<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
THE E.W. SCRIPPS COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE E.W. SCRIPPS COMPANY
1105 N. MARKET STREET
WILMINGTON, DELAWARE 19801
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 1996
------------------
TO THE SHAREHOLDERS OF THE E.W. SCRIPPS COMPANY
You are cordially invited to attend the Annual Meeting of the Stockholders
of The E.W. Scripps Company (the "Company") which will be held at the Queen City
Club, Cincinnati, Ohio, on Thursday, May 9, 1996 at 10:00 a.m., local time for
the following purposes:
1. To elect nine persons to serve as directors for the ensuing year;
and
2. To amend the Company's Long-Term Incentive Plan to reserve an
additional 2,000,000 shares of Class A Common Stock for issuance;
and
3. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 15, 1996 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
By order of the Board of Directors,
M. DENISE KUPRIONIS,
Corporate
Secretary
March 28, 1996
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
1996 ANNUAL MEETING
MAY 9, 1996
This proxy statement, which together with the accompanying notice, proxy,
and annual report is being mailed to stockholders on or about March 28, 1996, 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 Thursday, May 9, 1996.
The close of business on March 15, 1996, 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, 1996 the Company had outstanding 60,452,178 shares of Class A
Common Stock, $.01 par value per share ("Class A Common Stock"), and 19,807,053
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.
1
<PAGE> 4
The following table sets forth certain information as to each of the
nominees for election to the Board of Directors.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION OR OCCUPATION/BUSINESS
NAME AGE SINCE EXPERIENCE FOR PAST FIVE YEARS
- --------------------------- --- -------- -----------------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR ELECTION BY HOLDERS OF CLASS A COMMON STOCK
Daniel J. Meyer (1) 59 1988 Chairman since January 1, 1991, Chief Executive Officer
since April 24, 1990, of Cincinnati Milacron Inc. (a
manufacturer of metal working and plastics processing
machinery and systems).
Nicholas B. Paumgarten 50 1988 Managing Director of J.P. Morgan & Co. Inc. 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).
Ronald W. Tysoe (2) 42 n/a Vice Chairman and Chief Financial Officer of Federated De-
partment Stores, Inc. since April 1990.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON VOTING STOCK
John H. Burlingame (3) 62 1988 Executive Partner since 1982 of Baker & Hostetler (law
firm).
William R. Burleigh 60 1990 President of the Company since August 1994, Chief Operating
Officer since May 1994, Executive Vice President from March
1990 through May 1994, Senior Vice President/Newspapers and
Publishing from September 1986 to March 1990.
Lawrence A. Leser (4) 60 1977 Chairman of the Company since August 1994, Chief Executive
Officer since July 1985.
Charles E. Scripps (5) 76 1946 Chairman of the Executive Committee of the Company since
August 1994, Chairman of the Board of Directors of the
Company from 1953 to August 1994.
Paul K. Scripps (6) 50 1986 Chairman since December 1989, of John P. Scripps Newspa-
pers, a subsidiary of the Company.
Robert P. Scripps (7) 78 1949 A Director of the Company since 1949.
<FN>
- ---------------
(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. Tysoe is a nominee for election as a director. He is a director of
Federated Department Stores, Inc. Mr. Tysoe will replace Mr. David R. Huhn
who has been a director since 1991.
(3) Mr. Burlingame is a Trustee of The Edward W. Scripps Trust.
(4) Mr. Leser is a director of Union Central Life Insurance Company and of AK
Steel Holding Corporation (a steel manufacturer).
(5) Mr. Charles E. Scripps is the brother of Robert P. Scripps and Chairman of
the Board of Trustees of The Edward W. Scripps Trust.
(6) 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."
(7) Mr. Robert P. Scripps is a Trustee of The Edward W. Scripps Trust and the
brother of Charles E. Scripps.
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board held four regularly scheduled and five special meetings during
1995. Each director of the Company attended all of these meetings, except one
director who was unable to attend one special meeting and one director who was
unable to attend one regularly scheduled meeting.
2
<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 of the
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 did not hold any meetings during 1995.
