<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 sec.240.14a-11(c) or sec.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] No fee required.
[ ] 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
E. W. SCRIPPS LOGO
THE E. W. SCRIPPS COMPANY
312 WALNUT STREET
CINCINNATI, OHIO 45202
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1997
------------------
TO THE SHAREHOLDERS OF THE E. W. SCRIPPS COMPANY
The Annual Meeting of the Shareholders of The E. W. Scripps Company (the
"Company") will be held at the Queen City Club, Cincinnati, Ohio, on Monday, May
12, 1997 at 10:00 a.m., local time, for the following purposes:
1. To elect ten persons to serve as directors for the ensuing year;
2. To adopt the 1997 Long-Term Incentive Plan;
3. To amend the 1994 Non-Employee Directors' Stock Option Plan;
4. To adopt the 1997 Deferred Compensation and Stock Plan for
Directors; and
5. To transact such other business as may properly come before the
meeting.
The board of directors has fixed the close of business on March 18, 1997 as
the record date for the determination of shareholders who are entitled to notice
of and to vote at the meeting and any adjournments thereof.
We encourage you to attend the meeting and vote your shares in person. If
you plan to attend the meeting and need special assistance because of a
disability, please contact the corporate secretary's office.
It is important that your shares be represented at the meeting. Please
sign, date and promptly mail the enclosed proxy card in the envelope provided,
even if you plan to attend the meeting in person. Returning your executed proxy
card will not affect your right to attend the meeting and vote your shares in
person.
By order of the board of directors,
M. DENISE KUPRIONIS
Corporate Secretary
March 28, 1997
<PAGE> 3
THE E. W. SCRIPPS COMPANY
312 WALNUT STREET
CINCINNATI, OHIO 45202
------------------
PROXY STATEMENT
1997 ANNUAL MEETING
MAY 12, 1997
This proxy statement, which together with the accompanying notice, proxy,
and annual report is being mailed to shareholders on or about March 28, 1997, is
furnished in connection with the solicitation of proxies for use at the Annual
Meeting of Shareholders of The E. W. Scripps Company, an Ohio company (the
"Company"), to be held on Monday, May 12, 1997.
The close of business on March 18, 1997, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting.
On March 1, 1997, the Company had outstanding 61,591,461 Class A Common
Shares, $.01 par value per share ("Class A Common Shares"), and 19,333,711
Common Voting Shares, $.01 par value per share ("Common Voting Shares"). Holders
of Class A Common Shares 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 Ohio law. Holders of Common Voting Shares are
entitled to elect all remaining directors and to vote on all other matters
requiring a vote of shareholders. Each Class A Common Share and Common Voting
Share is entitled to one vote upon matters on which such class of shares is
entitled to vote.
PROPOSAL 1
ELECTION OF DIRECTORS
A board of ten directors is to be elected, three by the holders of Class A
Common Shares voting separately as a class and seven by the holders of Common
Voting Shares 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 Shareholders and until their respective
successors are elected and qualified.
Each proxy for Class A Common Shares executed and returned by a holder of
such shares will be voted for the election of the three directors hereinafter
shown as nominees for such class of shares, unless otherwise indicated on such
proxy. Each proxy for Common Voting Shares executed and returned by a holder of
such shares will be voted for the election of the seven directors hereinafter
shown as nominees for such class of shares, 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.
Under Ohio law, if notice is given by any holder of Common Voting Shares or
Class A Common Shares, as the case may be, to the president, a vice president or
the secretary of the Company not less than 48 hours before the time fixed for
holding the meeting that such shareholder desires that the voting for election
of directors by such class of shares be cumulative, and if an announcement of
the giving of such notice is made upon the convening of such meeting by the
chairman or secretary or by or on behalf of the shareholder giving such notice,
then each shareholder of such class entitled to vote at the Annual Meeting shall
have the right to cumulate such voting power as he or she possesses at such
election and to give one
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<PAGE> 4
nominee a number of votes equal to the number of directors to be elected by such
class multiplied by the number of shares of such class he or she holds, or to
distribute his or her votes on the same basis among two or more of the nominees
to be elected by such class, as such shareholder sees fit.
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 OCCUPATIONS/BUSINESS
NAME AGE SINCE EXPERIENCE FOR PAST FIVE YEARS
- - --------------------------- --- -------- -----------------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR ELECTION BY HOLDERS OF CLASS A COMMON SHARES
Daniel J. Meyer (1) 60 1988 Chairman since January 1, 1991 and 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 51 1988 Managing Director of J.P. Morgan & Co. Incorporated since
February 10, 1992 (an investment banking firm).
Ronald W. Tysoe (2) 43 1996 Vice Chairman and Chief Financial Officer of Federated De-
partment Stores, Inc. since April 1990.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON VOTING SHARES
John H. Burlingame (3) 63 1988 Executive Partner since 1982 of Baker & Hostetler LLP (law
firm).
William R. Burleigh (4) 61 1990 Chief Executive Officer of the Company since May 1996,
President of the Company since August 1994, Chief Operating
Officer from May 1994 to May 1996, Executive Vice President
from March 1990 through May 1994 and Senior Vice Presi-
dent/Newspapers and Publishing from September 1986 to March
1990.
Lawrence A. Leser (5) 61 1977 Chairman of the Company since August 1994 and Chief Exec-
utive Officer from July 1985 to May 1996.
Charles E. Scripps (6) 77 1946 Chairman of the Executive Committee of the Company since
August 1994 and Chairman of the Board of Directors of the
Company from 1953 to August 1994.
Paul K. Scripps (7) 51 1986 Chairman since December 1989 of a subsidiary of the Com-
pany.
Robert P. Scripps (8) 79 1949 A Director of the Company since 1949.
Julie A. Wrigley 48 (9) Chairman and CEO of Wrigley Management Inc. since 1995,
Assistant to the President/CEO of Wm. Wrigley Jr. Company
since 1994 and Investment Advisor & Manager of Wrigley
Family Trusts and Estates since 1977.
</TABLE>
- - ---------------
(1) Mr. Meyer is a director of Cincinnati Milacron Inc., Star Banc Corp. and
Hubbell Incorporated (manufacturer of wiring and lighting devices).
(2) Mr. Tysoe is a director of Federated Department Stores, Inc.
(3) Mr. Burlingame is a trustee of The Edward W. Scripps Trust.
(4) Mr. Burleigh is a director of Ohio National Financial Services Company (a
mutual insurance and financial services company).
(5) Mr. Leser is a director of Union Central Life Insurance Company and of AK
Steel Holding Corporation (a steel manufacturer).
(6) Mr. Charles E. Scripps is Chairman of the Board of Trustees of The Edward W.
Scripps Trust and the brother of Robert P. Scripps.
(7) 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."
(8) Mr. Robert P. Scripps is a trustee of The Edward W. Scripps Trust and the
brother of Charles E. Scripps.
(9) Mrs. Wrigley is a nominee for election as director.
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<PAGE> 5
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The board held four regularly scheduled and two special meetings during
1996. Each director of the Company attended all of these meetings, except one
director who was unable to attend one special meeting.
COMMITTEES
The board of directors of the Company has an executive committee, an audit
committee, a compensation committee and an incentive plan committee.
Charles E. Scripps, Lawrence A. Leser, William R. Burleigh 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 held five
meetings in 1996. Each member of the executive committee attended each of the
meetings that he was required to attend, except one member who was unable to
attend one meeting.
Daniel J. Meyer, Nicholas B. Paumgarten and Ronald W. Tysoe 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 three meetings during 1996. Each member of the audit committee attended
each of the meetings that he was required to attend.
Daniel J. Meyer, Ronald W. Tysoe, Charles E. Scripps and John H. Burlingame
are the members of the compensation committee, which oversees all compensation
matters relating to the Company's senior executives. The compensation committee
held six meetings during 1996. Each member of the compensation committee
attended each of the meetings that he was required to attend.
