<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1998.
REGISTRATION NO. 333-53315
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE E.W. SCRIPPS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Ohio
(STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION)
31-1223339
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
312 Walnut Street
Cincinnati, Ohio 45202
(513) 977-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
M. Denise Kuprionis
Secretary
312 Walnut Street
Cincinnati, Ohio 45202
(513) 977-3835
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE FOR REGISTRANT)
------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
William Appleton, Esq.
Baker & Hostetler LLP
312 Walnut Street, Suite 2650
Cincinnati, Ohio 45202
(513) 929-3400
William R. Kunkel, Esq.
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with the United States offering of shares (the "U.S.
Prospectus") and one to be used in connection with a concurrent international
offering of shares (the "International Prospectus"). The U.S. Prospectus and the
International Prospectus are identical except that they contain different front
and back cover pages and different descriptions of the plan of distribution
(contained under the caption "Underwriting" in each of the U.S. and
International Prospectuses). The form of U.S. Prospectus is included herein and
is followed by those pages to be used in the International Prospectus which
differ from, or are in addition to, those in the U.S. Prospectus. Each of the
pages for the International Prospectus included herein is labeled "Alternate
Page for International Prospectus."
<PAGE> 3
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 11, 1998
PROSPECTUS
6,300,000 SHARES
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
------------------------
SCRIPPS LOGO
Of the 6,300,000 Class A Common Shares, $.01 par value (the "Shares"), of
The E.W. Scripps Company (the "Company") being offered hereby, 3,500,000 are
being offered by The Edward W. Scripps Trust (the "Scripps Trust") and 2,800,000
shares are being offered by The Jack R. Howard Trust (the "Howard Trust," and
together with the Scripps Trust, the "Selling Shareholders"). The Company is not
offering any of its capital stock hereby and will not receive any proceeds from
the sale of the Shares by the Selling Shareholders. See "Selling Shareholders."
Of the 6,300,000 Shares offered hereby, 5,040,000 Shares are being offered
initially in the United States and Canada by the U.S. Underwriters (the "U.S.
Offering"), and 1,260,000 shares are being offered initially in a concurrent
international offering outside the United States and Canada by the International
Managers (the "International Offering," and together with the U.S. Offering, the
"Offerings"). The public offering price and the underwriting discount per Share
are identical for each of the Offerings. See "Underwriting."
The Class A Common Shares are listed on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "SSP". On June 8, 1998, the last reported sale
price of the Class A Common Shares on the NYSE was $51 1/16 per share. See
"Price Range of Class A Common Shares and Dividends."
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 of the Company are entitled to elect all remaining directors and to vote
on all other matters requiring a vote of shareholders. Holders of Class A Common
Shares and Common Voting Shares are entitled to the same cash dividends and to
share equally in distributions on liquidation of the Company. Each Common Voting
Share is convertible into one Class A Common Share. See "Description of Capital
Stock."
After giving effect to the sale of the Shares (and assuming that the
Underwriters' over-allotment options are not exercised), the Scripps Trust will
own approximately 47.3% of the outstanding Class A Common Shares and
approximately 83.5% of the outstanding Common Voting Shares and will continue to
control the Company, and the Howard Trust will own approximately .9% of the
outstanding Class A Common Shares and approximately .9% of the outstanding
Common Voting Shares. See "Selling Shareholders."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
========================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT (1) SHAREHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................................... $ $ $
- ------------------------------------------------------------------------------------------------------------------------
Total (3).......................................... $ $ $
========================================================================================================================
</TABLE>
(1) Each of the Company and the Selling Shareholders has agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Selling
Shareholders estimated at $321,000.
(3) The Scripps Trust and the Howard Trust have granted to the U.S. Underwriters
and the International Managers, on a pro rata basis, options to purchase up
to an aggregate additional 525,000 Shares and 420,000 Shares, respectively,
in each case exercisable within 30 days of the date hereof, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Selling Shareholders
will be $ , $ and $ , respectively. See "Underwriting."
------------------------
The Shares are being offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to the approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Shares will be made in New York, New York on or about
, 1998.
------------------------
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus is , 1998.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE OR JURISDICTION.
<PAGE> 4
Images:
- - Photo of paint cans with Home & Garden Television logos on the lids.
- - Photo of TV news reporter reporting live.
- - Photo of teenagers taping a television show especially for teen viewers.
- - Food Network logo.
- - Photo of chef Emeril Lagasse, host of a show on Food Network.
- - Photo of title image from America's Castles, a television series produced by
Cinetel Productions.
- - Picture of the PEANUTS characters.
- - Front page of several Florida newspapers.
- - Photo of people reading the Denver Rocky Mountain News and the Boulder (CO)
Daily Camera.
- - Photo of computer screen showing the Internet site of the Knoxville News
Sentinel.
- - Picture of the DILBERT characters.
<PAGE> 5
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SHARES. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
------------------------
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such materials can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants, such as the Company, that submit
electronic filings to the Commission. Such material may also be inspected and
copied at the offices of the New York Stock Exchange, on which the Class A
Common Shares of the Company are listed, at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Shares offered hereby reference is made to the Registration Statement.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete; and with respect to
each such contract, agreement or other document filed, or incorporated by
reference, as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998.
3. The description of the Company's Class A Common Shares contained in the
Company's Registration Statement on Form 10 (File No. 1-11969).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Registration Statement or this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY OR ALL DOCUMENTS WHICH HAVE BEEN INCORPORATED BY REFERENCE HEREIN, OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO VICE PRESIDENT -- INVESTOR
RELATIONS, THE E.W. SCRIPPS COMPANY, 312 WALNUT STREET, 28TH FLOOR, CINCINNATI,
OHIO 45202 (TELEPHONE: (513) 977-3825; E-MAIL: [email protected]).
3
<PAGE> 6
[THIS PAGE LEFT INTENTIONALLY BLANK]
4
<PAGE> 7
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more detailed information
and consolidated financial statements appearing in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997, and the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998, which are incorporated
by reference herein. Unless otherwise indicated, the information in this
Prospectus does not give effect to the exercise of the Underwriters'
over-allotment options described under "Underwriting."
THE COMPANY
The Company is a diversified media company operating daily newspapers,
network-affiliated broadcast television stations, cable television networks and
licensing and syndication businesses.
Founded by Edward W. Scripps, the Company began operating its first
newspaper in 1878 and its first television station in 1947. Three members of the
Company's Board of Directors are direct descendants of the founder, and the
Scripps Trust, established by the founder in 1922, owns a controlling interest
in the Company. The Company emphasizes quality, editorial independence,
editorial integrity, and public service in managing its media businesses. The
Company's revenues, EBITDA (as defined herein) and net income for the twelve
months ended March 31, 1998 were $1,298 million, $339 million and $153 million,
respectively.
Newspapers. The Company is the tenth largest newspaper publisher in the
United States, with daily newspapers reaching 20 separate markets and total
circulation of approximately 1.4 million daily and 1.6 million Sunday. From its
Washington bureau, the Company operates the Scripps Howard News Service, a
supplemental wire service covering stories in the capital, other parts of the
United States and abroad. Newspapers generated approximately 60% of the
Company's total revenues in 1997.
Broadcast Television. The Company owns and operates nine network-affiliated
broadcast television stations, eight of which are located in one of the top 50
largest television markets. Six stations are ABC affiliates and three are NBC
affiliates. In addition to broadcasting network programming, the Company's
television stations focus on producing quality local news programming. Broadcast
television generated approximately 27% of the Company's total revenues in 1997.
Category Television. The Company operates Home & Garden Television, a
24-hour cable network ("HGTV"), has an approximate 56% controlling interest in
The Television Food Network, G.P. which operates a 24-hour cable network ("Food
Network") and has a 12% equity interest in SportSouth, a regional cable network.
According to the Nielsen Homevideo Index, HGTV was telecast to 40.2 million
homes in March 1998, up 15.1 million from March 1997, and Food Network was
telecast to 31.7 million homes in March 1998, up 9.7 million from March 1997.
Management believes the popularity of HGTV and Food Network, which consistently
rank among the favorite channels of cable television subscribers, will enable
the Company to expand distribution and attract additional advertising revenue.
Category television generated approximately 5% of the Company's total revenues
in 1997, and is the fastest-growing segment of the Company.
Licensing and Other Media. The Company, under the trade name United Media,
is a leading distributor of news columns, comics and other features for the
newspaper industry, including PEANUTS(R) and DILBERT(R), and licenses worldwide
copyrights relating to PEANUTS, DILBERT and other characters. The Company also
creates, develops and produces nonfiction television programming for domestic
and international distribution through its Cinetel Productions division.
Licensing and other media generated approximately 8% of the Company's total
revenues in 1997.
The Company, an Ohio corporation, maintains its principal executive offices
at 312 Walnut Street, 28th Floor, Cincinnati, Ohio, and its telephone number is
(513) 977-3000.
5
<PAGE> 8
THE OFFERINGS
Class A Common Shares Offered
Hereby(1):
Scripps Trust.................. 3,500,000
Howard Trust................... 2,800,000
Total..................... 6,300,000
Common Shares Outstanding as of
April 30, 1998:
Class A Common Shares.......... 61,581,488
Common Voting Shares........... 19,218,913
Total..................... 80,800,401
Use of Proceeds and Expenses........ The Company will not receive any
proceeds from the sale of the Shares.
Expenses of the Offerings will be paid
by the Selling Shareholders.
Voting and Other Rights............. 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. Class A Common Shares and
Common Voting Shares are entitled to
the same cash dividends and to share
equally in distributions on liquidation
of the Company. Each Common Voting
Share is convertible into one Class A
Common Share.
Dividend Policy..................... The Company has declared cash dividends
in every year since its incorporation
in 1922. Dividends paid in 1996 and
1997 were $.52 per share. Dividends
paid in the three months ended March
31, 1998, were $.13 per share. Future
dividends are subject to, among other
things, the Company's earnings,
financial condition and capital
requirements.
NYSE Symbol for Class A Common
Shares.............................. SSP
- ------------------------------
(1) Assuming the Underwriters' over-allotment options are not exercised.
RECENT DEVELOPMENTS
Consolidated revenues of the Company for May 1998 increased 11 percent to
$130 million, compared to $117 million in May 1997. For comparative purposes,
such revenues exclude divested operations and include acquired operations as if
they had been purchased on January 1, 1997.
Newspaper advertising moved up 13 percent to $59.7 million compared to $53
million for the same month a year ago, benefiting from the additional Sunday in
May 1998 versus 1997. Classified advertising for May increased 18 percent to
$25.6 million compared to $21.7 million in 1997. Total newspaper revenues were
up 11 percent to $78.9 million from $71.2 million for May 1997.
Broadcast television revenues increased 2 percent to $31.4 million compared
to $30.7 million in May 1997. Political advertising was $1.6 million compared to
none in May 1997.
Category television revenues increased 88 percent to $12 million from $6.4
million in the same period a year ago. The number of HGTV subscribers reached
41.4 million in May, up 300,000 from the previous month, according to the
Nielsen Homevideo Index. The number of Food Network subscribers reached 32.7
million in May, up 400,000 from the previous month, according to the Nielsen
Index.
6
<PAGE> 9
SUMMARY OF CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- --------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating Revenues:
Newspapers........................ $ 215.1 $ 165.1 $ 723.8 $ 630.5 $ 602.1
Broadcast television.............. 74.8 72.7 331.2 323.5 295.2
Category television............... 29.1 9.5 58.4 22.1 11.3
Licensing and other media......... 29.1 24.0 94.7 87.1 76.9
-------- -------- -------- -------- --------
Total............................. $ 348.2 $ 271.3 $1,208.1 $1,063.1 $ 985.6
Eliminate intersegment revenue.... (1.4) (0.7) (4.4) (3.1) (1.1)
Divested operating units.......... -- 20.1 38.3 61.8 45.8
-------- -------- -------- -------- --------
Total operating revenues.......... $ 346.8 $ 290.7 $1,242.0 $1,121.9 $1,030.4
======== ======== ======== ======== ========
Operating Income (Loss):
Newspapers........................ $ 46.8 $ 40.4 $ 172.7 $ 134.0 $ 120.8
Broadcast television.............. 16.2 18.7 103.7 100.4 86.9
Category television............... (3.5) (2.9) (13.1) (17.9) (18.6)
Licensing and other media......... 3.4 3.5 6.2 8.9 7.1
Corporate......................... (4.5) (4.2) (17.2) (18.5) (16.8)
-------- -------- -------- -------- --------
Total............................. 58.4 55.5 252.3 206.9 179.4
Divested operating units.......... (0.9) 0.3 (1.4) 3.0 1.8
Unusual items..................... -- -- -- (4.0) --
-------- -------- -------- -------- --------
Total operating income............... $ 57.5 $ 55.9 $ 250.8 $ 205.9 $ 181.2
======== ======== ======== ======== ========
Income from continuing operations.... $ 25.1 $ 30.0 $ 157.7 $ 130.1 $ 93.6
PER SHARE DATA
Income from continuing operations.... $ .31 $ .37 $ 1.93 $ 1.61 $ 1.17
Adjusted income from continuing
operations........................ .31 .37 1.63 1.41 1.17
Dividends............................ .13 .13 .52 .52 .50
OTHER OPERATING DATA
EBITDA:
Newspapers........................ $ 62.7 $ 50.5 $ 217.1 $ 170.6 $ 155.5
Broadcast television.............. 22.6 24.9 128.0 126.2 113.0
Category television............... (0.8) (2.4) (9.3) (16.4) (17.6)
Licensing and other media......... 3.9 4.0 8.4 11.0 9.1
Corporate......................... (4.3) (3.9) (16.0) (17.4) (15.9)
-------- -------- -------- -------- --------
Total............................. $ 84.1 $ 73.2 $ 328.3 $ 274.1 $ 244.1
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------- --------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets......................... $2,252.2 $1,478.6 $2,280.8 $1,468.7 $1,349.7
Long-term debt (including current
portion).......................... 710.1 121.8 773.1 121.8 80.9
Stockholders' equity................. 1,071.9 970.4 1,049.0 944.6 1,191.4
</TABLE>
Note: Certain amounts may not foot as each is rounded independently.
7
<PAGE> 10
PRICE RANGE OF CLASS A COMMON SHARES AND DIVIDENDS
The Class A Common Shares are traded on the NYSE under the symbol "SSP."
The following table sets forth, for the periods indicated, the high and low
market prices for the Class A Common Shares on the NYSE, as reported by The Wall
Street Journal, and the cash dividends and other non-cash distributions declared
per share on the Class A Common Shares for the periods indicated.
<TABLE>
<CAPTION>
DISTRIBUTIONS
PRICE RANGE -----------------------
---------------------- CASH OTHER
HIGH LOW DIVIDEND NON-CASH
-------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1996
First Quarter..................................... $43 1/2 $38 1/8 $.13
Second Quarter.................................... 47 40 5/8 .13
Third Quarter..................................... 47 1/2 40 3/4 .13
Fourth Quarter.................................... 52 3/8 32 3/4 .13 $19.83(1)
1997
First Quarter..................................... $37 1/2 $32 5/8 $.13
Second Quarter.................................... 41 3/4 32 1/4 .13
Third Quarter..................................... 43 15/16 36 9/16 .13
Fourth Quarter.................................... 48 15/16 40 1/4 .13
1998
First Quarter..................................... $55 5/16 $45 1/16 $.13
Second Quarter (through May 26, 1998)............. 58 5/16 51 3/4 .13
</TABLE>
On June 8, 1998, the last reported sale price of the Class A Common Shares
on the NYSE was $51 1/16 per share. At April 30, 1998, there were approximately
5,000 owners of the Class A Common Shares and 18 owners of the Common Voting
Shares, based on security position listings.
DIVIDEND POLICY
The Company has declared cash dividends in every year since its
incorporation in 1922. Dividends in 1997 and 1996 were $.52 per share. Dividends
of $.13 per share were paid in the three months ended March 31, 1998. Future
dividends are subject to, among other things, the Company's earnings, financial
condition and capital requirements.
- ------------------------------
(1) On November 13, 1996, the Company's cable television systems were acquired
by Comcast Corporation through a merger whereby the Company's shareholders
received, on a tax-free basis, a total of 93 million shares of Class A
Special Common Stock of Comcast. For each share of the Company held,
shareholders received 1.15826 Comcast shares with a value of $19.83, based
on Comcast's November 13, 1996, closing price of $17.125 per share as
reported on the Nasdaq Stock Market.
8
<PAGE> 11
CAPITALIZATION
The following table sets forth the capitalization of the Company:
<TABLE>
<CAPTION>
MARCH 31,
1998
-------------
(UNAUDITED)
(IN MILLIONS)
<S> <C>
Long-term Debt (including current portion):
Variable rate credit facilities........................... $ 478.5
6.625% note, due in 2007.................................. 99.9
6.375% note, due in 2002.................................. 99.9
7.375% notes, due in 1998................................. 29.8
Other notes............................................... 2.1
--------
Total long-term debt...................................... $ 710.1
--------
Stockholders' Equity:
Preferred stock, $.01 par -- authorized: 25,000,000
shares; none outstanding
Common stock, $.01 par:
Class A -- authorized: 120,000,000 shares; issued and
outstanding: 61,553,530 (1).......................... $ .6
Voting -- authorized: 30,000,000 shares; issued and
outstanding: 19,218,913 shares....................... .2
--------
Total..................................................... $ .8
Additional paid-in capital................................ 263.9
Retained earnings......................................... 796.9
Unrealized gains on securities available for sale......... 15.1
Unvested restricted stock awards.......................... (5.0)
Foreign currency translation adjustment................... .2
--------
Total stockholders' equity................................ $1,071.9
--------
Total capitalization........................................ $1,782.0
========
</TABLE>
Note: Certain amounts may not foot as each is rounded independently.
- ------------------------------
(1) As of March 31, 1998, options for the purchase of 3,262,500 Class A Common
Shares were outstanding, of which options for 2,276,053 shares were
immediately exercisable.
9
<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA
The following summary income statement data and cash flow statement data
for the five years ended December 31, 1997, and balance sheet data as of those
same dates have been derived from the audited consolidated financial statements
of the Company. The following summary income statement and cash flow data for
the three months ended March 31, 1998, and balance sheet data as of that date
have been derived from the unaudited consolidated financial statements of the
Company. Those unaudited financial statements include, in management's opinion,
all adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the interim periods. The data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and the more detailed information and consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997, and the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, incorporated by reference herein
and available as described under "Available Information" and "Incorporation of
Certain Documents by Reference." The interim results of operations are not
necessarily indicative of the results that may be expected for future interim
periods or for the full year. All per share amounts are presented on a diluted
basis.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ------------------------------------------------------
1998(1) 1997(1) 1997(1) 1996(1) 1995(1) 1994(1) 1993(1)
------- ------- -------- -------- -------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating Revenues:
Newspapers.................. $215.1 $165.1 $ 723.8 $ 630.5 $ 602.1 $563.9 $515.0
Broadcast television........ 74.8 72.7 331.2 323.5 295.2 288.2 254.9
Category television......... 29.1 9.5 58.4 22.1 11.3 -- --
Licensing and other media... 29.1 24.0 94.7 87.1 76.9 73.5 84.7
------ ------ -------- -------- -------- ------ ------
Total....................... $348.2 $271.3 $1,208.1 $1,063.1 $ 985.6 $925.6 $854.7
Eliminate intersegment
revenue................... (1.4) (0.7) (4.4) (3.1) (1.1) -- --
Divested operating
units(2).................. -- 20.1 38.3 61.8 45.8 39.0 90.6
------ ------ -------- -------- -------- ------ ------
Total operating
revenues............. $346.8 $290.7 $1,242.0 $1,121.9 $1,030.4 $964.6 $945.2
====== ====== ======== ======== ======== ====== ======
Operating Income (Loss):
Newspapers.................. $ 46.8 $ 40.4 $ 172.7 $ 134.0 $ 120.8 $116.0 $ 73.8
Broadcast television........ 16.2 18.7 103.7 100.4 86.9 94.5 69.1
Category television......... (3.5) (2.9) (13.1) (17.9) (18.6) (9.1) (0.5)
Licensing and other media... 3.4 3.5 6.2 8.9 7.1 5.4 4.7
Corporate................... (4.5) (4.2) (17.2) (18.5) (16.8) (15.5) (13.6)
------ ------ -------- -------- -------- ------ ------
Total....................... $ 58.4 $ 55.5 $ 252.3 $ 206.9 $ 179.4 $191.4 $133.5
Divested operating
units(2).................. (0.9) 0.3 (1.4) 3.0 1.8 0.2 9.4
Unusual items(3)............ -- -- (4.0) -- (7.9) (0.9)
------ ------ -------- -------- -------- ------ ------
Total operating
income............... $ 57.5 $ 55.9 $ 250.8 $ 205.9 $ 181.2 $183.6 $142.0
Interest expense.............. (12.0) (2.6) (18.5) (9.6) (11.2) (16.3) (26.4)
Net gains on
divestitures(1)............. -- -- 47.6 -- -- -- 91.9
Garfield copyright gain(4).... -- -- -- -- -- 31.6 --
Unusual credits
(charges)(5)................ -- -- (2.7) 21.5 -- (16.9) 2.5
Miscellaneous, net............ (1.4) 0.1 3.1 1.8 1.5 (0.9) (2.4)
Income taxes(6)............... (18.0) (22.5) (117.5) (86.0) (74.5) (80.4) (86.4)
Minority interests............ (1.0) (0.9) (5.1) (3.4) (3.3) (7.8) (16.2)
------ ------ -------- -------- -------- ------ ------
Income from continuing
operations.................. $ 25.1 $ 30.0 $ 157.7 $ 130.1 $ 93.6 $ 92.8 $104.9
====== ====== ======== ======== ======== ====== ======
PER SHARE DATA
Income from continuing
operations.................. $ .31 $ .37 $ 1.93 $ 1.61 $ 1.17 $ 1.21 $ 1.40
Adjusted income from
continuing operations(7).... .31 .37 1.63 1.41 1.17 1.25 .72
Dividends..................... .13 .13 .52 .52 .50 .44 .44
OTHER OPERATING DATA
EBITDA(8):
Newspapers.................. $ 62.7 $ 50.5 $ 217.1 $ 170.6 $ 155.5 $149.5 $109.7
Broadcast television........ 22.6 24.9 128.0 126.2 113.0 115.8 89.5
Category television......... (0.8) (2.4) (9.3) (16.4) (17.6) (9.1) (0.5)
Licensing and other media... 3.9 4.0 8.4 11.0 9.1 7.1 5.6
Corporate................... (4.3) (3.9) (16.0) (17.4) (15.9) (14.8) (13.0)
------ ------ -------- -------- -------- ------ ------
Total....................... $ 84.1 $ 73.2 $ 328.3 $ 274.1 $ 244.1 $248.5 $191.2
====== ====== ======== ======== ======== ====== ======
</TABLE>
- ---------------
Note: Certain amounts may not foot as each is rounded independently.
