Please mark your
votes as in this
example.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. EVERY PROPERLY
SIGNED PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED,
PROXIES WILL BE VOTED FOR ITEM 1 AND IN THE DISCRETION OF
MANAGEMENT IN CONNECTION WITH ITEM 2.
Management Recommends a vote FOR:
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed below AUTHORITY
(except as marked to vote for all
to the contrary nominees listed
below). above.
For, except vote withheld from the following nominee(s):
(PLEASE sign exactly as your name
appears hereon. Executors,
administrators, trustees, custodians,
etc. should give full title. If
shares are registered in joint names,
each owner should sign.)
, 1994
SIGNATURE(S) DATE
, 1994
SIGNATURE(S) DATE
LEE ENTERPRISES, INCORPORATED
PROXY FOR ANNUAL MEETING-FEBRUARY 3, 1995
COMBINED PROXY FOR COMMON STOCK AND CLASS B COMMON STOCK
Lloyd G. Schermer and Richard D. Gottlieb, or either of them, each
with power of substitution, are authorized to vote all shares of Common
Stock and Class B Common Stock which the under-signed is entitled to vote
at the annual meeting of stockholders of Lee Enterprises, Incorporated to
be held February 3, 1995 and at any adjournment thereof, on the following
matters.
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Nominee Term
Richard W. Sonnenfeldt 1 year
Andrew W. Newman 3 years
Ronald L. Rickman 3 years
Lloyd G. Schermer 3 years
2. In their discretion, upon such other matters as may properly come
before the meeting.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendations. The
Proxy Committee cannot vote your shares unless you sign and return this
card.
LEE ENTERPRISES, INCORPORATED
400 Putnam Building
215 N. Main Street
Davenport, Iowa 52801-1924
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 3, 1995
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Lee Enterprises, Incorporated, a
Delaware corporation (the "Company"), will be held in the Wisconsin Room
of the RiverCenter, 136 East Third Street, Davenport, Iowa, on February 3,
1995, at 9:00 A.M., for the following purposes:
(1) To elect three directors for terms of three years, and one
director for a term of one year.
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed December 9, 1994 as the record date
for the determination of stockholders entitled to notice of and to vote at
the meeting.
You are invited to attend this meeting; however, if you do not expect
to attend in person you are urged to execute and return immediately the
enclosed proxy, which is solicited by management. You may revoke your
proxy and vote in person should you attend the meeting.
C.D. Waterman III, Secretary
Davenport, Iowa
December 28, 1994
LEE ENTERPRISES, INCORPORATED
1995 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Lee Enterprises, Incorporated (the
"Company"), to be voted at the annual meeting of the stockholders of the
Company to be held on Friday, February 3, 1995, or at any adjournment
thereof, for the purposes set forth in the foregoing Notice of Annual
Meeting.
The principal executive officers of the Company are located at 400
Putnam Building, 215 N. Main Street, Davenport, Iowa 52801. This proxy
statement and the enclosed form of proxy are being mailed to stockholders
on or about December 28, 1994, together with a copy of the Company's
Annual Report for the fiscal year ended September 30, 1994.
VOTING PROCEDURES
Stockholders of record at the close of business on December 9, 1994
will be entitled to vote at the meeting or any adjournment thereof. As of
December 9, 1994, there were 15,754,767 shares of Common Stock and
6,666,872 shares of Class B Common Stock outstanding. Each share of
Common Stock is entitled to one vote at the meeting; each share of Class B
Common Stock is entitled to ten votes at the meeting.
The presence, in person or by proxy, of a majority of the voting power
of Common Stock and Class B Common Stock of the Company issued and
outstanding and entitled to vote is necessary to constitute a quorum at
the Annual Meeting. The affirmative vote of the holders of a plurality of
the voting power of Common Stock and Class B Common Stock represented in
person or by proxy at the Annual Meeting is required to elect directors,
and the affirmative vote of the holders of a majority of the voting power
of Common Stock and Class B Common Stock is required to act on any other
matter properly brought before the meeting.
Abstentions from voting will be included for purposes of determining
whether the requisite number of affirmative votes are received on any
matters submitted to the stockholders for vote and, accordingly, will have
the same effect as a vote against such matters. If a broker indicates on
the proxy that it does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be considered
as present and entitled to vote, and will have no effect on the vote, in
respect to that matter.
In voting by proxy with regard to the election of directors,
stockholders may vote in favor of all nominees, withhold their votes as to
all nominees or withhold their votes as to specific nominees.
Stockholders should specify their choices on the accompanying proxy card.
All properly executed proxy cards delivered by stockholders to the Company
and not revoked will be voted at the Annual Meeting in accordance with the
directions given. If no specific instructions are given with regard to
the matters to be voted upon, the shares represented by a signed proxy
card will be voted "FOR" the election of all directors. If any other
matters properly come before the Annual Meeting, the persons named as
proxies will vote upon such matters according to their judgment.
Any stockholder delivering a proxy has the power to revoke it at any
time before it is voted by giving written notice to the Secretary of the
Company, by executing and delivering to the Secretary a proxy card bearing
a later date or by voting in person at the Annual Meeting.
ELECTION OF DIRECTORS
Three directors are to be elected at the annual meeting to hold office
for three year terms expiring at the annual meeting of stockholders in
1998, and one director is to be elected for a one year term expiring at
the annual meeting of stockholders in 1996. Each of the individuals named
below is a nominee of the Nominating Committee of the Board of Directors;
each is presently a director whose current term expires February 3, 1995.
Harry A. Fischer, Jr., a director of the Company since 1969, is retiring
from the Board of Directors and will not stand for re-election. The Board
of Directors does not currently plan to fill his vacancy and, effective as
of the annual meeting date, the number of directors will be reduced to
ten.