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 1995. 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. The Compensation Committee held four
meetings during 1995. Each member of the Compensation Committee attended all of
such Committee's meetings.
COMPENSATION OF DIRECTORS
During 1995, each director elected by the holders of the Class A Common
Stock received an annual fee of $22,000, and an additional $2,000 for each
meeting that he attended of the Board of Directors or a committee thereof on
which he served. Additionally, for each committee of which he was chairman, such
director received an annual fee of $3,000. Directors elected by the holders of
the Common Voting Stock, with the exception of Mr. Charles E. Scripps, do not
receive any compensation for services as directors or committee members.
Mr. Scripps received a fee for his services as Chairman of the Executive
Committee at the annual rate of $50,000. Mr. Scripps does not receive any
additional fees for his attendance at Board and Committee meetings.
None of the Directors received any awards in 1995 under the Company's Stock
Option Plan for Non-Employee Directors Elected by the Holders of the Company's
Class A Common Stock.
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, 1996, of more
than five percent of the Company's outstanding Class A Common Stock or Common
Voting Stock. Unless otherwise
3
<PAGE> 6
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.
<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 54.0% 16,040,000 81.0%
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Jack R. Howard (2) 3,659,198 6.1% 170,000 .9%
c/o Scripps Howard, Inc.
Attn: Corporate Secretary
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Paul K. Scripps and 189,097 .3% 1,616,113 8.2%
John P. Scripps Trust (3)
525 C Street, Suite 306
San Diego, California
The Capital Group Companies, Inc. (4) 4,226,400 7.0% -- --
333 South Hope Street
Los Angeles, California
Chemical Bank, Trustee (5) -- -- 1,242,000 6.3%
333 South Hope Street
Los Angeles, California
<FN>
- ---------------
(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 72 years of age. Upon the termination of the Trust,
substantially all of its assets (including all 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.
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 3,327,385 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; and 331,813 shares
of Class A Common Stock owned by Mr. Howard's wife. Mr. Howard disclaims any
beneficial interest in the shares held by his wife.
(3) See footnote 8 to the table under "Security Ownership of Management."
(4) The Capital Group Companies, Inc. ("Capital"), the parent company of six
investment management companies, 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,
1995, Capital Guardian Trust Company and Capital Research and Management
Company, operating subsidiaries of The Capital Group Companies, Inc.,
exercised as of December 29, 1995, investment discretion with respect to
1,111,400 and 3,115,000 shares, respectively, or a combined total of 7.0% of
the outstanding Class A Common Stock which was owned by various
institutional investors.
(5) Based on information provided by Chemical Bank, the 1,242,000 shares of
Common Voting Stock are held in two trusts of which Chemical Bank is the
sole trustee. These trusts were established by Jack R. Howard's parents for
the benefit of his sister.
</TABLE>
4
<PAGE> 7
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, 1996 by each director and each nominee for election as a director of
the Company, by each named executive, and by all directors and executive
officers of the Company as a group. 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.
<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) 32,515 * -- --
John H. Burlingame (2) -- -- -- --
David R. Huhn (3) 500 * -- --
Lawrence A. Leser (4) 50,000 * -- --
Daniel J. Meyer (5) 300 * -- --
Nicholas B. Paumgarten (6) 3,250 * -- --
Charles E. Scripps (2) (7) 36,480 * -- --
Paul K. Scripps (8) 189,097 * 1,616,113 8.2%
Robert P. Scripps (2) -- -- -- --
Ronald W. Tysoe -- -- -- --
Daniel J. Castellini (9) 24,735 * -- --
Paul F. (Frank) Gardner (10) 26,448 * -- --
Craig C. Standen (11) 11,355 * -- --
Alan M. Horton (12) 9,749 * -- --
All directors and executive
officers as a group
(20 persons) (13) 33,019,560 54.6% 17,656,113 89.1%
<FN>
- ---------------
* 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 205,000 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. Huhn are held jointly with his wife. The shares
listed do not include 5,000 shares of Class A Common Stock underlying
exercisable options held by him.