Daniel J. Meyer and Ronald W. Tysoe, two of the Company's independent
directors, are the members of the incentive plan committee, which approves all
awards under the Company's Long-Term Incentive Plan and approves all performance
based bonus awards for the Company's senior executives. This committee held two
meetings during 1996. Each member of the incentive plan committee attended these
meetings.
COMPENSATION OF DIRECTORS
During 1996, each director elected by the holders of Class A Common Shares
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 Shares, with the exception of Mr. Charles E. Scripps and Mr. Lawrence A.
Leser, did 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.
Mr. Leser retired from the Company on May 31, 1996. Upon his retirement, he
entered into a consulting agreement with the Company under which he receives a
fee for services as Chairman of the Board of Directors at the annual rate of
$250,000. In 1996, the actual fee paid to Mr. Leser for such services was
$145,833. Mr. Leser does not receive any additional fees for his attendance at
board and committee meetings. As consideration for Mr. Leser's agreement to
3
<PAGE> 6
serve as a consultant to the Company, Mr. Leser was granted a restricted stock
award for 50,000 Class A Common Shares.
Under the Company's Stock Option Plan for Non-Employee Directors, Mr. Tysoe
received an initial option award of 5,000 Class A Common Shares when he was
elected to the board in May 1996. In connection with the disposition of the
Company's cable television business to Comcast Corporation in late 1996, the
number of shares underlying this option was adjusted to 8,100 shares.
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, 1997, of more
than five percent of the Company's outstanding Class A Common Shares or Common
Voting Shares. 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>
COMMON
NAME AND ADDRESS CLASS A VOTING
OF BENEFICIAL OWNER COMMON SHARES PERCENT SHARES PERCENT
- - ------------------------------------------- ------------- ------- ---------- -------
<S> <C> <C> <C> <C>
The Edward W. Scripps Trust (1) 32,610,000 52.9% 16,040,000 83.0%
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Jack R. Howard (2) 3,659,198 5.9% 170,000 .9%
c/o The E. W. Scripps Company
Attn: Corporate Secretary
312 Walnut Street
P.O. Box 5380
Cincinnati, Ohio
Paul K. Scripps and 189,097 .3% 1,616,113 8.4%
John P. Scripps Trust (3)
625 Broadway, Suite 625
San Diego, California
The Capital Group Companies, Inc. (4) 3,505,900 5.7% -- --
333 South Hope Street
Los Angeles, California
The Chase Manhattan Bank, Trustee (5) 275,667 .4% 942,000 4.9%
270 Park Avenue, 21st Floor
New York, New York
</TABLE>
- - ---------------
(1) Under the Trust Agreement establishing The Edward W. Scripps Trust (the
"Trust"), the Trust must retain voting shares 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 73 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 Common Voting
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<PAGE> 7
Shares 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 Class A Common Shares
and 170,000 Common Voting Shares 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 Class A Common Shares owned by Mr.
Howard's wife. Mr. Howard disclaims any beneficial interest in the shares
held by his wife.
(3) See footnote 7 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 Shares. According to the Schedule 13G for the year ended December 31,
1996, Capital Research and Management Company, an investment advisor and
wholly owned subsidiary of Capital, beneficially held as of December 31,
1996, 3,165,000 of the outstanding Class A Common Shares of the Company. The
remaining shares reported as being beneficially owned by Capital are
beneficially owned by other subsidiaries of Capital.
(5) Based on information provided by The Chase Manhattan Bank, the 275,667 Class
A Common Shares and 942,000 Common Voting Shares 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.
SECURITY OWNERSHIP OF MANAGEMENT
The following information is set forth with respect to the Company's Class
A Common Shares and Common Voting Shares beneficially owned as of March 1, 1997,
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 SHARES PERCENT SHARES PERCENT
- - ------------------------------------ ------------- ------- ---------- -------
<S> <C> <C> <C> <C>
William R. Burleigh (1) 80,715 * -- --
John H. Burlingame (2) 100 * -- --
Lawrence A. Leser (3) 130,834 * -- --
Daniel J. Meyer (4) 1,000 * -- --
Nicholas B. Paumgarten (5) 3,250 * -- --
Charles E. Scripps (2) (6) 27,200 * -- --
Paul K. Scripps (7) 189,097 * 1,616,113 8.4%
Robert P. Scripps (2) 0 -- -- --
Ronald W. Tysoe (8) 0 -- -- --
Daniel J. Castellini (9) 24,735 * -- --
Paul F. (Frank) Gardner (10) 43,077 * -- --
Craig C. Standen (11) 15,880 * -- --
Alan M. Horton (12) 24,374 * -- --
All directors and executive
officers as a group
(23 persons) (13) 33,186,982 53.9% 17,656,113 91.3%
</TABLE>
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<PAGE> 8
- - ---------------
* 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 447,800 Class A Common
Shares 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 Class A
Common Shares and the 16,040,000 Common Voting Shares 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 do not include 419,400 Class A Common
Shares underlying exercisable options held by him.
(4) The shares listed for Mr. Meyer do not include 8,100 Class A Common Shares
underlying an exercisable option held by him.
(5) The shares listed for Mr. Paumgarten include 2,000 Class A Common Shares
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 8,100 Class A Common Shares underlying an exercisable option held
by him.
(6) The shares listed for Mr. Charles E. Scripps include 500 Class A Common
Shares owned by his wife. Mr. Scripps disclaims any beneficial interest in
these shares.
(7) The shares listed for Mr. Paul K. Scripps include 119,520 Common Voting
Shares and 400 Class A Common Shares held in various trusts for the benefit
of certain relatives of Paul K. Scripps and 100 Class A Common Shares 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 Common
Voting Shares and 188,497 Class A Common Shares held by five trusts of
which Mr. Scripps is a trustee. Mr. Scripps is the sole beneficiary of one
of these trusts, holding 349,018 Common Voting Shares and 47,124 Class A
Common Shares. He disclaims beneficial ownership of the shares held in the
other four trusts.
(8) The shares listed for Mr. Tysoe do not include 8,100 Class A Common Shares
underlying an option held by him which will be exercisable on May 9, 1997.
(9) The shares listed for Mr. Castellini include 1,000 Class A Common Shares
owned by his wife. Mr. Castellini disclaims any beneficial interest in
these shares. The shares listed for Mr. Castellini do not include 230,300
Class A Common Shares underlying exercisable options held by him.
(10) The shares listed for Mr. Gardner do not include 121,400 Class A Common
Shares 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 109,500 Class A Common Shares underlying exercisable options
held by him.
(12) The shares listed for Mr. Horton include 100 shares held jointly with his
wife. The shares listed for Mr. Horton do not include 118,400 Class A
Common Shares underlying exercisable options held by him.
(13) The shares listed include the 32,610,000 Class A Common Shares and the
16,040,000 Common Voting Shares of the Company owned by the Trust.
6
<PAGE> 9
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, Ronald W. Tysoe, Charles E. Scripps and John H.
Burlingame. The committee oversees all compensation matters relating to the
compensation of the Company's senior executives. All committee actions are
reviewed by the board of directors of The E. W. Scripps Company.
A subcommittee of the compensation committee is the incentive plan
committee. This committee discusses and approves awards under the Company's
Long-Term Incentive Plan. Mr. Meyer and Mr. Tysoe are the members of the
incentive plan committee. All committee actions are reported to the compensation
committee and are also reviewed by the Scripps board of directors. (Hereafter
the compensation committee and the incentive plan committee are jointly referred
to as the "Committee".)
Mr. Meyer and Mr. Tysoe 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. Mr. Burlingame
is the Executive Partner of Baker & Hostetler LLP, which is general counsel to
the Company and to The Edward W. Scripps Trust. Mr. Burlingame is also a trustee
of the 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. Scripps 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 toward enhancing the
Company's performance and maximizing 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 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 and broadcasting) and market type
and size which, along with other data, are used by Scripps to determine the
median and other levels of compensation of executives of media companies with
profiles comparable to those of the Company.
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 the other named
executives during the last fiscal year were consistent with this policy. None of
the named executives has an employment contract with the Company.
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<PAGE> 10
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
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.
