be voting against such proposal.
If any other matters shall properly come before the meeting, the persons
named in the proxy, or their substitutes, will vote thereon in accordance with
their judgment. The Board does not know of any other matters which will be
presented for action at the meeting.
A COPY OF THE COMPANY'S ANNUAL REPORT, INCLUDING FINANCIAL STATEMENTS FOR
THE YEAR ENDED DECEMBER 31, 1993, IS ENCLOSED.
By the order of the Board of Directors.
M. DENISE KUPRIONIS,
Secretary
March 31, 1994
22
<PAGE> 25
THE E.W. SCRIPPS COMPANY PROXY FOR
COMMON VOTING STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution, to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday
May 10, 1994 at 10:00 A.M., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: John H. Burlingame, William R. Burleigh, Lawrence A.
Leser, Charles E. Scripps, Paul K. Scripps and Robert P. Scripps.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. FOR, or AGAINST, or ABSTAIN WITH RESPECT TO, amending the
Company's Long-Term Incentive Plan to reserve 750,000 additional shares of
Class A Common Stock for issuance under the Plan, to comply with new federal
tax law, to provide for the grant of stock appreciation rights independent of
options, to add certain provisions relating to acceleration and exercise of
options following termination of employment, and to make certain technical
changes to the Plan.
3. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED, THEY
WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
(Continued, and to be signed, on other side)
THE E.W. SCRIPPS COMPANY PROXY FOR
COMMON VOTING STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution, to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday
May 10, 1994 at 10:00 A.M., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: John H. Burlingame, William R. Burleigh, Lawrence A.
Leser, Charles E. Scripps, Paul K. Scripps and Robert P. Scripps.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. FOR, or AGAINST, or ABSTAIN WITH RESPECT TO, amending the
Company's Long-Term Incentive Plan to reserve 750,000 additional shares of
Class A Common Stock for issuance under the Plan, to comply with new federal
tax law, to provide for the grant of stock appreciation rights independent of
options, to add certain provisions relating to acceleration and exercise of
options following termination of employment, and to make certain technical
changes to the Plan.
3. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED, THEY
WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
(Continued, and to be signed, on other side)
THE E.W. SCRIPPS COMPANY PROXY FOR
COMMON VOTING STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution, to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday
May 10, 1994 at 10:00 A.M., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: John H. Burlingame, William R. Burleigh, Lawrence A.
Leser, Charles E. Scripps, Paul K. Scripps and Robert P. Scripps.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. FOR, or AGAINST, or ABSTAIN WITH RESPECT TO, amending the
Company's Long-Term Incentive Plan to reserve 750,000 additional shares of
Class A Common Stock for issuance under the Plan, to comply with new federal
tax law, to provide for the grant of stock appreciation rights independent of
options, to add certain provisions relating to acceleration and exercise of
options following termination of employment, and to make certain technical
changes to the Plan.
3. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED, THEY
WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
(Continued, and to be signed, on other side)
<PAGE> 26
Receipt of the Notice of Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
Receipt of the Notice of Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
Receipt of the Notice of Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
<PAGE> 27
THE E.W. SCRIPPS COMPANY PROXY FOR
CLASS A COMMON
STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday,
May 10, 1994, at 10:00 a.m., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: Daniel J. Meyer, Nicholas B. Paumgarten and David R.
Huhn.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED,
THEY WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1.
(Continued, and to be signed, on other side)
THE E.W. SCRIPPS COMPANY PROXY FOR
CLASS A COMMON
STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday,
May 10, 1994, at 10:00 a.m., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: Daniel J. Meyer, Nicholas B. Paumgarten and David R.
Huhn.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED,
THEY WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1.
(Continued, and to be signed, on other side)
THE E.W. SCRIPPS COMPANY PROXY FOR
CLASS A COMMON
STOCK
The undersigned hereby appoints CHARLES E. SCRIPPS, LAWRENCE A. LESER and
DANIEL J. CASTELLINI and each of them, as the undersigned's proxies, with full
power of substitution to attend the Annual Meeting of Stockholders of The E.W.