10
<PAGE> 13
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1998(1) 1997(1) 1997(1) 1996(1) 1995(1) 1994(1) 1993(1)
-------- -------- -------- -------- -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOW STATEMENT DATA
Net cash provided by continuing
operations.................... $ 89.9 $ 54.9 $ 196.9 $ 176.2 $ 113.8 $ 170.2 $ 142.0
Depreciation and amortization of
intangible assets............. 25.8 18.3 77.6 69.4 66.6 58.9 60.8
Investing activity:
Capital expenditures.......... (12.1) (8.9) (56.6) (53.3) (57.3) (54.0) (36.8)
Business acquisitions and
investment expenditures..... (4.3) (11.0) (749.2) (127.7) (12.2) (32.4) (41.5)
Other (investing)/divesting
activity, net............... 1.3 (17.3) 30.6 35.0 (18.7) 51.3 146.9
Financing activity:
Increase (decrease) in
long-term debt.............. (63.0) -- 651.2 41.0 (29.7) (137.9) (194.0)
Dividends paid................ (10.9) (10.9) (46.0) (44.5) (42.6) (37.3) (37.0)
Purchase and retirement of
common stock................ -- -- (25.7) -- -- -- --
Other financing activity...... 2.3 2.1 3.0 8.5 5.5 1.7 1.9
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
------------------- ----------------------------------------------------
1997 1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets.................... $2,252.2 $1,478.6 $2,280.8 $1,468.7 $1,349.7 $1,286.7 $1,255.1
Long-term debt (including
current portion)(9)........... 710.1 121.8 773.1 121.8 80.9 110.4 247.9
Stockholders' equity(9)......... 1,071.9 970.4 1,049.0 944.6 1,191.4 1,083.5 859.6
</TABLE>
- ---------------
Note: Certain amounts may not foot as each is rounded independently.
NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA
The Company's cable television systems ("Scripps Cable") were acquired by
Comcast Corporation ("Comcast") on November 13, 1996 ("Cable Transaction")
through a merger whereby the Company's shareholders received, on a tax-free
basis, a total of 93 million shares of Comcast's Class A Special Common Stock.
The aggregate market value of the Comcast shares was $1.593 billion and the net
book value of Scripps Cable was $356 million, yielding an economic gain of
$1.237 billion to the Company's shareholders. This gain is not reflected in the
Company's financial statements as accounting rules required the Company to
record the transaction at book value. Unless otherwise noted, the data excludes
the cable television segment, which is reported as a discontinued business
operation.
(1) In the periods presented the Company acquired and divested the following:
ACQUISITIONS
1997 -- Daily newspapers in Abilene, Corpus Christi, Plano, San Angelo, and
Wichita Falls, Texas; Anderson, South Carolina; and Boulder,
Colorado (in exchange for the Company's newspapers in Monterey and
San Luis Obispo, California). Approximate 56% interest in The
Television Food Network.
1996 -- Vero Beach, Florida, daily newspaper.
1994 -- The remaining 13.9% minority interest in Scripps Howard Broadcasting
Company ("SHB") in exchange for 4,952,659 Class A Common Shares.
Cinetel Productions (an independent producer of programs for cable
television).
1993 -- Remaining 2.7% minority interest in the Knoxville News-Sentinel and
5.7% of the outstanding shares of SHB.
DIVESTITURES
1998 -- Expects to sell Scripps Howard Productions ("SHP"), its Los
Angeles-based fiction television program production operation.
1997 -- Monterey and San Luis Obispo, California, daily newspapers (in
exchange for Boulder, Colorado, daily newspaper). Terminated joint
operating agreement ("JOA") and ceased operations of El Paso daily
newspaper. The JOA termination and trade resulted in pre-tax gains
totaling $47.6 million, increasing income from continuing operations
$26.2 million, $.32 per share.
1995 -- Watsonville, California, daily newspaper. No material gain or loss
was realized as proceeds approximated the book value of net assets
sold.
11
<PAGE> 14
1993 -- Book publishing; newspapers in Tulare, California, and San Juan;
Memphis television station; radio stations. The divestitures
resulted in net pre-tax gains of $91.9 million, increasing income
from continuing operations $46.8 million, $.63 per share.
(2) Noncable television operating units sold prior to March 31, 1998, and SHP.
(3) Total operating income included the following:
1996 -- A $4.0 million charge for the Company's share of certain costs
associated with restructuring portions of the distribution system of
the Cincinnati JOA. The charge reduced income from continuing
operations $2.6 million, $.03 per share.
1994 -- A $7.9 million loss on program rights expected to be sold as a
result of changes in television network affiliations. The loss
reduced income from continuing operations $4.9 million, $.07 per
share.
1993 -- A change in estimate of disputed music license fees increased
operating income $4.3 million; a gain on the sale of certain
publishing equipment increased operating income $1.1 million; a
charge for workforce reductions at (i) the Company's Denver
newspaper and (ii) the newspaper feature distribution and the
licensing operations of United Media decreased operating income $6.3
million. The planned workforce reductions were fully implemented in
1994. These items totaled $0.9 million and reduced income from
continuing operations $0.6 million, $.01 per share.
(4) In 1994 the Company sold its worldwide Garfield and U.S. Acres copyrights.
The sale resulted in a pre-tax gain of $31.6 million, $17.4 million
after-tax, $.23 per share.
(5) Other unusual credits (charges) included the following:
1997 -- Write-down of investments totaling $2.7 million. Income from
continuing operations was reduced $1.7 million, $.02 per share.
1996 -- A $40.0 million gain on the Company's investment in Turner
Broadcasting Systems when Turner was merged into Time Warner; $3.0
million write-off of an investment in Patient Education Media, Inc.;
and $15.5 million contribution to a charitable foundation. These
items totaled $21.5 million and increased income from continuing
operations by $19.1 million, $.23 per share.
1994 -- An estimated $2.8 million loss on real estate expected to be sold as
a result of changes in television network affiliations; $8.0 million
contribution to a charitable foundation; and $6.1 million accrual
for lawsuits associated with a divested operating unit. These items
totaled $16.9 million and reduced income from continuing operations
$9.8 million, $.13 per share.
1993 -- A $2.5 million fee received in connection with the change in
ownership of the Ogden, Utah, newspaper. Income from continuing
operations was increased $1.6 million, $.02 per share.
(6) The provision for income taxes is affected by the following unusual items:
1994 -- A change in estimated tax liability for prior years increased the
tax provision, reducing income from continuing operations $5.3
million, $.07 per share.
1993 -- A change in estimated tax liability for prior years decreased the
tax provision, increasing income from continuing operations $5.4
million, $.07 per share; the effect of the increase in the federal
income tax rate to 35% from 34% on the beginning of the year
deferred tax liabilities increased the tax provision, reducing
income from continuing operations $2.3 million, $.03 per share.
(7) Excludes unusual items and net gains.
(8) Earnings before interest, income taxes, depreciation and amortization
("EBITDA") is presented in the Selected Consolidated Financial Data
because:
X Management believes the year-over-year change in EBITDA is a more
useful measure of year-over-year economic performance than the change
in operating income because, combined with information on capital
spending plans, it is more reliable. Changes in amortization and
depreciation have no impact on economic performance. Depreciation is
a function of capital spending. Capital spending is important and is
separately disclosed.
X Banks and other lenders use EBITDA to determine the Company's
borrowing capacity.
X Financial analysts and acquirors use EBITDA, combined with capital
spending requirements, to value communications and media companies.
EBITDA should not, however, be construed as an alternative measure of the
amount of the Company's income or cash flows from operating activities as
EBITDA excludes significant costs of doing business. EBITDA excludes
divested operating units and unusual items.
(9) Includes effect of discontinued cable television operations prior to
completion of the Cable Transaction.
12
<PAGE> 15
BUSINESS
The Company is a diversified media company operating daily newspapers,
network-affiliated broadcast television stations, cable television networks and
licensing and syndication businesses.
NEWSPAPERS
The Company is the tenth largest newspaper publisher in the United States,
with 20 daily newspapers concentrated in growth markets across the Southeast,
Southwest, Rocky Mountains and West Coast. The Company's daily newspaper
circulation is approximately 1.4 million daily and 1.6 million Sunday.
In October 1997 the Company acquired the newspaper and broadcast operations
of Harte-Hanks Communications ("Harte-Hanks") for approximately $790 million in
cash. The newspaper operations acquired from Harte-Hanks include daily
newspapers in Abilene, Corpus Christi, Plano, San Angelo and Wichita Falls,
Texas, and a daily newspaper in Anderson, South Carolina. The Company
immediately exchanged the Harte-Hanks broadcast operations for an approximate
56% controlling interest in Food Network and $75 million in cash. In August 1997
the Company traded its daily newspapers in Monterey and San Luis Obispo,
California, for the daily newspaper in Boulder, Colorado. The Company acquired
the Vero Beach, Florida, daily newspaper in May 1996 for approximately $120
million in cash.
<TABLE>
<CAPTION>
NEWSPAPER LOCATION DAILY(1) SUNDAY(1)
--------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Rocky Mountain News.............................. Denver, CO 325.3 435.0
The Commercial Appeal............................ Memphis, TN 183.0 254.0
The Knoxville News-Sentinel...................... Knoxville, TN 124.9 168.1
Ventura County Star.............................. Ventura, CA 95.0 103.0
The Cincinnati Post(2)(3)(4)..................... Cincinnati, OH 73.9 --
Corpus Christi Caller-Times...................... Corpus Christi, TX 68.8 90.6
The Evansville Courier(2)........................ Evansville, IN 60.3 108.0
Naples Daily News................................ Naples, FL 50.0 64.2
Anderson Independent-Mail........................ Anderson, SC 40.8 47.0
Abilene Reporter-News............................ Abilene, TX 40.4 50.4
The Sun.......................................... Bremerton, WA 38.2 40.8
Times Record News................................ Wichita Falls, TX 37.9 43.9
The Stuart News.................................. Stuart, FL 36.1 45.8
Daily Camera..................................... Boulder, CO 36.0 42.8
Redding Record Searchlight....................... Redding, CA 35.3 38.2
Vero Beach Press Journal......................... Vero Beach, FL 32.1 35.8
Standard-Times................................... San Angelo, TX 31.6 37.8
Birmingham Post-Herald(2)(4)..................... Birmingham, AL 24.7 --
The Albuquerque Tribune(2)(4).................... Albuquerque, NM 24.3 --
Plano Star Courier............................... Plano, TX 10.9 12.6
------- -------
Total.......................................... 1,369.5 1,618.0
======= =======
</TABLE>
- ---------------
(1) Based on Audit Bureau of Circulation Publisher's Statements for the
six-months ended March 31, 1998, except for the Florida newspapers, which
are for the twelve months ended March 31, 1998, and the Plano Star Courier,
which is for the six-months ended September 30, 1997.
(2) This newspaper is published under a joint operating agency with another
newspaper in its market. See "Business-Newspapers-Joint Operating Agencies."
(3) Includes circulation of The Kentucky Post.
(4) Does not publish on Sunday.
13
<PAGE> 16
The Company's newspaper operating revenues, excluding divested newspaper
operations, were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Newspaper advertising:
Local.............................. $ 65,024 $ 51,462 $221,199 $192,563 $185,821
Classified......................... 65,104 47,828 214,912 184,629 170,058
National........................... 6,369 5,447 23,056 19,384 16,480
Preprint and other................. 21,735 15,311 73,268 64,538 65,585
-------- -------- -------- -------- --------
Total advertising............. $158,232 $120,048 $532,435 $461,114 $437,944
-------- -------- -------- -------- --------
Circulation........................... 40,541 31,518 129,612 121,365 117,288
JOA distributions..................... 10,816 10,901 47,052 39,341 39,476
Other................................. 5,537 2,592 14,689 8,669 7,399
-------- -------- -------- -------- --------
Total......................... $215,126 $165,059 $723,788 $630,489 $602,107
======== ======== ======== ======== ========
</TABLE>
Advertising and Circulation. Substantially all of the Company's newspaper
publishing revenues are derived from advertising and circulation. Advertising
rates and revenues vary among the Company's newspapers depending on circulation,
demographics, type of advertising, local market conditions and competition.
Advertising revenues are derived from: (i) "run-of-paper" advertisements
included in each copy of a newspaper edition, (ii) "zoned" editions that feature
sections with stories and advertisements intended for limited areas of
distribution, (iii) "preprinted" advertisements that are inserted into
newspapers, and (iv) "shoppers" that have little or no news content and contain
primarily advertising run in the regular edition of the newspaper.
Run-of-paper advertisements are further broken down among "local",
"classified" and "national" advertising. Local refers to advertising that is not
in the classified advertising section and is purchased by in-market advertisers.
Classified refers to advertising in the section of the newspaper that is grouped
by type of advertising, e.g., automotive and help wanted. National refers to
advertising purchased by businesses that operate beyond the local market and
that purchase advertising from many newspapers, primarily through advertising
agencies. A given volume of run-of-paper advertisements is generally more
profitable to the Company than the same volume of preprinted advertisements.
Advertising revenues vary throughout the year, with the first and third
quarters generally having lower revenues than the second and fourth quarters.
Advertising rates and volume are highest on Sundays, primarily because
circulation and readership are greatest on Sundays.
Joint Operating Agencies. Four of the Company's daily metropolitan
newspapers operate under joint operating agencies ("JOAs"). Under a JOA,
newspapers in the same market share printing facilities and certain other
facilities and combine advertising and circulation sales efforts in order to
reduce aggregate expenses and take advantage of economies of scale, thereby
allowing both newspapers to continue to publish in that market. Each newspaper
maintains an independent editorial department.
The Newspaper Preservation Act of 1970 ("NPA") provides a limited exemption
from antitrust laws, generally permitting the continuance of JOAs in existence
prior to the enactment of the NPA and the formation, under certain
circumstances, of new JOAs between newspapers. Except for the Company's JOA in
Cincinnati, Ohio, all of the Company's JOAs were entered into prior to the
enactment of the NPA. From time to time the legality of the pre-NPA JOAs has
been challenged on antitrust grounds, but no such challenge has yet succeeded in
the courts.
The Evansville JOA expires at the end of 1998 and the remaining three
expire between 2007 and 2022. The JOAs generally provide for automatic renewal
terms of ten years unless an advance notice of termination ranging from two to
five years is given by either party. The Company has notified the other JOA
party in Evansville of its intent to terminate that JOA. Management believes
that termination of the Evansville JOA will enhance the Evansville Courier's
profitability.
14
<PAGE> 17
The table below provides certain information about the Company's JOAs.
<TABLE>
<CAPTION>
YEAR JOA YEAR JOA
NEWSPAPER PUBLISHER OF OTHER NEWSPAPER BEGAN EXPIRES
- -------------------------------- ---------------------------- -------- -----------
<S> <C> <C> <C>
Managed by the Company
The Evansville Courier........ Hartmann Publications 1938 1998
Managed by Other Publisher
The Albuquerque Tribune....... Journal Publishing Company 1933 2022
Birmingham Post-Herald........ Newhouse Newspapers 1950 2015
The Cincinnati Post........... Gannett Co., Inc. 1977 2007
</TABLE>
Scripps Howard News Service. From its Washington bureau, the Company
operates the Scripps Howard News Service, a supplemental wire service covering
stories in the nation's capital, other parts of the United States and abroad.
While the revenue for this service is not significant, the Company believes its
image is enhanced by the wide distribution of the Scripps Howard News Service.
Material and Labor Costs. The Company purchases newsprint from various
suppliers, many of which are Canadian. Management believes that the Company's
sources of supply of newsprint are adequate for its anticipated needs. Newsprint
and ink costs accounted for approximately 22% of total operating expenses of the
Company's newspaper operations for the three months ended March 31, 1998.
Newsprint prices have fluctuated widely in recent years. Newsprint prices
generally declined from 1992 through 1993, but began rising in the first quarter
of 1994 from approximately $420 per metric tonne to $745 by the first quarter of
1996. Newsprint prices declined from that level to approximately $500 per metric
tonne by March 1997 before increasing to the current price of $585 per tonne. If
the price remains at its current level, newsprint costs in 1998 are expected to
be approximately 30% higher in the second quarter and 25% higher in the second
half than during the comparable periods of 1997.
Labor costs accounted for approximately 42% of total operating expenses of
the Company's newspaper operations for the three months ended March 31, 1998. A
substantial number of the Company's newspaper employees are represented by labor
unions. See "Business--Employees."
Production. The Company's daily newspapers are printed by offset or
flexographic presses and use computer systems for writing, editing, composing
and producing the printing plates used in each edition.
Competition. The Company's newspapers compete for advertising revenues
primarily with other local media, including other local newspapers, television
and radio stations, cable television, telephone directories and direct mail.
Competition for advertising revenues is based upon audience size and
demographics, price and effectiveness. Changes in technology and new media, such
as electronic publications, may create additional competitors for classified
advertising revenue. Most of the Company's newspapers publish electronic
versions of the newspaper on the Internet. Newspapers compete with all other
information and entertainment media for consumers' discretionary time. All of
the Company's newspaper markets are highly competitive, particularly Denver, the
largest market in which the Company publishes a newspaper.
BROADCAST TELEVISION
The Company owns and operates nine network-affiliated broadcast television
stations, eight of which are located in one of the 50 largest television
markets. Six stations are ABC affiliates and three are NBC affiliates. In
addition to broadcasting network programming, the Company's television stations
focus on producing quality
15
<PAGE> 18
local news programming. The following table sets forth certain information about
the Company's television stations and the markets in which they operate.
<TABLE>
<CAPTION>
YEAR RANK OF
RANK OF CALL JOINED THE NETWORK STATION IN STATIONS IN
STATION AND MARKET MARKET(1) LETTERS COMPANY AFFILIATION(2) MARKET(3) MARKET(3)
------------------ --------- ------- ---------- -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Detroit, MI 9 WXYZ 1986 ABC 2 6
Cleveland, OH 13 WEWS 1947 ABC 2 11
Tampa, FL 15 WFTS 1986 ABC 4 10
Phoenix, AZ 17 KNXV 1985 ABC 4 11
Baltimore, MD 23 WMAR 1991 ABC 3 6
Cincinnati, OH 30 WCPO 1949 ABC 1 6
Kansas City, MO 31 KSHB 1977 NBC 4 8
W. Palm Beach, FL 43 WPTV 1961 NBC 1 7
Tulsa, OK 58 KJRH 1971 NBC 3 8
<CAPTION>
YEAR
FCC LICENSE
STATION AND MARKET EXPIRES
------------------ -----------
<S> <C>
Detroit, MI 2005
Cleveland, OH 2005
Tampa, FL 2005
Phoenix, AZ 1998(4)
Baltimore, MD 2004
Cincinnati, OH 2005
Kansas City, MO 2006
W. Palm Beach, FL 2005
Tulsa, OK 1998(5)
</TABLE>
- ---------------
(1) Based on data made available by the A.C. Nielsen Co. ("Nielsen") survey for
the November 1997 period. Rank of Market represents the relative size of the
designated television market compared to the 211 generally recognized
geographic market areas in the United States based on Nielsen estimates.
(2) All of the network affiliation agreements for the Company's stations expire
in 2004, except for the Baltimore and Cincinnati stations which expire in
2005 and 2006, respectively.
(3) Rank of Station in Market is determined on the basis of total viewing
households tuned to a specific station from 6:00 a.m. to 2:00 a.m. each day
compared to other stations in the designated area. Stations in Market does
not include public broadcasting stations, satellite stations, or translators
which rebroadcast signals from distant stations. Source: November 1997
Nielsen surveys.
(4) A license renewal application is due to be filed with the FCC on or before
June 1, 1998.
(5) A license renewal application was filed with the FCC on January 30, 1998,
and is pending.
The Company's broadcast television operating revenues were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Local Advertising......................... $39,656 $38,424 $171,211 $159,412 $150,489
National Advertising...................... 30,082 29,457 139,322 127,172 125,476
Political Advertising..................... 330 89 2,106 19,505 3,207
Network compensation...................... 3,952 3,951 15,601 14,348 13,510
Other..................................... 795 775 2,976 3,030 2,546
------- ------- -------- -------- --------
Total................................... $74,815 $72,696 $331,216 $323,467 $295,228
======= ======= ======== ======== ========
</TABLE>
Advertising. The Company's television operating revenues are derived
primarily from the sale of time to businesses for commercial messages that
appear during entertainment and news programming. Local and national advertising
refer to time purchased by local, regional and national businesses; political
refers to time purchased for advertising intended to influence voting.
Automobile advertising accounts for approximately one-fourth of the Company's
local and national advertising revenues.
The first and third quarters of each year generally have lower advertising
revenues than the second and fourth quarters. The Company's television stations
have benefited from increasing political advertising in even-numbered years when
congressional and presidential elections occur, making it more difficult to
achieve year-over-year increases in operating results in odd-numbered years.
Network Affiliation and Programming. The Company's television stations are
affiliated with national television networks that offer a variety of programs to
affiliated stations. The Company's stations are compensated for carrying network
programming and have the right of first refusal before such programming may be
offered to other television stations in the same market.
In addition to network programs, the Company's television stations
broadcast locally produced programs, syndicated programs, sports events, movies
and public service programs. News is the focus of the Company's locally produced
programming. Advertising during local news programs accounts for more than 30%
of broadcast television revenues.
16
<PAGE> 19
Digital Television. In accordance with policies and schedules set out by
the Federal Communications Commission (the "FCC"), some of the Company's
broadcast television stations are beginning the conversion from analog to
digital transmission technology. Digital technology offers the potential for
much higher quality pictures and sound, but requires the acquisition of new
transmission equipment by the Company. Consumers will also be required to
purchase new television receivers in order to receive this higher picture
quality and sound. The FCC has authorized existing broadcasters to commence
digital operations on newly allocated television channels, and, for a multi-year
conversion period (currently ending in 2006), broadcasters will be expected to
transmit television signals over both sets of frequencies. Following such
conversion period, broadcasters will be required under current FCC rules (which
are subject to reconsideration) to relinquish their analog channels. The
Company's ABC affiliate in Detroit is preparing to be among the first stations
to begin digital transmission.