(4) The shares listed for Mr. Leser include 5,500 shares of Class A Common
Stock owned by his wife. Mr. Leser disclaims any beneficial interest in
these shares. The shares listed do not include 321,100 shares of Class A
Common Stock underlying exercisable options held by Mr. Leser.
(5) The shares listed for Mr. Meyer do not include 5,000 shares of Class A
Common Stock underlying exercisable options held by him.
(6) 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. The shares
listed do not include 5,000 shares of Class A Common Stock underlying
exercisable options held by him.
</TABLE>
5
<PAGE> 8
(7) The shares listed for Mr. Charles E. Scripps include 500 shares of Class A
Common Stock owned by his wife. Mr. Scripps disclaims any beneficial
interest in these shares.
(8) 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.
(9) 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 134,000 shares of Class A Common Stock underlying exercisable
options held by him.
(10) The shares listed for Mr. Gardner do not include 59,500 shares of Class A
Common Stock underlying exercisable options held by him.
(11) The shares listed for Mr. Standen include 180 shares held by Mr. Standen
as custodian for the benefit of his children. Mr. Standen disclaims any
beneficial interest in these shares. The shares listed for Mr. Standen do
not include 66,275 shares of Class A Common Stock underlying exercisable
options held by him.
(12) The shares listed for Mr. Horton include 100 shares which are held jointly
with his wife. The shares listed for Mr. Horton do not include 57,550
shares of Class A Common Stock underlying exercisable options held by him.
(13) The shares listed include the 32,610,000 shares of Class A Common Stock
and the 16,040,000 shares of Common Voting Stock of the Company owned by
the Trust.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
THE COMMITTEE
This report is submitted by the members of the Compensation Committee,
Messrs. Daniel J. Meyer, Charles E. Scripps and David R. Huhn. The Committee
makes decisions on the compensation of the Company's senior executives. All
Committee actions are reviewed by the Board of Directors of The E.W. Scripps
Company.
Mr. Meyer and Mr. Huhn are independent directors and have no "interlocking"
relationships as defined by the Securities and Exchange Commission. Mr. Scripps
is Chairman of the Company's Executive Committee and Chairman of the Board of
Trustees of The Edward W. Scripps Trust.
PHILOSOPHY
The E.W. Scripps Company's compensation policy for senior officers and
certain other executives is designed to attract and retain a highly-qualified
management team. The Company 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.
This policy encourages coordinated and sustained efforts towards enhancing the
Company's performance and maximizing the value to shareholders.
The compensation program is reviewed annually and 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. The Company
6
<PAGE> 9
believes its compensation policy is fair to both its employees and its
shareholders and is competitive within the industry.
COMPONENTS OF THE COMPENSATION PROGRAM
BASE SALARY
The Company continues to participate annually in the Towers Perrin Media
Industry Compensation Survey (the "Survey") which is widely used in its industry
and gives relevant compensation information on executive positions. 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 which, 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.
The field of Survey participants is drawn from six major media areas;
newspaper publishing, television stations, radio stations, cable systems,
magazine publishing and book and information publishing. In the most recent
Survey, there were approximately 80 participants, which included all of the
corporations in the Company's peer group index.
The Company strives to place fully competent and high performing executives
at the median level of compensation or higher, dependent upon competitive
pressures and exceptional performance, no later than two to three years after
attaining their position. Actual base salaries for the CEO and for the other
named executives during the last fiscal year were consistent with this policy.
None of the named executives have employment contracts with the Company.
In deciding if an annual base salary increase is appropriate for a specific
executive, several factors are taken into account. These factors include an
examination of the compensation guidelines suggested by the Survey, an
evaluation of the responsibilities of the executive's position, consideration of
the executive's contributions to the Company during the year and over the course
of his employment by the Company, and a review of the Company's overall
corporate performance during the year. These performance factors are not
assigned specific weights. Rather, the Committee applies its own subjective good
judgment in evaluating the aggregate impact of these factors and in making final
compensation determinations. In considering salary increases for persons other
than the CEO, the Committee also takes into consideration recommendations made
by the Chief Executive Officer.
Four of the five named executives, not including the Chief Executive
Officer, were eligible, based on the criteria noted above, for base salary
increases effective January 1, 1996. These executives received increases
consistent with the Company's compensation philosophy.