Scripps Company, to be held at The Westin Hotel, Cincinnati, Ohio, on Tuesday,
May 10, 1994, at 10:00 a.m., local time, and any adjournment or adjournments
thereof, and to vote thereat the number of shares which the undersigned would be
entitled to vote, with all the power the undersigned would possess if present in
person, as follows:
1. / / FOR, or / / WITHHOLD AUTHORITY to vote for, the following nominees for
election as directors: Daniel J. Meyer, Nicholas B. Paumgarten and David R.
Huhn.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- - - --------------------------------------------------------------------------------
2. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED,
THEY WILL VOTE FOR THE NOMINEES LISTED IN ITEM 1.
(Continued, and to be signed, on other side)
<PAGE> 28
Receipt of the Notice of Annual Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
Receipt of the Notice of Annual Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
Receipt of the Notice of Annual Meeting of Stockholders and the related Proxy
Statement dated March 31, 1994 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated , 1994
(Please date your Proxy)
-------------------------------
Signature of Stockholder
Please sign exactly as your
name appears hereon,
indicating, where proper,
official position or
representative capacity.
When signing as Attorney,
Executor, Administrator,
Trustee, etc., give full title
as such.
<PAGE> 29
THE E.W. SCRIPPS COMPANY
1987 LONG-TERM INCENTIVE PLAN
AS AMENDED AND RESTATED
EFFECTIVE APRIL 30, 1992
1. PURPOSE.
The plan shall be known as The E.W. Scripps Company 1987 Long-Term Incentive
Plan (the "Plan"). The purpose of the Plan shall be to promote the long-term
growth and profitability of The E.W. Scripps Company (the "Company") and its
subsidiaries by (i) providing certain officers and other key employees of the
Company and its subsidiaries with incentives to improve stockholder values
and contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
substantial responsibility. Grants of incentive or nonqualified stock
options, stock appreciation rights in tandem with options ("SARs"),
restricted or nonrestricted share awards, performance units, or any
combination of the foregoing may be made under the Plan.
2. DEFINITIONS.
(a) "INCENTIVE STOCK OPTION" means an option conforming to the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
(b) "NONQUALIFIED STOCK OPTION" means any stock option other than an
Incentive Stock Option.
(c) "SUBSIDIARY" and "SUBSIDIARIES" mean a corporation or corporations of
which outstanding shares representing 50% or more of the combined voting
power of such corporation or corporations are owned directly or
indirectly by the Company.
(d) "DISABILITY" means a permanent and total disability as defined in
Section 72(m)(7) of the Code.
(e) "RETIREMENT" means retirement as defined under the Company's Media
Pension Plan or termination of one's employment on retirement with the
approval of the Committee.
(f) "CAUSE" means the occurrence of one of the following:
(i) Conviction for a felony or for any crime or offense lesser than a
felony involving the property of the Company or a subsidiary.
(ii) Conduct that has caused demonstrable and serious injury to the
Company or a subsidiary, monetary or
<PAGE> 30
otherwise, as evidenced by a final determination of a court or
governmental agency of competent jurisdiction in effect after
exhaustion or lapse of all rights of appeal.
(iii) Gross dereliction of duty or other grave misconduct, as determined
by the Company.
(g) "COMPETITION" is deemed to occur if a participant who has terminated
employment subsequently obtains a position as a full-time or part-time
employee, as a member of the board of directors, or as a consultant or
advisor with or to, or acquires an ownership interest in excess of five
percent (5%) of, a corporation, partnership, firm or other entity that
engages in any of the businesses of the Company or any subsidiary with
which the participant was involved in a management role at any time
during the last five years of his employment with the Company or any
subsidiary.
(h) "CHANGE IN CONTROL" shall mean an event that would be required to be
reported in response to Item 1 of Form 8-K or any successor form thereto
promulgated under the Securities Exchange Act of 1934 ("Exchange Act")
if the Company were subject to such Act (or that is so required if and
when the Company is subject to such Act).
