The E.W. Scripps Company DEF 14A
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
Proxy Statement |
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
þ Definitive Proxy
Statement |
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o Definitive
Additional Materials |
o Soliciting
Material Pursuant to Section 240.14a-11c or Section 240.14a-12 |
The E.W. Scripps Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1) |
Title of each class of securities to which transaction applies: |
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(2) |
Aggregate number of securities to which transaction applies: |
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(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11 (set
forth the amount on which the filing fee is calculated and state
how it was determined): |
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(4) |
Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing. |
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(1) |
Amount Previously Paid: |
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(2) |
Form, Schedule or Registration Statement No.: |
TABLE OF CONTENTS
THE E. W. SCRIPPS COMPANY
Scripps Center
312 Walnut Street
Cincinnati, Ohio 45202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 2006
TO THE SHAREHOLDERS OF THE E. W. SCRIPPS COMPANY
The Annual Meeting of the Shareholders of The E. W. Scripps
Company (the Company) will be held at the Queen City
Club, Cincinnati, Ohio, on Thursday, May 4, 2006 at
10:00 a.m., local time, for the following purposes:
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to fix the number of directors and to elect persons as directors
of the Company; |
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2. |
to approve a technical amendment to the Companys Code of
Regulations; and |
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3. |
to transact such other business as may properly come before the
meeting. |
The board of directors has fixed the close of business on
March 10, 2006 as the record date for the determination of
shareholders who are entitled to notice of and to vote at the
meeting and any adjournment thereof.
We encourage you to attend the meeting and vote your shares in
person. If you plan to attend the meeting and need special
assistance because of a disability, please contact the corporate
secretarys office.
We have enclosed the 2005 Annual Report, including financial
statements, and the Proxy Statement with this Notice of Annual
Meeting.
It is important that your shares be represented at the meeting,
whether or not you are personally able to attend. Registered
shareholders can vote their shares by using a toll-free
telephone number or the Internet. Instructions for using these
convenient services are set forth on the enclosed proxy card. Of
course, you may still vote your shares by marking your vote on
the enclosed proxy card and signing, dating and mailing it in
the envelope provided. Returning your executed proxy card, or
voting your shares using the toll-free number or the Internet,
will not affect your right to attend the meeting and vote your
shares in person.
Your proxy is being solicited by the board of directors.
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Mary Denise
Kuprionis, Esq.
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Vice President |
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Corporate Secretary/Director of Legal Affairs |
March 31, 2006
The E. W. Scripps Company
312 Walnut Street
Cincinnati, Ohio 45202
PROXY STATEMENT
2006 ANNUAL MEETING
May 4, 2006
This proxy statement, together with the accompanying notice of
meeting, proxy card and annual report, is being mailed to
shareholders on or about March 31, 2006. It is furnished in
connection with the solicitation of proxies by the Board of
Directors of The E. W. Scripps Company, an Ohio corporation (the
Company) for use at the Companys Annual
Meeting of Shareholders which will be held on Thursday,
May 4, 2006.
The close of business on March 10, 2006 has been fixed as
the record date for the determination of shareholders entitled
to notice of and to vote at the meeting.
On February 28, 2006 the Company had outstanding
127,026,354 Class A Common Shares, $.01 par value per
share (Class A Common Shares), and 36,668,226
Common Voting Shares, $.01 par value per share
(Common Voting Shares). Holders of Class A
Common Shares are entitled to elect the greater of three or
one-third of the directors of the Company but are not entitled
to vote on any other matters except as required by Ohio law.
Holders of Common Voting Shares are entitled to elect all
remaining directors and to vote on all other matters requiring a
vote of shareholders. Each Class A Common Share and Common
Voting Share is entitled to one vote upon matters on which such
class of shares is entitled to vote.
PROPOSAL 1
Election of Directors
A board of twelve directors is to be elected, four by the
holders of Class A Common Shares voting separately as a
class and eight by the holders of Common Voting Shares voting
separately as a class. In the election, the nominees receiving
the greatest number of votes will be elected. All directors will
hold office until the next Annual Meeting of Shareholders.
Each proxy for Class A Common Shares executed and returned
by a holder of such shares will be voted for the election of the
four directors hereinafter shown as nominees for such class of
shares, unless otherwise indicated on such proxy. Each proxy for
Common Voting Shares executed and returned by a holder of such
shares will be voted for the election of the eight directors
hereinafter shown as nominees for such class of shares, unless
otherwise indicated on such proxy. Although the board of
directors does not contemplate that any of the nominees
hereinafter named will be unavailable for election, in the event
that any such nominee is unable to serve, the proxies will be
voted for the remaining nominees and for such other person(s),
if any, as the board may propose.