ANNUAL BONUS
In 1995, the Committee continued to emphasize the link between Company
performance, which benefits the shareholders, and executive pay. The annual
bonus plan promotes this pay-for-performance philosophy by providing executives
with an opportunity to earn annual cash bonuses based on the achievement of
specific performance goals. Two performance measures were utilized in 1995: the
achievement of operating cash flow targets and an earnings-per-share target.
These performance measures represented 60% and 40% of the executive's maximum
bonus opportunity, respectively. The operating cash flow target for Mr. Gardner
and for Mr. Horton was based on their specific area of responsibility. For the
other named executives, the cash flow goal was based on the consolidated
operating cash flow target.
The Company's 1995 annual bonus plans for its senior vice presidents
allowed for a maximum bonus opportunity of 40% of the executive's base salary.
The President and Chief Operating Officer's maximum bonus opportunity was 50% of
his base salary. Determining if the executive would earn his maximum bonus
amount was a matter of ascertaining whether or not the preestablished goals were
achieved. The annual bonus plan requires that a minimum of 93%
7
<PAGE> 10
of a preestablished goal must be attained before a bonus amount related to that
performance measurement can be paid.
The Company attained its 1995 earnings per share and consolidated operating
cash flow goals which resulted in Messrs. Burleigh, Standen and Castellini
receiving 100% of their 1995 maximum bonus award. Mr. Horton also received 100%
of his targeted bonus opportunity. However, the Company's television division
did not attain its operating cash flow goal, resulting in Mr. Gardner not
receiving his maximum bonus potential.
The bonus amount is payable on an annual basis, although executives may
elect to defer payment of the bonus until retirement or another other
predetermined date.
LONG-TERM INCENTIVES
The Committee continues to endorse 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.
None of the named executives received restricted stock awards in 1995.
Stock Options. Generally executives receive a stock option award with
their restricted stock award when they first attain an executive position. From
1990 to 1994 the Company also made annual stock option awards to executives. The
purpose of this annual grant of non-qualified stock options was to further tie
executive compensation to the long-term financial performance of the Company and
to give the executive a stake similar to that of the Company's shareholders.
When awarded, stock options are granted at not less than the fair market value
of the Company's Class A Common Stock on the date of the grant. Therefore, the
stock options have value only if the stock price appreciates following the date
of the award.
Although the Company continues to believe that stock option grants are a
valuable motivating tool, annual grants were not awarded in 1995. In light of
the pending transaction concerning the Company's cable division, the Committee
members agreed that it was not appropriate at this time to make equity awards
under the Company's Long-Term Incentive Plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Lawrence A. Leser has served as Chief Executive Officer since 1985. He
was elected Chairman of the Company in 1994. As reflected in the Summary
Compensation Table, Mr. Leser received a $25,000 (3.8%) annual base salary
increase in 1995. According to the Survey, Mr. Leser's salary places him between
the median and the 75th percentile for his job position. The 1995 adjustment in
Mr. Leser's salary was based on a review of the Survey guidelines and on a
review of his contributions to the Company in achieving its financial,
operational and strategic
8
<PAGE> 11
goals. Additional details regarding his 1995 base salary increase were outlined
in last year's proxy statement.
In February 1996, Mr. Leser announced his intention to retire as Chief
Executive Officer on June 1, 1996. Therefore, notwithstanding his significant
accomplishments during 1995, he did not receive an annual salary increase for
1996.
The Chief Executive Officer's maximum bonus opportunity in 1995 was 80% of
his base salary. As described for the other named executives, determination of
whether or not he would earn this maximum bonus amount was a matter of
ascertaining whether or not the preestablished goals were achieved. As noted
above, for fiscal 1995 the Company attained its earnings per share and
consolidated operating cash flow goals which resulted in Mr. Leser earning 100%
of his maximum bonus potential.
RESPONSE TO OMNIBUS BUDGET RECONCILIATION ACT OF 1993
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid in any one year to a company's Chief Executive Officer and each of its four
other most highly compensated executives. In 1994, the stockholders approved
amendments to the Company's Long-Term Incentive Plan so that certain performance
based compensation under that plan would comply with the deduction limit.