Each of the named executives was eligible, based on the criteria noted
above, for base salary increases effective January 1, 1997. These executives
received increases consistent with the Company's compensation philosophy.
ANNUAL BONUS
The purpose of the annual bonus program is to support the Company's
objective of enhancing value for our shareholders and to offer competitive total
compensation for financial performance that meets expectations. The program
directly links compensation to Company performance. Participants in the program
are senior officers and certain other executives. Two performance measures were
utilized in 1996: 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
targets for Mr. Gardner and for Mr. Horton were based on their specific areas of
responsibility. For the other named executives, the cash flow goal was based on
the consolidated operating cash flow target.
The Company's 1996 annual bonus plan for senior vice presidents allowed for
a maximum bonus opportunity of 40% of base salary. Determining if the executive
earned the 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% of a preestablished goal must be attained before a bonus amount
related to that performance measurement can be paid.
The Company attained its 1996 earnings per share and consolidated operating
cash flow goals which resulted in Messrs. Burleigh, Standen and Castellini
receiving 100% of their 1996 maximum bonus award. The publishing and
broadcasting divisions each attained their operating cash flow goals resulting
in Messrs. Gardner and Horton also receiving 100% of their 1996 maximum bonus
award.
The bonus amount is payable on an annual basis, although executives may
elect to defer payment of the bonus until retirement or another 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"). This Plan expires in December of this year. At this year's annual
meeting, shareholders will be asked to adopt the 1997 Long-Term Incentive Plan.
Eligible participants in the Plan 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 the Company's Class A Common Shares
at the fair market value per share as of the date the option is granted, and 2)
8
<PAGE> 11
restricted stock awards, which represent Class A Common Shares 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.
In recognition of his promotion, Mr. Burleigh is the only named executive
who received a restricted stock award in 1996.
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. In
1995 and 1996, annual awards were not made because of the proposed disposition
of the cable business, which was completed in late 1996.
In January 1997 Scripps adopted performance-based option grant guidelines.
Grants are to be based on an individual review of each participant's
performance. Award size is predicated on an executive's past personal
achievements, his or her contributions to the business and his or her potential
to materially build future shareholder value. Such awards will provide incentive
for continuing to build shareholder value and also align the executive's
interests with shareholder interests.
Performance reviews are to take place annually. When awarded, stock options
are to be granted at not less than the fair market value of the Company's Class
A Common Shares on the date of the grant. Therefore, the stock options have
value only if the share price appreciates following the date of the award. This
further ties executive compensation to long-term financial performance.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. William R. Burleigh was elected Chief Executive Officer in May 1996. He
remains President of the Company, a position to which he was elected in 1994.
Effective January 1, 1996, he received a 4.4% increase, which brought his annual
base salary to $475,000. He was elected CEO in May 1996. Because of his
increased responsibilities, his annual base salary, effective June 1, 1996, was
adjusted to $550,000. This base salary amount was below the median level for a
CEO in the media industry.
To recognize his promotion, in May 1996, Mr. Burleigh was granted a
restricted stock award of 30,000 shares and a nonqualified stock option award
which would have enabled him to purchase 50,000 of the Company's Class A Common
Shares at an exercise price of $43.81. In recognition of the fact that the value
of the Company's shares was affected by the disposition of the cable business in
late 1996, the restricted stock award was adjusted to 48,500 shares and the
option award was adjusted to 80,900 shares with an exercise price of $27.20.
These adjustments represent the same exchange value that was received by all
Scripps shareholders through the disposition of the cable business.
In December 1996 the Committee reviewed the performance of the Company.
Several analysts noted that Scripps was one of the top media performers in 1996.
The Committee also recognized that Mr. Burleigh's leadership and personal
performance contributed significantly to the Company's success in achieving its
financial, operations and strategic goals for 1996. Effective January 1, 1997,
his annual base salary was increased to $600,000.
9
<PAGE> 12
Mr. Burleigh's maximum bonus opportunity for 1996 was prorated for the time
that he was President and COO and for the time that he was President and CEO. As
described for the other named executives, determination of whether or not Mr.
Burleigh would earn his maximum bonus amount was a matter of ascertaining
whether or not the preestablished goals were achieved. As noted above, for
fiscal 1996 the Company attained its earnings per share and consolidated
operating cash flow goals, which resulted in Mr. Burleigh 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. While the Scripps annual bonus plan is based on performance measures of
the Company, these measures are not intended to qualify as performance-based
under the tax regulations.
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
John H. Burlingame
Charles E. Scripps
Ronald W. Tysoe
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<PAGE> 13
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(1)
--------------------------
AWARDS
--------------------------
ANNUAL COMPENSATION SECURITIES
RESTRICTED UNDERLYING ALL OTHER
NAME AND --------------------- STOCK OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS AWARD(S)(2) SARS(#) (3)
- - ------------------------------ ---- -------- -------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Leser (4) 1996 $281,250 $225,000 $2,198,684 0 $ 0
Chairman 1995 675,000 540,000 0 0 4,500
1994 650,000 520,000 0 64,700 4,500
William R. Burleigh 1996 $518,750 $355,625 $1,319,200 80,900 $4,500
President and Chief 1995 455,000 227,500 0 0 4,500
Executive Officer(5) 1994 423,333 211,667 180,780 48,500 4,500
Paul F. (Frank) Gardner 1996 $400,000 $160,000 0 0 $4,500
Senior Vice President/ 1995 380,000 106,400 0 0 4,500
Broadcasting 1994 330,000 132,000 $ 376,625 40,500 4,500
Daniel J. Castellini 1996 $335,000 $134,000 0 0 $4,500
Senior Vice President/ 1995 335,000 134,000 0 0 4,500
Finance and Administration 1994 325,000 130,000 0 32,400 4,500
Craig C. Standen 1996 $335,000 $134,000 0 0 $4,500
Senior Vice President/ 1995 325,000 130,000 0 0 4,500
Corporate Development (6) 1994 310,000 103,833 $ 210,975 32,400 4,500
Alan M. Horton 1996 $350,000 $140,000 0 0 $4,500
Senior Vice President/ 1995 325,000 130,000 0 0 4,500
Newspapers (7) 1994 255,938 92,813 $ 210,975 32,400 4,500
</TABLE>
- - ---------------
(1) In connection with the disposition of the cable television business to
Comcast Corporation in 1996, options and restricted stock awards granted
under the Company's Long-Term Incentive Plan were adjusted by the
compensation committee in accordance with such plan to prevent the dilution
or enlargement of rights of the holders of such options and awards.
Information in the Summary Compensation Table above with respect to options
and restricted stock awards reflects these adjustments.
(2) The aggregate number and value of restricted stock holdings for each named
executive officer as of the end of 1996 were as follows: Mr. Leser held
80,834 shares with a value of $2,813,832; Mr. Burleigh held 58,200 shares
with a value of $2,025,942; Mr. Gardner held 25,058 shares with a value of
$872,269; and Mr. Standen and Mr. Horton each held 12,125 shares, with a
value of $422,071 each. Dividends were paid during 1996 on shares of
restricted stock held by each named executive officer at a rate of thirteen
cents per share per. Mr. Castellini did not hold any restricted stock at
December 31, 1996. The value of the restricted stock is based on the fair
market value of the Company's shares on December 31, 1996.
(3) Represents compensation paid pursuant to the Company's Retirement and
Investment Plan.
(4) Mr. Leser retired as chief executive officer of the Company on May 23, 1996.
He retired as an employee of the Company on May 31, 1996. See "Information
Concerning the Board of Directors and its Committees -- Compensation of
Directors."
(5) Mr. Burleigh was elected chief executive officer of the Company on May 23,
1996. On January 1, 1996, his annual base pay rate was $475,000. Effective
June 1, 1996, his annual base pay rate was increased to $550,000.
(6) Mr. Standen was elected an executive officer of the Company in August 1994.
Prior to this appointment he was a vice president of a subsidiary of the
Company. The compensation reported for 1994 reflects his actual 1994
earnings.
(7) Mr. Horton was elected an executive officer of the Company in May 1994.