(i) "FAIR MARKET VALUE" of a share of Class A Common Stock of the Company
shall mean, with respect to the date in question, the average of the
closing bid and asked prices as quoted by the National Association of
Securities Dealers through its automated quotation system ("NASDAQ");
or, if the Company's Class A Common Stock is listed or admitted to
unlisted trading privileges on a national stock exchange, either (x) the
average of the highest and lowest officially-quoted selling prices on
such exchange or (y) the closing sale price of such stock, as selected
by the committee; or if the Company's Class A Common Stock is not quoted
by NASDAQ, traded on such an exchange, or otherwise traded publicly, the
value determined, in good faith, by the Committee.
3. ADMINISTRATION.
The Plan shall be administered by a committee (the "Committee") consisting of
at least two persons. Members of the Committee shall be directors of the
Company. Each member of the Committee shall be a person who has not at any
time within one year prior to his or her appointment to the Committee been
granted or awarded any stock of the Company or any of its subsidiaries or any
stock options, SARS,
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performance units or any other equity securities of the Company or any of its
subsidiaries pursuant to the Plan or any other plan of the Company or any of
its subsidiaries. Subject to the provisions of the Plan, the Committee shall
be authorized to (i) select persons to participate in the Plan, (ii)
determine the form and substance of grants made under the Plan to each
participant, and the conditions and restrictions, if any, subject to which
such grants will be made, (iii) interpret the Plan and (iv) adopt, amend, or
rescind such rules and regulations for carrying out the Plan as it may deem
appropriate. Decisions of the Committee on all matters relating to the Plan
shall be in the Committee's sole discretion and shall be conclusive and
binding on all parties, including the Company, its stockholders, and the
participants in the Plan. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto.
4. SHARES AVAILABLE FOR THE PLAN.
Subject to adjustments as provided in Section 15, an aggregate of 1,750,000
shares of Class A Common Stock of the Company (hereinafter the "shares") may
be issued pursuant to the Plan. Such shares may represent unissued or
treasury shares. If any grant under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited as to any shares, such
unpurchased or forfeited shares shall thereafter be available for further
grants under the Plan unless, in the case of options granted under the Plan,
related SARs are exercised.
5. PARTICIPATION.
Participation in the Plan shall be limited to those officers and other key
employees of the Company and its subsidiaries selected by the Committee.
Nothing in the Plan or in any grant thereunder shall confer any right on an
employee to continue in the employ of the Company or shall interfere in any
way with the right of the Company to terminate an employee at any time.
Directors who are officers of the Company shall be eligible to participate
in the Plan. No director who is not an officer of the Company, no member of
the Committee and no beneficiary of The Edward W. Scripps Trust shall be
eligible to participate in the Plan.
Incentive or nonqualified stock options, SARs, restricted or nonrestricted
stock awards, performance units, or any combination thereof, may be granted
to such persons and for such number of shares as the Committee shall
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determine (such individuals to whom grants are made being herein called
"optionees" or "grantees" as the case may be). A grant of any type made
hereunder in any one year to an eligible employee shall neither guarantee nor
preclude a further grant of that or any other type to such employee in that
year or subsequent years.
6. INCENTIVE AND NONQUALIFIED OPTIONS.
The Committee may from time to time grant to eligible participants Incentive
Stock Options, Nonqualified Stock Options, or any combination thereof. The
options granted shall take such form as the Committee shall determine,
subject to the following terms and conditions.
(a) PRICE. The price per share deliverable upon the exercise of each option
("exercise price") shall not be less than 100% of the Fair Market Value
of the shares on the date the option is granted or the date the option
first becomes exercisable, as the Committee determines. In the case of
the grant of any Incentive Stock Option to an employee who, at the time
of the grant, owns more than 10% of the total combined voting power of
all classes of stock of the Company or any of its subsidiaries, such
price per share, if required by the Code at the time of grant, shall not
be less than 110% of the Fair Market Value of the shares on the date the
option is granted.