1
REPORT ON THE NOMINEES FOR ELECTION TO THE BOARD OF
DIRECTORS
The following table sets forth certain information as to each of
the nominees for election to the board of directors.
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Director | |
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Principal Occupation or Occupation/Business |
Name |
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Age | |
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Since | |
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Experience for Past Five Years |
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Nominees for Election by Holders of Class A Common
Shares |
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David A. Galloway (1)
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62 |
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2002 |
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President and Chief Executive Officer of Torstar Corporation
from 1988 until his retirement in May 2002 (a media company
listed on the Toronto Stock Exchange). |
Nicholas B. Paumgarten (2)
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60 |
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1988 |
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Chairman, Corsair Capital LLC (an investment firm) since March
2006, Managing Director of J.P. Morgan Chase and Chairman
of J.P. Morgan Corsair II Capital Partners L.P. from
February 1992 to March 2006 (an investment banking firm and an
investment fund). |
Ronald W. Tysoe (3)
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52 |
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1996 |
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Vice Chairman since December 1997 and Vice Chairman and Chief
Financial Officer from April 1990 to December 1997 of Federated
Department Stores, Inc. |
Julie A. Wrigley
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57 |
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1997 |
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President and CEO of Wrigley Investments, LLC since March 1999,
Chairman and CEO of Wrigley Management Inc. from 1995 through
1998, Assistant to the President/CEO of Wm. Wrigley Jr. Company
from 1994 through 1998, Investment Advisor & Manager of
Wrigley Family Trusts and Estates from 1977 through 1998. |
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Nominees for Election by Holders of Common Voting Shares |
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William R. Burleigh (4)
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70 |
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1990 |
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Chairman of the Company since May 1999. Chief Executive Officer
from May 1996 to September 2000, President from August 1994 to
January 2000, Chief Operating Officer from May 1994 to May 1996,
Executive Vice President from March 1990 through May 1994 and
Senior Vice President/Newspapers and Publishing from September
1986 to March 1990. |
John H. Burlingame (5)
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72 |
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1988 |
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Retired Partner since January 2003, Active Retired Partner from
January 2000 to December 2002, Senior Partner from January 1998
to December 1999, Partner from June 1997 through December 1997
and Executive Partner from 1982 through 1997 of Baker &
Hostetler LLP (law firm). |
Kenneth W. Lowe (6)
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55 |
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2000 |
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President and Chief Executive Officer of the Company since
October 2000, and President and Chief Operating Officer from
January 2000 to September 2000. Chairman and CEO of Scripps
Networks, a subsidiary of the Company, from 1994 to January 2000. |
Jarl Mohn (7)
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54 |
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2002 |
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Trustee of the Mohn Family Trust since September 1991; President
and Chief Executive Officer of Liberty Digital, Inc. from
January 1999 to March 2002. President and CEO of E!
Entertainment Television from January 1990 to December 1998. |
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Director | |
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Principal Occupation or Occupation/Business |
Name |
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Since | |
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Experience for Past Five Years |
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Jeffrey Sagansky (8)
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54 |
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2003 |
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Chairman, Ardustry Home Entertainment since April 2005;
Chairman, Peoples Choice Cable TV since January 2005; Vice
Chairman of Paxson Communications from December 2002 to August
2003. President and CEO of Paxson from 1998 to December 2002.
Co-President, Sony Pictures Entertainment, from 1996 to 1998.
President of CBS Entertainment 1990 to 1994. |
Nackey E. Scagliotti (5)(9)
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60 |
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1999 |
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Chairman of the Board of Directors since May 1999 and Assistant
Publisher from 1996 to May 1999 of The Union Leader Corporation
(New Hampshire publisher of daily, Sunday and weekly
newspapers). Former President (1999 through 2003) and Publisher
(1999 and 2000) of Neighborhood Publications, Inc. (New
Hampshire publisher of weekly newspapers). |
Edward W. Scripps (5)(9)
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47 |
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1998 |
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Lifetime Emeritus Trustee of the Scripps Howard Foundation.