Competition. The Company's television stations compete for advertising
revenues primarily with other local media, including other television stations,
radio stations, cable television, newspapers, telephone directories and direct
mail. Competition for advertising revenues is based upon the audience size and
demographics, price and effectiveness. Television stations compete for
consumers' discretionary time with all other information and entertainment
media. Continuing technological advances will improve the capability of
alternative service providers such as traditional cable, "wireless" cable and
direct broadcast satellite television to offer video services in competition
with broadcast television. The degree of competition is expected to increase.
Technological advances in interactive media services, including Internet
services, will increase these competitive pressures.
Federal Regulation of Broadcasting. Television broadcasting is subject to
the jurisdiction of the FCC pursuant to the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcast stations except in accordance with a license
issued by the FCC and empowers the FCC to revoke, modify and renew broadcasting
licenses, approve or disapprove the assignment of any broadcast license or the
transfer of control of any company holding such licenses, determine the location
of stations, regulate the equipment used by stations and adopt and enforce
necessary regulations. The FCC extensively regulates many aspects of television
broadcasting, including without limitation the ownership of broadcast licenses
(with respect to multiple ownership rules, cross-ownership rules and foreign
ownership rules), the operations of licensees, network affiliations, frequency
use, programming, employment, and many other issues.
CATEGORY TELEVISION
Category television is a newly created division of the Company bringing
together HGTV and Food Network, two of the fastest-growing cable networks in
1997. According to the Nielsen Homevideo Index, HGTV was telecast to 40.2
million homes in March 1998, up 15.1 million from March 1997, and Food Network
was telecast to 31.7 million homes in March 1998, up 9.7 million from March
1997. Management believes the popularity of HGTV and Food Network, which
consistently rank among the favorite channels of cable television subscribers,
will enable the Company to expand distribution and attract additional
advertising revenue.
The Company believes that its category television strategy creates an
efficient marketplace by bringing together viewers and advertisers of common
interest. In addition, the Company believes these networks are catalysts for
ancillary business development, including radio programming,
business-to-business services and online computer services.
HGTV, based in Knoxville, Tennessee, was developed internally and remains
100% owned by the Company. HGTV was launched on December 31, 1994 and focuses on
home repair and remodeling, gardening, decorating and other activities
associated with the home.
The Company acquired a 56% controlling interest in Food Network in October
1997. Food Network, based in New York City, has been telecasting since December
1993 and focuses on food and nutrition.
HGTV was profitable in the first quarter of 1998, after only three full
years on the air, and management believes HGTV will be profitable for the full
year 1998. Although Food Network had cash operating losses in the first quarter
of 1998, management believes losses will diminish over the next several years as
the network grows. Any unforeseen declines in revenues from advertising for
either of these networks could diminish the potential for their profitability.
17
<PAGE> 20
The Company's category television segment also includes a 12% interest in
SportSouth, a regional sports network carried by cable systems in the
Southeastern United States.
The Company's category television operating revenues were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ---------------------------
1998 1997 1997 1996 1995
-------- -------- ------- ------- -------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Advertising.................................. $19,404 $ 5,658 $36,603 $14,888 $ 8,175
Affiliate fees............................... 8,677 3,737 19,711 6,943 3,021
Other........................................ 1,025 154 2,082 280 140
------- ------- ------- ------- -------
Total...................................... $29,106 $ 9,549 $58,396 $22,111 $11,336
======= ======= ======= ======= =======
</TABLE>
Advertising and Affiliate Fees. Category television revenues are derived
from the sale of advertising time and, if provided for in the affiliation
agreement, from affiliate fees received from cable television and other
distribution systems that carry the networks. Affiliate fees are generally based
on the number of subscribers who receive the networks. Most of Food Network's
affiliation agreements do not provide for such fees.
Programming. Both HGTV and Food Network feature 24 hours of daily
programming. Some programming is produced internally and other programming is
purchased from a variety of independent producers. Programming is transmitted
via satellite to cable television systems and to satellite dish owners.
Competition. HGTV and Food Network compete with other television networks
for distribution on cable television and direct broadcast satellite systems as
well as for advertiser support. Popularity of the programming is a primary
factor in obtaining and retaining distribution and attracting advertising
revenues. Because of limited channel capacity, cable television system operators
have been able to demand distribution payments or equity interests in cable
television programming networks in exchange for long-term agreements to
distribute the networks. In 1996 and 1997 the Company agreed to pay distribution
fees of approximately $75 million to certain cable and direct broadcast
satellite systems in exchange for long-term contracts to carry HGTV. The amount
of the incentives approximates the affiliate fee revenue HGTV expects to receive
over the lives of the contracts. In 1996 and 1997 Food Network paid
approximately $6 million in distribution fees (including $1.5 million subsequent
to its acquisition by the Company) to cable television systems in exchange for
long-term contracts that do not provide for affiliate fee revenue, and
approximately $10 million to direct broadcast satellite systems for long-term
contracts that do provide for affiliate fee revenue. Additional distribution
fees may be required to obtain carriage on additional cable television systems.
Based upon the Company's historical experience, advertising revenues are
expected to increase as distribution of the networks increases.
LICENSING AND OTHER MEDIA
The Company's licensing and other media businesses include:
- United Media -- a fully integrated, worldwide licensing and
syndication company that focuses on building brand equity around a
wide range of creative content. In addition to PEANUTS, DILBERT and
the recently added FOR BETTER OR FOR WORSE(R) comic strips and
characters, United Media is the exclusive licensor of products for
National Geographic and the Public Broadcasting System.
- Cinetel Productions -- one of the largest independent producers of
programming for cable networks, including HGTV and Food Network.
Cinetel, based in Knoxville, focuses on nonfiction programming.
- Yellow Pages-USA -- an independent telephone directory publisher
launched in August 1996. This venture (60% owned) distributes
directories in three markets.
- Scripps Ventures -- an internally managed $50 million venture fund
launched in June 1996. Scripps Ventures is designed to discover
emerging media and education franchises.
The Company expects to sell Scripps Howard Productions ("SHP"), its Los
Angeles-based fiction television production operation, in 1998. The operations
of SHP are not material to the Company.
18
<PAGE> 21
The Company's licensing and other media operating revenues, excluding SHP,
were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ---------------------------
1998 1997 1997 1996 1995
-------- -------- ------- ------- -------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Licensing ................................... $14,584 $16,224 $56,813 $53,672 $49,366
Newspaper feature distribution............... 5,663 4,935 20,919 20,695 18,915
Advertising.................................. 5,691 428 3,878 828 559
Program production........................... 2,786 1,817 11,145 10,710 7,167
Other........................................ 418 604 1,898 1,162 922
------- ------- ------- ------- -------
Total...................................... $29,142 $24,008 $94,653 $87,067 $76,929
======= ======= ======= ======= =======
</TABLE>
United Media owns and licenses worldwide copyrights relating to PEANUTS,
DILBERT and other character properties for use on numerous products, including
plush toys, greeting cards and apparel, for promotional purposes and for exhibit
on television, video cassettes and other media. PEANUTS and DILBERT provided
more than 80% and 15%, respectively, of the Company's licensing revenues in the
first quarter of 1998. Approximately 70% of PEANUTS licensing revenues are
earned in international markets, with the Japanese market providing
approximately two-thirds of international revenue.
Merchandise, literary and exhibition licensing revenues are generally a
negotiated percentage of the licensee's sales. The Company generally receives a
fixed fee for the use of its copyrights for promotional and advertising
purposes. The Company generally pays a percentage of its gross syndication and
licensing royalties to the creators of these properties.
Cinetel Productions develops and produces its programs both internally and
in collaboration with a number of independent writers, producers and creative
teams under production arrangements. Generally, Cinetel licenses the initial
telecast rights for programs prior to commencing production. Initial license
fees commonly approximate the production costs of a program. Additional license
fees may be pursued from foreign, syndicated television, cable television and
home video markets. The ultimate profitability of the Company's programs is
dependent upon public taste, which is unpredictable and subject to change.
Competition. The Company's newspaper-feature distribution operations
compete for a limited amount of newspaper space with other distributors of news
columns, comics and other features. Competition is primarily based on price and
popularity of the features. Popularity of licensed characters is a primary
factor in obtaining and renewing merchandise and promotional licenses.
The Company's program production operations compete with all forms of
entertainment. In addition to competing for market share with other
entertainment companies, the Company also competes to obtain creative talent and
story properties. A significant number of other companies produce or distribute
programs. Competition is primarily based on price, quality of the programming
and public taste.
EMPLOYEES
As of March 31, 1998, the Company had approximately 8,100 full-time
employees, including 6,000 in newspapers, 1,500 in broadcast television, 300 in
category television and 200 in licensing and other media. Various labor unions
represent approximately 2,800 employees, primarily in newspapers. The present
operations of the Company have not experienced any work stoppages since March
1985. The Company considers its relationship with employees to be generally
satisfactory.
19
<PAGE> 22
MANAGEMENT
The Board of Directors of the Company consists of ten members. All
directors hold office until the next annual meeting of shareholders of the
Company or until the election of their respective successors. Officers of the
Company serve at the pleasure of the Board.
The following table sets forth certain information with respect to the
directors and certain key executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE WITH THE COMPANY
---- --- ------------------------------------
<S> <C> <C>
Lawrence A. Leser 62 Chairman of the Board
William R. Burleigh 62 President, Chief Executive Officer and Director
Daniel J. Castellini 58 Senior Vice President/Finance and Administration
Paul F. (Frank)
Gardner 55 Senior Vice President/Television
Alan M. Horton 54 Senior Vice President/Newspapers
Craig C. Standen 55 Senior Vice President/Corporate Development
John H. Burlingame 64 Director
Daniel J. Meyer 61 Director
Nicholas B. Paumgarten 52 Director
Charles E. Scripps 78 Director
Paul K. Scripps 52 Director
Edward W. Scripps 39 Director
Ronald W. Tysoe 44 Director
Julie A. Wrigley 49 Director
</TABLE>
Lawrence A. Leser has been the Chairman of the Company since August 1994
and was Chief Executive Officer from July 1985 to May 1996.
William R. Burleigh has been the Chief Executive Officer of the Company
since May 1996 and President of the Company since August 1994. Mr. Burleigh was
the Chief Operating Officer of the Company from May 1994 to May 1996, Executive
Vice President from March 1990 to May 1994 and Senior Vice President/Newspapers
and Publishing from September 1986 to March 1990.
Daniel J. Castellini has been the Senior Vice President/Finance and
Administration of the Company since 1986.
Paul F. (Frank) Gardner has been the Senior Vice President/Television of
the Company since April 1993 and was the Senior Vice President/News Programming,
Fox Broadcasting Company from 1991 to 1993.
Alan M. Horton has been the Senior Vice President/Newspapers of the Company
since May 1994 and was Vice President/Operations, Newspapers of the Company from
1991 to 1994.
Craig C. Standen has been Senior Vice President/Corporate Development of
the Company since August 1994 and was Vice President/Marketing -- Advertising,
Newspapers from 1990 to 1994.
John H. Burlingame has been a Senior Partner of Baker & Hostetler LLP (a
law firm) since January 1, 1998, and was a Partner from June 1, 1997 through
December 31, 1997 and Executive Partner from 1982 through June 1, 1997 of such
firm. Mr. Burlingame is a trustee of the Scripps Trust.
Daniel J. Meyer has been the President of Cincinnati Milacron Inc. (a
manufacturer of metal working and plastics processing machinery and systems)
since January 1, 1998, Chairman since January 1, 1991 and Chief Executive
Officer of Cincinnati Milacron Inc. since April 24, 1990. Mr. Meyer is also a
director of Star Banc Corp. and Hubbell Incorporated (a manufacturer of wiring
and lighting devices).
Nicholas B. Paumgarten has been a Managing Director of J.P. Morgan & Co.
Incorporated (an investment banking firm) since February 10, 1992.
20
<PAGE> 23
Charles E. Scripps has been Chairman of the Executive Committee of the
Company since August 1994 and served as the Chairman of the Board of Directors
of the Company from 1953 to August 1994. Mr. Scripps is a grandson of Edward W.
Scripps, the founder of the Company.
Paul K. Scripps has been the Vice President/Newspapers of the Company since
November 1997 and was Chairman of a subsidiary of the Company from December 1989
to June 1997. Mr. Scripps is a second cousin of Charles E. Scripps. Mr. Scripps
serves as a director of the Company pursuant to an agreement between the Scripps
Trust and John P. Scripps. See "Certain Transactions--John P. Scripps
Newspapers."
Edward W. Scripps was the news Director at KJRH-TV, a division of a
subsidiary of the Company from February 1983 through September 1993. Mr. Scripps
is a nephew of Charles E. Scripps.
Ronald W. Tysoe is a director of Federated Department Stores, Inc., and has
been its Vice Chairman, Finance and Real Estate since December 1997. Mr. Tysoe
also served as Vice Chairman and Chief Financial Officer of Federated Department
Stores, Inc. from April 1990 to December 1997.
Julie A. Wrigley has been the Chairman and Chief Executive Officer 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. Mrs. Wrigley was a director of Associated
Bank, Chicago from 1988 to 1996.
21
<PAGE> 24
SELLING SHAREHOLDERS
The Shares offered hereby are being sold by the Scripps Trust and the
Howard Trust. Certain information regarding the Selling Shareholders which has
been provided to the Company by them appears below.
THE EDWARD W. SCRIPPS TRUST
3,500,000 of the Shares offered hereby are being sold by the Scripps Trust.
The Company has been advised that the Scripps Trust is selling the Shares in
order to diversify the assets of the Scripps Trust. The Trustees of the Scripps
Trust are Charles E. Scripps, Robert P. Scripps, Jr. and John H. Burlingame.
Each of the Trustees other than Robert P. Scripps is a director of the Company,
and Charles E. Scripps is Chairman of the Executive Committee of the Board of
Directors of the Company. The Trustees have the power to vote and dispose of the
shares of capital stock of the Company held by the Scripps Trust. Charles E.
Scripps and Robert P. Scripps, Jr. have a life income interest in the Scripps
Trust. John H. Burlingame has no economic interest in the assets held by the
Scripps Trust.
The agreement establishing the Scripps Trust (the "Trust Agreement") is
dated November 23, 1922. Under the Trust Agreement, the Scripps Trust must
retain voting stock sufficient to ensure control of the Company by the Scripps
Trust until the final distribution of the Scripps Trust estate unless earlier
stock dispositions are necessary for the purpose of preventing loss or damage to
the Scripps Trust estate. Under a probate court ruling obtained in 1998, the
Scripps Trust is not required to hold a majority of the outstanding Class A
Common Shares or to hold a majority of the Company's total number of outstanding
shares (Class A Common Shares and Common Voting Shares combined) to ensure
control of the Company.
The Scripps Trust will terminate upon the death of the last to survive of
four persons specified by the Trust Agreement, the youngest of whom is 74 years
of age. Upon the termination of the Scripps Trust, substantially all of its
assets (including all the shares of capital stock of the Company held by the
Scripps Trust) will be distributed to the grandchildren of Robert Paine Scripps
(a son of Edward W. Scripps), of whom there are 28. Twenty-seven 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
Shares to be held by them upon termination of the Scripps Trust and distribution
of the Scripps Trust estate. See "Certain Transactions--Scripps Family
Agreement." The Company has been advised that no tax will be payable on the
assets of the Scripps Trust upon distribution thereof to the beneficiaries.
As of April 30, 1998, the Scripps Trust owned 32,610,000, or 53.0%, of the
outstanding Class A Common Shares and 16,040,000, or 83.5%, of the outstanding
Common Voting Shares, such shares together being 60.2% of the outstanding
capital stock of the Company. Following the sale of its portion of the Shares
and assuming that the Underwriters' over-allotment options are not exercised,
the Scripps Trust will own 29,110,000, or 47.3%, of the outstanding Class A
Common Shares and 16,040,000, or 83.5%, of the outstanding Common Voting Shares,
which together would constitute 55.9% of the outstanding capital stock of the
Company. See "Security Ownership of Certain Beneficial Owners and Selling
Shareholders."
Prior to the Offerings, as holder of a majority of the outstanding Class A
Common Shares and the outstanding Common Voting Shares, the Scripps Trust is
able to elect all of the Company's directors. After the Offerings, the Scripps
Trust will continue to own a majority of the Common Voting Shares, which will
enable it to elect two-thirds of the Company's directors, and will own
approximately 47% of the outstanding Class A Common Shares, which may, as a
practical matter, enable it to continue to elect the remainder of the Company's
directors. Nominations of persons for election by either class of shares of the
Company to the Board of Directors are made, and will continue to be made after
the Offerings, by the vote of a majority of all directors then in office,
regardless of the class of shares entitled to elect them.
So long as the Scripps Trust owns a majority of the Common Voting Shares,
it will be able to, under most circumstances, amend the Company's Articles of
Incorporation and effect any fundamental corporate transaction without the
approval of any other of the Company's shareholders and will be able to defeat
any unsolicited attempt to acquire control of the Company. The concentration of
voting power in the Scripps Trust and the limited voting rights of holders of
Class A Common Shares may have the effect of precluding holders of shares of
22
<PAGE> 25
capital stock of the Company from receiving any premium above market price for
their shares which may be offered in connection with any attempt to acquire
control of the Company.
JACK R. HOWARD TRUST
2,800,000 of the Shares offered hereby are being sold by the Howard Trust.
The Howard Trust is an irrevocable trust that was established in 1981 by Jack R.
Howard for his benefit and the benefit of his wife, both of whom are now
deceased. The sole trustee of the Howard Trust is The Chase Manhattan Bank,
which has the power to vote and dispose of the shares of capital stock of the
Company held by it under the Howard Trust. The Company has been advised that the
Howard Trust is selling the Shares in order to pay estate taxes and to diversify
assets of the Trust.
As of April 30, 1998, the Howard Trust owned 3,327,385, or 5.4%, of the
outstanding Class A Common Shares and 170,000, or .9%, of the outstanding Common
Voting Shares, such shares together being 4.3% of the outstanding capital stock
of the Company. Following the sale of its portion of the Shares and assuming
that the Underwriters' over-allotment options are not exercised, the Howard
Trust will own 527,385, or .9%, of the outstanding Class A Common Shares and
170,000, or .9%, of the outstanding Common Voting Shares, which together would
constitute .9% of the outstanding capital stock of the Company. See "Security
Ownership of Certain Beneficial Owners and Selling Shareholders."
23
<PAGE> 26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND SELLING SHAREHOLDERS
The following table sets forth certain information with respect to persons
known to management to be the beneficial owners, as of April 30, 1998, 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>
BENEFICIAL OWNERSHIP PRIOR TO THE OFFERINGS
------------------------------------------- CLASS A
CLASS A COMMON COMMON
NAME AND ADDRESS COMMON VOTING SHARES TO
OF BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT BE SOLD (1)
- --------------------------- ---------- ------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
The Edward W. Scripps Trust 32,610,000 53.0% 16,040,000 83.5% 3,500,000
312 Walnut Street
P.O. Box 5380
Cincinnati,Ohio
The Jack R. Howard Trust 3,327,385 5.4 170,000 .9 2,800,000
Chase Manhattan Bank,
Trustee (2)
c/o George Rowe, Esq.
Fulton, Rowe, Hart & Coon
1 Rockefeller Plaza
Suite 301
New York, NY 10020
Paul K. Scripps and 600 -- 1,616,113 8.4 --
John P. Scripps Trust (3)
625 Broadway, Suite 625
San Diego, California
Franklin Resources, Inc. 3,737,800 6.1 -- -- --
(4)
777 Mariners Island Blvd.
San Mateo, California
<CAPTION>
BENEFICIAL OWNERSHIP AFTER THE OFFERINGS
------------------------------------------
CLASS A COMMON
NAME AND ADDRESS COMMON VOTING
OF BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT
- --------------------------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
The Edward W. Scripps Trust 29,110,000 47.3% 16,040,000 83.5%
312 Walnut Street
P.O. Box 5380
Cincinnati,Ohio
The Jack R. Howard Trust 527,385 .9 170,000 .9
Chase Manhattan Bank,
Trustee (2)
c/o George Rowe, Esq.
Fulton, Rowe, Hart & Coon
1 Rockefeller Plaza
Suite 301
New York, NY 10020
Paul K. Scripps and 600 -- 1,616,113 8.4
John P. Scripps Trust (3)
625 Broadway, Suite 625
San Diego, California
Franklin Resources, Inc. 3,737,800 6.1 -- --
(4)
777 Mariners Island Blvd.
San Mateo, California
</TABLE>
- ---------------
(1) Excludes 945,000 Shares that may be purchased by the Underwriters to cover
over-allotments, if any.
(2) Chase Manhattan Bank (the "Bank") also serves as trustee of several trusts,
including trusts established for the benefit of Jack R. Howard's sister, and
as executor of the Estate of Mr. Howard's wife. In these capacities, the
Bank is the beneficial owner of 249,885 Class A Common Shares and 1,017,800
Common Voting Shares.
(3) 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 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. He disclaims beneficial ownership of the shares held
in the other four trusts. Mr. Scripps is a director of the Company.
(4) Franklin Resources, Inc. has filed a Schedule 13G with the Securities and
Exchange Commission with respect to the Company's Class A Common Shares. The
information in the table is based on the information contained in such
filing as of December 31, 1997.
24
<PAGE> 27
DESCRIPTION OF CAPITAL STOCK
The following summary description of the Company's capital stock does not
purport to be complete and is qualified entirely by reference to the Articles of
Incorporation and Code of Regulations of the Company, which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus
forms a part.
The authorized capital stock of the Company consists of 120 million Class A
Common Shares, 30 million Common Voting Shares and 25 million Preferred Shares.
As of April 30, 1998, 61,581,488 Class A Common Shares and 19,218,913 Common
Voting Shares were outstanding. No Preferred Shares are outstanding. Except in
connection with stock splits, stock dividends or similar transactions, the
Articles of Incorporation of the Company prohibit the issuance of additional
Common Voting Shares.
CLASS A COMMON SHARES AND COMMON VOTING SHARES
Voting Rights. Holders of Class A Common Shares are entitled to elect the
greater of three or one-third of the directors of the Company (or the nearest
smaller whole number if one-third of the entire Board is not a whole number),
except directors, if any, to be elected by holders of Preferred Shares or any
series thereof. Holders of Common Voting Shares are entitled to elect all
remaining directors and to vote on all other matters. Nomination of persons for
election by either class of shares to the Board are made by the vote of a
majority of all directors then in office, regardless of the class of shares
entitled to elect them. Holders of a majority of the outstanding Common Voting
Shares have the right to increase or decrease the number of authorized and
unissued Class A Common Shares and Common Voting Shares, but not below the
number of shares thereof then outstanding. The Company's Class A Common Shares
and Common Voting Shares do not have cumulative voting rights.