Prior to this appointment he was a vice president of a subsidiary of the
Company. The compensation reported for 1994 reflects his actual 1994
earnings.
11
<PAGE> 14
OPTION/SAR GRANTS IN 1996
The following table sets forth certain information regarding options for
Class A Common Shares granted in 1996 under the Company's Long-Term Incentive
Plan to named executives who participate therein.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
-------------------------------------------------------- ASSUMED ANNUAL
NUMBER OF % OF RATES OF
SECURITIES TOTAL SHARE PRICE
UNDERLYING OPTIONS/SAR'S EXERCISE APPRECIATION FOR
OPTIONS/SAR'S GRANTED TO OR BASE EXPIRA- OPTION TERM
GRANTED EMPLOYEES PRICE TION --------------------------
NAME (#)(1) IN 1996 ($/SH) DATE 5%($) 10%($)
- - -------------------- ------------- ------------- -------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
William R. Burleigh 80,900 46.6% $27.20 2006 $1,383,870 $3,506,998
</TABLE>
- - ---------------
(1) In recognition of Mr. Burleigh's election as CEO, he was granted a
nonqualified stock option for 50,000 of the Company's Class A Common Shares
on May 23, 1996. This award will be 100% exercisable on May 23, 1997. In
connection with the disposition of the cable television business to Comcast
Corporation in 1996, Mr. Burleigh's option for 50,000 shares was adjusted by
the compensation committee in accordance with the Company's Long-Term
Incentive Plan and accordingly represents an option for 80,900 shares as
indicated in the table above.
AGGREGATED OPTION/SAR EXERCISES IN 1996 AND FY-END OPTION/SAR VALUES
The following table sets forth certain information regarding the number and
value of options for Class A Common Shares held by the named executives at
December 31, 1996. Two executives exercised options during 1996.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
12/31/96(#) 12/31/96($)
---------------- ------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED UNEXERCISABLE UNEXERCISABLE
- - ------------------------ --------------- ----------- ---------------- ------------------
<S> <C> <C> <C> <C>
William R. Burleigh 331,900/80,900 $6,397,493/615,649
Paul F. (Frank) Gardner 96,400/-0- $ 1,532,293/-0-
Daniel J. Castellini 6,500 $ 159,900 210,300/-0- $ 4,279,526/-0-
Craig C. Standen 17,800 $ 416,665 89,500/-0- $ 1,731,954/-0-
Alan M. Horton 93,400/-0- $ 1,758,842/-0-
</TABLE>
12
<PAGE> 15
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Class A Common Shares, assuming an initial investment of $100 as
of December 31, 1991, 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>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S&P 500 $100 $108 $118 $120 $165 $203
- - -----------------------------------------------------------------
Scripps $100 $104 $118 $132 $174 $252
- - -----------------------------------------------------------------
Media Index $100 $115 $131 $123 $154 $198
</TABLE>
- - ---------------
(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. The index is weighted based on market capitalization. The companies
included in the peer group were approved by the compensation committee.
(2) The Company's divestiture of its cable television business on November 13,
1996 was treated as a dividend of $19.83 per share that was reinvested in
the Company's Class A Common Shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Daniel J. Meyer, Ronald W. Tysoe, Charles E. Scripps and John H.
Burlingame are the members of the Company's compensation committee.
Mr. Charles E. Scripps is chairman of the executive committee of the
Company's board of directors.
13
<PAGE> 16
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 1996 was approximately $1,866,324. 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. Charles E. Scripps and Mr. Burlingame are trustees of The Edward W.
Scripps Trust and for 1997 they are expected to continue to serve as trustees.
As trustees, Mr. Scripps and Mr. Burlingame share the power, together with one
other trustee, to vote and dispose of the 32,610,000 Class A Common Shares and
16,040,000 Common Voting Shares 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 99,000 123,000 148,000 173,000
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 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
14
<PAGE> 17
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, 1996, the years of credited service of the individuals named in the cash
compensation table are as follows: Mr. Burleigh-40; Mr. Gardner-12; Mr.
Castellini-26; Mr. Standen-6; Mr. Horton-26. Mr. Leser retired in May 1996.
The board of directors of the Company on May 23, 1996 adopted a Selected
Officer Retirement Program, the purpose of which is to provide supplemental
retirement benefits to certain key employees of the Company who meet the
eligibility requirements. Participants in the program must be specifically
designated as participants by the compensation committee. As of March 1, 1997,
the only designated participants are Mr. Lawrence A. Leser and Mr. William R.
Burleigh. The participants begin to receive benefits under the program upon
retirement.
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 Common Voting Shares 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, 1997, the Signatories
would have held in the aggregate approximately 88.7% of the outstanding Common
Voting Shares as of such date.
Once effective, the provisions restricting transfer of Common Voting Shares
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 Shares 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 Ohio law and certain
provisions set forth in the Agreement.
Transfer Restrictions. No Signatory will be able to dispose of any Common
Voting Shares (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 Common Voting Shares into Class A Common Shares
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 Common Voting Shares 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
15
<PAGE> 18
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 Common
Voting Shares by testamentary transfer to their spouses provided such shares are
converted to Class A Common Shares 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 Common Voting Shares made by Signatories without compliance with the Scripps
Family Agreement will result in automatic conversion of such shares to Class A
Common Shares.
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 shareholders 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
shareholders 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 Common Voting Share 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 shareholders of
the Company, will vote his Common Voting Shares 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 shareholders 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 Shares 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 Shares.
Stockholder Agreement. The former shareholders 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 Shares
received by such shareholders 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 Shares. Under
the agreement, if a shareholder has received a written offer to purchase 25% or
more of his Common Voting Shares, 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 shareholders, the Company is obligated to purchase from the shareholder's
estate a sufficient number of the common shares of the
16
<PAGE> 19
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 shareholder, the Company
has an option to buy all common shares of the Company owned by such shareholder.
Under the agreement, stockholders owning 25% or more of the outstanding Common
Voting Shares issued pursuant to the JPSN Merger may require the Company to
register Common Voting Shares (subject to the right of first refusal mentioned
above) under the Securities Act of 1933 for sale at the shareholders' expense in
a public offering. In addition, the former shareholders of the John P. Scripps
Newspaper Group will be entitled, subject to certain conditions, to include
Common Voting Shares (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 Common Voting Shares.
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."
Mr. John H. Burlingame is the executive partner of Baker & Hostetler LLP,
which is general counsel to the Company and to The Edward W. Scripps Trust (the
"Trust"). Baker & Hostetler LLP performed legal services for the Company and the
Trust in 1996 and is expected to perform such services in 1997. In 1996, the
Company and the Trust paid approximately $8,400,000 in legal fees to Baker &
Hostetler LLP.
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., has performed investment banking services for the
Company in the current year and may again perform investment banking services
for the Company.
Mr. Lawrence A. Leser, chairman of the Company, entered into a loan
agreement with the Company in January 1996 pursuant to the Employee Stock
Purchase Loan Program. This program 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
TO ADOPT THE E. W. SCRIPPS COMPANY'S 1997 LONG-TERM INCENTIVE PLAN
GENERAL
There will be submitted at the Annual Meeting for action by the holders of
the Common Voting Shares a proposal to adopt the 1997 Long-Term Incentive Plan
(the "Incentive Plan"). The Company's 1987 Long-Term Incentive Plan expires on
December 10, 1997. The board continues to believe that the 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 of
substantial benefit to the Company and its shareholders. 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 Incentive Plan was approved by the board of directors on March 10,
1997.
No awards relating to the proposed Incentive Plan have been made. If the
proposed Incentive Plan is approved by the holders of Common Voting Shares, the
Company's incentive
17
<PAGE> 20
plan committee will from time to time consider awards for key employees of the
Company under such Plan.
Administration. The Incentive Plan will be administered by the Company's
incentive plan committee (the "Committee"). Subject to the terms of the
Incentive Plan, the Committee will be authorized to select persons to
participate in the Incentive Plan, determine the form and substance of grants
made under the Incentive Plan, and the conditions and restrictions, if any, to
which such grants are subject, interpret the Incentive Plan and adopt, amend, or
rescind such rules and regulations for carrying out the Incentive Plan.