Proxies will be voted for the election of these nominees unless the
stockholder giving the proxy withholds such authority. If as a result of
circumstances not now known any of such nominees shall be unable to serve
as a director, proxies will be voted for the election of such other person
as management may select. Information about the nominees and directors
continuing in office is set forth below:
NOMINEES FOR ELECTION AS DIRECTORS
Principal Proposed Director
Nominee Occupation Age Term Since
Andrew E. Newman Chairman of the 50 3 years 1991
Board, Edison Brothers (1998)
Stores, Inc.
Ronald L. Vice President- 56 3 years 1986
Rickman Newspapers (1998)
Lloyd G. Chairman of the 68 3 years 1959
Schermer Board (1998)
Richard W. Consultant and Retired 71 1 year 1982
Sonnenfeldt Chief Executive Officer (1996)
of NAPP Systems Inc.
DIRECTORS CONTINUING IN OFFICE
Principal Remaining Director
Director Occupation Age Term Since
J. P. Guerin Investor 65 2 years 1985
(1997)
Charles E. Chairman of the Board, 66 2 years 1990
Rickershauser, Jr. PS Group, Inc. (1997)
Mark Vittert Private Investor 46 2 years 1986
(1997)
Rance E. President, Crain 56 1 year 1990
Crain Communications (1996)
Richard D. President and Chief 52 1 year 1986
Gottlieb Executive Officer (1996)
Phyllis Retired 64 1 year 1977
Sewell (1996)
[FN]
Member of Executive Committee
Member of Executive Compensation Committee
Member of Audit Committee
Member of Nominating Committee
Mr. Newman is Chairman of the Board of Edison Brothers Stores, Inc., a
position he has held since 1987. Edison Brothers is a diversified retail
apparel, footwear and entertainment concern with its principal corporate
offices in St. Louis, MO. He is also a director of Boatmen's Bancshares
and Sigma-Aldrich Corporation, St. Louis, MO.
For more than the past 5 years, Mr. Rickman has been Vice President-
Newspapers of the Company.
Mr. Schermer was Chairman and Chief Executive Officer of the Company
until May 11, 1991 when, upon his recommendation, the Board of Directors
elected Mr. Gottlieb as Chief Executive Officer.
From September 1, 1987 to September 28, 1990, Mr. Sonnenfeldt held the
position of Chairman of the Board and Chief Executive Officer of NAPP
Systems Inc., a subsidiary of the Company. He is a director of SKYSAT
Communications Network Corp., New York, NY; Solar Outdoor Lighting Co.,
Stuart, FL; and TRIDEX Corporation, Westport, CT. He is also a member of
the Council on Foreign Relations, the American Council on Germany, and is
a Fellow of the IEEE.
Mr. Guerin is Vice-Chairman of Daily Journal Company, Los Angeles, CA
and a director of PS Group, Inc., San Diego, CA and Chairman of Tapestry
Films and Mitchum Securities Corp., Los Angeles, CA.
Mr. Rickershauser is Chairman of the Board of PS Group, Inc., San
Diego, CA. From 1986 until October 31, 1990, he was a partner of the firm
of Fried, Frank, Harris, Shriver & Jacobson, Los Angeles, CA. He is also
a director of City National Corporation and of The Vons Companies, Inc.,
Los Angeles, CA.
Mr. Vittert organized the Business Journal Publications Corporation in
St. Louis 12 years ago. This corporation published business newspapers in
St. Louis, Indianapolis, Cincinnati, Philadelphia, Baltimore and
Pittsburgh. He sold his interest in this business in 1986. Mr. Vittert
is currently a private investor and a director of Munsingwear, Inc.
Mr. Crain is the President and Editorial Director of Crain
Communications, a diversified publishing company with its principal
offices in Chicago, IL.
Mr. Gottlieb was elected Chief Executive Officer of the Company on
May 11, 1991, and prior thereto served as President and Chief Operating
Officer since November 11, 1986.
Until July, 1988, Mrs. Sewell was a Senior Vice President of Federated
Department Stores. Mrs. Sewell is also a director of Pitney Bowes Inc.,
Stamford, CT, The United States Shoe Corporation, Cincinnati, OH, and
SYSCO Corporation, Houston, TX.
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors met 4 times in fiscal 1994.
The Company's Audit Committee met 3 times in fiscal 1994; its
functions are to review the scope, timing and other considerations
relative to the independent auditor's annual examination of financial
statements, and the adequacy of internal control and the internal audit
functions; and to evaluate the performance of external and internal
auditors and the Company's accounting and financial departments. In
addition, the Committee reviews professional services provided by the
Company's independent auditors, in general, prior to rendering of such
services, and the possible effect of any nonaudit-related services upon
the independence of the Company's independent auditors.
The Company's Nominating Committee met 1 time in fiscal year 1994; its
functions are to consider and recommend to the Board all nominees for
possible election and re-election to the Board, and to consider all
matters relating to the size and composition of the Board and the general
subject matter, size and composition of Board committees. The Nominating
Committee will consider nominees recommended by the stockholders.
Recommendations should be sent to Charles E. Rickershauser, Jr., Chairman,
Nominating Committee, c/o the Company, at the address shown on the cover
of this Proxy Statement.
The Company's Executive Compensation Committee met 2 times in fiscal
1994; its functions are to administer the Company's 1962 Deferred
Compensation Unit Plan, the Supplementary Benefit Plan, the 1982 Incentive
Stock Option Plan and the 1990 Long-Term Incentive Plan; to establish
salary ranges and salaries, bonus formulae and bonuses, and participation
in other benefit plans or programs, for elected officers; to determine
employment terminations involving payment to any individual in excess of
$150,000, and to approve employment contracts for executives extending
beyond one year; and to approve the position description, performance
standards and Key Result Areas for Bonus Criteria for the Chief Executive
Officer of the Company and to measure his performance thereunder. In
addition, the Committee recommends to the Board of Directors significant
employee benefit programs and bonus or other benefit plans affecting
individuals on the executive payroll other than elected officers.