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 attention of the Company's
Corporate Secretary.
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
------------------------ PAYOUTS ALL
RESTRICTED SECURITIES -------- OTHER
ANNUAL COMPENSATION STOCK UNDERLYING LTIP COMPEN-
NAME AND --------------------- AWARD(S) OPTIONS/ PAYOUTS SATION
PRINCIPAL POSITION YEAR SALARY BONUS (1) SARS (#) (2) (3)
- ---------------------------- ---- -------- -------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. Leser 1995 $675,000 $540,000 0 0 0 $4,500
Chairman and Chief 1994 650,000 520,000 0 40,000 0 4,500
Executive Officer 1993 630,000 250,000 0 140,000 $76,000 7,075
William R. Burleigh 1995 $455,000 $227,500 0 0 0 $4,500
President and Chief 1994 423,333 211,667 $180,780 30,000 0 4,500
Operating Officer 1993 400,000 100,000 0 75,000 $21,600 7,075
Paul F. (Frank) Gardner 1995 $380,000 $106,400 0 0 0 $4,500
Senior Vice President/ 1994 330,000 132,000 $376,625 25,000 0 4,500
Broadcasting (4) 1993 225,000 120,000 413,925 56,500 0 6,000
Daniel J. Castellini 1995 $335,000 $134,000 0 0 0 $4,500
Senior Vice President/ 1994 325,000 130,000 0 20,000 0 4,500
Finance and Administration 1993 325,000 85,000 0 48,000 $26,208 7,075
Craig C. Standen 1995 $325,000 $130,000 0 0 0 $4,500
Senior Vice President/ 1994 310,000 103,833 $210,975 20,000 0 4,500
Corporate Development (5)
Alan M. Horton 1995 $325,000 $130,000 0 0 0 $4,500
Senior Vice President/ 1994 255,938 92,813 $210,975 20,000 $14,323 4,500
Newspapers (6)
<FN>
- ---------------
(1) The aggregate number and value of restricted stock holdings for each named
executive officer as of the end of 1995 were as follows: Mr. Burleigh held
6,000 shares with a value of $239,250; Mr. Gardner held 24,500 shares with a
value of $976,938; Mr. Standen and Mr. Horton both held 7,500 shares, with a
value of $299,063 each. Dividends were paid during 1995 on the shares of
restricted stock held by each named executive officer at a rate of thirteen
cents per share per quarter, except for the first quarter when the dividend
rate was eleven cents. Messrs. Leser and Castellini did not hold any
restricted stock at December 31, 1995.
(2) Represents compensation paid pursuant to the Company's Medium Term Bonus
Plan. This Plan terminated in 1991. The final vesting period, with respect
to contingent awards outstanding under the Plan, was December 1993.
(3) Represents compensation paid pursuant to the Company's Retirement and
Investment Plan.
(4) Mr. Gardner was elected to the position of Senior Vice
President/Broadcasting on April 1, 1993. The compensation reported for 1993
reflects his actual 1993 earnings.
(5) Mr. Standen was elected an executive officer of the Company in August 1994.
Prior to this appointment he was a Vice President of a subsidiary of the
Company. The compensation reported for 1994 reflects his actual 1994
earnings.
(6) Mr. Horton was elected an executive officer of the Company in May 1994.
Prior to this appointment he was a Vice President of a subsidiary of the
Company. The compensation reported for 1994 reflects his actual 1994
earnings.
</TABLE>
OPTION/SAR GRANTS IN 1995
There were no option grants to the named executives in 1995.