Shares Available Under the Incentive Plan. Subject to certain provisions in
the Plan, an aggregate of 3,158,700 Class A Common Shares of the Company may be
issued pursuant to the Incentive Plan.
Participation; Award Limitation. Participation in the Incentive Plan will
be limited to officers and other key employees of the Company and its
subsidiaries selected by the Committee. Directors who are officers of the
Company shall be eligible to participate in the Incentive Plan. Directors who
are not officers of the Company and directors who are members of the Committee
or beneficiaries of The Edward W. Scripps Trust will not be eligible to
participate in the Incentive Plan.
Under the Incentive Plan, the Committee will determine who receives
incentive or nonqualified stock options, stock appreciation rights (SARs),
restricted or nonrestricted stock awards, performance units, or any combination
thereof. In addition, the Committee will determine the number of shares with
respect to which incentive or nonqualified stock options, SARs, restricted or
nonrestricted stock awards, performance units are to be granted to a
participant. The maximum number of shares granted to any single individual in
any one calendar year may not exceed 500,000 shares.
Incentive and Nonqualified Options. The Incentive Plan provides for the
grant to eligible participants of incentive stock options, nonqualified stock
options, or any combination thereof. The exercise price under any option awarded
under the Incentive Plan is required to be not less than 100% of the fair market
value of the shares on the date the option is granted.
Options may be exercised in whole or in part upon payment of the exercise
price of the shares to be acquired. Payment will be made in cash or in shares
previously acquired by the participant or a combination thereof. The fair market
value of Class A Common Shares tendered on exercise of options will be
determined on the date of exercise. A participant also may exercise his or her
options under a "cashless" exercise method involving a brokerage loan or a
brokered sale of all or part of the shares underlying the options.
Pursuant to the Incentive Plan, the Committee will determine the date on
which each option may be exercised and whether an option is exercisable in
installments. In addition, the Committee may accelerate the time at which any
option may be exercised in whole or in part. A participant may exercise an
option only if he or she is, and has continuously since the date the option was
granted been, an employee of the Company or a subsidiary.
The Committee will determine the term during which each option may be
exercised, but in no event will 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.
Stock Appreciation Rights. Under the Incentive Plan, the Committee has the
authority to grant SARs with an option ("Tandem SAR") or independently of
options ("Independent SARs").
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Tandem SARs. The exercise of a Tandem SAR will cause an immediate
forfeiture of its corresponding option, and the exercise of an option will
result in an immediate forfeiture of its corresponding Tandem SAR. A Tandem SAR
will expire at the same time as the related option expires. Upon the exercise of
a Tandem SAR, the participant will be entitled to a distribution in an amount
equal to the difference between the fair market value of a Class A Common Share
of the Company on the date of exercise and the exercise price of the option to
which the SAR corresponds.
Independent SARs. An Independent SAR will entitle a participant to receive,
with respect to each Class A Common Share as to which the SAR is exercised, the
excess of the fair market value of one share on the date of exercise over its
fair market value on the date the Independent SAR was granted.
Performance Units. The Committee may grant performance units on a
contingent basis to participants at any time. The Committee will determine the
number of performance units granted to a participant, the appropriate period
over which performance is to be measured ("performance cycle"), and the dollar
value of the performance unit 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. The
Committee will establish performance goals that will determine the ultimate
value of the performance unit or the number of performance units earned by
participants, or both.
Restricted and Nonrestricted Share Awards. Under the Incentive Plan, the
Committee may at any time award shares to participants in such amounts as it
determines. Each award of shares will specify the applicable restrictions, if
any, on such shares, the duration of such restrictions, and the time or times at
which such restrictions will lapse with respect to all or a specified number of
shares that are part of the award.
Termination and Modification of the Incentive Plan. The board of directors
of the Company, without further approval of the shareholders, may modify or
terminate the Incentive Plan and may suspend, and if suspended, may reinstate
any or all of the provisions of the Incentive Plan, except that no modification,
suspension or termination of the Incentive Plan may, without the consent of the
participant affected, alter or impair any grant previously made under the
Incentive Plan.
The Incentive Plan will commence on May 12, 1997, and terminate on May 11,
2007.
FEDERAL INCOME TAX CONSEQUENCES OF 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 Shares are
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 Shares acquired upon the exercise of an incentive stock
option are 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
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<PAGE> 22
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. 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 Class
A Common Shares 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.
Stock Appreciation Rights. No income will be realized by an optionee in
connection with the grant of a stock appreciation right under the Incentive
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 Shares 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 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 Shares acquired
pursuant to the Incentive 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 shares
generally will be treated as compensation that is taxable as ordinary income to
the participant and may be
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<PAGE> 23
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.
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the Common Voting
Shares present or represented at the annual meeting is required to approve the
proposed Incentive Plan. The board of directors recommends that holders of such
shares vote FOR the proposed Incentive Plan. It is expected that the Common
Voting Shares owned by The Edward W. Scripps Trust will be voted in favor of the
Incentive Plan, thus assuring approval thereof. Proxies for Common Voting Shares
solicited by the board will be voted FOR the proposed amendment unless
shareholders specify a contrary choice in their proxies.
PROPOSAL 3
TO AMEND THE 1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
GENERAL
There will be submitted at the annual meeting for action by the holders of
Common Voting Shares a proposal to approve three amendments to The E. W. Scripps
Company's 1994 Non-Employee Directors' Stock Option Plan (the "Stock Option
Plan").
Increase in the Total Number of Shares Subject to Option Awards. Currently,
the total number of Class A Common Shares of the Company that may be made
subject to options awarded under the plan is 50,000. If Proposal Three is
approved, the number of Class A Common Shares subject to options awarded under
the plan will be increased to 100,000.
Increase of Class A Common Shares at Initial Election. The Stock Option
Plan currently provides that each qualified director receives a one-time
non-qualified stock option for 8,100 Class A Common Shares at the time of
initial election. If Proposal Three is approved by the holders of Common Voting
Shares, each qualified director will receive a one-time non-qualified stock
option for 10,000 Class A Common Shares at the time of initial election.
Grant of Additional Stock Options To Current Non-Employee Directors. At the
implementation of the Stock Option Plan, effective December 9, 1994, each of the
three non-employee directors currently in office received an option for 5,000
Class A Common Shares. In connection with the disposition of the cable
television business to Comcast Corporation in late 1996, the options for 5,000
Class A Common Shares granted under the Stock Option Plan were adjusted by the
compensation committee and accordingly now represent options for 8,100 Class A
Common Shares. If Proposal 3 is approved by the holders of Common Voting Shares,
each qualified director currently in office will receive an option for an
additional 1,900 Class A Common Shares, thus providing each such director with
options for 10,000 Class A Common Shares under the plan.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
With respect to non-qualified stock options generally, no income is
realized by the optionee at the time the option is granted, 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 Class A Common Shares 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 reporting requirements are satisfied), and upon disposition of the
Class A Common Shares 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
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<PAGE> 24
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.
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the Common Voting
Shares present or represented at the annual meeting is required to approve the
proposed Stock Option Plan. The board of directors recommends that holders of
such shares vote FOR the proposed Stock Option Plan. It is expected that the
Common Voting Shares owned by The Edward W. Scripps Trust will be voted in favor
of the Stock Option Plan, thus assuring approval thereof. Proxies for Common
Voting Shares solicited by the board will be voted FOR the proposed amendment
unless shareholders specify a contrary choice in their proxies.
PROPOSAL 4
TO ADOPT THE 1997 DEFERRED COMPENSATION AND STOCK PLAN FOR DIRECTORS
GENERAL
There will be submitted at the annual meeting for action by the holders of
Common Voting Shares a proposal to adopt the 1997 Deferred Compensation and
Stock Plan for Directors (the "Directors' Deferral Plan"). The purpose of the
Deferral Plan is to more closely align the participants' financial interests
with the Company's shareholders. The board of directors of the Company approved
the Deferral Plan on March 10, 1997.