Holders of Class A Common Shares are not entitled to vote on any other
matters except as required by the Ohio General Corporation Law ("Ohio Law").
Under Ohio Law, an amendment to a corporation's articles of incorporation that
purports to do any of the following would require the approval of the holders of
each class of capital stock affected: (i) increase or decrease the par value of
the issued shares of such class (or of any other class of capital stock of the
corporation if the amendment would reduce or eliminate the stated capital of the
corporation), (ii) change issued shares of a class into a lesser number of
shares or into the same or a different number of shares of any other class
theretofore or then authorized (or so change any other class of capital stock of
the corporation if the amendment would reduce or eliminate the stated capital of
the corporation), (iii) change the express terms of, or add express terms to,
the shares of a class in any manner substantially prejudicial to the holders of
such class, (iv) change the express terms of issued shares of any class senior
to the particular class in any manner substantially prejudicial to the holders
of such junior class, (v) authorize shares of another class that are convertible
into, or authorize the conversion of shares of another class into, such class,
or authorize the directors to fix or alter conversion rights of shares of
another class that are convertible into such class, (vi) provide that the stated
capital of the corporation shall be reduced or eliminated as a result of an
amendment described in clause (i) or (ii) above, or provide, in the case of an
amendment described in clause (v) above, that the stated capital of the
corporation shall be reduced or eliminated upon the exercise of such conversion
rights, (vii) change substantially the purpose of the corporation, or provide
that thereafter an amendment to the corporation's articles of incorporation may
be adopted that changes substantially the purposes of the corporation, or (viii)
change the corporation into a nonprofit corporation.
The holders of Common Voting Shares have the power to defeat any attempt to
acquire control of the Company with a view to effecting a merger, sale of assets
or similar transaction even though such a change in control may be favored by
shareholders holding substantially more than a majority of the Company's
outstanding equity. This may have the effect of precluding holders of shares in
the Company from receiving any premium above market price for their shares which
may be offered in connection with any such attempt to acquire control.
The Company's voting structure, which is similar to voting structures
adopted by a number of other media companies, is designed to promote the
continued independence and integrity of the Company's media operations under the
control of the holders of Common Voting Shares while at the same time providing
for equity ownership in the Company by a broader group of shareholders through
the means of a class of publicly traded common shares. This structure may render
more difficult certain unsolicited or hostile attempts to take over the Company
25
<PAGE> 28
which could disrupt the Company, divert the attention of its directors, officers
and employees and adversely affect the independence and quality of its media
operations.
Dividend Rights. Each Class A Common Share is entitled to dividends if, as
and when dividends are declared by the Board of Directors of the Company.
Dividends must be paid on the Class A Common Shares and Common Voting Shares at
any time that dividends are paid on either. Any dividend declared and payable in
cash, capital stock of the Company (other than Class A Common Shares or Common
Voting Shares) or other property must be paid equally, share for share, on the
Common Voting Shares and the Class A Common Shares. Dividends and distributions
payable in Common Voting Shares may be paid only on Common Voting Shares, and
dividends and distributions payable in Class A Common Shares may be paid only on
Class A Common Shares. If a dividend or distribution payable in the Class A
Common Shares is made on Class A Common Shares, a simultaneous dividend or
distribution in Common Voting Shares must be made on the Common Voting Shares.
If a dividend or distribution payable in Common Voting Shares is made on the
Common Voting Shares, a simultaneous dividend or distribution in Class A Common
Shares must be made on the Class A Common Shares. Pursuant to any such dividend
or distribution, each Common Voting Share will receive a number of Common Voting
Shares equal to the number of Class A Common Shares payable on each Class A
Common Share. In the case of any dividend or other distribution payable in stock
of any corporation which just prior to the time of the distribution is a wholly
owned subsidiary of the Company and which possesses authority to issue class A
common shares and common voting shares with voting characteristics identical to
those of the Company's Class A Common Shares and Common Voting Shares,
respectively, including a distribution pursuant to a stock dividend, a stock
split or division of stock or a spin-off or split-up reorganization of the
Company, only class A common shares of such subsidiary will be distributed with
respect to the Company's Class A Common Shares and only common voting shares of
such subsidiary will be distributed with respect to the Company's Common Voting
Shares.
Conversion. Each Common Voting Share is convertible at any time, at the
option of and without cost to its holder, into one Class A Common Share.
Liquidation Rights. In the event of the liquidation, dissolution or
winding up of the Company, holders of Class A Common Shares and Common Voting
Shares will be entitled to participate equally, share for share, in the assets
available for distribution.
Preemptive Rights. Holders of Class A Common Shares do not have preemptive
rights to purchase shares of such stock or shares of stock of any other class
that the Company may issue. Holders of Common Voting Shares have preemptive
rights to purchase any additional Common Voting Shares or any other stock with
or convertible into stock with general voting rights issued by the Company.
PREFERRED SHARES
No Preferred Shares are outstanding. The Board of Directors is authorized
to issue, by resolution and without any action by shareholders, up to 25 million
Preferred Shares. All Preferred Shares will be of equal rank. Dividends on
Preferred Shares will be cumulative and will have a preference to the Class A
Common Shares and Common Voting Shares. So long as any Preferred Shares are
outstanding, no dividends may be paid on, and the Company may not redeem or
retire, any common shares or other securities ranking junior to the Preferred
Shares unless all accrued and unpaid dividends on the Preferred Shares shall
have been paid. In the event of a liquidation, dissolution or winding up of the
Company, the Company's Preferred Shares are entitled to receive, before any
amounts are paid or distributed in respect of any securities junior to the
Preferred Shares, the amount fixed by the Board of Directors as a liquidation
preference, plus the amount of all accrued and unpaid dividends. The Preferred
Shares have no voting rights except as may be required by Ohio Law. See
"Description of Capital Stock--Class A Common Shares and Common Voting
Shares--Voting Rights" for those amendments to the Articles that would require a
vote of the holders of the Preferred Shares.
Except as specifically described in this section, the Board of Directors
will have the power to establish the designations, dividend rate, conversion
rights, terms of redemption, liquidation preference, sinking fund terms and all
other preferences and rights of any series of Preferred Shares. The issuance of
Preferred Shares may
26
<PAGE> 29
adversely affect certain rights of the holders of Class A Common Shares and
Common Voting Shares and may render more difficult certain unsolicited or
hostile attempts to take over the Company.
EVALUATION OF TENDER OFFERS AND SIMILAR TRANSACTIONS
The Company's Articles of Incorporation provide that the Board of
Directors, when evaluating any offer of another party to make a tender or
exchange offer for any equity security of the Company, or any proposal to merge
or consolidate the Company with another company, or to purchase or otherwise
acquire all or substantially all the properties and assets of the Company, must
give due consideration to the effect of such a transaction on the integrity,
character and quality of the Company's operations, as well as to all other
relevant factors, including the long-term and short-term interests of the
Company and its shareholders, and the social, legal and economic effects on
employees, customers, suppliers and creditors and on the communities and
geographical areas in which the Company and its subsidiaries operate or are
located, and on any of the businesses and properties of the Company or any of
its subsidiaries. This provision may have the effect of rendering more difficult
or discouraging an acquisition of the Company that is deemed undesirable by the
Board of Directors.
COMPLIANCE WITH FCC REGULATIONS
The Company's Articles of Incorporation authorize it to obtain information
from shareholders and persons seeking to have shares of the Company's capital
stock transferred to them, in order to ascertain whether ownership of, or
exercise of rights with respect to, the Company's shares by such persons would
violate federal communications laws. If any person refuses to provide such
information or the Company concludes that such ownership or exercise of such
rights would result in the violation of applicable federal communications laws,
the Company may refuse to transfer shares to such person or refuse to allow him
to exercise any rights with respect to the Company's shares if exercise thereof
would result in such a violation.
CERTAIN OHIO ANTI-TAKEOVER LAWS
Certain Ohio anti-takeover laws may have the effect of discouraging or
rendering more difficult an unsolicited acquisition of a corporation or its
capital stock to the extent the corporation is subject to such provisions. The
articles of incorporation of a corporation may provide that any one or more of
these provisions of Ohio Law will not apply to the corporation. The Articles of
Incorporation of the Company provide that none of these provisions apply to the
Company except the tender offer statute.
Business Combinations with Interested Shareholders. Chapter 1704 of the
Ohio Law applies to a broad range of business combinations between an Ohio
corporation and an "interested shareholder." Chapter 1704 is triggered by the
acquisition of 10% of the voting power of a subject Ohio corporation. The
prohibition imposed by Chapter 1704 continues indefinitely after the initial
three-year period unless the subject transaction is approved by the requisite
vote of the shareholders or satisfies statutory conditions relating to the
fairness of consideration received by shareholders who are not interested in the
subject transaction. During the initial three-year period the prohibition is
absolute absent prior approval by the board of directors of the acquisition of
voting power by which a person became an "interested shareholder" or of the
subject transaction. The Company has made Chapter 1704 inapplicable to it by so
providing in the Articles of Incorporation of the Company.
Control Share Acquisition. Section 1701.831 of the Ohio Law (the "Ohio
Control Share Acquisition Statute") provides that certain notice and
informational filings and special shareholder meeting and voting procedures must
be followed prior to consummation of a proposed "control share acquisition,"
which is defined as any acquisition of an issuer's shares which would entitle
the acquiror, immediately after such acquisition, directly or indirectly, to
exercise or direct the exercise of voting power of the issuer in the election of
directors within any of the following ranges of such voting power: (i) one-fifth
or more but less than one-third of such voting power, (ii) one-third or more but
less than a majority of such voting power, or (iii) a majority or more of such
voting power. Assuming compliance with the notice and information filings
prescribed by statute, the proposed control share acquisition may be made only
if, at a duly convened special meeting of shareholders, the acquisition is
approved by both a majority of the voting power of the issuer represented at the
meeting and a majority of the voting power remaining after excluding the
combined voting power of the intended acquiror and
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<PAGE> 30
the directors and officers of the issuer. The Company has made the Ohio Control
Share Acquisition Statute inapplicable to it by so providing in the Articles of
Incorporation of the Company.
Ohio "Anti-Greenmail" Statute. Pursuant to Ohio Law Section 1707.043, a
public corporation formed in Ohio may recover profits that a shareholder makes
from the sale of the corporation's securities within 18 months after making a
proposal to acquire control or publicly disclosing the possibility of a proposal
to acquire control. The corporation may not, however, recover from a person who
proves either (i) that his sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that he would acquire control of the corporation or (ii) that his
purpose was not to increase any profit or decrease any loss in the stock. Also,
before the corporation may obtain any recovery, the aggregate amount of the
profit realized by such person must exceed $250,000. Any shareholder may bring
an action on behalf of the corporation if a corporation refuses to bring an
action to recover these profits. The party bringing such an action may recover
his attorneys' fees with the permission of the court having jurisdiction over
such action. The Articles of Incorporation of the Company provide that this
statute does not apply to the Company.
Tender Offer Statute. The Ohio tender offer statute (Ohio Law Section
1707.041) requires any person making a tender offer for a corporation having its
principal place of business in Ohio to comply with certain filing, disclosure
and procedural requirements. The disclosure requirements include a statement of
any plans or proposals that the offeror, upon gaining control, may have to
liquidate the subject company, sell its assets, effect a merger or consolidation
of it, establish, terminate, convert, or amend employee benefit plans, close any
plant or facility of the subject company or of any of its subsidiaries or
affiliates, or make any other major change in its business, corporate structure,
management personnel, or policies of employment.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Company's Class A Common Shares is
Fifth Third Bank, Cincinnati, Ohio.
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<PAGE> 31
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 Scripps Trust. Such persons
and trusts (the "Signatories") consist of certain grandchildren of Robert Paine
Scripps who are beneficiaries of the Scripps 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 Scripps Trust were to have terminated as of April 30, 1998, the
Signatories would have held in the aggregate approximately 89.2% 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 years after
the death of the last survivor of the descendants of Robert Paine Scripps and
John P. Scripps alive when the Scripps Trust terminates. The provisions of the
Scripps Family Agreement governing the voting of Common Voting Shares will be
effective for a ten year period after termination of the Scripps Trust and may
be renewed for additional ten year periods pursuant to Ohio law and certain
provisions set forth in the Scripps Family 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 the spouse of such descendant or any other person or
entity. Descendants to whom such shares are sold or transferred outright, and
trustees of trusts into which such shares are transferred, must become parties
to the Scripps Family Agreement or such shares shall be deemed to be offered for
sale pursuant to the Scripps Family Agreement. Signatories will also be
permitted to transfer 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 Scripps 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.
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<PAGE> 32
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 Scripps Trust entered into certain agreements
discussed below.
JPSN Board Representation Agreement. The 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 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.
The Board Representation Agreement terminates upon the earlier of the
termination of the Scripps Trust or the completion of a public offering by the
Company of Common Voting Shares.
Stockholder Agreement. The former shareholders of the JPSN, 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 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 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, shareholders 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 JPSN 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.
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<PAGE> 33
CERTAIN UNITED STATES FEDERAL TAX
CONSEQUENCES TO NON-U.S. SHAREHOLDERS
The following is a general discussion of certain United States Federal tax
consequences of the acquisition, ownership, and disposition of Shares by a
holder that, for United States Federal income tax purposes, is not a "United
States person" (a "Non-United States Holder"). This discussion is based upon the
United States Federal tax law now in effect, which is subject to change,
possibly retroactively. For purposes of this discussion, a "United States
person" means a citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in the United States or under
the laws of the United States or of any political subdivision thereof (except to
the extent otherwise provided in United States Treasury regulations in the case
of a partnership); an estate whose income is includible in gross income for
United States Federal income tax purposes regardless of its source; a person
otherwise subject to United States Federal income tax on a net income basis in
respect of its worldwide taxable income; or a "United States Trust." A United
States Trust is any trust if, and only if, (i) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(ii) one or more United States trustees have the authority to control all
substantial decisions of the trust. This discussion does not consider any
specific facts or circumstances that may apply to a particular Non-United States
Holder. Prospective investors are urged to consult their tax advisors regarding
the United States Federal tax consequences of acquiring, holding, and disposing
of Shares, as well as any tax consequences that may arise under the laws of any
foreign, state, local, or other taxing jurisdiction.
DIVIDENDS
Dividends paid to a Non-United States Holder will generally be subject to
withholding of United States Federal income tax at the rate of 30% unless the
dividend is effectively connected with the conduct of a trade or business within
the United States by the Non-United States Holder (or if certain tax treaties
apply, is attributable to a United States permanent establishment maintained by
such Non-United States Holder), in which case the dividend will be subject to
the United States Federal income tax on net income on the same basis that
applies to United States persons generally. In the case of a Non-United States
Holder which is a corporation, such effectively connected income also may be
subject to the branch profits tax (which is generally imposed on a foreign
corporation on the repatriation from the United States of effectively connected
earnings and profits). Non-United States Holders should consult any applicable
income tax treaties that may provide for a lower rate of withholding or other
rules different from those described above. A Non-United States Holder may be
required to satisfy certain certification requirements in order to claim treaty
benefits or otherwise claim a reduction of or exemption from withholding under
the foregoing rules.
GAIN ON DISPOSITION
A Non-United States Holder will generally not be subject to United States
Federal income tax on gain recognized on a sale or other disposition of Shares
unless (i) the gain is effectively connected with the conduct of a trade or
business within the United States by the Non-United States Holder or, if tax
treaties apply, is attributable to a United States permanent establishment
maintained by the Non-United States Holder, (ii) in the case of a Non-United
States Holder who is a nonresident alien individual and holds Shares as capital
assets, such holder is present in the United States for 183 or more days in the
taxable year of disposition or either such individual has a "tax home" in the
United States or the gain is attributable to an office or other fixed place of
business maintained by such individual in the United States, (iii) the Company
is or has been a "United States real property holding corporation" for United
States Federal income tax purposes (which the Company does not believe that it
is or likely to become) and the Non-United States Holder holds or has held,
directly or indirectly, at any time during the five-year period ending on the
date of disposition, more than 5% of the Class A Common Shares or (iv) the
Non-United States Holder is subject to tax pursuant to the Internal Revenue Code
of 1986, as amended, provisions applicable to certain United States expatriates.
Gain that is effectively connected with the conduct of a trade or business
within the United States by the Non-United States Holder will be subject to the
United States Federal income tax on net income on the same basis that applies to
United States persons generally (and, with respect to corporate holders, under
certain circumstances, the branch profit tax) but will not be subject
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<PAGE> 34
to withholding. Non-United States Holders should consult any applicable treaties
that may provide for different rules.
FEDERAL ESTATE TAXES
Shares owned or treated as owned by an individual who is a Non-United
States Holder at the date of death will be included in such individual's estate
for United States Federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Internal Revenue Service and to
each Non-United States Holder the amount of dividends paid to, and the tax
withheld with respect to, such holder, regardless of whether any tax was
actually withheld. This information may also be made available to the tax
authorities of a country in which the Non-United States Holder resides.
Under the temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax at a rate of 31%
will generally apply to dividends paid on Shares to a Non-United States Holder
and to payments by a United States office of a broker of the proceeds of a sale
of Shares to a Non-United States Holder unless the holder certifies its
Non-United States Holder status under penalties of perjury or otherwise
establishes an exemption. Information reporting requirements (but not backup
withholding) will also apply to payments of the proceeds of sales of Shares by
foreign offices of United States brokers, or foreign brokers with certain types
of relationships to the United States, unless the broker has documentary
evidence in its records that the holder is a Non-United States Holder and
certain other conditions are met, or the holder otherwise establishes an
exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the Non-United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.
These information reporting and backup withholding rules are under review
by the United States Treasury, and their application to the Shares could be
changed by future regulations. On October 14, 1997, Treasury Regulations were
published in the Federal Register concerning the withholding of tax and
reporting for certain amounts paid to nonresident individuals and foreign
corporations. The Treasury Regulations will be effective for payments made after
December 31, 1999. After that date, Non-United States Holders claiming treaty
benefits or claiming that income is effectively connected will be required to
submit an appropriate version of Internal Revenue Service Form W-8 to the U.S.
withholding agent. New rules will apply to Non-United States Holders who invest
through intermediaries. Prospective investors should consult their tax advisors
concerning the United States Treasury regulations and the potential effect on
their ownership of Shares.
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<PAGE> 35
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement") among the Company, each of the Selling Shareholders
and each of the underwriters named below (the "U.S. Underwriters"), and
concurrently with the sale of 1,260,000 Shares to the International Managers (as
defined below), the Selling Shareholders have agreed to sell to the U.S.
Underwriters, and each of the U.S. Underwriters severally has agreed to purchase
from the Selling Shareholders, the number of Shares set forth opposite its name
below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
---------
Total.......................................... 5,040,000
=========
</TABLE>
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") is
acting as representative (the "U.S. Representative") for the U.S. Underwriters.
The Company and the Selling Shareholders have also entered into a purchase
agreement (the "International Purchase Agreement" and, together with the U.S.
Purchase Agreement, the "Purchase Agreements") with certain underwriters outside
the United States and Canada (collectively, the "International Managers" and,
together with the U.S. Underwriters, the "Underwriters") for whom Merrill Lynch
International is acting as representative (the "International Representative"
and, together with the U.S. Representative, the "Representatives"). Subject to
the terms and conditions set forth in the International Purchase Agreement, and
concurrently with the sale of 5,040,000 Shares to the U.S. Underwriters pursuant
to the U.S. Purchase Agreement, the Selling Shareholders have agreed to sell to
the International Managers, and the International Managers severally have agreed
to purchase from the Selling Shareholders, an aggregate of 1,260,000 Shares. The
public offering price per Share and underwriting discount per Share are
identical under the U.S. Purchase Agreement and the International Purchase
Agreement. The respective percentages of Shares to be sold by the Selling
Shareholders will be identical in the U.S. Offering and the International
Offering.
In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the Shares being sold pursuant to each such
agreement if any of the Shares being sold pursuant to such agreement are
purchased. Under certain circumstances involving a default by an Underwriter,
the commitments of non-defaulting U.S. Underwriters or International Managers
(as the case may be) may be increased or the U.S. Purchase Agreement or the
International Purchase Agreement (as the case may be) may be terminated. The
sale of Shares to the U.S. Underwriters is conditioned upon the sale of Shares
to the International Managers and vice versa.
The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. The Underwriters are permitted to sell Shares
to each other for purposes of resale at the public offering price, less an
amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom they sell
Shares will not offer to sell or sell Shares to persons who are non-U.S. or
non-Canadian persons or to persons they believe intend to resell to persons who
are non-U.S. or non-Canadian persons, and the International Managers and any
dealer to whom they sell Shares will not offer to sell or sell Shares to U.S.
persons or to Canadian persons or to persons they believe intend to resell to
U.S. or Canadian persons, except in the case of transactions pursuant to the
Intersyndicate Agreement.
The U.S. Representative has advised the Selling Shareholders that the U.S.
Underwriters propose initially to offer the Shares to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess $ per Share. The U.S.
Underwriters may allow,
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<PAGE> 36
and such dealers may reallow, a discount not in excess of $ per Share on
sales to certain other dealers. After the Offerings, the public offering price,
concession and discount may be changed.
The Scripps Trust and the Howard Trust have granted options to the U.S.
Underwriters, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of 420,000 and 336,000 additional Shares,
respectively, at the public offering price set forth on the cover page of this
Prospectus, less the underwriting discount. The U.S. Underwriters may exercise
this option only to cover over-allotments, if any, made on the sale of the
Shares offered hereby. To the extent that the U.S. Underwriters exercise this
option, each U.S. Underwriter will be obligated, subject to certain conditions,
to purchase a number of additional Shares proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Scripps Trust
and the Howard Trust also have granted options to the International Managers,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 105,000 and 84,000 additional Shares, respectively, to cover
over-allotments, if any, on terms similar to those granted to the U.S.
Underwriters. If purchased, the Underwriters will offer such Shares on the same
terms as those on which the 6,300,000 Shares are being offered.
The Company and the Selling Shareholders have agreed, subject to certain
exceptions, not to directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise dispose
of or transfer any Common Voting Shares or Class A Common Shares or securities
convertible into or exchangeable or exercisable for Common Voting Shares or
Class A Common Shares, as the case may be, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Voting
Shares or Class A Common Shares whether any such swap or transaction is to be
settled by delivery of Common Voting Shares or Class A Common Shares or other
securities, in cash or otherwise, without the prior written consent of Merrill
Lynch on behalf of the Underwriters for a period of 180 days after the date of
this Prospectus.