No incumbent director attended fewer than 75% of the aggregate of (1)
the total number of meetings of the Board of Directors and (2) the total
number of meetings held by all committees of the Board on which he or she
served during 1994.
COMPENSATION OF DIRECTORS
No Company employee receives any remuneration for acting as a
director. In fiscal 1994 Messrs. Fischer, Newman, Vittert, Crain,
Rickershauser, Guerin, Schermer and Sonnenfeldt and Mrs. Sewell were paid
a $24,400 annual retainer, $1,000 for each Board meeting attended and
$700 for each Committee meeting attended. Committee chairmen were also
paid $3,000 extra as an annual retainer for acting as such. Mr. Schermer
received an additional stipend of $60,000 for his services as Chairman of
the Board. Directors engaged to provide consultative services are
compensated at the rate of $1,500 per diem. The Company in fiscal 1994
also paid to or accrued deferred compensation for Mr. Sonnenfeldt in the
amount of $40,000 for consultative services rendered to the Company and
its subsidiary, NAPP Systems Inc.
In 1984 the Board of Directors authorized "outside" directors prior to
the beginning of any Company fiscal year to elect to defer receipt of all
or any part of compensation such director might earn during such year.
Amounts so deferred will be paid to the director upon his or her ceasing
to be a director or upon attaining any specified age between 60 and 70,
together with interest thereon at the average rate of interest earned by
the Company on its invested funds during each year. Alternatively,
directors may elect to have deferred compensation credited to a "rabbi
trust" established by the Company with an independent trustee, which
administers the investment of amounts so credited for the benefit and at
the direction of the trust beneficiaries until their accounts are
distributed under the deferred compensation plan.
In 1991 the Company adopted a plan whereby it would match, on a
dollar-for-dollar basis up to $5,000 annually, charitable contributions
made by outside directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For more than 10 years, the Company has been engaged, through its
wholly owned subsidiary, Voice Response, Inc. ("VRI"), in various research
and development activities and commercial ventures in the emerging
telephone services industry. In January, 1992, the Company limited VRI's
external business activities to licensing of certain patent rights and
servicing existing customers, because of the absence of immediate business
opportunities and the need for substantial additional investment to
develop VRI's patent rights for commercial use.
In April, 1993, the Company decided to discontinue the operations as
of September 30, 1993, and to discontinue patent licensing efforts after
that date. VRI had no significant tangible assets, but retained certain
intangible patents, patent rights and associated "know-how" (the "VRI
Technology"). VRI's fiscal 1993 revenues were insignificant, while the
venture continued to have significant costs, which included the costs of
developing voice response applications for the Company's use.
The Board of Directors' decision to cease operations was reached after
careful review of VRI's business operations and was based on the following
factors: the immediate prospects for successful consummation of a license
agreement with a significant potential licensing customer were highly
speculative; continued efforts to secure such a license would require
considerable additional expense to the Company, the recovery of which is
not assured in any such licensing arrangement; and there was no other
prospect for such a licensing arrangement known to the Company's
management which could be secured without significant further commitment
of the Company's management efforts and financial resources, which could
be more profitably directed toward the Company's continuing business
operations.
Subsequently, Lloyd G. Schermer, Chairman of the Company's Board of
Directors, expressed a desire to acquire the VRI Technology from the
Company. In July, 1993 a special committee of independent directors was
appointed by the Board of Directors to review the Company's proposed
agreement with Voice Capture, Inc., a company to be formed by Mr. Schermer
to acquire the VRI Technology, and after consultation with persons with
experience in matters pertaining to telephone technology and patent
licensing, concluded that the proposed Agreement was fair to the Company.
The Company's Board of Directors (excluding Mr. Schermer), after full
consideration of the proposed Agreement and the advice of the special
committee, determined that the proposed Agreement with Voice Capture, Inc.
was fair to the Company, and approved the transactions described therein.
On October 1, 1993, Voice Capture, Inc. and the Company entered into
the Agreement, which provided, among other things, that Voice Capture,
Inc. acquire from the Company the exclusive title to the VRI Technology,
assume certain contracts, liabilities and obligations which are not
significant in the aggregate, with respect to the VRI Technology (except
monetary obligations associated with the VRI Technology incurred before
October 1, 1993), and assume the associated patent licensing activities
previously conducted by the Company.
As consideration for the transfer of the VRI Technology to Voice
Capture, Inc., the Company will receive an annual royalty from Voice
Capture, Inc. equal to fifty (50%) percent of the gross revenues from
licensing of the VRI Technology to third parties and has retained, at no
cost, a non-exclusive world-wide license to use the VRI Technology in its
continuing business or future operations. In the event the Company does
not receive from Voice Capture, Inc. aggregate royalties of $100,000 prior
to September 30, 1996, the Company has the right to reacquire the VRI
Technology and dispose of such rights as its management determines. Mr.
Schermer has personally guaranteed the payment of all royalties and the
performance of certain obligations by Voice Capture, Inc. During fiscal
1994 Voice Capture, Inc. derived no revenues from licensing activities
and, accordingly, no royalties were due or paid to the Company.
EQUITY SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of December 9, 1994 as
to each person known by the Company to own beneficially more than five
(5%) percent of the Common Stock or Class B Common Stock of the Company.
Common Percent Class B Percent
Beneficial Owner Stock of Class Common Stock of Class
New England 991,000 6.29% --- ---
Investment Co.
c/o Reich & Tang
Asset Management, L.P.