Eligibility. Any director who is not an officer or employee of the Company
or a beneficiary or trustee of The Edward W. Scripps Trust will be eligible to
participate in the Deferral Plan.
Election. A participating director can elect to defer a minimum of 50% of
his or her annual fees, meeting fees or fees for serving as chairman of a board
committee. Participants can defer a payment from the date such payment would
have been made until a future date not earlier than three years from the date
the payment would have been made or until the date the participant resigns or is
not re-elected as a director.
Funds. A participant may elect to defer his or her fees into the fixed
income fund or phantom stock fund. Fees deferred into the fixed income fund will
be recorded on the Company's books and credited annually with compounded
interest, based on the 12 month average of the 10-year treasury rate plus 1%.
Fees deferred into the phantom stock fund will be earned and converted into
phantom Class A Common Shares each quarter. The conversion is calculated by
dividing an amount equal to the quarterly fees deferred by the participant by
the fair market value of the Company's Class A Common Shares on the date the
fees are earned (i.e. the last day of such quarter). Dividends on shares shall
be converted on December 31 of each year based upon the fair market value on the
last trading day for that calendar year.
Payment. A participant can elect to have deferred fees paid in a lump sum
or over a specified number of years. In the event of death, disability or severe
hardship, the Company may accelerate pay-outs to participants. At the election
of the participant, deferred fees in phantom stock can be paid in shares or in
cash equal to the value of the shares or a combination of both.
Previous Deferral Elections. Fees deferred under the 1995 Directors'
Deferred Compensation Plan will be transferred to the Deferral Plan and held in
the fixed income fund or phantom stock at the participant's election. The
conversion shall be based upon the fair market value for the quarter in which
the conversion is made.
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<PAGE> 25
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
For Federal income tax purposes, amounts deferred under the plan are not
includible in the participant's income until distributed to the participant. The
amount of cash or the fair market value of stock distributed from the plan to
the participant will be taxed as ordinary income to the participant in the year
distributed, and the Company will be entitled to a deduction in the same amount
in the same year.
VOTE NECESSARY FOR APPROVAL
The affirmative vote of the holders of a majority of the Common Voting
Shares present or represented at the annual meeting is required to approve the
proposed Deferral Plan. The board of directors recommends that holders of such
shares vote FOR the proposed Deferral Plan. It is expected that the Common
Voting Shares owned by The Edward W. Scripps Trust will be voted in favor of the
Deferral Plan, thus assuring approval thereof. Proxies for Common Voting Shares
solicited by the board will be voted FOR the proposed amendment unless
shareholders specify a contrary choice in their proxies.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and owners of more than ten percent of the
Company's Class A Common Shares ("10% shareholders"), 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 Shares and other equity securities of the Company. Executive officers,
directors and 10% shareholders 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, 1996, all Section
16(a) filing requirements applicable to its executive officers, directors and
10% shareholders were complied with.
INDEPENDENT PUBLIC ACCOUNTANTS
At its February 25, 1997 meeting, the board approved the appointment of
Deloitte & Touche as independent public accountants for the Company for the
fiscal year ending December 31, 1997. A representative of Deloitte & Touche is
expected to be present at the annual meeting.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received by the Company at 312 Walnut
Street, Cincinnati, Ohio on or before November 28, 1997, for inclusion in the
Company's proxy statement and form of proxy relating to the 1998 Annual Meeting
of Shareholders.
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 Shares.
The presence of any shareholder 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.
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<PAGE> 26
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 Shares
permits specification of a vote for or against, or abstention with respect to,
each of the proposals to adopt the Long-Term Incentive Plan, amend the
Non-Employee Directors' Stock Option Plan, and adopt the Directors' Deferred
Compensation and Stock 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 proposals to adopt the Incentive
Plan, amend the Stock Option Plan, and adopt the Directors' Deferred
Compensation and Stock Plan.
Under Ohio law and the Company's Articles of Incorporation, broker
non-votes for Class A Common Shares and abstaining votes for both Class A Common
Shares and Common Voting Shares will not be counted in favor of, or against,
election of any nominee and any holder of Common Voting Shares who abstains from
voting on the proposals to adopt the Long-Term Incentive Plan, amend the Stock
Option Plan, and adopt the Directors' Deferred Compensation and Stock Plan will
in effect be voting against such proposals.
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 ENDED DECEMBER 31, 1996,
IS ENCLOSED.
By order of the Board of Directors,
M. DENISE KUPRIONIS
Corporate Secretary
March 28, 1997
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PROPOSAL 2/SEC COPY
print date 3/7/97
BOD approval 3/10/97
shareholder approval 5/12/97
THE E. W. SCRIPPS COMPANY
1997 LONG-TERM INCENTIVE PLAN
1. Purpose.
-------
The plan shall be known as The E. W. Scripps Company 1997 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 or independent of options
("SARs"), restricted or nonrestricted share awards, performance units,
or any combination of the foregoing may be made under the Plan.
2. Definitions.
------------
(a) "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
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.
(b) "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").
(c) "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.
(d) "DISABILITY" means a permanent and total disability as defined
in Section 72(m)(7) of the Code.
(e) "FAIR MARKET VALUE" of Class A Common Shares of the Company
shall mean, with respect to the date in question, the average
of the high and low sale prices of such shares on the New York
Stock Exchange, or if the Company's Class A Common Shares are
not traded on such exchange, or otherwise traded publicly, the
value determined, in good faith, by the Committee.
(f) "INCENTIVE STOCK OPTION" means an option conforming to the
requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
(g) "NONQUALIFIED STOCK OPTION" means any stock option other than
an Incentive Stock Option.
<PAGE> 28
(h) "RETIREMENT" means retirement as defined under the Company's
Media Pension Plan or termination of one's employment with the
approval of the Committee.
(i) "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.
3. Administration.
---------------
The Plan shall be administered by a committee (the "Committee")
consisting of at least three persons. Members of the Committee shall be
such directors of the Company as are permitted by applicable laws and
regulations. 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. At its discretion, the Committee is
authorized to appoint a subcommittee, the members of which it will
designate and which shall be composed solely of such directors as are
permitted by applicable laws and regulations. Such committee shall
possess and may exercise all the powers of the Committee and shall keep
full records and accounts of its proceedings and transactions. All such
transactions shall be reported to the Committee and to the Board of
Directors.
4. Shares Available for the Plan.
------------------------------
Subject to adjustments as provided in Section 15, an aggregate of
3,158,700 of Class A Common Shares 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, SARs in tandem therewith 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 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.
The maximum number of shares with respect to which incentive
or nonqualified options, SARs, restricted or nonrestricted stock or
performance units, or any combination of the foregoing may be granted
to any single individual in any one calendar year shall not exceed
500,000 shares.
<PAGE> 29
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, 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 Class A Common
Shares. The Fair Market Value of Class A Common Shares
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 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.
<PAGE> 30
(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 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 or any subsidiary 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 five 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 five-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 or any subsidiary 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 or any subsidiary 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 and SARs that were not exercisable on the date of such
termination shall be forfeited.
Notwithstanding anything to the contrary herein, if a
participant ceases to be an employee of the Company or any
subsidiary, for any reason other than Cause, the Committee at
its sole discretion may accelerate the vesting of any option
or SAR so that it will become fully vested and exercisable as
of the date of such participant's termination of employment.
If there is a Change in Control of the Company, there will be
an automatic acceleration of the vesting of any outstanding
option or SAR so that it will become fully vested and
exercisable as of the date of the Change in Control.
7. Stock Appreciation Rights.
-------------------------
(a) TANDEM SARS. The Committee shall have the authority to grant
SARs in tandem with an option ("tandem SAR") 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 tandem SAR, and the exercise of a tandem SAR
shall cause an immediate forfeiture of its corresponding
option. Tandem SARs shall be subject to such other terms and
conditions as the Committee may specify. A tandem 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.
<PAGE> 31
Tandem SARs shall be exercisable only when, to the
extent and on the conditions that the related option is
exercisable. No tandem SAR may be exercised unless the Fair
Market Value of a Class A Common Share of the Company on the
date of exercise exceeds the exercise price of the option to
which the SAR corresponds.