(b) CASH EXERCISE. Options may be exercised in whole or in part upon
payment of the exercise price of the shares to be acquired. Payment
shall be made in cash or, in the discretion of the Committee, in shares
previously acquired by the participant or a combination of cash and
shares of Class A Common Stock. The Fair Market Value of shares of
Class A Common Stock tendered on exercise of options shall be determined
on the date of exercise.
(c) CASHLESS EXERCISE. Options may be exercised in whole or in part upon
delivery to the Secretary of the Company of an irrevocable written
notice of exercise. The date on which such notice is received by the
Secretary shall be the date of exercise of the option, provided that
within five business days of the delivery of such notice the funds to
pay for exercise of the option are delivered to the Company by a broker
acting on behalf of the optionee either in connection with the sale of
the shares underlying the option or in connection with the making of a
margin loan to the optionee to enable payment of the exercise price of
the option. In connection with the foregoing, the Company will provide
a copy of the notice of exercise of the
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option to the aforesaid broker upon receipt by the Secretary of such
notice and will deliver to such broker, within five business days of
the delivery of such notice to the Company, a certificate or
certificates (as requested by the broker) representing the number of
shares underlying the option that have been sold by such broker for the
optionee.
(d) TERMS OF OPTIONS. The term during which each option may be exercised
shall be determined by the Committee, but in no event shall an option be
exercisable in whole or in part in less than one year or, in the case of
a Nonqualified Stock Option, more than ten years and one day from the
date it is granted or, in the case of an Incentive Stock Option, ten
years from the date it is granted; and, in the case of the grant of an
Incentive Stock Option to an employee who at the time of the grant owns
more than 10% of the total combined voting power of all classes of stock
of the Company or any of its subsidiaries, in no event shall such option
be exercisable, if required by the Code at the time of grant, more than
five years from the date of the grant. All rights to purchase shares
pursuant to an option shall, unless sooner terminated, expire at the
date designated by the Committee. The Committee shall determine the
date on which each option shall become exercisable and may provide that
an option shall become exercisable in installments. The shares
constituting each installment may be purchased in whole or in part at
any time after such installment becomes exercisable, subject to such
minimum exercise requirement as is designated by the Committee. The
Committee may accelerate the time at which any option may be exercised
in whole or in part. Unless otherwise provided herein, an optionee may
exercise an option only if he or she is, and has continuously been since
the date the option was granted, an employee of the Company or a
subsidiary. Prior to the exercise of the option and delivery of the
stock represented thereby, the optionee shall have no rights to any
dividends or be entitled to any voting rights on any stock represented
by outstanding options.
(e) LIMITATIONS ON GRANTS. If required by the Code at the time of grant of
an Incentive Stock Option, the aggregate Fair Market Value (determined
as of the grant date) of shares for which such option is exercisable for
the first time during any calendar year may not exceed $100,000.
(f) TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL. If a participant ceases
to be an employee of the Company or any subsidiary due to death or
Disability, each of the
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participant's options and SARs that was granted at least one year prior to
death or Disability shall become fully vested and exercisable and shall
remain so for a period of one year from the date of termination of
employment, but in no event after its expiration date; and all options and
SARs granted to such participant less than one year prior to death or
Disability shall be forfeited.
If a participant ceases to be an employee of the Company upon the
occurrence of his or her Retirement, each of his or her options and SARs
granted at least one year prior to Retirement shall become fully vested and
exercisable and shall remain so for a period of two years from the date of
Retirement, but in no event after its expiration date, provided that the
participant does not engage in Competition during that two-year period
unless he receives written consent to do so from the Board. Notwithstanding
the foregoing, Incentive Stock Options not exercised by such participant
within 90 days after Retirement will cease to qualify as Incentive Stock
Options and will be treated as Nonqualified Stock Options under the Plan if
required to be so treated under the Code. All options and SARs granted to
such participant less than one year prior to Retirement shall be forfeited.
If a participant ceases to be an employee of the Company due to Cause, all
of his or her options and SARs shall be forfeited.