600 Fifth Avenue
8th Floor
New York, NY 10020
Lloyd G. Schermer 333,381 2.12% 596,293 8.94%
c/o Lee Enterprises,
Incorporated
215 N. Main Street
Davenport, IA 52801
Betty A. Schermer 257,803 1.64% 534,677 8.02%
c/o Lee Enterprises,
Incorporated
215 N. Main Street
Davenport, IA 52801
[FN]
Includes (i) 46,828 Common and 232,514 Class B Common shares owned
by a trust as to which Lloyd G. Schermer retains sole voting and
investment powers; (ii) 138,627 Common shares subject to
acquisition within 60 days by the exercise of outstanding stock
options; (iii) 4,962 Common and 15,105 Class B Common shares held
by a charitable foundation as to which Lloyd G. Schermer has shared
voting and investment power; (iv) 174,419 Class B Common shares
held by a charitable trust as to which Lloyd G. Schermer has sole
voting and shared investment power; and (v) 55,010 Common and
55,010 Class B Common shares held by a trust and 87,954 Common and
119,245 Class B Common shares held by a charitable trust as to
which Lloyd G. Schermer shares voting and investment powers. Lloyd
G. Schermer disclaims beneficial ownership of 147,926 Common and
363,779 Class B Common shares listed above, and of the Common and
Class B Common shares beneficially owned by Betty A. Schermer
listed above and described in footnote (2) below.
Includes (i) 164,887 Common and 375,669 Class B Common shares owned
by trusts under which Betty A. Schermer has sole voting and
investment powers; (ii) 87,954 Common and 119,245 Class B Common
shares owned by a charitable trust as to which Betty A. Schermer
shares voting and investment powers, but disclaims all beneficial
ownership; and (iii) 4,962 Common and 15,105 Class B Common shares
held by a charitable foundation as to which Betty A. Schermer has
shared voting and investment power, but disclaims all beneficial
ownership. Betty A. Schermer also disclaims beneficial ownership
of all Common and Class B Common shares beneficially owned by Lloyd
G. Schermer listed and described in footnote (1) above.
The following table sets forth information as to the Common Stock
and Class B Common Stock of the Company beneficially owned as of
December 9, 1994 by each director, each of the named executive officers
listed in the Summary Compensation Table below, and by all directors and
executive officers as a group:
Name and Class B
Address of Percent Common Percent
Beneficial Owner Common Stock of class Stock of class
Larry L. Bloom 2,310 * --- ---
1021 Carriage Place Drive
Bettendorf, IA 52722
Rance E. Crain 1,000 * --- ---
220 E. 42nd Street
Room 930
New York, NY 10017
Harry A. --- * 100 *
Fischer, Jr.
One Westbrook Corp. Cntr.
Suite 100
Westchester, IL 60153
Richard D. 243,612 1.55% 66,818 1.00%
Gottlieb
11 Deer Hill Road
Pleasant Valley, IA 52767
J. P. Guerin --- --- 53,407 *
355 S. Grand Ave.
34th Floor
Los Angeles, CA 90024
Andrew E. Newman 1,000 * --- ---
501 N. Broadway
St. Louis, MO 63102
Charles E. 1,000 * --- ---
Rickershauser, Jr.
355 S. Grand Ave.
34th Floor
Los Angeles, CA 90071
Ronald L. Rickman 142,109 * 43,678 *
3265 Woodcrest Drive
Bettendorf, IA 52722
Lloyd G. Schermer 498,268 3.16% 996,620 14.95%
c/o Lee Enterprises,
Incorporated
400 Putnam Building
215 N. Main Street
Davenport, IA 52801
Gary N. Schmedding 80,626 * 4,532 ---
5743 Lewis Court
Bettendorf, IA 52722
Phyllis Sewell 950 * 1,450 *
7716 Pinemeadow
Cincinnati, OH 45224
Richard W. Sonnenfeldt 100 * 100 *
4 Secor Drive
Port Washington, NY 11050
Name and Class B
Address of Percent Common Percent
Beneficial Owner Common Stock of class Stock of class
Mark Vittert 1,000 * --- ---
750 S. Price Road
Ladue, MO 63124
Floyd Whellan 64,758 * --- ---
6401 Utica Ridge Road
Bettendorf, IA 52722
All present executive
officers and directors
as a group (18). 1,061,697 6.67% 1,166,907 17.50%
* Less than one (1%) percent of the class.
[FN]
The following directors and officers disclaim beneficial ownership
of the following shares, included above, not owned personally by
them or held for their benefit: Schermer, 312,813 Common Stock,
764,106 Class B Common Stock; Gottlieb, 10,502 Common Stock,
16,292 Class B Common Stock; Guerin, 1,425 Class B Common Stock;
and Schmedding, 20 Common Stock.
This table includes the following shares subject to acquisition
within 60 days by the exercise of outstanding stock options:
Schermer, 138,627 Common Stock; Gottlieb, 203,340 Common Stock,
10,000 Class B Common Stock; Rickman, 117,238 Common Stock, 10,000
Class B Common Stock; Schmedding, 68,436 Common Stock; Whellan,
59,819 Common Stock; and Bloom, 960 Common Stock.
COMPENSATION OF EXECUTIVE OFFICERS
The following tables and discussion summarize the compensation which the Company paid for services
rendered in all capacities for the fiscal year ended September 30, 1994 to the chief executive officer of the
Company and to each of the four other most highly compensated executive officers of the Company.