In connection with the Offerings, the Underwriters may engage in certain
transactions which stabilize, maintain or otherwise affect the price of Class A
Common Shares. Such transactions may include the purchase of Class A Common
Shares in the open market to cover short positions created by over-allotments or
to stabilize the price of Class A Common Shares. In general, purchases of a
security for the purpose of stabilization or to reduce a short position could
cause the price of the security to be higher than it might be in the absence of
such purchases. Neither the Company nor any of the Underwriters make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Shares. In
addition, neither the Company nor any of the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Underwriters do not intend to confirm sales of the Shares offered
hereby to any accounts over which they exercise discretionary authority.
Each of the Company and the Selling Shareholders has agreed to indemnify
the U.S. Underwriters and the International Managers against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
34
<PAGE> 37
LEGAL MATTERS
Baker & Hostetler LLP, Cincinnati, Ohio, will pass upon certain legal
matters in respect of the Shares offered hereby for the Company and the Selling
Shareholders. Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago,
Illinois, will pass upon certain legal matters for the Underwriters. John H.
Burlingame, a Senior Partner of Baker & Hostetler LLP, is a director and a
member of the Executive Committee of the Board of Directors of the Company and a
trustee of the Scripps Trust. See "Selling Shareholders--The Edward W. Scripps
Trust."
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated herein by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
35
<PAGE> 38
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERINGS
CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING SHAREHOLDERS OR ANY UNDERWRITER, DEALER OR AGENT. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Prospectus Summary.................... 5
Price Range of Class A Common Shares
and Dividends....................... 8
Capitalization........................ 9
Selected Consolidated Financial
Data................................ 10
Business.............................. 13
Management............................ 20
Selling Shareholders.................. 22
Security Ownership of Certain
Beneficial Owners and Selling
Shareholders........................ 24
Description of Capital Stock.......... 25
Certain Transactions.................. 29
Certain United States Federal Tax
Consequences to Non-U.S.
Shareholders........................ 31
Underwriting.......................... 33
Legal Matters......................... 35
Experts............................... 35
</TABLE>
======================================================
======================================================
6,300,000 SHARES
[SCRIPPS LOGO]
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH & CO.
, 1998
======================================================
<PAGE> 39
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 11, 1998
PROSPECTUS
6,300,000 SHARES
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
------------------------
SCRIPPS LOGO
Of the 6,300,000 Class A Common Shares, $.01 par value (the "Shares"), of
The E.W. Scripps Company (the "Company") being offered hereby, 3,500,000 are
being offered by The Edward W. Scripps Trust (the "Scripps Trust") and 2,800,000
shares are being offered by The Jack R. Howard Trust (the "Howard Trust," and
together with the Scripps Trust, the "Selling Shareholders"). The Company is not
offering any of its capital stock hereby and will not receive any proceeds from
the sale of the Shares by the Selling Shareholders. See "Selling Shareholders."
Of the 6,300,000 Shares offered hereby, 1,260,000 Shares are being offered
initially outside the United States and Canada by International Managers (the
"International Offering"), and 5,040,000 shares are being offered initially in a
concurrent offering in the United States and Canada by the U.S. Underwriters
(the "U.S. Offering," and together with the International Offering, the
"Offerings"). The public offering price and the underwriting discount per Share
are identical for each of the Offerings. See "Underwriting."
The Class A Common Shares are listed on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "SSP". On June 8, 1998, the last reported sale
price of the Class A Common Shares on the NYSE was $51 1/16 per share. See
"Price Range of Class A Common Shares and Dividends."
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 of the Company are entitled to elect all remaining directors and to vote
on all other matters requiring a vote of shareholders. Holders of Class A Common
Shares and Common Voting Shares are entitled to the same cash dividends and to
share equally in distributions on liquidation of the Company. Each Common Voting
Share is convertible into one Class A Common Share. See "Description of Capital
Stock."
After giving effect to the sale of the Shares (and assuming that the
Underwriters' over-allotment options are not exercised), the Scripps Trust will
own approximately 47.3% of the outstanding Class A Common Shares and
approximately 83.5% of the outstanding Common Voting Shares and will continue to
control the Company, and the Howard Trust will own approximately .9% of the
outstanding Class A Common Shares and approximately .9% of the outstanding
Common Voting Shares. See "Selling Shareholders."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
========================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT (1) SHAREHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................................... $ $ $
- ------------------------------------------------------------------------------------------------------------------------
Total (3).......................................... $ $ $
========================================================================================================================
</TABLE>
(1) Each of the Company and the Selling Shareholders has agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Selling
Shareholders estimated at $321,000.
(3) The Scripps Trust and the Howard Trust have granted to the International
Managers and the U.S. Underwriters, on a pro rata basis, options to purchase
up to an aggregate additional 525,000 Shares and 420,000 Shares,
respectively, in each case exercisable within 30 days of the date hereof,
solely to cover over-allotments, if any. If such options are exercised in
full, the total Price to Public, Underwriting Discount and Proceeds to
Selling Shareholders will be $ , $ and $ ,
respectively. See "Underwriting."
------------------
The Shares are being offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to the approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Shares will be made in New York, New York on or about
, 1998.
------------------
MERRILL LYNCH INTERNATIONAL
------------------
The date of this Prospectus is , 1998.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE OR JURISDICTION.
<PAGE> 40
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"International Purchase Agreement") among the Company, each of the Selling
Shareholders and each of the underwriters named below (the "International
Managers"), and concurrently with the sale of 5,040,000 Shares to the U.S.
Underwriters (as defined below), the Selling Shareholders have agreed to sell to
the International Managers, and each of the International Managers severally has
agreed to purchase from the Selling Shareholders, the number of Shares set forth
opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
---------------------- ---------
<S> <C>
Merrill Lynch International
---------
Total.......................................... 1,260,000
=========
</TABLE>
Merrill Lynch International ("Merrill Lynch International") is acting as
representative (the "International Representative") for the International
Managers.
The Company and the Selling Shareholders have also entered into a purchase
agreement (the "U.S. Purchase Agreement" and, together with the International
Purchase Agreement, the "Purchase Agreements") with certain underwriters in the
United States and Canada (collectively, the "U.S. Underwriters" and, together
with the International Managers, the "Underwriters") for whom Merrill Lynch is
acting as representative (the "U.S. Representative" and, together with the
International Representative, the "Representatives"). Subject to the terms and
conditions set forth in the U.S. Purchase Agreement, and concurrently with the
sale of 1,260,000 Shares to the International Managers pursuant to the
International Purchase Agreement, the Selling Shareholders have agreed to sell
to the U.S. Underwriters, and the U.S. Underwriters severally have agreed to
purchase from the Selling Shareholders, an aggregate of 5,040,000 Shares. The
public offering price per Share and underwriting discount per Share are
identical under the International Purchase Agreement and the U.S. Purchase
Agreement. The respective percentages of Shares to be sold by the Selling
Shareholders will be identical in the U.S. Offering and the International
Offering.
In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the Shares being sold pursuant to each such
agreement if any of the Shares being sold pursuant to such agreement are
purchased. Under certain circumstances involving a default by an Underwriter,
the commitments of non-defaulting International Managers or U.S. Underwriters
(as the case may be) may be increased or the International Purchase Agreement or
the U.S. Purchase Agreement (as the case may be) may be terminated. The sale of
Shares to the International Managers is conditioned upon the sale of Shares to
the U.S. Underwriters and vice versa.
The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. The Underwriters are permitted to sell Shares
to each other for purposes of resale at the public offering price, less an
amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the International Managers and any dealer to whom they
sell Shares will not offer to sell or sell Shares to U.S. persons or Canadian
persons or to persons they believe intend to resell to persons who are U.S.
persons or Canadian persons, and the U.S. Underwriters and any dealer to whom
they sell Shares will not offer to sell or sell Shares to non-U.S. persons or to
non-Canadian persons or to persons they believe intend to resell to persons who
are non-U.S. or non-Canadian persons, except in the case of transactions
pursuant to the Intersyndicate Agreement.
The International Representative has advised the Selling Shareholders that
the International Managers propose initially to offer the Shares to the public
at the public offering price set forth on the cover page of this
33
<PAGE> 41
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Prospectus and to certain dealers at such price less a concession not in excess
$ per Share. The International Managers may allow, and such dealers may
reallow, a discount not in excess of $ per Share on sales to certain
other dealers. After the Offerings, the public offering price, concession and
discount may be changed.
The Scripps Trust and the Howard Trust have granted options to the
International Managers, exercisable for 30 days after the date of this
Prospectus, to purchase up to an aggregate of 105,000 and 84,000 additional
Class A Common Shares, respectively, at the public offering price set forth on
the cover page of this Prospectus, less the underwriting discount. The
International Managers may exercise this option only to cover over-allotments,
if any, made on the sale of the Shares offered hereby. To the extent that the
International Managers exercise this option, each International Manager will be
obligated, subject to certain conditions, to purchase a number of additional
Class A Common Shares proportionate to such International Manager's initial
amount reflected in the foregoing table. The Scripps Trust and the Howard Trust
also have granted options to the U.S. Underwriters, exercisable for 30 days
after the date of this Prospectus, to purchase up to an aggregate of 420,000 and
336,000 additional Class A Common Shares, respectively, to cover
over-allotments, if any, on terms similar to those granted to the International
Managers. If purchased, the Underwriters will offer such Shares on the same
terms as those on which the 6,300,000 Shares are being offered.
The Company and the Selling Shareholders have agreed, subject to certain
exceptions, not to directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise dispose
of or transfer any Common Voting Shares or Class A Common Shares or securities
convertible into or exchangeable or exercisable for Common Voting Shares or
Class A Common Shares, as the case may be, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Voting
Shares or Class A Common Shares whether any such swap or transaction is to be
settled by delivery of Common Voting Shares or Class A Common shares or other
securities, in cash or otherwise, without the prior written consent of Merrill
Lynch on behalf of the Underwriters for a period of 180 days after the date of
this Prospectus.
In connection with the Offerings, the Underwriters may engage in certain
transactions which stabilize, maintain or otherwise affect the price of Class A
Common Shares. Such transactions may include the purchase of Class A Common
Shares in the open market to cover short positions created by over-allotments or
to stabilize the price of Class A Common Shares. In general, purchases of a
security for the purpose of stabilization or to reduce a short position could
cause the price of the security to be higher than it might be in the absence of
such purchases. Neither the Company nor any of the Underwriters make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Shares. In
addition, neither the Company nor any of the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Underwriters do not intend to confirm sales of the Shares offered
hereby to any accounts over which they exercise discretionary authority.
Each of the Company and the Selling Shareholders has agreed to indemnify
the U.S. Underwriters and the International Managers against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
34
<PAGE> 42
ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERINGS
CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING SHAREHOLDERS OR ANY UNDERWRITER, DEALER OR AGENT. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Prospectus Summary.................... 5
Price Range of Class A Common Shares
and Dividends....................... 8
Capitalization........................ 9
Selected Consolidated Financial
Data................................ 10
Business.............................. 13
Management............................ 20
Selling Shareholders.................. 22
Security Ownership of Certain
Beneficial Owners and Selling
Shareholders........................ 24
Description of Capital Stock.......... 25
Certain Transactions.................. 29
Certain United States Federal Tax
Consequences to Non-U.S.
Shareholders........................ 31
Underwriting.......................... 33
Legal Matters......................... 35
Experts............................... 35
</TABLE>
======================================================
======================================================
6,300,000 SHARES
[SCRIPPS LOGO]
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH INTERNATIONAL
, 1998
======================================================
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with sale
and distribution of the securities being registered hereby, other than
underwriting discounts. All amounts are estimated except the Securities and
Exchange Commission registration fee. All fees will be paid by the Selling
Shareholders.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 115,279
Printing expenses........................................... 95,000
Legal fees and expenses..................................... 60,000
Accounting fees and expenses................................ 35,000
Blue Sky fees and expenses.................................. 10,000
Transfer agent and registrar's fee and expense.............. 5,000
Miscellaneous............................................... $ 721
----------
Total..................................................... $ 321,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13 of the Ohio Revised Code grants corporations the power to
indemnify their directors and officers in accordance with the provisions set
forth therein.
The Articles of Incorporation of the Company provide for indemnification of
directors and officers of the Company to the extent set forth therein.
Reference is made to the forms of Purchase Agreements, filed as Exhibit 1.1
and 1.2 to this Registration Statement, for information concerning certain
indemnification arrangements between the Company and the Underwriter.
ITEM 16. EXHIBITS.
1.1 Form of U.S. Purchase Agreement
1.2 Form of International Purchase Agreement
4 Articles of Incorporation and Code of Regulations of the Company (1)
5 Opinion of Baker & Hostetler LLP, counsel for the Registrant and the
Selling Shareholders (2)
23.1 Consent of Deloitte & Touche LLP (2)
23.2 Consent of Baker & Hostetler LLP (contained in Exhibit 5)
24.1 Power of Attorney (2)
24.2 Power of Attorney (2)
- ---------------
(1) Incorporated by reference to Registration Statement on Form 10 (File No.
1-11969).
(2) Filed Previously.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of any employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration
II-1
<PAGE> 44
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Company pursuant to the provisions or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
The Company hereby undertakes that:
(1) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Company pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of the registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The E.W.
Scripps Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cincinnati, State of Ohio, on June 11, 1998.
THE E.W. SCRIPPS COMPANY
By *
------------------------------------
William R. Burleigh
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1933, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated, on June 11, 1998.
<TABLE>
<C> <S>
* Chairman of the Board
- -----------------------------------------------------
LAWRENCE A. LESER
* President, Chief Executive Officer and
- ----------------------------------------------------- Director
WILLIAM R. BURLEIGH (Principal Executive Officer)
* Senior Vice President/Finance and
- ----------------------------------------------------- Administration
DANIEL J. CASTELLINI (Principal Financial and Accounting Officer)
* Chairman of the Executive Committee of the
- ----------------------------------------------------- Board of Directors
CHARLES E. SCRIPPS
* Director
- -----------------------------------------------------
JOHN H. BURLINGAME
* Director
- -----------------------------------------------------
DANIEL J. MEYER
* Director
- -----------------------------------------------------
NICHOLAS B. PAUMGARTEN
* Director
- -----------------------------------------------------
PAUL K. SCRIPPS
* Director
- -----------------------------------------------------
EDWARD W. SCRIPPS
* Director
- -----------------------------------------------------
RONALD W. TYSOE
* Director
- -----------------------------------------------------
JULIE A. WRIGLEY
</TABLE>
- ---------------
* William Appleton, by signing his name hereto, does sign this Registration
Statement on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons and filed as Exhibits to this
Registration Statement.
By /s/ WILLIAM APPLETON
-----------------------------------
William Appleton, Attorney-in-Fact
II-3
<PAGE> 1
Exhibit 1.1
================================================================================
THE E.W. SCRIPPS COMPANY
(AN OHIO CORPORATION)
5,040,000 CLASS A COMMON SHARES
U.S. PURCHASE AGREEMENT
DATED: JUNE __, 1998
================================================================================
i
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties.............................................4
(a) Representations and Warranties by the Company..............................4
(i) Compliance with Registration Requirements.........................4
(ii) Incorporated Documents............................................5
(iii) Independent Accountants...........................................5
(iv) Financial Statements..............................................5
(v) No Material Adverse Change in Business............................5
(vi) Good Standing of the Company......................................6
(vii) Good Standing of Subsidiaries.....................................6
(viii) Capitalization....................................................6
(ix) Authorization of Agreement........................................6
(x) Authorization and Description of Securities.......................7
(xi) Absence of Defaults and Conflicts.................................7
(xii) Compliance with ERISA.............................................7
(xiii) Absence of Labor Dispute..........................................8
(xiv) Absence of Proceedings............................................8
(xv) Accuracy of Exhibits..............................................8
(xvi) Possession of Intellectual Property...............................8
(xvii) Absence of Further Requirements...................................9
(xviii) Possession of Licenses and Permits................................9
(xix) Title to Property.................................................9
(xx) Compliance with Cuba Act.........................................10
(xxi) Investment Company Act...........................................10
(xxii) Environmental Laws...............................................10
(b) Representations and Warranties by the Selling Shareholders................10
(i) Good Standing of the Selling Shareholders........................11
(ii) Accurate Disclosure..............................................11
(iii) Authorization of Agreements......................................11
(iv) Good and Marketable Title........................................12
(v) Absence of Manipulation..........................................12
(vi) Absence of Further Requirements..................................12
(vii) Restriction on Sale of Securities................................12
(viii) No Association with NASD.........................................13
(ix) Delivery of Form W-9.............................................13
(c) Officer's Certificates.............................................................13
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing...........................13
(a) Initial U.S. Securities...................................................13
(b) U.S. Option Securities....................................................14
(c) Payment...................................................................14
(d) Denominations; Registration...............................................15
SECTION 3. Covenants of the Company..................................................15
(a) Compliance with Securities Regulations and Commission Requests............15
(b) Filing of Amendments......................................................15
(c) Delivery of Registration Statements.......................................16
(d) Delivery of Prospectuses.................................................16
(e) Continued Compliance with Securities Laws.................................16
(f) Blue Sky Qualifications...................................................16
(g) Rule 158..................................................................17
(h) Restriction on Sale of Securities.........................................17
(i) Reporting Requirements....................................................17
</TABLE>
ii
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 4. Payment of Expenses.......................................................18
(a) Expenses..................................................................18
(b) Termination of Agreement..................................................18
SECTION 5. Conditions of U.S. Underwriters' Obligations..............................18
(a) Effectiveness of Registration Statement...................................18
(b) Opinion of Counsel for Company............................................19
(c) Opinion of Counsel for the Selling Shareholders...........................19
(d) Opinion of Counsel for U.S. Underwriters..................................19
(e) Officers' Certificate.....................................................19
(f) Certificate of Selling Shareholders.......................................19
(g) Accountant's Comfort Letter...............................................20
(h) Bring-down Comfort Letter.................................................20
(i) Purchase of Initial International Securities..............................20
(j) Conditions to Purchase of U.S. Option Securities..........................20
(i) Officers' Certificate............................................20
(ii) Certificate of Selling Shareholders..............................20
(iii) Opinion of Counsel for Company...................................20
(iv) Opinion of Counsel for the Selling Shareholders..................21
(v) Opinion of Counsel for U.S. Underwriters........................21
(vi) Bring-down Comfort Letter........................................21
(k) Additional Documents......................................................21
(l) Termination of Agreement..................................................21
SECTION 6. Indemnification...........................................................22
(a) Indemnification of U.S. Underwriters......................................22
(b) Indemnification of Company, Directors, Officers and Selling
Shareholders..............................................................24
(c) Actions Against Parties; Notification.....................................25
(d) Settlement Without Consent If Failure to Reimburse........................25
SECTION 7. Contribution....................................................................25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery..................26
SECTION 9. Termination of Agreement........................................................27
(a) Termination; General......................................................27
(b) Liabilities...............................................................27
SECTION 10. Default by One or More of the U.S. Underwriters.................................27
SECTION 11. Notices.........................................................................28
SECTION 12. Parties.........................................................................28
SECTION 13. Governing Law and Time..........................................................29
SECTION 14. Effect of Headings..............................................................29
</TABLE>
iii
<PAGE> 4
THE E.W. SCRIPPS COMPANY
(an Ohio corporation)
5,040,000 Class A Common Shares
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representative of the U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
The E.W. Scripps Company, an Ohio corporation (the "Company"), The
Edward W. Scripps Trust (the "Scripps Trust") and The Jack R. Howard Trust (the
"Howard Trust," and together with the Scripps Trust, the "Selling
Shareholders"), confirm their respective agreements with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of
the other U.S. Underwriters named in Schedule A hereto (collectively, the " U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch is acting as
representative (in such capacity, the "U.S. Representative"), with respect to
(i) the sale by the Selling Shareholders, acting severally and not jointly, and
the purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective numbers of Class A Common Shares, par value $.01 per share ("Class A
Common Shares"), of the Company set forth in Schedules A and B hereto and (ii)
the grant by the Selling Shareholders to the U.S. Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 756,000 additional Class A Common Shares to cover
over-allotments, if any. The aforesaid 5,040,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 756,000 Class A Common Shares subject to the option described in
Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities."
The Company and the Selling Shareholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representative deems advisable after this Agreement has been executed
and delivered.
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Company
and the Selling Shareholders of an aggregate of 1,260,000 Class A Common Shares
(the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International Managers")
for whom Merrill Lynch International is acting as lead manager (the "Lead
Manager") and the grant by the Selling Shareholders to the International
Managers, acting severally and not jointly, of an option to purchase all or any
part of the International Managers' pro rata portion of up to 189,000 additional
Class A Common Shares solely to cover over allotments, if any (the
"International Option Securities" and, together with the U.S. Option Securities,
the "Option Securities"). The Initial International Securities and the
International Option Securities are hereinafter called the "International
Securities." It is understood that (a) the Selling Shareholders are not
obligated to sell, and the U.S. Underwriters are not obligated to purchase, any
Initial U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers, and (b) the Selling
Shareholders are not obligated to sell, and the International Managers are not
obligated to purchase, any Initial International Securities unless all of the
Initial
1
<PAGE> 5
U.S. Securities are contemporaneously purchased by the U.S. Underwriters.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersydicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-53315) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or Prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
such prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." The form of U.S. Prospectus and the form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, are herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final form of U.S. Prospectus and the final form of International
Prospectus in the forms first furnished to the Underwriters for use in
connection with the offering are herein called the "U.S. Prospectus" and the
"International Prospectus", respectively, and collectively, the "Prospectuses."
If Rule 434 is relied on, the terms "U.S. Prospectus" and "International
Prospectus" shall refer to the Preliminary U.S. Prospectus dated May 27, 1998
and Preliminary International Prospectus dated May 27, 1998, respectively, each
together with the applicable Term Sheet and all references in this Agreement to
the date of the Prospectuses shall mean the date of the Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall
2
<PAGE> 6
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectuses, as the
case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectuses nor any amendments or supplements thereto, at
the time the Prospectuses or any such amendment or supplement was
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement
or U.S. Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any U.S. Underwriter
through the U.S. Representative expressly for use in the Registration
Statement or the U.S. Prospectus or any amendments or supplements
thereto.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectuses, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations or the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
as applicable, and, when read together with the other information in
the Prospectuses, at the time the Registration Statement became
effective, at the time the Prospectuses were issued and at the Closing
Time (and, if any U.S. Option Securities are purchased, at the Date of
Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified
the financial
3
<PAGE> 7
statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the Class
A Common Shares and Common Voting Shares of the Company in amounts per
share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Ohio and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement and the International Purchase
Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and except for Memphis Publishing Company
and Evansville Courier Company, Inc., is owned by the Company, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under
the caption "Capitalization" (except for
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<PAGE> 8
subsequent issuances, if any, pursuant to this Agreement or the
International Purchase Agreement, pursuant to reservations, agreements
or employee benefit plans referred to in the Prospectuses or pursuant
to the exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock,
including the Securities to be purchased by the U.S. Underwriters and
the International Managers from the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the U.S. Underwriters and
the International Managers from the Selling Shareholders, was issued in
violation of preemptive or other similar rights of any securityholder
of the Company.