If a participant ceases to be an employee of the Company for any reason
other than death, Disability, Retirement or Cause, each of his or her
options and SARs that was exercisable on the date of termination shall
remain exercisable for, and shall otherwise terminate at the end of, a
period of 90 days after the date of termination of employment, but in no
event after its expiration date; provided that the participant does not
engage in Competition during such 90-day period unless he or she receives
written consent to do so from the Board. All of the participant's options
that were not exercisable on the date of such termination shall be
forfeited.
If there is a Change in Control of the Company, each of the participant's
options and SARs that was granted at least one year prior to such Change in
Control shall become fully vested and exercisable, and all options and SARs
granted to such participant less than one year prior to such Change in
Control shall be forfeited.
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<PAGE> 35
7. STOCK APPRECIATION RIGHTS.
The Committee shall have the authority to grant SARs under this Plan to any
optionee, either at the time of grant of an option or thereafter by amendment
to an option. The exercise of an option shall result in an immediate
forfeiture of its corresponding SAR, and the exercise of an SAR shall cause
an immediate forfeiture of its corresponding option. SARs shall be subject
to such other terms and conditions as the Committee may specify. An SAR
shall expire at the same time as the related option expires and shall be
transferable only when, and under the same conditions as, the related option
is transferable.
SARs shall be exercisable only when, to the extent and on the conditions
that the related option is exercisable. No SAR may be exercised unless the
Fair Market Value of a share of Class A Common Stock of the Company on the
date of exercise exceeds the exercise price of the option to which the SAR
corresponds.
Upon the exercise of an SAR, the optionee shall be entitled to a
distribution in an amount equal to the difference between the Fair Market
Value of a share of Class A Common Stock of the Company on the date of
exercise and the exercise price of the option to which the SAR corresponds.
The Committee shall decide whether such distribution shall be in cash, in
shares, or in a combination thereof.
All SARs will be exercised automatically on the last day prior to the
expiration date of the related option, so long as the Fair Market Value of a
share of the Company's Class A Common Stock on that date exceeds the exercise
price of the related option.
8. PERFORMANCE UNITS.
Performance units may be granted on a contingent basis to participants at any
time and from time to time as determined by the Committee. The Committee
shall have complete discretion in determining the number of performance units
so granted to a participant and the appropriate period over which performance
is to be measured ("performance cycle"). Each performance unit shall have a
dollar value determined by the Committee at the time of grant. The value of
each unit may be fixed or it may be permitted to fluctuate based on a
performance factor (e.g., return on equity) selected by the Committee. The
Committee shall establish performance goals that, depending on the extent to
which they are met, will determine the ultimate value of the performance unit
or the number of performance units earned by participants, or both.
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<PAGE> 36
The Committee shall establish performance goals and objectives for each
performance cycle on the basis of such criteria and objectives as the
Committee may select from time to time. During any performance cycle, the
Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.
The Committee shall determine the number of performance units that have been
earned by a participant on the basis of the Company's performance over the
performance cycle in relation to the performance goals for such cycle.
Earned performance units may be paid out in restricted or nonrestricted
shares, cash, or a combination of both, as the Committee may determine.
A participant must be an employee of the Company at the end of the
performance cycle in order to be entitled to payment of a performance unit
granted in respect of such cycle; provided, however, that, except as
otherwise provided by the Committee, if a participant ceases to be an
employee of the Company upon the occurrence of his or her death, Retirement,
or Disability prior to the end of the performance cycle, the participant
shall earn a proportionate number of performance units based upon the elapsed
portion of the performance cycle and the Company's performance over that
portion of such cycle.
In the event of a Change in Control a participant shall earn no less than
the number of performance units that the participant would have earned if the
performance cycle(s) had terminated as of the date of the Change in Control.
9. RESTRICTED AND NONRESTRICTED SHARE AWARDS.
The Committee may at any time and from time to time award shares under the
Plan to such participants and in such amounts as it determines. Each award
of shares shall specify the applicable restrictions, if any, on such shares,
the duration of such restrictions, and the time or times at which such
restrictions shall lapse with respect to all or a specified number of shares
that are part of the award. Notwithstanding the foregoing, the Committee may
reduce or shorten the duration of any restriction applicable to any shares
awarded to any participant under the Plan.