Summary Compensation Table
Annual Compensation Long Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Annual Re- Other
Name and Comp- stricted Stock Comp-
Principal ensa- Stock Options LTIP ensa-
Position Year Salary($) Bonus($) tion($) Awards($) (#) Payouts($) tion($)
Richard D. Gottlieb 1994 $421,000 $315,750 $ 0 $ 96,600 20,000 $478,827 $165,302
President and 1993 390,000 240,000 0 83,200 17,800 98,410 211,681
Chief Executive Officer 1992 378,750 386,100 0 183,329 30,000 754,816 130,765
Ronald L. Rickman 1994 289,920 176,851 0 51,750 10,000 341,750 100,994
Vice-President-Newspapers 1993 270,400 170,352 0 56,800 15,600 64,077 154,962
1992 262,600 262,288 0 97,202 15,000 627,469 88,823
Gary N. Schmedding 1994 220,240 165,180 0 51,750 10,000 242,098 107,623
Vice-President-Broadcast 1993 206,000 119,975 0 36,000 10,400 43,509 78,539
1992 200,000 197,760 0 74,394 12,000 172,975 66,107
Floyd Whellan 1994 166,200 66,480 0 17,250 3,000 170,308 51,010
Vice-President - 1993 160,200 52,800 0 16,000 3,400 37,972 77,005
Human Resources and 1992 154,517 158,598 0 58,383 9,500 327,024 51,734
Corporate Planning
Larry L. Bloom 1994 206,000 136,240 $72,087 34,500 7,500 0 31,728
Vice President - Finance 1993 73,790 65,256 0 11,200 3,200 0 0
and Chief Financial Officer
[FN]
The Executive Compensation Committee of the Company meets each
November following the conclusion of the Company's fiscal year to
determine among other things, the amount of the annual bonus to be
awarded and the long term compensation grants to be made, if any,
for the fiscal year just concluded.
The Summary Compensation Table includes the value of shares of
restricted stock and the number of stock option shares granted by
the Executive Compensation Committee under the Company's 1990 Long
Term Incentive Plan in each of the years indicated for the
corresponding fiscal year.
Mr. Bloom joined the Company in May, 1993. Mr. Bloom was paid
additional compensation in 1994 in accordance with the Company's
Relocation Policy to compensate him for certain costs and expenses
incurred in connection with his relocation to the Company's
corporate office.
The amounts shown represent shares of restricted stock in the
following amounts granted to the named individuals in 1992, 1993 and
1994, respectively: Mr. Gottlieb, 5,803, 2,600, and 2,800 shares;
Mr. Rickman, 3,062, 1,775 and 1,500 shares; Mr. Schmedding, 2,352,
1,125 and 1,500 shares; Mr. Whellan, 1,839, 500 and 500 shares; and
Mr. Bloom, 350 and 1,000 shares. The restricted stock awarded in
1992, 1993 and 1994 will vest on the third anniversary of the grant
date. Holders of restricted stock are entitled to receive all cash
dividends paid in respect thereof during the restricted period. At
September 30, 1994, the number and market value of shares of
restricted stock (including those awarded in November, 1994) held by
each of the named executive officers were as follows: Mr. Gottlieb,
11,203 shares ($386,504); Mr. Rickman, 6,337 shares ($218,627); Mr.
Schmedding, 4,977 shares ($171,707); Mr. Whellan, 2,839 shares
($97,946); and Mr. Bloom, 1,350 shares ($46,575).
Includes replacement (reload) options awarded at exercise of non-
qualified options with payment made with restricted stock; the 1993
replacement options were awarded to the following executive
officers: Mr. Rickman, 3,500 shares; and Mr. Schmedding, 2,700
shares.
The amounts shown represent the aggregate of (a) cash distributions
to the named individuals under the Company's 1990 Long Term
Incentive Plan in 1992, 1993, and 1994 for the three year
performance cycles ending in those years; (b) the value at
September 30, 1994 of restricted stock awarded in November, 1991 and
vesting in November, 1994 for Mr. Gottlieb ($201,750), Mr. Rickman
($164,494), Mr. Schmedding ($126,901), and Mr. Whellan ($70,613);
and (c) payments in 1992 and 1994 to distribute accrued deferred
compensation account balances at September 30, 1992 and 1994 payable
under the phaseout of the 1962 Deferred Compensation Unit Plan
(discontinued in 1989). The 1992 and 1994 deferred compensation
distributions, respectively, to the named executive officers and
included in column (h) were as follows: Mr. Gottlieb, $727,190 and
$15,270; Mr. Rickman, $608,059 and $25,991; Mr. Schmedding, $160,848
and none; and Mr. Whellan, $315,303 and $10,100.
The amounts shown include (a) contributions by the Company on behalf
of the named individuals to the Company's Retirement Account Plan
and Supplemental Retirement Account, which as to the named executive
officers in 1994 were as follows: Mr. Gottlieb, $165,302; Mr.
Rickman, $100,994; Mr. Schmedding, $81,150; Mr. Whellan, $51,010;
and Mr. Bloom, $27,503; and (b) accrued compensation in 1994 of
$26,473 to the account of Mr. Schmedding in connection with the
phaseout of the 1962 Deferred Compensation Unit Plan.
Option Grants In Last Fiscal Year
Individual Grants
(a) (b) (c) (d) (e) (f)
% of Total
Options Grant
Granted to Exercise Date
Options Employees In Price Expiration Present
Name Granted Fiscal Year ($/Sh) Date Value($)
Richard D. Gottlieb 20,000 21.1% $ 33.25 31-Oct-04 $234,000
Ronald L. Rickman 10,000 10.6% 33.25 31-Oct-04 117,000
Gary N. Schmedding 10,000 10.6% 33.25 31-Oct-04 117,000
Floyd Whellan 3,000 3.2% 33.25 31-Oct-04 35,100
Larry L. Bloom 7,500 7.9% 33.25 31-Oct-04 87,750
[FN]
The options granted to the named individuals were determined by the
Executive Compensation Committee in November, 1994 following review
of each individual's performance in fiscal year 1994, and become
exercisable in installments of 30% of the original grant on each of
the first and second anniversaries of the grant date and 40% on the
third anniversary. All options are for Common Stock and have an
exercise price equal to the closing market price of the stock on the
grant date. The lesser of 25% or the maximum number of shares
permitted by law are designated as incentive stock options, and the
balance are non-qualified options. All options were granted under
the Company's 1990 Long Term Incentive Plan, the provisions of
which, among other things, allow an optionee exercising an option to
satisfy the exercise price and withholding tax obligations by
electing to have the Company withhold shares of stock otherwise
issuable under the option with a fair market value equal to such
obligations. The Plan also permits an optionee exercising an option
to satisfy the exercise price by delivering previously awarded
restricted stock or previously owned Common Stock. The limitations
accompanying the restricted stock remain in effect and apply to the
corresponding number of shares issued upon the stock option exercise
until they lapse according to their original terms.