(ix) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by the Company.
(x) Authorization and Description of Securities. The Class A
Common Shares conform to all statements relating thereto contained in
the Prospectuses and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to preemptive or other
similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the International
Purchase Agreement and the consummation of the transactions
contemplated herein and therein and in the Registration Statement
(including the sale of the Securities) and compliance by the Company
with its obligations hereunder and under the International Purchase
Agreement have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
a default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Compliance with ERISA. The Company and each member of
its Control Group (as defined below) is in compliance in all material
respects with all presently applicable provisions of the U.S. Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the
regulations and published interpretations thereunder; no "reportable
event" (for which a filing is required with the Pension Benefit
Guaranty Corporation) (as defined in ERISA and the regulations and
published interpretations thereunder) has occurred with respect to any
material "pension plan" (as defined in ERISA and the regulations and
published interpretations thereunder) established or maintained by the
Company or any member of its Control Group; neither the Company nor any
member of its Control Group has incurred nor expects to incur any
material liability under (i) Title IV of ERISA with respect to
termination of a "pension plan" or withdrawal from any multiemployer
"pension plan" (as defined in ERISA and the
5
<PAGE> 9
regulations and published interpretations thereunder) or (ii) Section
412 or 4971 of the U.S. Internal Revenue Code of 1986, as amended (the
"Code"); and each material "pension plan" established or maintained by
the Company that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and has received
favorable determination letter as to its qualifications and nothing has
occurred, whether by action or failure to act, which would cause the
loss of such qualification. For purposes of this subsection, "Control
Group" is defined to include any entity which is part of a group which
includes the Company and is treated as a single employer under Section
414 of the Code.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the International
Purchase Agreement or the performance by the Company of its obligations
hereunder and thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to
be filed as exhibits thereto which have not been so described and filed
as required.
(xvi) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement or the International Purchase
Agreement, in connection with the offering, issuance or sale of the
Securities hereunder or thereunder or the consummation of the
transactions contemplated by this Agreement or the International
Purchase Agreement, except such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries
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<PAGE> 10
possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in
full force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xx) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the Company's knowledge, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the
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<PAGE> 11
Company or any of its subsidiaries relating to Hazardous Materials or
any Environmental Laws.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally and not jointly represents and warrants to each
U.S. Underwriter as of the date hereof, as of the Closing Time, and, if the
Selling Shareholder is selling U.S. Option Securities on a Date of Delivery, as
of each such Date of Delivery, and agrees with each U.S. Underwriter, as
follows:
(i) Good Standing of the Selling Shareholders. The Scripps
Trust represents and warrants that it is a trust duly formed and
validly existing pursuant to Ohio law. The Howard Trust represents and
warrants that it is a trust duly formed and validly existing pursuant
to New York law.
(ii) Accurate Disclosure. To the best knowledge of the Scripps
Trust, the representations and warranties of the Company contained in
Section 1(a) hereof are true and correct. The Scripps Trust has
reviewed and is familiar with the Registration Statement and the
Prospectuses with respect to all information contained therein other
than information furnished by the Howard Trust and with respect to such
information neither the Prospectuses nor any amendments or supplements
thereto includes any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The Scripps Trust makes no representation or warranty
with respect to any matters or information relating to the Howard Trust
contained in the Registration Statement and Prospectuses, or any
amendments or supplements thereto. The Howard Trust has reviewed and is
familiar with the Registration Statement and the Prospectuses with
respect to matters relating to the Howard Trust only, and with respect
to such matters neither the Prospectuses nor any amendments or
supplements thereto includes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Howard Trust makes no representation or
warranty with respect to any matters or information relating to the
Company or the Scripps Trust contained in the Registration Statement
and Prospectuses, or any amendments or supplements thereto. Neither
Selling Shareholder is prompted to sell the Securities to be sold by
such Selling Shareholder under this Agreement and the International
Purchase Agreement by any information concerning the Company or any
subsidiary of the Company which is not set forth in the Prospectuses.
(iii) Authorization of Agreements. Each Selling Shareholder
has the full right, power and authority to enter into this Agreement
and the International Purchase Agreement and to sell, transfer and
deliver the Securities to be sold by such Selling Shareholder hereunder
and thereunder. The execution and delivery of this Agreement and the
International Purchase Agreement and the sale and delivery of the
Securities to be sold by such Selling Shareholder and the consummation
of the transactions contemplated herein and therein and compliance by
such Selling Shareholder with its obligations hereunder and under the
International Purchase Agreement have been duly authorized by such
Selling Shareholder and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of
such Selling Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will
such action result in any violation of the provisions of the trust
agreement of such Selling Shareholder, or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its
properties.
(iv) Good and Marketable Title. Each Selling Shareholder has
and will at the Closing Time and, if any U.S. Option Securities are
purchased, on the Date of Delivery,
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have good and marketable title to the Securities to be sold by such
Selling Shareholder under this Agreement and the International Purchase
Agreement, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement and the International Purchase Agreement,
and upon delivery of such Securities and payment of the purchase price
therefor as herein and therein contemplated, assuming each such
Underwriter has no notice of any adverse claim, each of the
Underwriters will receive good and marketable title to the Securities
purchased by it from such Selling Shareholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by any Selling
Shareholder of its obligations under this Agreement or the
International Purchase Agreement or in connection with the sale and
delivery of the Securities under this Agreement or the International
Purchase Agreement or the consummation of the transactions contem
plated by this Agreement and the International Purchase Agreement,
except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(vii) Restriction on Sale of Securities. During a period of
180 days from the date of the Prospectuses, neither Selling Shareholder
will, without the prior written consent of Merrill Lynch, (i) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any Common Voting Shares or Class A Common
Shares or any securities convertible into or exercisable or
exchangeable for Common Voting Shares or Class A Common Shares or file
any registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Voting
Shares or Class A Common Shares, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Voting Shares or Class A Common Shares or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to the
Securities to be sold hereunder or under the International Purchase
Agreement.
(viii) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(q) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(ix) Delivery of Form W-9. Such Selling Shareholder agrees to
deliver to the U.S. Representative at or prior to the Closing Time a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the U.S. Representative or
to counsel for the U.S. Underwriters and the International Managers shall be
deemed a representation and warranty by the Company to each U.S. Underwriter and
each International Manager as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the U.S. Representative or to counsel for the U.S. Underwriters and
the International Managers pursuant to the terms of this Agreement and the
International Purchase Agreement shall be deemed a representation and warranty
by such Selling Shareholder to each U.S. Underwriter and
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<PAGE> 13
International Manager as to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial U.S. Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder, severally and not jointly, agrees to sell to
each U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
severally and not jointly, agrees to purchase from each Selling Shareholder, at
the price per share set forth in Schedule C, that proportion of the number of
Initial U.S. Securities set forth in Schedule B opposite the name of such
Selling Shareholder, the number of Initial U.S. Securities set forth in Schedule
A opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such U.S. Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof, bears to the total
number of Initial U.S. Securities, subject, in each case, to such adjustments
among the U.S. Underwriters as the U.S. Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional securities.
(b) U.S. Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, The Scripps Trust and the Howard Trust hereby grant
options to the U.S. Underwriters, severally and not jointly, to purchase up to
an aggregate additional 756,000 Class A Common Shares as set forth in Schedule
B, at the price per share set forth in Schedule C, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial U.S. Securities but not payable on the U.S. Option Securities. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial U.S. Securities upon notice by the U.S.
Representative to the Selling Shareholders setting forth the number of U.S.
Option Securities as to which the several U.S. Underwriters are then exercising
the option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the U.S. Representative, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
U.S. Option Securities then being purchased which the number of Initial U.S.
Securities set forth in Schedule A opposite the name of such U.S. Underwriter
bears to the total number of Initial U.S. Securities, subject in each case to
such adjustments as the U.S. Representative in its discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Securities shall be made at the offices of
Baker & Hostetler, Suite 2650, Walnut Street, Cincinnati, Ohio 45202, or at such
other place as shall be agreed upon by the U.S. Representative, the Company and
the Selling Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth, if
the pricing occurs after 4:30 P.M. (Eastern time)) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the U.S. Representative, the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
U.S. Representative, the Company and the Selling Shareholders, on each Date of
Delivery as specified in the notice from the U.S. Representative to the Company
and the Selling Shareholders.
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to the bank account designated by each Selling
Shareholder against delivery to the U.S. Representative for the respective
accounts of the U.S. Underwriters of certificates for the Securities to be
purchased by them. It is understood that each U.S. Underwriter has authorized
the U.S. Representative, for its account, to accept delivery of, receipt for,
and make payment of
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the purchase price for, the Initial U.S. Securities and the U.S. Option
Securities, if any, which it has agreed to purchase. Merrill Lynch, individually
and not as representative of the U.S. Underwriters, may (but shall not be
obligated to) make payment of the purchase price for the Initial U.S. Securities
or the U.S. Option Securities, if any, to be purchased by any U.S. Underwriter
whose funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such U.S.
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representative may
request in writing at least two full business days before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial U.S. Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Representative in the City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the U.S. Representative immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the U.S. Representative
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
U.S. Representative with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which the U.S. Representative or counsel for the
U.S. Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representative and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the U.S. Representative,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
such U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes
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permitted by the 1933 Act. The Company will furnish to each U.S. Underwriter,
without charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may reasonably
request. The U.S. Prospectus and any amendments or supplements thereto furnished
to the U.S. Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement, the International Purchase Agreement and in
the Prospectuses. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectuses in order that the
Prospectuses will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectuses in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the Company
will furnish to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the U.S. Representative may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any Common Voting Shares or Class A Common Shares or any
securities convertible into or exercisable or exchangeable for Common Voting
Shares or Class A Common Shares or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Voting Shares
or Class A Common Shares, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Voting Shares or
Class A Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder
and under the International Purchase Agreement, (B) any Common Voting Shares or
Class A Common Shares issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred
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to in the Prospectuses, (C) any shares of Common Voting Shares or Class A Common
Shares issued or options to purchase Common Voting Shares or Class A Common
Shares granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectuses or (D) Common Voting Shares or Class A Common
Shares issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(i) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Selling Shareholders will pay or cause to be paid all
fees and expenses incident to the performance of their obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the U.S. Underwriters of this Agreement and the International
Purchase Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp duties, capital duties, stock transfer taxes
or other duties payable upon the sale, issuance or delivery of the Securities to
the U.S. Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors and the fees and disbursement of the Selling
Shareholders' respective counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the U.S. Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectuses and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto
and (viii) the fees and expenses of any transfer agent or registrar for the
Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
U.S. Representative in accordance with the provisions of Section 5, Section
9(a)(i) or Section 10 hereof, the Selling Shareholders shall reimburse the U.S.
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof and in certificates of any officer of
the Company or any subsidiary of the Company or on behalf of any Selling
Shareholder delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
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(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representative shall have received the favorable opinion, dated as of Closing
Time, of Baker & Hostetler LLP, counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the U.S. Underwriters to the effect
set forth in Exhibit A hereto and to such further effect as counsel to the U.S.
Underwriters may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At Closing Time,
the U.S. Representative shall have received the favorable opinion, dated as of
Closing Time, of Baker & Hostetler LLP and Fulton, Rowe, Hart & Coon, counsel
for The Scripps Trust and The Howard Trust, respectively, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the U.S. Underwriters to the effect
set forth in Exhibit B hereto and to such further effect as counsel to the U.S.
Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the U.S.
Representative shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for each
of the other U.S. Underwriters with respect to such matters as you may
reasonably request.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the U.S.
Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the U.S.
Representative shall have received a certificate of each Selling Shareholder,
dated as of Closing Time, to the effect that (i) the representations and
warranties of such Selling Shareholder contained in Section 1(b) hereof are true
and correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) such Selling Shareholder has complied in
all material respects with all agreements and all conditions on its part to be
performed under this Agreement and the International Purchase Agreement at or
prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representative shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the U.S.
Representative, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the U.S. Representative
shall have received from Deloitte & Touche LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to clause (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(i) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(j) Conditions to Purchase of U.S. Option Securities. In the event that
the U.S.
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Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the U.S. Option Securities, the representations and
warranties of the Company and the Selling Shareholders contained herein and the
statements in any certificates furnished by the Company, any subsidiary of the
Company and the Selling Shareholders hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the U.S.
Representative shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(e) hereof remains true
and correct as of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A
certificate, dated such Date of Delivery, of each Selling
Shareholder confirming that the certificate delivered at
Closing Time pursuant to Section 5(f) remains true and correct
as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable
opinion of Baker & Hostetler LLP, counsel for the Company, in
form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the
U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholders.
The favorable opinion of Baker & Hostetler LLP and Fulton,
Rowe, Hart & Coon, counsel for The Scripps Trust and The
Howard Trust, respectively, in form and substance satisfactory
to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for U.S. Underwriters. The
favorable opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois), counsel for the U.S. Underwriters, dated such Date
of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from
Deloitte & Touche LLP, in form and substance satisfactory to
the U.S. Representative and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the U.S. Representative pursuant to Section 5(g)
hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the U.S. Representative and counsel for the U.S.
Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant U.S.
Option Securities, may be terminated by the U.S. Representative by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
15
<PAGE> 19
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. (1) By the Company. The
Company agrees to indemnify and hold harmless each U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in the manner
set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company and the Selling Shareholders;
and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under clause (i) or (ii) above;
provided that the liability of the Company to indemnify or otherwise make
payments to the U.S. Underwriters (or persons controlling the U.S. Underwriters)
pursuant to the foregoing indemnity agreement of the Company (and any liability
of the Company as a result of any breach of this Agreement by the Company other
than as a result of bad faith) shall not extend to statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
information furnished by the Scripps Trust or the Howard Trust for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto).
(2) By the Scripps Trust. The Scripps Trust agrees to indemnify and
hold harmless each U.S. Underwriter and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
described in clauses (i), (ii) and (iii) of Section 6(a)(1) above, as incurred;
provided that the liability of the Scripps Trust to indemnify or otherwise make
payments to the U.S. Underwriters (or persons controlling the U.S. Underwriters)
pursuant to the foregoing indemnity agreement of the Scripps Trust shall not
extend to statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto) in reliance upon and in conformity with information furnished by the
Howard Trust for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto).
(3) By the Howard Trust. The Howard Trust agrees to indemnify and hold
harmless each U.S. Underwriter and each person, if any, who controls any U.S.
Underwriter within the
16
<PAGE> 20
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
extent and manner set forth in clauses (i), (ii) and (iii) of Section 6(a)(1)
above; provided that the liability of the Howard Trust to indemnify or otherwise
make payments to the U.S. Underwriters (or persons controlling the U.S.
Underwriters) pursuant to the foregoing indemnity agreement of the Howard Trust
(and any liability as a result of any breach of this Agreement by the Howard
Trust other than as a result of bad faith) shall be limited to statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished by the Howard Trust for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto), and in no event
shall the aggregate of such liability of the Howard Trust exceed the product of
the number of Shares sold by the Howard Trust times the price per share paid to
it by the U.S. Underwriters pursuant hereto.
The foregoing notwithstanding, indemnity agreements of the
Company and Selling Shareholders shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any U.S. Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto). The Company and the Selling
Shareholders will not be liable to any U.S. Underwriter with respect to any U.S.
Prospectus to the extent that the Company or Selling Shareholders shall sustain
the burden of proving that any such loss, liability, claim, damage or expense
resulted from the fact that such U.S. Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a person to
whom such U.S. Underwriter failed to send or give, at or prior to the Closing
Time, a copy of the U.S. Prospectus, as then amended or supplemented if: (i) the
Company has previously furnished copies thereof (sufficiently in advance of the
Closing Time to allow for distribution by the Closing Time) to the U.S.
Underwriters and the loss, liability, claim, damage or expense of such U.S.
Underwriter resulted from an untrue statement or omission of a material fact
contained in or omitted from a prospectus which was corrected in the U.S.
Prospectus as, if applicable, amended or supplemented prior to the Closing Time
and such U.S. Prospectus was required by law to be delivered at or prior to the
written confirmation of sale to such person and (ii) such failure to give or
send such U.S. Prospectus by the Closing Date to the party or parties asserting
such loss, liability, claim, damage or expense would have deprived the Company
or the Selling Shareholders of its or their sole defense to the claim asserted
by such person.
(b) Indemnification of Company, Directors, Officers and Selling
Shareholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder each against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company and the Selling
Shareholders. An
17
<PAGE> 21
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement Without Consent If Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the U.S. Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the U.S. Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Selling Shareholders and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering price
of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders
or by the U.S. Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the U.S. Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses
18
<PAGE> 22
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company or such
Selling Shareholder, as the case may be. The U.S. Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial U.S. Securities set forth opposite their respective
names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any U.S. Underwriter or controlling person, or by or on behalf
of the Company or the Selling Shareholders, and shall survive delivery of the
Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representative may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the U.S. Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the U.S. Representative, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal,
New York or Ohio authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
19
<PAGE> 23
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representative shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
U.S. Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-defaulting
U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the U.S.
Underwriters to purchase and of the Selling Shareholders to sell the U.S. Option
Securities to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
U.S. Underwriters to purchase and the Selling Shareholders to sell the relevant
U.S. Option Securities, as the case may be, either (i) the U.S. Representative
or (ii) any Selling Shareholder shall have the right to postpone Closing Time or
the relevant Date of Delivery, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectuses or in any other documents or arrangements. As used herein, the
term "U.S. Underwriter" includes any person substituted for a U.S. Underwriter
under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the U.S. Representative at North Tower, World
Financial Center, New York, New York 10281-1201, attention of [__________];
notices to the Company shall be directed to it at 312 Walnut Street, 28th Floor,
Cincinnati, Ohio 45202, attention: Daniel J. Castellini, Senior Vice
President/Finance and Administration; notices to The Scripps Trust shall be
directed to it at 312 Walnut Street, 28th Floor, Cincinnati, Ohio 45202,
attention: Donald E. Meihaus, Secretary-Treasurer; and notices to The Howard
Trust shall be directed to it at c/o George Rowe, Esq., Fulton, Rowe, Hart &
Coon, One Rockefeller Plaza, Suite 301, New York, New York 10020.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any U.S. Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
20
<PAGE> 24
STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
<PAGE> 25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the U.S. Underwriters, the Company and the
Selling Shareholders in accordance with its terms.
Very truly yours,
THE E.W. SCRIPPS COMPANY
By
------------------------------------
Title:
THE EDWARD W. SCRIPPS TRUST
By
------------------------------------
THE JACK R. HOWARD TRUST
By
------------------------------------
CONFIRMED AND ACCEPTED, as of the date first above written:
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
----------------------------------------
Authorized Signatory
For itself and as U.S. Representative of the other U.S. Underwriters named in
Schedule A hereto.
22
<PAGE> 26
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
Name of Underwriter U.S. Securities
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated [ ]
--------------
[ ] [ ]
--------------------------------------------------------- --------------
[ ] [ ]
--------------------------------------------------------- --------------
[ ] [ ]
--------------------------------------------------------- --------------
[ ] [ ]
--------------------------------------------------------- --------------
Total [5,040,000]
</TABLE>
23
<PAGE> 27
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial U.S. Maximum Number of U.S.
Selling Shareholders Securities to be Sold Option Securities to Be Sold
-------------------- --------------------- ----------------------------
<S> <C> <C>
The Edward Scripps Trust 2,800,000 420,000
The Jack R. Howard Trust 2,240,000 336,000
Total.................. 5,040,000 756,000
========= =======
</TABLE>
24
<PAGE> 28
SCHEDULE C
THE E. W. SCRIPPS COMPANY
5,040,000 Class A Common Shares
(Par Value $.01 Per Share)
(i) The initial public offering price per share for the U.S.
Securities, determined as provided in said Section 2, shall be $[ ].
(ii) The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $[ ] per share; provided that the purchase
price per share for any U.S. Option Securities purchased upon the exercise of
the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities.
25
<PAGE> 29
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Ohio.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to the U.S. Purchase Agreement and the International Purchase Agreement
or pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses); the shares of issued and outstanding
capital stock of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
preemptive or other similar rights of any securityholder of the Company.
(v) The sale of the Securities by the Selling Shareholders is not
subject to preemptive or other similar rights of any securityholder of the
Company.
(vi) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of such counsel's knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.
(vii) Each of the U.S. Purchase Agreement and the International
Purchase Agreement has been duly authorized, executed and delivered by the
Company.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted or
are pending or threatened by the Commission.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectuses, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which such
counsel need express no opinion) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(x) The documents incorporated by reference in the Prospectuses (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder.
(xi) The form of certificate used to evidence the Class A Common Shares
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the New York Stock Exchange.
26
<PAGE> 30
(xii) To the best of such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
(xiii) The information in the Prospectus under "Description of Capital
Stock", "Business-- Broadcast Television-Digital Television" and "--Federal
Regulation of Broadcasting" and "Certain United States Tax Consequences to
Non-U.S. Shareholders" and in the Registration Statement under Item 15, to the
extent that it constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by such counsel and is correct in all material respects.
(xiv) To the best of such counsel's knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.
(xv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of such counsel's knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
(xvi) To the best of such counsel's knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which such counsel need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the U.S. Purchase Agreement and the
International Purchase Agreement or for the offering, issuance, sale or delivery
of the Securities.
(xviii) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation of the
transactions contemplated in the U.S. Purchase Agreement, in the International
Purchase Agreement and in the Registration Statement (including the sale of the
Securities) and compliance by the Company with its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(xi) of the U.S. Purchase Agreement and the International Purchase
Agreement) under or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to such
counsel, to which the Company or any subsidiary is a party or by which it or any
of them may be bound, or to which any of the property or assets of the Company
or any subsidiary is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to such counsel, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
27
<PAGE> 31
(xix) Each of the Company and its subsidiaries has obtained all
material licenses required by the Federal Communications Commission ("FCC") for
the conduct and operation of its respective businesses, and such licenses are in
full force and effect. The Company and its subsidiaries are presently conducting
their respective businesses in substantial compliance with all applicable rules
and regulations of the FCC.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which such
counsel need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectuses
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need make no statement), at the
time the Prospectuses was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
28
<PAGE> 32
Exhibit B
FORM OF OPINION OF COUNSEL FOR EACH OF THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) Such Selling Shareholder is a trust duly formed and validly
existing pursuant to the laws of the state of Ohio or New York, as the case may
be.