Trustee of the Scripps Howard Foundation from August 2001 to
July 2004 and from 1994 through 1998. Vice President of Scripps
Howard Foundation from 1995 through 1998. News Director at
KJRH-TV, a division of a subsidiary of the Company from February
1983 through September 1993. |
Paul K. Scripps (9)(10)
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60 |
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1986 |
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Vice President/Newspapers of the Company from November 1997 to
December 2001 and Chairman from December 1989 to June 1997 of a
subsidiary of the Company. |
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(1) |
Mr. Galloway is chairman of the board of directors of the
Bank of Montreal, and a director of Toromont Industries (a
Caterpillar machinery dealer and gas compression company),
Harris Bankmont (a Midwest bank), and Hudson Bay Company (a
retail merchandise company). |
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(2) |
Mr. Paumgarten is a director of Compucredit (a credit card
company), Catlin Group Ltd. (a property and casualty reinsurance
company) and Post Properties, Inc. (a real estate investment
trust). |
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(3) |
Mr. Tysoe is a director of Canadian Imperial Bank of
Commerce and of Ohio Casualty Corporation (the holding company
of The Ohio Casualty Insurance Company). |
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(4) |
Mr. Burleigh is a director of Ohio National Financial
Services Company (a mutual insurance and financial services
company). |
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(5) |
Mr. Burlingame, Mrs. Scagliotti and Mr. Edward W.
Scripps are trustees of The Edward W. Scripps Trust. |
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(6) |
Mr. Lowe is a director of Fifth Third Bancorp (a Midwest
bank). |
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(7) |
Mr. Mohn is a director of CNET (a web-based computer
consumer electronics information service), XM Satellite Radio
Holdings, Inc. (a satellite radio service provider) and MobiTV
(a private company that provides live television and video
programming to cell phones). |
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(8) |
Mr. Sagansky is a director of American Media (a publishing
company). |
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(9) |
Mrs. Scagliotti and Mr. Edward W. Scripps are first
cousins and are income beneficiaries of The Edward W. Scripps
Trust. Mr. Paul K. Scripps is a second cousin to
Mrs. Scagliotti and Mr. Edward W. Scripps. |
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(10) |
Mr. Paul K. Scripps serves as a director of the Company
pursuant to an agreement between The Edward W. Scripps Trust and
John P. Scripps. See Certain Transactions John
P. Scripps Newspapers. |
3
REPORT ON THE BOARD OF DIRECTORS AND ITS COMMITTEES
2005 Board and Committee Meetings
The board held four regularly scheduled meetings and one special
meeting. The following committees of the board held the number
of meetings indicated: Executive, one; Audit, six; Compensation
and Incentive Plan, four; and Nominating & Governance,
five. Each director attended each of the meetings of the board
and the committees on which he or she served, except one
director who missed one board meeting.
Committees
Executive Committee. William R. Burleigh (chairman), John
H. Burlingame and Kenneth W. Lowe are the members of the
executive committee which, if necessary, exercises all of the
powers of the board in the management of the business and
affairs of the Company between board meetings except the power
to fill vacancies on the board or its committees.
Audit Committee. Ronald W. Tysoe (chairman), Jeffrey
Sagansky and Julie A. Wrigley are the members of the audit
committee. Among other things, the audit committee appoints the
independent auditors each year, reviews the audit plans of both
the internal and independent auditors, evaluates the adequacy of
and monitors compliance with corporate accounting policies, and
reviews the Companys annual and quarterly financial
statements. The internal and independent auditors have
unrestricted access to the audit committee. The committee meets
privately with each of the independent auditors, the internal
auditors and management. The committees charter is
available for review on the Companys Web site,
www.scripps.com.
Compensation Committee. David A. Galloway (chairman),
John H. Burlingame, Jarl Mohn, Edward W. Scripps and Ronald W.
Tysoe are the members of the compensation committee, which
oversees all compensation matters relating to the Companys
senior executives. The committees charter is available for
review on the Companys Web site.
Incentive Plan Committee. David A. Galloway (chairman),
Jarl Mohn and Ronald W. Tysoe, three of the Companys
independent directors, are the members of the incentive plan
committee, which approves all awards under the Companys
Long-Term Incentive Plan and approves all performance-based
bonus awards for the Companys senior executives. The
incentive plan committee is a subcommittee of the compensation
committee and meets at the same time as the compensation
committee.
Nominating & Governance Committee. John H.
Burlingame (chairman), William R. Burleigh, Nicholas B.
Paumgarten, Nackey E. Scagliotti and Julie A. Wrigley are the
members of the nominating & governance committee. The
purpose of the committee is to review the size and composition
of the board, to recommend nominees to the board of directors,
to formulate policies of board conduct and to insure that the
board adopts appropriate corporate governance standards. The
committees charter is available for review on the
Companys Web site. The Edward W. Scripps Trust holds a
majority of the Companys Common Voting Shares, which
qualifies the company as a controlled company as
defined by Section 303A of the listing standards of the New
York Stock Exchange. As such, the Company could avail itself of
an exemption such status affords it from compliance with the
Exchanges requirements to have a majority of independent
directors and an independent nominating and corporate governance
committee and an independent compensation committee. The board
of directors has determined that a majority of its board of
directors is independent. When selecting new director nominees,
the committee considers any requirements of applicable law or
listing standards, as well as a candidates strength of
character, judgment, business experience, specific areas of
expertise, factors relating to the composition of the board
(including its size and structure) and principles of diversity.