Upon the exercise of a tandem SAR, the optionee shall
be entitled to a distribution in an amount equal to the
difference between the Fair Market Value of a Class A Common
Share 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 tandem 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
Class A Common Shares on that date exceeds the exercise price
of the related option.
(b) INDEPENDENT SARs. SARs may be granted by the Committee
independently of options ("Independent SARs"). An Independent
SAR will entitle a participant to receive, with respect to
each Class A Common Share as to which the SAR is exercised,
the excess of the Fair Market Value 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 Committee may
specify, except that no SAR shall become exercisable during
the first six months following the date on which it was
granted.
Any exercise of an Independent SAR must be in
writing, signed by the proper person and delivered or mailed
to the Company, accompanied by any other documents required by
the Committee.
Each Independent SAR will be exercised automatically
on the last day prior to the expiration date established by
the Committee at the time of the award of such SAR.
Payment of the amount to which a participant is
entitled upon the exercise of an Independent SAR shall be made
in cash or Class A Common Shares, or in a combination thereof,
as the Committee shall determine. To the extent that payment
is made in such shares, the shares shall be valued at their
Fair Market Value on the date of exercise of such SAR.
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.
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.
<PAGE> 32
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 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 Class A Common Shares 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.
<PAGE> 33
12. 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.
13. 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.
14. 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.
15. 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 no modification, suspension or termination of the Plan may,
without the consent of the grantee affected, alter or impair any grant
previously made under 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.
16. Commencement Date; Termination Date.
-----------------------------------
The date of commencement of the Plan shall be May 13, 1997. Unless
previously terminated, the Plan shall terminate at the close of
business on May 12, 2007.
17. 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.
18. Provisions Applicable Solely to Insiders.
----------------------------------------
<PAGE> 34
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) 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.
(b) 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 applicable law.
19. Transferability.
----------------
No option, SAR, or performance unit, nor any right thereunder, may be
assigned or transferred by an employee except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations
order (as defined in the Code or the Employee Retirement Income
Security Act of 1974, as amended); provided, however, that if so
provided in the instrument evidencing a nonqualified option, the
Committee may permit any employee to transfer such option during his
lifetime to one or more members of his family, to one or more trusts
for the benefit of one or more members of his family, or to a
partnership or partnerships of members of his family, provided that no
consideration is paid for the transfer and that such transfer would not
result in the loss of any exemption under Rule 16b-3 for any option
that the Committee does not permit to be so transferred. The Committee
may permit in its discretion transfers of nonqualified options to other
persons or entities, as permitted by applicable law. The transferee of
such option shall be subject to all restrictions, terms and conditions
applicable to such option prior to its transfer, except that the option
shall not be further transferable inter vivos by the transferee. The
Committee may impose on any such transferable option and on the shares
to be issued upon the exercise of such option such limitations and
conditions as the Committee deems appropriate.
<PAGE> 35
PROPOSAL 3/SEC COPY
BOD approval 3/10/97
Shareholder Approval 5/12/97
THE E. W. SCRIPPS COMPANY
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(AS AMENDED EFFECTIVE 5/12/97)
- - --------------------------------------------------------------------------------
1. PURPOSE.
The Plan shall be known as The E. W. Scripps Company 1994 Non-Employee
Directors' Stock Option Plan. The purpose of The E. W. Scripps Company
1994 Non-Employee Directors' Stock Option Plan (hereinafter referred
to as the "Plan") is to strengthen the alignment of interests between
non-employee directors (hereinafter referred to as "Participants") and
the shareholders of The E. W. Scripps Company (hereinafter
referred to as the "Company") through the increased ownership of the
Company's Class A Common Shares.
The Plan shall be subject to approval by the holders of the Company's
Common Voting Shares at the Company's 1995 annual meeting of shareholders
and the amendment to this Plan is subject to shareholder approval at the
Company's 1997 annual meeting of shareholders.
2. LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
The total number of Class A Common Shares of the Company that may be made
subject to options awarded under the Plan shall be 100,000.
3. LIMITATION ON AMENDMENTS TO THE PLAN.
The Plan may not be amended more than once every six months, other than
to comport with changes in the Internal Revenue Code of 1986, as amended
(the "Code"), the Employee Retirement Income Security Act, as amended, or
the rules under either of the foregoing acts.
4. PARTICIPATION.
For purposes of this Plan, a director shall be defined as any director
who is not an officer or employee of the Company, or a beneficiary of The
Edward W. Scripps Trust, or a trustee of The Edward W. Scripps Trust.
5. NONQUALIFIED OPTIONS.
Directors elected by the holders of the Company's Class A Common Shares
shall receive an option for 10,000 Class A Common Shares at the time of
their initial election. At the implementation of the amendment to this
Plan, effective May 12, 1997, each director, as defined by section 4 of
this Plan, in office on May 9, 1997 shall receive an option for 1,900
Class A Common Shares.
All options granted under the Plan shall be subject to the following
terms and conditions.
A. PRICE.
The price per share deliverable upon the exercise of each option
("exercise price") shall be equal to 100% of the Fair Market Value
of the shares on the date the option is granted.
The Fair Market Value of a Class A Common Share of the Company
shall mean, with respect to the date in question, the average of
the highest and lowest officially-quoted selling prices on the New
York Stock Exchange.
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 by means of Class A Common Shares previously acquired
by the Participant or a combination of cash and Class A Common
Shares. The Fair Market Value of Class A Common Shares tendered on
exercise of options shall be determined on the date of exercise.
<PAGE> 36
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 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 initial stock option award effective on December 9, 1994 shall
be exercisable on December 9, 1995. All other stock option awards
shall be exercisable on the first anniversary of the director's
award.
The term of each option shall be ten years from the date it is
granted. Shares may be purchased in whole or in part at any time
after the option becomes exercisable, subject to a minimum
exercise of 100 shares.
6. 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 Class A Common Shares 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 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 Securities Exchange Act of 1934
(the "Exchange Act").
7. WRITTEN AGREEMENT.
Each director 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
Company.
8. TRANSFERABILITY.
No option granted under the Plan shall be transferable by a director
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 may be exercised only by the optionee or grantee
thereof or his guardian or legal representative.
9. 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 Company 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 options granted under the Plan,
and in the exercise price of outstanding options. In the event of any
merger, consolidation or other reorganization
<PAGE> 37
in which the Company is not the surviving or continuing corporation, all
stock option awards that were granted hereunder and that are outstanding
on the date of such event shall be assumed by the surviving or continuing
corporation.
10. LISTING AND REGISTRATION.
If the Company determines that the listing, registration, or
qualification upon any securities exchange or under any law of shares
subject to any option granted under the Plan 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 may be exercised in
whole or in part, or no shares issued unless such listing, registration
or qualification is effected free of any conditions not acceptable to the
Company.
11. DURATION OF PLAN.
This Plan shall become effective as of December 9, 1994 subject to
approval before December 1, 1995 by the affirmative vote of the holders
of a majority of the Common Voting Shares of the Company present, or
represented, and entitled to vote at a meeting duly held. All options
awarded prior to approval of the Plan by such shareholders may not be
exercised until such approval is obtained and shall be canceled and
forfeited in the event such approval is not obtained. This Plan will
terminate on December 8, 2004 but no such termination shall affect the
prior rights under this Plan of the Company or of any Participant who has
received an option hereunder.
12. ADDITIONAL PROVISIONS.
A Participant may elect to (i) 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.
Notwithstanding the foregoing, a Participant may elect to have shares
withheld on exercise of an option granted 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 such option
<PAGE> 38
PROPOSAL 4/SEC COPY
BOD approval 3/10/97
Shareholder Approval 5/12/97
THE E. W. SCRIPPS COMPANY
1997 DEFERRED COMPENSATION AND STOCK PLAN FOR DIRECTORS
- - ------------------------------------------------------------------------------
1. INTRODUCTION
------------
Effective January 1, 1997, The E. W. Scripps Company (the "Company")
hereby adopts a non-qualified deferred compensation and stock plan (the
"Plan") for its directors ("Participants"). For purposes of this Plan, a
director shall be defined as any director who is not an officer or
employee of the Company, a beneficiary of The Edward W. Scripps Trust, or
a trustee of The Edward W. Scripps Trust.