(ii) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which such counsel need express no opinion) is necessary or required
to be obtained by such Selling Shareholder for the performance by such Selling
Shareholder of its obligations under the U.S. Purchase Agreement or the
International Purchase Agreement or in connection with the offer, sale or
delivery of the Securities.
(iii) Each of the U.S. Purchase Agreement and the International
Purchase Agreement has been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder.
(iv) The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement and the sale and delivery of
the Securities and the consummation of the transactions contemplated in the U.S.
Purchase Agreement, the International Purchase Agreement and the Registration
Statement and compliance by such Selling Shareholder with its obligations under
the U.S. Purchase Agreement and the International Purchase Agreement have been
duly authorized by all necessary action on the part of such Selling Shareholder
and do not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of such Selling Shareholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which such
Selling Shareholder is a party or by which it may be bound, or to which any of
the property or assets of such Selling Shareholder may be subject nor will such
action result in any violation of the provisions of the trust agreement of such
Selling Shareholder, or any law, administrative regulation, judgment or order of
any governmental agency or body or any administrative or court decree having
jurisdiction over such Selling Shareholder or any of its properties.
(v) To the best of such counsel's knowledge, such Selling Shareholder
has valid and marketable title to the Securities to be sold by such Selling
Shareholder pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement. By delivery of a
certificate or certificates therefor such Selling Shareholder will transfer to
the Underwriters who have purchased such Securities pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement (without notice of
any defect in the title of such Selling Shareholder and who are otherwise bona
fide purchasers for purposes of the Uniform Commercial Code) valid and
marketable title to such Securities, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
Nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which such
counsel need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectuses
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need make no statement), at the
time the Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing
29
<PAGE> 33
Time, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
30
<PAGE> 1
Exhibit 1.2
===============================================================================
THE E.W. SCRIPPS COMPANY
(AN OHIO CORPORATION)
1,260,000 CLASS A COMMON SHARES
INTERNATIONAL PURCHASE AGREEMENT
DATED: JUNE __, 1998
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
PURCHASE AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 1. Representations and Warranties..................................................3
(a) Representations and Warranties by the Company...................................3
(i) Compliance with Registration Requirements..............................3
(ii) Incorporated Documents.................................................4
(iii) Independent Accountants................................................5
(iv) Financial Statements...................................................5
(v) No Material Adverse Change in Business.................................5
(vi) Good Standing of the Company...........................................5
(vii) Good Standing of Subsidiaries..........................................6
(viii) Capitalization.........................................................6
(ix) Authorization of Agreement.............................................6
(x) Authorization and Description of Securities............................6
(xi) Absence of Defaults and Conflicts......................................6
(xii) Compliance with ERISA..................................................7
(xiii) Absence of Labor Dispute...............................................8
(xiv) Absence of Proceedings.................................................8
(xv) Accuracy of Exhibits...................................................8
(xvi) Possession of Intellectual Property....................................8
(xvii) Absence of Further Requirements........................................9
(xviii) Possession of Licenses and Permits.....................................9
(xix) Title to Property......................................................9
(xx) Compliance with Cuba Act...............................................9
(xxi) Investment Company Act................................................10
(xxii) Environmental Laws....................................................10
(b) Representations and Warranties by the Selling Shareholders.....................10
(i) Good Standing of the Selling Shareholders.............................10
(ii) Accurate Disclosure...................................................10
(iii) Authorization of Agreements...........................................11
(iv) Good and Marketable Title.............................................11
(v) Absence of Manipulation...............................................12
(vi) Absence of Further Requirements.......................................12
(vii) Restriction on Sale of Securities.....................................12
(viii) No Association with NASD..............................................12
(ix) Delivery of Form W-9..................................................13
(c) Officer's Certificates...........................................................13
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 2. Sale and Delivery to International Managers; Closing...........................13
(a) Initial International Securities...............................................13
(b) International Option Securities................................................13
(c) Payment........................................................................14
(d) Denominations; Registration....................................................15
SECTION 3. Covenants of the Company.......................................................15
(a) Compliance with Securities Regulations and Commission Requests.................15
(b) Filing of Amendments...........................................................15
(c) Delivery of Registration Statements............................................15
(d) Delivery of Prospectuses......................................................16
(e) Continued Compliance with Securities Laws......................................16
(f) Blue Sky Qualifications........................................................16
(g) Rule 158.......................................................................17
(h) Restriction on Sale of Securities..............................................17
(i) Reporting Requirements.........................................................17
SECTION 4. Payment of Expenses............................................................17
(a) Expenses.......................................................................17
(b) Termination of Agreement.......................................................18
SECTION 5. Conditions of International Managers' Obligations..............................18
(a) Effectiveness of Registration Statement........................................18
(b) Opinion of Counsel for Company.................................................18
(c) Opinion of Counsel for the Selling Shareholders................................19
(d) Opinion of Counsel for International Managers..................................19
(e) Officers' Certificate..........................................................19
(f) Certificate of Selling Shareholders............................................19
(g) Accountant's Comfort Letter....................................................19
(h) Bring-down Comfort Letter......................................................20
(i) Purchase of Initial International Securities...................................20
(j) Conditions to Purchase of International Option Securities......................20
(i) Officers' Certificate.................................................20
(ii) Certificate of Selling Shareholders...................................20
(iii) Opinion of Counsel for Company........................................20
(iv) Opinion of Counsel for the Selling Shareholders.......................20
(v) Opinion of Counsel for International Managers.........................21
(vi) Bring-down Comfort Letter.............................................21
(k) Additional Documents...........................................................21
(l) Termination of Agreement.......................................................21
SECTION 6. Indemnification................................................................21
(a) Indemnification of International Managers......................................21
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
(b) Indemnification of Company, Directors, Officers and Selling
Shareholders..................................................................24
(c) Actions against Parties; Notification.........................................24
(d) Settlement Without Consent if Failure to Reimburse............................25
SECTION 7. Contribution..................................................................25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................26
SECTION 9. Termination of Agreement......................................................26
(a) Termination; General..........................................................26
(b) Liabilities...................................................................27
SECTION 10. Default by One or More of the International Managers..........................27
SECTION 11. Notices.......................................................................28
SECTION 12. Parties.......................................................................28
SECTION 13. Governing Law and Time........................................................28
SECTION 14. Effect of Headings............................................................28
</TABLE>
iii
<PAGE> 5
THE E.W. SCRIPPS COMPANY
(an Ohio corporation)
1,260,000 Class A Common Shares
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
Merrill Lynch International
as Lead Manager of the International Managers
c/o Merrill Lynch International
20 Farringdon Street
London England EC1M 3NH
Ladies and Gentlemen:
The E.W. Scripps Company, an Ohio corporation (the "Company"), The
Edward W. Scripps Trust (the "Scripps Trust") and The Jack R. Howard Trust (the
"Howard Trust," and together with the Scripps Trust, the "Selling
Shareholders"), confirm their respective agreements with Merrill Lynch & Co.,
Merrill Lynch International ("MLI") and each of the other International Managers
named in Schedule A hereto (collectively, the "International Managers", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom MLI is acting as representative (in such capacity,
the "Lead Manager"), with respect to (i) the sale by the Selling Shareholders,
acting severally and not jointly, and the purchase by the International
Managers, acting severally and not jointly, of the respective numbers of Class A
Common Shares, par value $.01 per share ("Class A Common Shares"), of the
Company set forth in Schedules A and B hereto and (ii) the grant by the Selling
Shareholders to the International Managers, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
189,000 additional Class A Common Shares to cover over-allotments, if any. The
aforesaid 1,260,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 189,000 Class A Common Shares subject to the option described in Section
2(b) hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities."
The Company and the Selling Shareholders understand that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Manager deems advisable after this Agreement has
been executed and delivered.
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company and the Selling
Shareholders of an aggregate of 5,040,000 Class A Common Shares (the "Initial
U.S. Securities") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters") for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated
<PAGE> 6
is acting as representative (the "U.S. Representative") and the grant by the
Selling Shareholders to the U.S. Underwriters, acting severally and not jointly,
of an option to purchase all or any part of the U.S. Underwriters' pro rata
portion of up to 756,000 additional Class A Common Shares solely to cover over
allotments, if any (the "U.S. Option Securities" and, together with the
International Option Securities, the "Option Securities"). The Initial U.S.
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities." It is understood that (a) the Selling Shareholders are not
obligated to sell, and the International Managers are not obligated to purchase,
any Initial International Securities unless all of the Initial U.S. Securities
are contemporaneously purchased by the U.S. Underwriters, and (b) the Selling
Shareholders are not obligated to sell, and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersydicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-53315) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or Prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form of
International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
such prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." The form of International Prospectus and the form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery
2
<PAGE> 7
of this Agreement, are herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final form
of International Prospectus and the final form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering are
herein called the "International Prospectus" and the "U.S. Prospectus",
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms "International Prospectus" and "U.S. Prospectus" shall refer to the
Preliminary International Prospectus dated May __, 1998 and Preliminary U.S.
Prospectus dated May __, 1998, respectively, each together with the applicable
Term Sheet and all references in this Agreement to the date of the Prospectuses
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the
date hereof, as of the Closing Time referred to in Section 2(c)
hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, and agrees with each International Manager,
as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under
the 1933 Act. Each of the Registration Statement and any
Rule 462(b) Registration Statement has become effective
under the 1933
3
<PAGE> 8
Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any
request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectuses nor any amendments or supplements thereto, at
the time the Prospectuses or any such amendment or supplement was
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or International Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by any International Manager through the Lead Manager expressly
for use in the Registration Statement or the U.S. Prospectus or any
amendments or supplements thereto.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents
incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectuses, when
they became effective or at the time they were or
hereafter are filed with the Commission, complied and
will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act
4
<PAGE> 9
Regulations or the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together
with the other information in the Prospectuses, at the
time the Registration Statement became effective, at the
time the Prospectuses were issued and at the Closing
Time (and, if any International Option Securities are
purchased, at the Date of Delivery), did not and will
not contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting
schedules included in the Registration Statement are
independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
included in the Registration Statement and the
Prospectuses, together with the related schedules and
notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified;
said financial statements have been prepared in
conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in
accordance with GAAP the information required to be
stated therein. The selected financial data and the
summary financial information included in the
Prospectuses present fairly the information shown
therein and have been compiled on a basis consistent
with that of the audited financial statements included
in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the
Registration Statement and the Prospectuses, except as
otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the
ordinary course of business (a
5
<PAGE> 10
"Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and
(C) except for regular quarterly dividends on the Class
A Common Shares and Common Voting Shares of the Company
in amounts per share that are consistent with past
practice, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation
in good standing under the laws of the State of Ohio and
has corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectuses and to enter into and
perform its obligations under this Agreement and the
U.S. Purchase Agreement; and the Company is duly
qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or
to be in good standing would not result in a Material
Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) (each a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to
be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has
been duly authorized and validly issued, is fully paid
and non-assessable and except for Memphis Publishing
Company
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<PAGE> 11
and Evansville Courier Company, Inc., is owned by the
Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any
securityholder of such Subsidiary.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth
in the Prospectuses under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to
this Agreement or the U.S. Purchase Agreement, pursuant
to reservations, agreements or employee benefit plans
referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred
to in the Prospectuses). The shares of issued and
outstanding capital stock, including the Securities to
be purchased by the International Managers and the U.S.
Underwriters from the Selling Shareholders, have been
duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of
capital stock, including the Securities to be purchased
by the International Managers and the U.S. Underwriters
from the Selling Shareholders, was issued in violation
of preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement and the
U.S. Purchase Agreement have been duly authorized,
executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Class A Common Shares conform to all statements relating
thereto contained in the Prospectuses and such
description conforms to the rights set forth in the
instruments defining the same; no holder of the
Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the
Securities is not subject to preemptive or other similar
rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of
its charter or by-laws or in default in the performance
or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit
7
<PAGE> 12
agreement, note, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or
any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S.
Purchase Agreement and the consummation of the
transactions contemplated herein and therein and in the
Registration Statement (including the sale of the
Securities) and compliance by the Company with its
obligations hereunder and under the U.S. Purchase
Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether with
or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or a
default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements
and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary or
any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any
of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Compliance with ERISA. The Company and each member
of its Control Group (as defined below) is in compliance
in all material respects with all presently applicable
provisions of the U.S. Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the
regulations and published interpretations thereunder; no
"reportable event" (for which a filing is required with
the Pension Benefit Guaranty Corporation) (as defined in
ERISA and the
8
<PAGE> 13
regulations and published interpretations thereunder)
has occurred with respect to any material "pension plan"
(as defined in ERISA and the regulations and published
interpretations thereunder) established or maintained by
the Company or any member of its Control Group; neither
the Company nor any member of its Control Group has
incurred nor expects to incur any material liability
under (i) Title IV of ERISA with respect to termination
of a "pension plan" or withdrawal from any multiemployer
"pension plan" (as defined in ERISA and the regulations
and published interpretations thereunder) or (ii)
Section 412 or 4971 of the U.S. Internal Revenue Code of
1986, as amended (the "Code"); and each material
"pension plan" established or maintained by the Company
that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and
has received favorable determination letter as to its
qualifications and nothing has occurred, whether by
action or failure to act, which would cause the loss of
such qualification. For purposes of this subsection,
"Control Group" is defined to include any entity which
is part of a group which includes the Company and is
treated as a single employer under Section 414 of the
Code.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to
the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse
Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought
by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed
therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely
affect the properties or assets thereof or the
consummation of the transactions contemplated in this
9
<PAGE> 14
Agreement or the U.S. Purchase Agreement or the
performance by the Company of its obligations hereunder
and thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any
subsidiary is a party or of which any of their
respective property or assets is the subject which are
not described in the Registration Statement, including
ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material
Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the
Registration Statement, the Prospectuses or the
documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so
described and filed as required.
(xvi) Possession of Intellectual Property. The Company
and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now
operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual
Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency is necessary or
required for the performance by the Company of its
obligations under this Agreement or the U.S. Purchase
Agreement, in connection with the offering, issuance or
sale of the Securities hereunder or thereunder or the
consummation of the transactions contemplated by this
10
<PAGE> 15
Agreement or the U.S. Purchase Agreement, except such as
have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are
in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property
owned by the Company and its subsidiaries and good title
to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances
of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not
interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries;
and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered
as one enterprise, and under which the Company or any of
its subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither
the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights
of the Company
11
<PAGE> 16
or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or
sublease.
(xx) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the
provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules
and regulations thereunder (collectively, the "Cuba
Act") or is exempt therefrom.
(xxi) Investment Company Act. The Company is not, and
upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds
therefrom as described in the Prospectuses will not be,
an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940
Act").
(xxii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly
or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof,
including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection
of human health, the environment (including, without
limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations
relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits,
authorizations and approvals required under any
applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to
the Company's knowledge, threatened administrative,
regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or
12
<PAGE> 17
any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or
governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(b) Representations and Warranties by the Selling Shareholders.
Each Selling Shareholder severally and not jointly represents and warrants
to each International Manager as of the date hereof, as of the Closing
Time, and, if the Selling Shareholder is selling International Option
Securities on a Date of Delivery, as of each such Date of Delivery, and
agrees with each International Manager, as follows:
(i) Good Standing of the Selling Shareholders. The
Scripps Trust represents and warrants that it is a trust
duly formed and validly existing pursuant to Ohio law.
The Howard Trust represents and warrants that it is a
trust duly formed and validly existing pursuant to New
York law.
(ii) Accurate Disclosure. To the best knowledge of the
Scripps Trust, the representations and warranties of the
Company contained in Section 1(a) hereof are true and
correct. The Scripps Trust has reviewed and is familiar
with the Registration Statement and the Prospectuses
with respect to all information contained therein other
than information furnished by the Howard Trust and with
respect to such information neither the Prospectuses nor
any amendments or supplements thereto includes any
untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading. The Scripps Trust makes
no representation or warranty with respect to any
matters or information relating to the Howard Trust
contained in the Registration Statement and
Prospectuses, or any amendments or supplements thereto.
The Howard Trust has reviewed and is familiar with the
Registration Statement and the Prospectuses with respect
to matters relating to the Howard Trust only, and with
respect to such matters neither the Prospectuses nor any
amendments or supplements thereto includes any untrue
statement of a material fact or omits to state a
material fact necessary in
13
<PAGE> 18
order to make the statements therein, in light of the
circumstances under which they were made, not
misleading. The Howard Trust makes no representation or
warranty with respect to any matters or information
relating to the Company or the Scripps Trust contained
in the Registration Statement and Prospectuses, or any
amendments or supplements thereto. Neither Selling
Shareholder is prompted to sell the Securities to be
sold by such Selling Shareholder under this Agreement
and the U.S. Purchase Agreement by any information
concerning the Company or any subsidiary of the Company
which is not set forth in the Prospectuses.
(iii) Authorization of Agreements. Each Selling
Shareholder has the full right, power and authority to
enter into this Agreement and the U.S. Purchase
Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder
hereunder and thereunder. The execution and delivery of
this Agreement and the U.S. Purchase Agreement and the
sale and delivery of the Securities to be sold by such
Selling Shareholder and the consummation of the
transactions contemplated herein and therein and
compliance by such Selling Shareholder with its
obligations hereunder and under the U.S. Purchase
Agreement have been duly authorized by such Selling
Shareholder and do not and will not, whether with or
without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to
be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any
contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other
agreement or instrument to which such Selling
Shareholder is a party or by which such Selling
Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is
subject, nor will such action result in any violation of
the provisions of the trust agreement of such Selling
Shareholder, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court,
domestic or foreign, having jurisdiction over such
Selling Shareholder or any of its properties.
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<PAGE> 19
(iv) Good and Marketable Title. Each Selling Shareholder
has and will at the Closing Time and, if any
International Option Securities are purchased, on the
Date of Delivery, have good and marketable title to the
Securities to be sold by such Selling Shareholder under
this Agreement and the U.S. Purchase Agreement, free and
clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind, other
than pursuant to this Agreement and the U.S. Purchase
Agreement, and upon delivery of such Securities and
payment of the purchase price therefor as herein and
therein contemplated, assuming each such Underwriter has
no notice of any adverse claim, each of the Underwriters
will receive good and marketable title to the Securities
purchased by it from such Selling Shareholder, free and
clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind.
(v) Absence of Manipulation. Such Selling Shareholder
has not taken, and will not take, directly or
indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the
sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration,
qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary
or required for the performance by any Selling
Shareholder of its obligations under this Agreement or
the U.S. Purchase Agreement or in connection with the
sale and delivery of the Securities under this Agreement
or the U.S. Purchase Agreement or the consummation of
the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, except such as may have
previously been made or obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(vii) Restriction on Sale of Securities. During a period
of 180 days from the date of the Prospectuses, neither
Selling Shareholder will, without the prior written
consent of MLI, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any
15
<PAGE> 20
option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any
Common Voting Shares or Class A Common Shares or any
securities convertible into or exercisable or
exchangeable for Common Voting Shares or Class A Common
Shares or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the
Common Voting Shares or Class A Common Shares, whether
any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Voting
Shares or Class A Common Shares or such other
securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder
or under the U.S. Purchase Agreement.
(viii) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates directly, or
indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, or
has any other association with (within the meaning
of Article I, Section 1(q) of the By-laws of the
National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities
Dealers, Inc.
(ix) Delivery of Form W-9. Such Selling Shareholder
agrees to deliver to the Lead Manager at or prior to the
Closing Time a properly completed and executed United
States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department
regulations in lieu thereof).
(c) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Lead
Manager or to counsel for the International Managers and the U.S.
Underwriters shall be deemed a representation and warranty by the
Company to each International Manager and each U.S. Underwriter as
to the matters covered thereby; and any certificate signed by or on
behalf of the Selling Shareholders as such and delivered to the
Lead Manager or to counsel for the International Managers and the
U.S. Underwriters pursuant to the terms of this Agreement and the
U.S. Purchase Agreement shall be deemed a representation and
warranty by such Selling Shareholder to each International Manager
and U.S. Underwriter as to the matters covered thereby.
16
<PAGE> 21
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial International Securities. On the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, each Selling
Shareholder, severally and not jointly, agrees to sell to each
International Manager, severally and not jointly, and each
International Manager, severally and not jointly, agrees to
purchase from each Selling Shareholder, at the price per share
set forth in Schedule C, that proportion of the number of
Initial International Securities set forth in Schedule B
opposite the name of such Selling Shareholder, the number of
Initial International Securities set forth in Schedule A
opposite the name of such International Manager, plus any
additional number of Initial International Securities which
such International Manager may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the
total number of Initial International Securities, subject, in
each case, to such adjustments among the International
Managers as the Lead Manager in its sole discretion shall make
to eliminate any sales or purchases of fractional securities.
(b) International Option Securities. In addition, on the basis
of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, The
Scripps Trust and the Howard Trust hereby grant options to the
International Managers, severally and not jointly, to purchase
up to an aggregate additional 189,000 Class A Common Shares as
set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the
Initial International Securities but not payable on the
International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised
in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with
the offering and distribution of the Initial International
Securities upon notice by the Lead Manager to the Selling
Shareholders setting forth the number of International Option
Securities as to which the several International Managers are
then exercising the option and the time and date of payment
and delivery for such International Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be
determined by the Lead Manager, but shall not be later than
seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter
defined. If the option is exercised as to all or any portion
of the International Option Securities, each of the
International Managers, acting severally and not jointly, will
purchase that proportion of the total number of International
Option Securities then being purchased which the number of
Initial International Securities set forth in Schedule A
opposite the name of such International Manager bears to the
total number of Initial
17
<PAGE> 22
International Securities, subject in each case to such
adjustments as the Lead Manager in its discretion shall make
to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial International Securities
shall be made at the offices of Baker & Hostetler, Suite 2650,
Walnut Street, Cincinnati, Ohio 45202, or at such other place
as shall be agreed upon by the Lead Manager, the Company and
the Selling Shareholders, at 9:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern
time)) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other
time not later than ten business days after such date as shall
be agreed upon by the Lead Manager, the Company and the
Selling Shareholders (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Lead Manager, the Company and the Selling
Shareholders, on each Date of Delivery as specified in the notice from the Lead
Manager to the Company and the Selling Shareholders.