The participant will be required to deposit shares with the Company during
the period of any restriction thereon and to execute a blank stock power
therefor.
Except as otherwise provided by the Committee, on termination of a grantee's
employment due to death, Disability, retirement with the consent of the
Company, or a
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Change in Control during any period of restriction, all restrictions on shares
awarded to such grantee shall lapse. On termination of a grantee's employment
for any other reason, all restricted shares subject to awards made to such
grantee shall be forfeited to the Company.
10. WITHHOLDING OF TAXES.
The Company may require, as a condition to any grant under the Plan or to the
delivery of certificates for shares issued hereunder, that the grantee pay to
the Company, in cash, any federal, state or local taxes of any kind required
by law to be withheld with respect to any grant or any delivery of shares.
The Committee, in its sole discretion, may permit participants to pay such
taxes through the withholding of shares otherwise deliverable to such
participant in connection with such grant or the delivery to the Company of
shares otherwise acquired by the participant. The Fair Market Value of
shares of Class A Common Stock withheld by the Company or tendered to the
Company for the satisfaction of tax withholding obligations under this
section shall be determined on the date such shares are withheld or tendered.
The Company, to the extent permitted or required by law, shall have the right
to deduct from any payment of any kind (including salary or bonus) otherwise
due to a grantee any federal, state or local taxes of any kind required by
law to be withheld with respect to any grant or to the delivery of shares
under the Plan, or to retain or sell without notice a sufficient number of
the shares to be issued to such grantee to cover any such taxes, provided
that the Company shall not sell any such shares if such sale would be
considered a sale by such grantee for purposes of Section 16 of the Exchange
Act.
11. WRITTEN AGREEMENT.
Each employee to whom a grant is made under the Plan shall enter into a
written agreement with the Company that shall contain such provisions,
consistent with the provisions of the Plan, as may be established by the
Committee.
12. TRANSFERABILITY.
No option, SAR, or performance unit granted under the Plan shall be
transferable by an employee otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder. An option, SAR, or performance unit may be exercised only
by the optionee or grantee thereof or his guardian or legal representative;
provided that Incentive Stock Options may be exercised by such guardian or
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<PAGE> 38
legal representative only if permitted by the Code and any regulations
promulgated thereunder.
13. LISTING AND REGISTRATION.
If the Committee determines that the listing, registration, or qualification
upon any securities exchange or under any law of shares subject to any
option, SAR, performance unit, or share award is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or
purchase of shares thereunder, no such option or SAR may be exercised in
whole or in part, no such performance unit paid out, or no shares issued
unless such listing, registration or qualification is effected free of any
conditions not acceptable to the Committee.
14. TRANSFER OF EMPLOYEE.
Transfer of an employee from the Company to a subsidiary, from a subsidiary
to the Company, and from one subsidiary to another shall not be considered a
termination of employment. Nor shall it be considered a termination of
employment if an employee is placed on military or sick leave or such other
leave of absence which is considered as continuing intact the employment
relationship; in such a case, the employment relationship shall be continued
until the date when an employee's right to reemployment shall no longer be
guaranteed either by law or by contract.
15. ADJUSTMENTS.
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of
assets, or any other change in the corporate structure or shares of the
Company, the Committee shall make such adjustments as it deems appropriate in
the number and kind of shares reserved for issuance under the Plan, in the
number and kind of shares covered by grants made under the Plan, and in the
exercise price of outstanding options. In the event of any merger,
consolidation or other reorganization in which the Company is not the
surviving or continuing corporation, all options, SARs, performance units,
and stock awards that were granted hereunder and that are outstanding on the
date of such event shall be assumed by the surviving or continuing
corporation.