10
<PAGE> 13
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND FY-END OPTION/SAR VALUES
The following table sets forth certain information regarding the number and
value of options for shares of Class A Common Stock held by the named executives
at December 31, 1995. One executive exercised an option during 1995.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE- MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
12/31/95(#) 12/31/95
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------ --------------- ----------- --------------- ------------------
<S> <C> <C> <C> <C>
Lawrence A. Leser 325,500/12,000 $4,641,988/263,940
William R. Burleigh 195,000/10,000 $2,806,225/219,950
Paul F. (Frank) Gardner 22,000 $ 294,945 59,500/0 $ 555,938/0
Daniel J. Castellini 129,000/5,000 $1,865,525/109,975
Craig C. Standen 60,275/6,000 $ 934,807/131,970
Alan M. Horton 56,050/1,500 $ 781,061/32,993
</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, 1990, 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 peer group
of media companies.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 SCRIPPS MEDIA INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 131 145 119
1992 140 151 136
1993 154 170 155
1994 156 190 146
1995 215 251 182
</TABLE>
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S&P 500 $100 $131 $140 $154 $156 $215
- -----------------------------------------------------------------
Scripps $100 $145 $151 $170 $190 $251
- -----------------------------------------------------------------
Media Index $100 $119 $136 $155 $146 $182
<FN>
- ---------------
(1) The Companies in the peer group index are A.H. Belo Corporation, Gannett Co.
Inc., Knight-Ridder, Inc., Lee Enterprises, Inc., The New York Times
Company, Times Mirror Company, Tribune Company, and the Washington Post
Company. Prior to 1995 Multimedia, Inc. was included in the peer group.
Multimedia, Inc. was acquired by Gannett Co., Inc. in 1995. Lee Enterprises,
Inc. was added to the peer group in 1995. The index is weighted based on
market capitalization. The companies included in the peer group were
approved by the Compensation Committee.
</TABLE>
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.
12
<PAGE> 15
Mr. Meyer and Mr. Huhn also serve as directors of Scripps Howard, Inc.
("SHI"), which is a wholly-owned subsidiary of the Company, and are both members
of the audit committee of the Company.
Mr. Lawrence A. Leser, Chairman and Chief Executive Officer and a director
of the Company, is also Chairman and Chief Executive Officer of SHI, and a
member of the executive committee of each.
Mr. Charles E. Scripps is Chairman of the executive committee of the
Company's Board of Directors and Chairman of the executive committee of the
Board of Directors of SHI.
Mr. Charles E. Scripps and Mr. Robert P. Scripps are general partners in
Jefferson Building Partnership, (the "Jefferson Partnership") which was formed
in 1984. 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 1995 was approximately $1,851,790. 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. Scripps is a trustee of The Edward W. Scripps Trust and for 1995 he is
expected to continue to serve as a trustee. As a trustee, Mr. Scripps shares the
power, together with the other two trustees, 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. 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 99,000 123,000 148,000 173,000
500,000............ 93,000 124,000 155,000 186,000 216,000
600,000............ 112,000 149,000 186,000 223,000 260,000
700,000............ 130,000 174,000 217,000 261,000 304,000
800,000............ 149,000 199,000 248,000 298,000 348,000
900,000............ 168,000 224,000 280,000 336,000 391,000
1,000,000............ 187,000 249,000 311,000 373,000 435,000
1,500,000............ 280,000 374,000 467,000 561,000 654,000
</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
1996 social security integration level under the Pension Plan), pursuant to a
straight life annuity option, for employees in the compensation
13
<PAGE> 16
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 $120,000 (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.
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 Scripps Retirement &
Investment 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, 1995, the years of credited service of the individuals named in the cash
compensation table are as follows: Mr. Leser-28; Mr. Burleigh-39; Mr.
Gardner-11; Mr. Castellini-25; Mr. Standen-5; Mr. Horton-25.
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, 1996, the Signatories
would have held in the aggregate approximately 86.6% 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.
14
<PAGE> 17
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 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
15
<PAGE> 18
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 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
For information concerning certain transactions which involve Mr. Charles
E. Scripps and Mr. Robert P. Scripps, see "Compensation Committee Interlocks and
Insider Participation" and "Security Ownership of Certain Beneficial Owners and
Management -- Security Ownership of Certain Beneficial Owners."
Mr. John H. Burlingame is the Executive Partner of Baker & Hostetler, which
is general counsel to the Company and to The Edward W. Scripps Trust (the
"Trust"). Baker & Hostetler performed legal services for the Company and the
Trust in 1995 and is expected to perform such services in 1996. In 1995, the
Company and the Trust paid approximately $7,000,000 in legal fees to Baker &
Hostetler.