The "grant date present value" is a hypothetical value determined
under the Black-Scholes Option Pricing Model. It is one of the
methods permitted by the Securities and Exchange Commission for
estimating the present value of options. The Company's stock
options are not transferrable, and the actual value of the stock
options that an executive officer may realize, if any, will depend
on the excess of the market price on the date of exercise over the
exercise price. The Black-Scholes Option Pricing Model is based on
assumptions as to certain variables such as the volatility of the
Company's stock price and prevailing interest rates, so there is no
assurance that an individual will actually realize the option values
presented in this table.
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year End Option Values
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value FY End (#) FY End ($)
Acquired On Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
Richard D. Gottlieb 0 $ 0 213,340 $1,924,725
44,460 96,650
Ronald L. Rickman 0 0 127,238 1,176,800
24,470 53,925
Gary N. Schmedding 0 0 68,436 573,775
20,190 42,175
Floyd Whellan 16,381 253,906 59,819 464,025
9,180 22,525
Larry L. Bloom 0 0 960 3,600
9,740 17,775
[FN]
All options are for Common Stock or Class B Common Stock and were
granted under the Company's 1982 Incentive Stock Option Plan or the
1990 Long Term Incentive Plan.
Market value of underlying securities at exercise date minus the
exercise price.
Options granted under the Company's 1990 Long Term Incentive Plan
become exercisable in three installments over a period of three years
from the date of grant. The number of unexercisable options shown
includes those granted by the Executive Compensation Committee in
November, 1994 for the fiscal year just concluded.
Market value of underlying securities at September 30, 1994 ($34.50),
minus the exercise price.
Long Term Incentive Plans - Awards in Last Fiscal Year
The Executive Compensation Committee decided in January, 1993 to
cancel, as to executive officers of the Company, outstanding performance
units awarded for three year performance cycles ending in 1993 and 1994.
The Committee recognized that such termination would have an adverse
financial impact for the Company's executive officers, and determined in
November, 1993 and 1994 to pay each executive officer, in cash, a
discretionary amount equal to one-half of the value of performance units
earned at the end of the 1993 and 1994 cycles. Each executive officer
named in the Summary Compensation Table (except Mr. Bloom, who was not
affected by the Committee's decision) received payment in cash, the amount
of which is shown in column (h) of the Table.
The Committee further determined in November, 1992 not to make any
performance unit awards in future fiscal years under the Company's Long
Term Incentive Plan. The Committee made its decisions after careful
examination of the Plan, the award of performance units thereunder, and
the relationship between award performance and the compensation objectives
of the Committee for executive officers of the Company. The Committee
does not intend to make performance unit awards during fiscal year 1995.
Pension Plans
Under the Company's Retirement Account and Supplementary Benefit
Plans, the Company matches employee contributions up to 5% of employee
compensation and, in addition, contributes 6.2% of a participant's total
compensation plus an additional 5.7% of such compensation in excess of
$60,600. These retirement plans are defined contribution plans and were
adopted in 1980 to replace the Company's Pension Plan, a defined benefit
plan. The Company and employee contributions are invested and the total
amount standing to each employee's credit is paid following his or her
retirement. The amounts credited in fiscal 1994 under the Retirement
Account and Supplementary Benefit Plans to the accounts of the persons
listed in the Summary Compensation Table were as follows: Mr. Gottlieb,
$165,302; Mr. Rickman, $100,994; Mr. Schmedding, $107,623; Mr. Whellan,
$51,010; and Mr. Bloom, $27,503.
The Company's Pension Plan was superseded in 1980 by the Retirement
Account Plan. Annual benefits under the Pension Plan payable upon
retirement at age 65 to the individuals listed in the Summary Compensation
Table are as follows: Mr. Gottlieb, none; Mr. Rickman, $11,574; Mr.
Schmedding, $1,376; Mr. Whellan, none; and Mr. Bloom, none.
Executive Agreements
The Company is obliged under written agreements to pay to Messrs.
Gottlieb, Rickman, Schmedding and Whellan a multiple of three times the
executive officer's base salary in the event of termination of his
employment without cause. The Company determined in 1991 not to enter
into such agreements in the future with its executive officers.
PERFORMANCE PRESENTATION
The graphical presentation omitted herein compares the yearly
percentage change in the cumulative total shareholder return of the
Company, the Standard & Poor's (S & P) 500 Stock Index, and the S & P
Publishing/Newspapers Index, in each case for the five years ending
September 30, 1994. Total shareholder return is measured by dividing (a)
the sum of (i) the cumulative amount of dividends declared for the
measurement period, assuming dividend reinvestment and (ii) the difference
between the issuer's share price at the end and the beginning of the
measurement period, by (b) the share price at the beginning of the
measurement period.
The following data points were utilized in preparation of the omitted
graph.