The purpose of the Plan is to provide an opportunity for Participants to
enhance their personal financial planning by having access to a vehicle
for deferring income to a time considered to be of personal advantage.
Additionally, the Plan is designed to more closely align the
Participants' financial interests with those of the Company's
shareholders.
2. PLAN ADMINISTRATION
-------------------
The Plan shall be governed by the Board of Directors of the Company and
administered by the Corporate Secretary.
A Participant's interest in the Plan may not be sold, assigned, pledged,
transferred or otherwise encumbered.
3. COMPENSATION ELIGIBLE FOR DEFERRAL
----------------------------------
Participating directors can elect to defer annual fees, meeting fees,
and/or fees for serving as chairman of a committee which become payable
under the director fee schedule approved from time to time by The E.
W. Scripps Company.
4. TIMING OF ELECTION
------------------
The election to defer potential director fee payments under the Plan must
be made within 30 days after the first of each calendar year. (However,
for the year 1997, since the Plan was approved by the Board of Directors
on March 10, 1997, the deadline to defer fees is extended to March 31,
1997 for those directors who have been continuously deferring fees.)
Once an election is made, it cannot be revoked.
5. DEFERRAL PERIOD
---------------
Participants can elect to defer payment from the date such payment
otherwise would be made until an actual date specified by the
Participant, but no earlier than three years from the date it would
otherwise have been paid, or until the date that he/she resigns as a
director or is not re-elected a director.
6. DEFERRAL ELECTION
-----------------
Directors may defer a minimum of 50% of annual fees, meeting fees, and/or
fees for serving as chairman of a committee which become payable under
the director fee schedule approved by the Board of Directors of the
Company.
<PAGE> 39
A Participant must elect to defer either into the Fixed Income Fund or
into Phantom Stock, or some combination of these two funds.
Once an election to defer is made, it is irrevocable.
Deferred amounts will be earned on a quarterly basis.
(A) FIXED INCOME FUND
Deferred amounts will be recorded on the Company's books and
credited with an interest factor during the deferral period.
Interest on unpaid deferred amounts will be compounded and
credited annually. Interest is calculated based on the twelve
month average of the 10-year treasury rate (at November of
each year), plus 1%.
(B) PHANTOM STOCK FUND
Quarterly, the earned amount will be converted to phantom
shares of the Company's Class A Common Stock. The conversion
calculation is:
<TABLE>
<S> <C> <C>
Quarterly deferred retainer, the Fair Market Value1 of the Company's # of
committee chair retainer, <K247> Class A Common Shares on the date <K061> phantom
and meeting fee amounts earned2 shares
</TABLE>
credited
1 The Fair Market Value shall
be the average of the high
and low sale prices of the
Company's stock on the New
York Stock Exchange.
2 The date earned is the last
day of each quarter that the
director served in his or her
position.
Dividends on shares accumulated during the year and for prior
years shall be converted on December 31 of each year and added
to the balance of the deferred amount. Dividends shall be
converted to phantom shares using the above calculation,
except that it will be computed on an annual basis. The Fair
Market Value shall be calculated on the last trading day for
that calendar year.
An example of how the Plan will work is attached as Exhibit A.
7. PAYMENT OF THE BALANCE IN THE DEFERRED ACCOUNT
----------------------------------------------
Participants may not make intra-Plan transfers, i.e., once an election is
made to defer into a specific fund, the Participant cannot elect to move
an account balance into another fund.
(A) FIXED INCOME FUND
At the time the Participant executes the Election Form, the
Participant may elect that deferred amounts, including
interest, be paid in a lump sum, or over a specified number of
years (not to exceed 15 years). If the Participant fails to
make an election as to the period of time over which payments
are to be made, payments shall be made over a 10 year period,
commencing on the date elected by the Participant on the
Election Form.
<PAGE> 40
Balances in the fixed income fund will continue to earn
interest credit as described above.
Notwithstanding the foregoing provision, the Company shall
have the discretion to accelerate pay-out in the event of a
Participant's disability, death or severe hardship.
(B) PHANTOM STOCK FUND
At the election of the Participant, made at the time the
Participant executes the Election Form, the Participant may
elect that (i) the balance in his or her phantom stock account
shall be paid in shares, in cash equal to the value of the
shares, or a combination of shares and cash and (ii) such
payment shall be in a lump sum at the end of the deferral
period or over a specified number of years (not to exceed 15
years) beginning at the end of the deferral period.
Participant may change the form of payment of the balance in
his or her Phantom Stock Account subject to applicable law.
If payment is to be in cash and over time as aforesaid, the
unpaid balance will be held in the phantom stock fund and will
continue to earn dividend credit as described above. If the
Participant fails to make an election as to the period of time
over which cash payments are to be made, such payment shall be
made over a ten-year period, beginning at the end of the
deferral period.
8. PREVIOUS DEFERRAL ELECTIONS
Adoption of the Plan automatically transfers all deferred balances, for
active directors, under the 1995 Deferred Compensation Plan for
Directors, to the Plan. A written election must be made as to whether the
transferred funds are to be held in the fixed income fund or the phantom
stock fund. Transferred funds from the 95 plan to the phantom stock fund
within the Plan will be converted using the actual Fair Market Value for
the quarter in which the conversion occurs.
9. FUNDING OF THE PLAN
The deferred dollar amount will be recorded on the Company's books.
During the deferral period, and the payout period, the director will be a
general, unsecured creditor of the Company.
10. CHANGE OF CONTROL
At the time the Participant executes the Election Form, the Participant
may elect to accelerate the payment of all deferred amounts and receive
payment in a lump sum (in cash or shares or a combination of both, as the
case may be) as soon as practicable after (and in the event that) a
Change in Control occurs. For purposes hereof, "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.
<PAGE> 41
THE E.W. SCRIPPS COMPANY PROXY FOR
CLASS A COMMON SHARES
The undersigned hereby appoints WILLIAM R. BURLEIGH, 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
Shareholders of The E.W. Scripps Company, to be held at The Queen City Club,
Cincinnati, Ohio, on Monday, May 12, 1997 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)
THE E.W. SCRIPPS COMPANY
C/O CORPORATE TRUST SERVICES
MAIL DROP 1090FS
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263
FOLD AND DETACH HERE
- - -------------------------------------------------------------------------------
Receipt of the Notice of Meeting of Shareholders and the related Proxy
Statement dated March 28, 1997 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated ___________________________, 1997
(Please date your Proxy.)
_______________________________________
Signature of Shareholder
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> 42
THE E.W. SCRIPPS COMPANY PROXY FOR
COMMON VOTING SHARES
The undersigned hereby appoints WILLIAM R. BURLEIGH, 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
Shareholders of The E.W. Scripps Company, to be held at The Queen City Club,
Cincinnati, Ohio, on Monday, May 12, 1997 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, Robert P. Scripps and Julie A. Wrigley.
(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, adopting the
Company's 1997 Long-Term Incentive Plan.
3. / / FOR, or / / AGAINST, or / / ABSTAIN WITH RESPECT TO, amending the
Company's 1994 Non-Employee Directors' Stock Option Plan.
4. / / FOR, or / / AGAINST, or / / ABSTAIN WITH RESPECT TO, adopting the
Company's 1997 Deferred Compensation and Stock Plan for Directors.
5. 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 items 2, 3 and 4.
(Continued, and to be signed, on other side)
THE E.W. SCRIPPS COMPANY
C/O CORPORATE TRUST SERVICES
MAIL DROP 1090F5
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263
FOLD AND DETACH HERE
- - -------------------------------------------------------------------------------
Receipt of the Notice of Meeting of Shareholders and the related Proxy
Statement dated March 28, 1997 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Dated ___________________________, 1997
(Please date your Proxy)
_______________________________________
Signature of Shareholder
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.