Mr. Nicholas B. Paumgarten is a Managing Partner 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 1995 and may perform investment banking services for the Company in the
current year.
Mr. Lawrence A. Leser, Chairman and Chief Executive Officer, entered into a
loan agreement with Scripps Howard, Inc., a subsidiary of the Company, in
January 1996 pursuant to the Employee Stock Purchase Loan Program. This Plan is
designed to assist key employees in exercising stock options. Mr. Leser borrowed
$450,000 at an interest rate of 6.02%, which was the applicable Federal rate in
effect under Section 1274(d) of the Internal Revenue Code of 1986, as of the day
on which the loan was made. In accordance with the terms of the loan program,
Mr. Leser agreed to repay the loan within ten years.
PROPOSAL 2
AMENDMENT TO LONG TERM INCENTIVE PLAN TO RESERVE AN ADDITIONAL 2,000,000 SHARES
OF CLASS A COMMON STOCK FOR ISSUANCE UNDER THE PLAN.
GENERAL
There will be submitted at the Annual Meeting for action by the holders of
Common Voting Stock a proposal to approve an amendment to the Long-Term
Incentive Plan to reserve 2,000,000 additional shares of Class A Common Stock
for issuance under the plan. The Board believes that the continued use of
stock-related benefits as part of the Company's compensation
16
<PAGE> 19
package is of great importance in promoting the growth and continued success of
the Company and is thus of substantial benefit to the Company and its
stockholders. The Company cannot be successful without the ability to attract
and retain talented executives, managers and other employees. The Incentive Plan
is an effective recruiting tool, as well as a means of promoting long-term
commitment to the Company. The proposed amendment was approved by the Board of
Directors on February 15, 1996.
Reservation of Additional Shares of Class A Common Stock. The Plan
presently provides for the issuance of 3,250,000 shares of Class A Common Stock.
As of March 1, 1996, awards for 404,784 restricted shares and options for
2,356,825 shares had been granted and were outstanding to executive officers and
key employees of the Company. On that date, 488,391 shares of Class A Common
Stock were available for issuance in the future under the Plan. These shares,
however, are expected to be cancelled on May 23, 1996, the date of the next
regularly scheduled Board of Directors meeting. If proposal two is approved by
the holders of Common Voting Stock, on May 24, 1996, 2,000,000 shares of Class A
Common Stock will be reserved for issuance under the Plan. This 2,000,000
shares, along with the 2,761,609 shares already granted and subject to the Plan,
would represent an amount equal to approximately 7.9% 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, 1996 was $42.00. At that date, the aggregate value of the
additional 2,000,000 shares proposed to be reserved for purposes of the Plan was
$84,000,000, and the aggregate market value of the 2,761,609 shares currently
subject to restricted shares and options awarded and outstanding under the Plan
was $115,987,578.
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.
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 applicable federal withholding or
reporting 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.
17
<PAGE> 20
With respect to the exercise of an incentive stock option and the payment
of the option price by the delivery of shares of Class A Common Stock, to the
extent that the number of shares received does not exceed the number of shares
surrendered, no taxable income will be realized by the optionee at that time,
the tax basis of the shares received will be the same as the tax basis of the
shares surrendered, and the holding period (except for purposes of the one-year
period referred to above) of the optionee in shares received will include his
holding period in the shares surrendered. To the extent that the number of
shares received exceeds the number of shares surrendered, no-taxable income will
be realized by the optionee at that time; such excess shares will be considered
incentive stock option stock with a zero basis; and the holding period of the
optionee in such shares will begin on the date such shares are transferred to
the optionee. If the shares surrendered were acquired as the result of the
exercise of an incentive stock option and the surrender takes place within two
years from the date the option relating to the surrendered shares was granted or
within one year from the date of such exercise, the surrender will result in a
disqualifying disposition and the optionee will realize ordinary income at that
time in the amount of the excess, if any, of the fair market value at the time
of exercise of the shares surrendered over the basis of such shares. If any of
the shares received are disposed of in a disqualifying disposition, the optionee
will be treated as first disposing of the shares with a zero basis.