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to the bank account designated by each Selling
Shareholder against delivery to the Lead Manager for the respective accounts of
the International Managers of certificates for the Securities to be purchased by
them. It is understood that each International Manager has authorized the Lead
Manager, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase. MLI,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option
Securities, if any, shall be in such denominations and
registered in such names as the Lead Manager may request in
writing at least two full business days before the Closing
Time or the relevant Date of Delivery, as the case may be. The
certificates for the Initial International Securities and the
International Option Securities, if any, will be made
available for examination and packaging by the Lead Manager in
the City of New York not later than 10:00 A.M. (Eastern time)
on the business
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<PAGE> 23
day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply
with the requirements of Rule 430A or Rule 434, as applicable,
and will notify the Lead Manager immediately, and confirm the
notice in writing, (i) when any post-effective amendment to
the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses
shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any
amendment or supplement to the Prospectuses or for additional
information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission
and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Lead
Manager notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing
under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Lead Manager with
copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will
not file or use any such document to which the Lead Manager or
counsel for the International Managers shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Manager and counsel for
the International Managers, without charge, signed copies of
the Registration Statement as originally filed
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and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Lead Manager, without
charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without
exhibits) for each of the International Managers. The copies
of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each International Manager, without charge, as many copies of
each preliminary prospectus as such International Manager
reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each International Manager, without
charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the International Prospectus (as
amended or supplemented) as such International Manager may
reasonably request. The International Prospectus and any
amendments or supplements thereto furnished to the
International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as
contemplated in this Agreement, the U.S. Purchase Agreement
and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the
opinion of counsel for the International Managers or for the
Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that the Prospectuses
will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectuses in order to comply
with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct
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<PAGE> 25
such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the International Managers
such number of copies of such amendment or supplement as the
International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to
qualify the Securities for offering and sale under the
applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Lead Manager may
designate and to maintain such qualifications in effect for a
period of not less than one year from the later of the
effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the
Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as
practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectuses, the Company will not,
without the prior written consent of MLI, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any Common Voting
Shares or Class A Common Shares or any securities convertible
into or exercisable or exchangeable for Common Voting Shares
or Class A Common Shares or file any registration statement
under the 1933 Act with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the
Common Voting Shares or Class A Common Shares, whether any
such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Voting Shares or Class
A Common Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the
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<PAGE> 26
Securities to be sold hereunder and under the U.S. Purchase
Agreement, (B) any Common Voting Shares or Class A Common
Shares issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the
date hereof and referred to in the Prospectuses, (C) any
shares of Common Voting Shares or Class A Common Shares issued
or options to purchase Common Voting Shares or Class A Common
Shares granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectuses or (D) Common
Voting Shares or Class A Common Shares issued pursuant to any
non-employee director stock plan or dividend reinvestment
plan.
(i) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the
1933 Act or the 1934 Act, will file all documents required to
be filed with the Commission pursuant to the 1934 Act within
the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Selling Shareholders will pay or cause to
be paid all fees and expenses incident to the performance of
their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally
filed and of each amendment thereto, (ii) the preparation,
printing and delivery to the International Managers of this
Agreement and the U.S. Purchase Agreement, any Agreement among
Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and
any stamp duties, capital duties, stock transfer taxes or
other duties payable upon the sale, issuance or delivery of
the Securities to the International Managers, (iv) the fees
and disbursements of the Company's counsel, accountants and
other advisors and the fees and disbursement of the Selling
Shareholders' respective counsel, accountants and other
advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the International Managers in
connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the
Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of
copies of the
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<PAGE> 27
Blue Sky Survey and any supplement thereto and (viii) the fees
and expenses of any transfer agent or registrar for the
Securities.
(b) Termination of Agreement. If this Agreement is terminated
by the Lead Manager in accordance with the provisions of
Section 5, Section 9(a)(i) or Section 10 hereof, the Selling
Shareholders shall reimburse the International Managers for
all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the International
Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder
are subject to the accuracy of the representations and
warranties of the Company and the Selling Shareholders
contained in Section 1 hereof and in certificates of any
officer of the Company or any subsidiary of the Company or on
behalf of any Selling Shareholder delivered pursuant to the
provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement,
has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information
shall have been filed and declared effective in accordance
with the requirements of Rule 430A) or, if the Company has
elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Manager shall have received the favorable opinion, dated as of
Closing Time, of Baker & Hostetler LLP, counsel for the
Company, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced
copies of such letter for each of the International Managers
to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the International Managers may
reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At
Closing Time, the Lead Manager shall have received the
favorable opinion, dated as of Closing Time, of Baker &
Hostetler LLP and Fulton, Rowe, Hart & Coon, counsel for The
Scripps Trust and The Howard Trust, respectively, in form
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<PAGE> 28
and substance satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such
letter for each of the International Managers to the effect
set forth in Exhibit B hereto and to such further effect as
counsel to the International Managers may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time,
the Lead Manager shall have received the favorable opinion,
dated as of Closing Time, of Skadden, Arps, Slate, Meagher &
Flom (Illinois), counsel for the International Managers,
together with signed or reproduced copies of such letter for
each of the other International Managers with respect to such
matters as you may reasonably request.
(e) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates
as of which information is given in the Prospectuses, any
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course
of business, and the Lead Manager shall have received a
certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are
contemplated by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Lead Manager shall have received a certificate of each Selling
Shareholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of such Selling Shareholder
contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) such Selling
Shareholder has complied in all material respects with all
agreements and all conditions on its part to be performed
under this Agreement and the U.S. Purchase Agreement at or
prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Manager shall have received from
Deloitte & Touche LLP a letter dated such date, in form and
substance satisfactory to the Lead
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<PAGE> 29
Manager, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information contained in the Registration
Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the Lead
Manager shall have received from Deloitte & Touche LLP a
letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant
to clause (g) of this Section, except that the specified date
referred to shall be a date not more than three business days
prior to Closing Time.
(i) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement, the U.S.
Underwriters shall have purchased the Initial U.S. Securities
under the U.S. Purchase Agreement.
(j) Conditions to Purchase of International Option
Securities. In the event that the International Managers
exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the International Option
Securities, the representations and warranties of the Company
and the Selling Shareholders contained herein and the
statements in any certificates furnished by the Company, any
subsidiary of the Company and the Selling Shareholders
hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Lead
Manager shall have received:
(i) Officers' Certificate. A certificate, dated
such Date of Delivery, of the President or a
Vice President of the Company and of the chief
financial or chief accounting officer of the
Company confirming that the certificate
delivered at the Closing Time pursuant to
Section 5(e) hereof remains true and correct as
of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A
certificate, dated such Date of Delivery, of
each Selling Shareholder confirming that the
certificate delivered at Closing Time pursuant
to Section 5(f) remains true and correct as of
such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable
opinion of Baker & Hostetler LLP, counsel for
the Company, in form and substance satisfactory
to counsel for the International Managers, dated
such
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<PAGE> 30
Date of Delivery, relating to the International
Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling
Shareholders. The favorable opinion of Baker &
Hostetler LLP and Fulton, Rowe, Hart & Coon,
counsel for The Scripps Trust and The Howard
Trust, respectively, in form and substance
satisfactory to counsel for the International
Managers, dated such Date of Delivery, relating
to the International Option Securities to be
purchased on such Date of Delivery and otherwise
to the same effect as the opinion required by
Section 5(c) hereof.
(v) Opinion of Counsel for International Managers.
The favorable opinion of Skadden, Arps, Slate,
Meagher & Flom (Illinois), counsel for the
International Managers, dated such Date of
Delivery, relating to the International Option
Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from
Deloitte & Touche LLP, in form and substance
satisfactory to the Lead Manager and dated such
Date of Delivery, substantially in the same form
and substance as the letter furnished to the
Lead Manager pursuant to Section 5(g) hereof,
except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date
of Delivery.
(k) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the International Managers shall have been
furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company and the
Selling Shareholders in connection with the issuance and sale of
the Securities as herein contemplated
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<PAGE> 31
shall be satisfactory in form and substance to the Lead Manager
and counsel for the International Managers.
(l) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required
to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of International Option Securities
on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase
the relevant International Option Securities, may be
terminated by the Lead Manager by notice to the Company at any
time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without
liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. (1) By the
Company. The Company agrees to indemnify and hold harmless each
International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the extent and in the
manner set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement
of a material fact included in any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company and the Selling
Shareholders; and
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<PAGE> 32
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by MLI),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under clause (i) or (ii) above;
provided that the liability of the Company to indemnify or otherwise make
payments to the International Managers (or persons controlling the International
Managers) pursuant to the foregoing indemnity agreement of the Company (and any
liability of the Company as a result of any breach of this Agreement by the
Company other than as a result of bad faith) shall not extend to statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished by the Scripps Trust or the Howard Trust
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto).
(2) By the Scripps Trust. The Scripps Trust agrees to indemnify
and hold harmless each International Manager and each person, if any, who
controls any International Manager within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in clauses (i), (ii) and (iii) of Section 6(a)(1)
above, as incurred; provided that the liability of the Scripps Trust to
indemnify or otherwise make payments to the International Managers (or persons
controlling the International Managers) pursuant to the foregoing indemnity
agreement of the Scripps Trust shall not extend to statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
information furnished by the Howard Trust for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto).
(3) By the Howard Trust. The Howard Trust agrees to indemnify and
hold harmless each International Manager and each person, if any, who controls
any International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and manner set forth in clauses (i),
(ii) and (iii) of Section 6(a)(1) above; provided that the liability of the
Howard Trust to indemnify or otherwise make payments to the International
Managers (or persons controlling the International Managers) pursuant to the
foregoing indemnity agreement of the Howard Trust (and any liability as a result
of any breach of this Agreement by the Howard Trust other than as a result of
bad faith) shall be limited to statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto) in reliance upon and in conformity with information
furnished
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<PAGE> 33
by the Howard Trust for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), and in no event shall the aggregate of such
liability of the Howard Trust exceed the product of the number of Shares sold by
the Howard Trust times the price per share paid to it by the International
Managers pursuant hereto.
The foregoing notwithstanding, indemnity agreements of the
Company and Selling Shareholders shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any International Manager
through MLI expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto). The Company and the Selling Shareholders will not be
liable to any International Manager with respect to any International Prospectus
to the extent that the Company or Selling Shareholders shall sustain the burden
of proving that any such loss, liability, claim, damage or expense resulted from
the fact that such International Manager, in contravention of a requirement of
this Agreement or applicable law, sold Securities to a person to whom such
International Manager failed to send or give, at or prior to the Closing Time, a
copy of the International Prospectus, as then amended or supplemented if: (i)
the Company has previously furnished copies thereof (sufficiently in advance of
the Closing Time to allow for distribution by the Closing Time) to the
International Managers and the loss, liability, claim, damage or expense of such
International Manager resulted from an untrue statement or omission of a
material fact contained in or omitted from a prospectus which was corrected in
the International Prospectus as, if applicable, amended or supplemented prior to
the Closing Time and such International Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person and
(ii) such failure to give or send such International Prospectus by the Closing
Time to the party or parties asserting such loss, liability, claim, damage or
expense would have deprived the Company or the Selling Shareholders of its or
their sole defense to the claim asserted by such person.
(b) Indemnification of Company, Directors, Officers and
Selling Shareholders. Each International Manager
severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, and each
Selling Shareholder each against any and all loss,
liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or
supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by
such International Manager through MLI expressly for use
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<PAGE> 34
in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectuses (or
any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each
indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any
action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to
the indemnified parties shall be selected by MLI, and,
in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be
selected by the Company and the Selling Shareholders. An
indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified
parties in connection with any one action or separate
but similar or related actions in the same jurisdiction
arising out of the same general allegations or
circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not
the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each
indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) Settlement Without Consent If Failure to Reimburse.
If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement
of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the
terms of such settlement at least 30 days prior to such
settlement
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being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or
insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the
relative benefits received by the Company and the
Selling Shareholders on the one hand and the
International Managers on the other hand from the
offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative
fault of the Company and the Selling Shareholders on the
one hand and of the International Managers on the other
hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Selling Shareholders and the total underwriting
discount received by the International Managers, in each case as set forth on
the cover of the International Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Shareholders
or by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the International Managers
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the International
Managers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include
31
<PAGE> 36
any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such International Manager has otherwise been required to pay by reason of any
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The International Managers'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial International Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements
contained in this Agreement or in certificates of officers
of the Company or any of its subsidiaries or the Selling
Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any
investigation made by or on behalf of any International
Manager or controlling person, or by or on behalf of the
Company or the Selling Shareholders, and shall survive
delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Manager may
terminate this Agreement, by notice to the Company and the
Selling Shareholders, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which
information is given in the International Prospectus, any
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered
32
<PAGE> 37
as one enterprise, whether or not arising in the ordinary
course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the
United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a
prospective change in national or international political,
financial or economic conditions, in each case the effect of
which is such as to make it, in the judgment of the Lead
Manager, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the
Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New
York or Ohio authorities.
(b) Liabilities. If this Agreement is terminated
pursuant to this Section, such termination shall be without
liability of any party to any other party except as provided
in Section 4 hereof, and provided further that Sections 1,
6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the International
Managers. If one or more of the International
Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or
they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Lead
Manager shall have the right, within 24 hours
thereafter, to make arrangements for one or more
of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Lead Manager
shall not have completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each
of the non-defaulting International Managers shall be
obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
33
<PAGE> 38
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the
International Managers to purchase and of the Selling
Shareholders to sell the International Option Securities to be
purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting
International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Selling Shareholders to sell the
relevant International Option Securities, as the case may be, either (i) the
Lead Manager or (ii) any Selling Shareholder shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectuses or in any other documents or
arrangements. As used herein, the term "International Manager" includes any
person substituted for a International Manager under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the
Underwriters shall be directed to the Lead Manager at
North Tower, World Financial Center, New York, New York
10281-1201, attention of [__________]; notices to the
Company shall be directed to it at 312 Walnut Street,
28th Floor, Cincinnati, Ohio 45202, attention: Daniel J.
Castellini, Senior Vice President/Finance and
Administration; notices to The Scripps Trust shall be
directed to it at 312 Walnut Street, 28th Floor,
Cincinnati, Ohio 45202, attention: Donald E. Meihaus,
Secretary-Treasurer; and notices to The Howard Trust
shall be directed to it at c/o George Rowe, Esq.,
Fulton, Rowe, Hart & Coon, One Rockefeller Plaza, Suite
301, New York, New York 10020.
SECTION 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the International
Managers, the Company and the Selling Shareholders and
their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other
than the International Managers, the Company and the
Selling Shareholders and their respective successors and
the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and
legal
34
<PAGE> 39
representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the International
Managers, the Company and the Selling Shareholders and
their respective successors, and said controlling
persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities
from any International Manager shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH
HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the International Managers, the Company and the
Selling Shareholders in accordance with its terms.
Very truly yours,
THE E.W. SCRIPPS COMPANY
By_______________________________________
Title:
THE EDWARD W. SCRIPPS TRUST
By________________________________________
THE JACK R. HOWARD TRUST
By________________________________________
35
<PAGE> 40
CONFIRMED AND ACCEPTED, as of the date first above written:
By: MERRILL LYNCH INTERNATIONAL
By________________________________________
Authorized Signatory
For itself and as Lead Manager of the other International Managers named in
Schedule A hereto.
36
<PAGE> 41
SCHEDULE A
Number of
Initial
Name of Underwriter International Securities
------------------- ------------------------
Merrill Lynch International.......................... [ ]
--------------
[ ].................... [ ]
------------------------------- --------------
[ ].................... [ ]
------------------------------- --------------
[ ].................... [ ]
------------------------------- --------------
[ ].................... [ ]
------------------------------- --------------
Total..................................................[1,260,000]
Sch A-1
<PAGE> 42
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial Maximum Number of
Selling Shareholders International International Option Securities
-------------------- Securities to be Sold to Be Sold
--------------------- ----------
<S> <C> <C>
The Edward Scripps Trust 700,000 105,000
The Jack R. Howard Trust 560,000 84,000
Total.................. 1,260,000 189,000
========= =======
</TABLE>
Sch B-1
<PAGE> 43
SCHEDULE C
THE E. W. SCRIPPS COMPANY
1,260,000 Class A Common Shares
(Par Value $.01 Per Share)
(i) The initial public offering price per share for the
International Securities, determined as provided in said
Section 2, shall be $[ ].
(ii) The purchase price per share for the Securities to be
paid by the several Underwriters shall be $[ ], being an
amount equal to the initial public offering price set forth
above less $[ ] per share; provided that the purchase price
per share for any International Option Securities purchased
upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and
payable on the Initial International Securities but not
payable on the International Option Securities.
Sch C-1
<PAGE> 44
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Ohio.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the International Purchase Agreement and the
U.S. Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to the International
Purchase Agreement and the U.S. Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible
securities or options referred to in the Prospectuses); the
shares of issued and outstanding capital stock of the Company,
including the Securities to be purchased by the Underwriters from
the Selling Shareholders, have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in
violation of preemptive or other similar rights of any
securityholder of the Company.
(v) The sale of the Securities by the Selling Shareholders is
not subject to preemptive or other similar rights of any
securityholder of the Company.
(vi) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether
A-1
<PAGE> 45
by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each Subsidiary
has been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of such counsel's knowledge, is
owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such
Subsidiary.
(vii) Each of the International Purchase Agreement and the U.S.
Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; any required filing of the Prospectuses pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or
threatened by the Commission.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectuses, excluding the
documents incorporated by reference therein, and each amendment
or supplement to the Registration Statement and Prospectuses,
excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or
omitted therefrom, as to which such counsel need express no
opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(x) The documents incorporated by reference in the Prospectuses
(other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which such counsel
need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.
38
<PAGE> 46
(xi) The form of certificate used to evidence the Class A Common
Shares complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
charter and by-laws of the Company and the requirements of the
New York Stock Exchange.
(xii) To the best of such counsel's knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a party,
or to which the property of the Company or any subsidiary is
subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
(xiii) The information in the Prospectus under "Description of
Capital Stock", "Business-- Broadcast Television-Digital
Television" and "--Federal Regulation of Broadcasting" and
"Certain United States Tax Consequences to Non-U.S. Shareholders"
and in the Registration Statement under Item 15, to the extent
that it constitutes matters of law, summaries of legal matters,
the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects.
(xiv) To the best of such counsel's knowledge, there are no
statutes or regulations that are required to be described in the
Prospectuses that are not described as required.
(xv) All descriptions in the Registration Statement of contracts
and other documents to which the Company or its subsidiaries are
a party are accurate in all material respects; to the best of
such counsel's knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all
material respects.
(xvi) To the best of such counsel's knowledge, neither the Company
nor any subsidiary is in violation of its charter or by-laws and
no default by the Company or any subsidiary exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration
Statement or
A-3
<PAGE> 47
the Prospectuses or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xvii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign
(other than under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which
such counsel need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of
the International Purchase Agreement and the U.S. Purchase
Agreement or for the offering, issuance, sale or delivery of the
Securities.
(xviii) The execution, delivery and performance of the International
Purchase Agreement and the U.S. Purchase Agreement and the
consummation of the transactions contemplated in the
International Purchase Agreement, in the U.S. Purchase Agreement
and in the Registration Statement (including the sale of the
Securities) and compliance by the Company with its obligations
under the International Purchase Agreement and the U.S. Purchase
Agreement do not and will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section
1(a)(xi) of the International Purchase Agreement and the U.S.
Purchase Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or any subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to such
counsel, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse
Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any
subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to such counsel, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary
or any of their respective properties, assets or operations.
(xix) Each of the Company and its subsidiaries has obtained all
material licenses required by the Federal Communications
Commission ("FCC") for the conduct and operation of its
respective businesses, and such licenses are in full force and
effect. The Company and its subsidiaries are presently conducting
A-4
<PAGE> 48
their respective businesses in substantial compliance with all
applicable rules and regulations of the FCC.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the 1940 Act.
Nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which such
counsel need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectuses
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need make no statement), at the
time the Prospectuses was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-5
<PAGE> 49
Exhibit B
FORM OF OPINION OF COUNSEL FOR EACH OF THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) Such Selling Shareholder is a trust duly formed and validly
existing pursuant to Ohio or New York law, as the case may be.
(ii) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign,
(other than the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations,
approvals or consents as may be necessary under state securities
laws, as to which such counsel need express no opinion) is
necessary or required to be obtained by such Selling Shareholder
for the performance by such Selling Shareholder of its
obligations under the International Purchase Agreement or the
U.S. Purchase Agreement or in connection with the offer, sale or
delivery of the Securities.
(iii) Each of the International Purchase Agreement and the U.S.
Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(iv) The execution, delivery and performance of the International
Purchase Agreement and the U.S. Purchase Agreement and the sale
and delivery of the Securities and the consummation of the
transactions contemplated in the International Purchase
Agreement, the U.S. Purchase Agreement and the Registration
Statement and compliance by such Selling Shareholder with its
obligations under the International Purchase Agreement and the
U.S. Purchase Agreement have been duly authorized by all
necessary action on the part of such Selling Shareholder and do
not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of,
or default under or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities or any
property or assets of such Selling Shareholder pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement
to which such Selling Shareholder is a party or by which it may
be bound, or to which any of the property or assets of such
Selling Shareholder may be subject nor will such action result in
any violation of the provisions of the trust agreement of such
Selling Shareholder, or any law, administrative regulation,
judgment or order of any governmental agency or body or any
administrative or court decree having jurisdiction over such
Selling Shareholder or any of its properties.
B-1
<PAGE> 50
(v) To the best of such counsel's knowledge, such Selling
Shareholder has valid and marketable title to the Securities to
be sold by such Selling Shareholder pursuant to the International
Purchase Agreement and the U.S. Purchase Agreement, free and
clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant
to the International Purchase Agreement and the U.S. Purchase
Agreement. By delivery of a certificate or certificates therefor
such Selling Shareholder will transfer to the Underwriters who
have purchased such Securities pursuant to the International
Purchase Agreement and the U.S. Purchase Agreement (without
notice of any defect in the title of such Selling Shareholder and
who are otherwise bona fide purchasers for purposes of the
Uniform Commercial Code) valid and marketable title to such
Securities, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
Nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if applicable),
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which such
counsel need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectuses
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need make no statement), at the
time the Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
B-2