1989 1990 1991 1992 1993 1994
Lee $100.00 $ 64.83 $ 75.08 $108.65 $109.43 $123.32
S&P Publishing/
Newspapers-
Index 100.00 66.50 83.85 99.66 101.86 102.48
S&P 500 100.00 90.76 119.20 132.20 149.39 154.89
The (S & P) 500 Stock Index includes 500 U.S. companies in the industrial,
transportation, utilities and financial sectors and is weighted by market
capitalization. The S & P Publishing/Newspapers Index, which is also
weighted by market capitalization, includes the following six publishing
companies: Gannett Co., Inc., Knight-Ridder, Inc., The New York Times
Company, The Times Mirror Company, Dow Jones & Company, Inc. and Tribune
Company.
Report of the Executive Compensation Committee of the
Board of Directors on Executive Compensation
The Committee
The Executive Compensation Committee of the Board of Directors (the
"Committee") is composed of four independent outside directors. No
executive officer of the Company is a member of the Board of Directors of
any company with which a member of the Committee is affiliated. The Board
of Directors has delegated to the Committee the authority to review,
consider and determine the compensation of the Company's executive
officers and other key executive employees and, in accordance with Rule
16b-3 of the Exchange Act, make the final determination regarding awards
of stock options, restricted stock, and other stock-based awards to such
persons.
Compensation Policies
The Committee operates on the principle that the compensation of the
Company's executive management, including its Chief Executive Officer and
the other executive officers named in the Summary Compensation Table,
should be competitive with compensation of executive management at
comparable companies but should not be at the top of any range derived
from such comparisons. The Committee also follows a policy of basing a
significant portion of the cash compensation of senior executive officers
on the operating performance of the Company, and of other members of the
executive management team on the performance of the enterprises units or
functions over which they exercise significant management responsibility.
The Committee's policies are designed to assist the Company in attracting
and retaining qualified executive management by providing competitive
levels of compensation that integrate the Company's annual and long term
performance goals, reward strong corporate performance, and recognize
individual initiative and achievements. The Committee also believes that
stock ownership by management and stock-based performance compensation
arrangements are beneficial in the linking management's and stockholders'
interests in the enhancement of stockholder value.
The Company's executive compensation program is comprised of three
elements: (1) base salary; (2) annual incentive bonus; and (3) long term
incentive compensation.
Base Salary
Salary levels for executive management are set so as to reflect the
duties and level of responsibilities inherent in the position, and to
reflect competitive conditions in the lines of business in which the
Company is engaged in the geographic areas where services are being
performed. Comparative salaries paid by other companies in the industries
and locations where the Company does business are considered in
establishing the salary for a given position. The Company participates
annually in the Towers Perrin Media Industry Compensation Survey, which is
widely used in its industry and gives relevant compensation information on
executive positions. The Company strives to place fully competent and
highly performing executives at or above the median level of compensation,
as reported annually in the Towers Survey.
The Towers Survey provides annual compensation analyses for executives
in the media industry based on revenues, industry segments including
publishing and broadcasting, and market type and size. The statistical
information, including revenues and compensation levels, provided by
Survey participants is utilized by the Towers Survey to develop
statistical equations based on revenues, industry segments and markets.
These equations, along with other data, are used by the Company to
determine the median and other levels of compensation of the executive
management of media companies with profiles comparable to that of the
Company. Base salaries for executives named in the Summary Compensation
Table are reviewed annually by the Committee taking into account the
competitive level of pay as reflected in the Towers Survey. In setting
base salaries, the Committee also considers a number of factors relating
to the particular executive, including individual performance, level of
experience, ability and knowledge of the job. Base salaries were
increased in 1994 for executive management by 5.29% on a composite basis.
The Committee believes the base salary levels are reasonable and necessary
to retain these key employees.
Annual Incentive Bonus Plan
The purpose of the annual incentive bonus plan is to motivate and
reward executive management so that they consistently achieve specific
financial targets, and are compensated for the accomplishment of certain
non-financial objectives. These targets and objectives are reviewed and
approved by the Committee annually in conjunction with its review of the
Company's strategic and operating plans. A target bonus level, stated as
a percent of year end salary, is established for each member of the
executive management team, other than executive officers, by the executive
officer exercising responsibility over an enterprise unit or function.
For executive officers other than the Chief Executive Officer, the bonus
level and achievement targets are determined by the Chief Executive
Officer and approved by the Committee. Similarly, the Committee
determines the annual bonus opportunity and performance objectives of the
Chief Executive Officer. While the annual incentive bonus awards for
executives other than the Chief Executive Officer are generally approved
upon the recommendation of the Chief Executive Officer, the Committee
retains the right to adjust the recommended bonus awards to reflect its
evaluation of the Company's overall performance.
Long Term Incentive Plan
Under the Company's Long Term Incentive Plan, the Committee is
authorized, in its discretion, to grant stock options, restricted stock
awards, and performance units payable in cash or restricted stock of the
Company, in such proportions and upon such terms and conditions as the
Committee may determine. The Committee meets in November of each year to
evaluate the performance of the Company for the preceding fiscal year and
determine the annual incentive bonus and long term incentive awards of
executive management of the Company, for the fiscal year just ended. In
November, 1994 the Committee made the following determinations with
respect to long term compensation for the Company's executive management.