Non-Qualified Stock Options. With respect to non-qualified stock options
generally, (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, if any, 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 amount of
ordinary income realized (provided that applicable withholding or reporting
requirements are satisfied), and (c) upon disposition of the shares of Class A
Common Stock received upon the exercise of the option, the optionee recognizes,
as either short-term or long-term capital gain (or loss), depending upon the
length of time that the optionee has held the shares, income (or loss) equal to
the difference between the amount realized and the fair market value of the
shares on the date of exercise.
With respect to the exercise of a non-qualified stock option and the
payment of the option price by the delivery of shares of Class A Common Stock,
to the extent that the number of shares received does not exceed the number of
shares surrendered, no taxable income will be realized by the optionee at that
time, the tax basis of the shares received will be the same as the tax basis of
the shares surrendered, and the holding period of the optionee in the shares
received will include his holding period in the shares surrendered. To the
extent that the number of shares received exceeds the number of shares
surrendered, ordinary income will be realized by the optionee at that time in
the amount of the fair market value of such excess shares, the tax basis of such
excess shares will be such fair market value, and the holding period of the
optionee in such shares will begin on the date such shares are transferred to
the optionee.
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 applicable federal
withholding or reporting requirements. If the optionee received 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 Option."
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
18
<PAGE> 21
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
applicable federal withholding or reporting 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 on long-term capital gains
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. The Company is not 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.
Under 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.
19
<PAGE> 22
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the outstanding Common
Voting Stock present or represented at the meeting is required to approve the
proposed amendment 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(A) 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, 1995, all Section
16(a) filing requirements applicable to its executive officers, directors and
10% stockholders were complied with, except that one Form 4 for a director was
filed late. The director made a charitable gift of some shares of the Company's
Class A Common Stock in December 1995. The Form 4 was filed in February 1996.
INDEPENDENT PUBLIC ACCOUNTANTS
At its February 15, 1996 meeting, the Board approved the appointment of
Deloitte & Touche as independent public accountants for the Company for the
fiscal year ending December 31, 1996. A representative of Deloitte & Touche is
expected to be present at the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any stockholder proposals intended to be presented at the Company's 1997
Annual Meeting of Stockholders must be received by the Company at 1105 N. Market
Street, Wilmington, Delaware 19801 on or before November 29, 1996, for inclusion
in the Company's proxy statement and form of proxy relating to the 1997 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
20
<PAGE> 23
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 Long-Term 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 holder of Common Voting Stock who abstains from voting on the
proposal to amend the Long-Term 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 FOR THE YEAR 1995 IS ENCLOSED.
AUDITED FINANCIAL STATEMENTS FOR 1995 ARE INCLUDED IN THE APPENDIX TO THIS PROXY
STATEMENT.
By order of the Board of Directors,
M. DENISE KUPRIONIS
Corporate Secretary
March 28, 1996
21
<PAGE> 24
THE E.W. SCRIPPS COMPANY
PROXY FOR
CLASS A COMMON STOCK
The undersigned hereby appoints LAWRENCE A. LESER, DANIEL J. CASTELLINI
and M. DENISE KUPRIONIS 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 Queen City Club, Cincinnati, Ohio, on
Thursday, May 9, 1996 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 Ronald W. Tysoe.
(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)
Receipt of the Notice of Meeting of Stockholders and the related Proxy
Statement dated March 28, 1996 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated ___________________________, 1996
(Please date your Proxy)
Number of Shares
_______________________________________
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> 25
THE E.W. SCRIPPS COMPANY
PROXY FOR
COMMON VOTING STOCK
The undersigned hereby appoints LAWRENCE A. LESER, DANIEL J. CASTELLINI
and M. DENISE KUPRIONIS 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 Queen City Club, Cincinnati, Ohio, on
Thursday, May 9, 1996 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 an additional 2,000,000
shares of Class A Common Stock for issuance under 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)
Receipt of the Notice of Meeting of Stockholders and the related Proxy
Statement dated March 28, 1996 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated ___________________________, 1996
(Please date your Proxy)
Number of Shares
_______________________________________
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.