16. TERMINATION AND MODIFICATION OF THE PLAN.
The Board of Directors, without further approval of the shareholders, may
modify or terminate the Plan and from time to time may suspend, and if
suspended, may reinstate any or all of the provisions of the Plan, except
that (i) no modification, suspension or termination of the Plan may,
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<PAGE> 39
without the consent of the grantee affected, alter or impair any grant
previously made under the Plan, and (ii) no modification shall become
effective without prior approval of the stockholders of the Company that
would (a) increase (except as provided in Section 15) the maximum number of
shares reserved for issuance under the Plan; (b) change the classes of
employees eligible to be participants; or (iii) materially increase the
benefits accruing to participants in the Plan.
With the consent of the grantee affected thereby, the Committee may amend or
modify the grant of any outstanding option, SAR, performance unit, or share
award in any manner to the extent that the Committee would have had the
authority to make such grant as so modified or amended, including without
limitation to change the date or dates as of which (i) an option becomes
exercisable, (ii) a performance unit is to be determined or paid, or (iii)
restrictions on shares are to be removed. The Committee shall be authorized
to make minor or administrative modifications to the Plan as well as
modifications to the Plan that may be dictated by requirements of federal or
state laws applicable to the Company or that may be authorized or made
desirable by such laws.
17. COMMENCEMENT DATE; TERMINATION DATE.
The date of commencement of the Plan shall be December 10, 1987. Unless
previously terminated, the Plan shall terminate at the close of business on
December 9, 1997.
18. CASH AWARDS.
The Committee may authorize cash awards to any participant receiving shares
under the Plan in order to assist such participant in meeting his or her tax
obligations with respect to such shares.
19. PROVISIONS APPLICABLE SOLELY TO INSIDERS.
The following provisions shall apply only to persons who are subject to
Section 16 of the Securities Exchange Act of 1934 with respect to securities
of the Company ("Insiders"):
(a) No Insider shall be permitted to transfer any securities of the Company
acquired by him, except to the extent permitted by 17 C.F.R. Section
240.16a-2(d)(1), upon the exercise of any Incentive Stock Option,
Nonqualified Stock Option or SAR, until at least six months and one day
after the later of (i) the day on which such security is granted to the
participant or (ii) the day on which the exercise or conversion price of
such security is fixed.
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(b) An Insider may elect to (i) exercise an SAR or (ii) have shares withheld
from a grant or an award made under the Plan or tender shares to the
Company in order to satisfy the tax withholding consequences of a grant
or an award made under the Plan, only during the period beginning on the
third business day following the date on which the Company releases the
financial information specified in 17 C.F.R. Section
240.16b-3(e)(1)(ii) and ending on the twelfth business day following
such date.
(c) No Insider shall be permitted to exercise any SAR for cash until at
least six months and one day after the date on which such SAR was
granted, except to the extent permitted by 17 C.F.R. Section
240.16a-2(d)(1).
(d) Any performance unit awarded to any Insider which is not redeemable (i)
solely for cash or (ii) on a date which is automatic or fixed in advance
and outside the control of the Insider shall be redeemable only during
the period beginning on the third business day following the date on
which the Company releases the financial information specified in 17
C.F.R. Section 240.16b-3(e)(1)(ii) and ending on the twelfth business
day following such date.
(e) The right of an Insider to elect to redeem any performance unit which by
its terms gives such Insider the right to elect to redeem such
performance unit for either cash or shares shall at all times be subject
to the right of the Committee to approve or disapprove such election.
(f) No Insider shall be permitted to sell any shares awarded under Section 9
hereof until at least six months and one day after the date on which
such shares were awarded, except to the extent permitted by 17 C.F.R.
Section 240.16a-2(d)(1).
(g) Notwithstanding Section 19 (b)(ii) hereof, an Insider may elect to have
shares withheld from a grant or an award made under the Plan in order to
satisfy tax withholding consequences thereof by providing the Company
with a written election to so withhold at least six months in advance of
the withholding of shares otherwise issuable upon exercise of an option
or pursuant to an award of stock.
CCM2811:99163:89005:WA-26.PLN
saw 4/14/93
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