Performance Unit Awards
As noted above, performance unit awards made in 1990 and 1991 for the
three year cycles ending in 1993 and 1994 were cancelled, as to executive
officers, by the Committee in January, 1993. The Committee agreed to
permit completion of the three year cycles and related performance unit
awards previously made for persons other than executive officers, but made
no performance unit awards for the three year cycles commencing in fiscal
years 1993 and 1994. The Committee has considered and will continue to
consider, in addition to objective performance criteria, certain non-
quantitative factors including the accomplishment of specific goals
established by the Board of Directors and the Committee in connection with
long term compensation to executive officers for 1994 and succeeding
years, and for other executive management employees of the Company
following the conclusion of the performance unit cycles presently
outstanding. The Summary Compensation Table includes payments to
executive officers for performance unit awards made in 1989 based upon
cumulative earnings per share and revenue growth targets established for
the three year cycle ending in 1992. The cumulative targets were only
partially achieved, and therefore, consistent with the Company's
philosophy of relating compensation to performance, performance unit
awards paid to participants in the Long Term Incentive Plan, including
executive officers, reflected less than targeted achievement. The
performance unit awards were paid equally in restricted stock and cash at
the completion of the performance cycle. As noted previously, the
Committee determined to make discretionary payments to executive officers
in lieu of performance unit awards made in 1990 and 1991 for the three
year cycles ending in 1993 and 1994 of one-half of the amount that would
have been earned.
Stock Option Grants
The number of stock options granted to each executive officer in 1994
was determined by dividing a specified dollar amount for the grant by a
hypothetical fair market value of the stock option as of the grant date,
based upon the Black-Scholes Option Pricing Model. The more responsible
the executive officer's position, the greater the dollar amount of the
grant. All stock options granted have an exercise price equal to the fair
market value of the Common Stock at time of grant. In order to assure the
retention of high level executives and to tie the compensation of those
executives to the creation of long-term value for shareholders, the
Committee provided that these stock options generally vest in specified
portions over a three year period.
Restricted Stock Awards
In November, 1994, the Committee granted to executive officers and
other key employees awards of restricted stock, which represent shares of
the Common Stock of the Company and which the recipient cannot sell or
otherwise transfer until the applicable restriction period lapses. The
number of shares of restricted stock awarded is generally determined by
dividing a specified dollar amount for the target award by the fair market
value of the Company's Common Stock on the date such awards are approved.
The number of shares then determined is reviewed by the Committee and may
be increased or decreased to reflect a number of criteria including, but
not limited to, the Company's past operating performance, the individual
executive's role in accomplishment of the Company's operating objectives,
and that individual's potential for long term growth and contribution to
the Company's strategic objectives. Restricted stock awards are also
intended to increase the ownership of executives in the Company, through
which the value of long term stockholder ownership and growth can be
enhanced.
Compensation of Chief Executive Officer
The Committee determined the 1994 base salary for the Company's Chief
Executive Officer, Richard D. Gottlieb, in a manner consistent with the
base salary guidelines applied to executive officers of the Company as
described above. The annual bonus paid to Mr. Gottlieb for 1994 was based
upon a subjective evaluation of the performance of the Company in relation
to past years and the performance of comparable media companies, and to a
lesser extent, his accomplishment of certain non-financial performance
objectives. In making that evaluation, the Committee gave particular
weight to the consistently high performance of the Company in relation to
its peers in revenue growth, operating income growth, and operating cash
flow growth, which contributed in 1994 to record levels of revenue,
operating income and operating cash flow. When examining the performance
of peer group companies for the past three years, the Committee found the
Company's performance, overall and in its primary business segments of
newspaper publishing and broadcasting, to be well above the median
performance of its peer group in all categories.
The Committee made long term compensation awards of stock options and
restricted stock to Mr. Gottlieb in 1994 by applying the same criteria
described for the determination of such awards to other executive officers
of the Company. The Committee did not consider past stock options and
restricted stock grants to Mr. Gottlieb in determining the amount of his
1994 grants. The Committee did consider the consistently exceptional
performance of the Company, as more particularly described above, in the
final determination of such grants.
Executive Compensation Committee Participation
The current members of the Executive Compensation Committee are
Phyllis Sewell, Chairman, Mark Vittert, Rance E. Crain and Andrew E.
Newman.
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of McGladrey & Pullen, Certified Public Accountants, has been
designated by the Board of Directors of the Company to audit the financial
statements of the Company, its divisions and subsidiaries, for the fiscal
year to end September 30, 1994. Said firm has audited the Company's
account since 1960 and is considered to be well qualified.
Representatives of McGladrey & Pullen will be present at the 1995
annual meeting and will be afforded the opportunity to make a statement,
if they desire to do so, and will be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1996 annual
meeting of the Company must be received by the Company for inclusion in
its proxy statement and form of proxy relating to that meeting by
August 15, 1995.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires the Company's directors and executive officers and persons who
own more than ten percent of the Company's Common Stock or Class B Common
Stock to file initial reports of ownership and reports of changes in that
ownership with the Securities and Exchange Commission (the "SEC") and the
New York Stock Exchange. Specific due dates for these reports have been
established, and the Company is required to disclose in its proxy
statement any failure to file by these dates during the Company's 1994
fiscal year.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required,
the Company believes that all filing requirements applicable to its
executive officers and directors were satisfied, except that a benefit
trust of which Mr. Rickershauser is trustee reported late the acquisition
of certain shares as to which Mr. Rickershauser has beneficial ownership.
OTHER MATTERS
The Management of the Company knows of no matters to be presented at
the meeting other than those set forth in the Notice of Annual Meeting.
However, if any other matters properly come before the meeting, your
proxy, if signed and returned, will give discretionary authority to the
persons designated in it to vote in accordance with their best judgment.
The cost of the solicitation of proxies will be borne by the Company.
In addition to solicitation by mail, some of the officers and regular
employees of the Company may, without extra renumeration, solicit proxies
personally or by telephone or telegraph. The Company may also request
brokerage houses, nominees, custodians and fiduciaries to forward proxy
materials to the beneficial owners of stock held of record and will
reimburse such persons for their expenses. The Company has retained D. F.
King & Co. Inc. to aid in the solicitation of proxies, for which the
Company will pay an amount which it is estimated will not exceed $8,500
plus expenses.
RICHARD D. GOTTLIEB
President and Chief Executive Officer