The committee will review any candidate recommended by the
shareholders of the Company in light of the committees
criteria for selection of new directors. If a shareholder wishes
to recommend a candidate, he or she should send his or her
recommendation, with a description of the candidates
qualifications, to: Chairman, Nominating & Governance
Committee, c/o Mrs. Mary Denise Kuprionis, The
E. W. Scripps Company, 312 Walnut
4
Street, Suite 2800, Cincinnati, Ohio 45202. In the past,
the committee has hired an independent consultant to assist with
the identification and evaluation of director nominees and may
do so in the future.
REPORT ON THE COMPENSATION OF DIRECTORS
Since January 1, 2005, directors who are not employees of
the Company have received an annual fee of $40,000 and an
additional $2,500 for each board of directors meeting they
attended. A summary of all fees paid to non-employee directors
follows. Directors who are employees of the Company do not
receive any compensation for services as directors or committee
members.
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Annual retainer for the chairman of the board
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100,000 |
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Annual retainer
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40,000 |
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Board per meeting fee
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2,500 |
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Executive Committee per meeting fee
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2,000 |
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Audit Committee per meeting fee
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2,500 |
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Compensation Committee per meeting fee
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2,000 |
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Nominating and Governance Committee per meeting fee
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2,000 |
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Executive Committee annual chair fee
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3,000 |
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Audit Committee annual chair fee
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9,000 |
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Compensation Committee annual chair fee
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6,000 |
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Nominating & Governance Committee annual chair fee
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3,000 |
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Consistent with past practice, in April 2005, non-employee
directors received a nonqualified stock option to
purchase 10,000 of the Companys Class A Common
Shares.
5
REPORT ON THE SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
The following table sets forth certain information with respect
to persons known to management to be the beneficial owners, as
of December 31, 2005, of more than five percent of the
Companys 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.
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Common | |
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Class A | |
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Voting | |
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Name and Address Of Beneficial Owner |
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Common Shares | |
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Percent | |
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Shares | |
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The Edward W. Scripps Trust (1)
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39,192,222 |
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30.87 |
% |
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32,080,000 |
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87.49 |
% |
13350 Metro Parkway, Suite 301
Fort Myers, Florida 33912 |
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Paul K. Scripps and
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1,230 |
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% |
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3,232,226 |
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8.81 |
% |
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John P. Scripps Trust (2)
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5360 Jackson Drive, Suite 206
La Mesa, California 91942 |
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AXA Financial Inc. (3)
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11,879,401 |
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9.40 |
% |
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1290 Avenue of the Americas
New York, New York 10104 |
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Capital Research and Management
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7,372,800 |
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5.80 |
% |
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Company (4) |
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333 South Hope Street
Los Angeles, California 90071 |
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(1) |
Under the Trust Agreement establishing The Edward W.
Scripps Trust (the Trust), the Trust must retain
voting shares sufficient to ensure control of the Company until
the final distribution of the Trust estate unless earlier stock
dispositions are necessary for the purpose of preventing loss or
damage to such estate. The trustees of the Trust are John H.
Burlingame, Edward W. Scripps and Nackey Scagliotti. The Trust
will terminate upon the death of the last to survive of two
persons specified in the Trust, the younger of whom is
86 years of age. Upon the termination of the Trust,
substantially all of its assets (including all shares of capital
stock of the Company held by the Trust) will be distributed to
the grandchildren of Robert Paine Scripps (a son of Edward W.
Scripps), of whom there are 27. Certain of these grandchildren
have entered into an agreement among themselves, other cousins
and the Company which will restrict transfer and govern voting
of Common Voting Shares to be held by them upon termination of
the Trust and distribution of the Trust estate. See
Certain Transactions Scripps Family
Agreement. |
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(2) |
See footnote 5 to the table under Security Ownership
of Management. |
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(3) |
AXA Financial Inc. filed a Schedule 13G with the Securities
and Exchange Commission with respect to the Companys
Class A Common Shares on February 14, 2006. The
information in the table is based on the information contained
in such filing for the year ended 2005. Such report states that
AXA Financial Inc. has sole voting power over
6,856,036 shares, shared voting power over
35,506 shares and sole investment power over
11,879,401 shares. The 13G was filed pursuant to the Joint
Filing Agreement with respect to Schedule 13G among AXA
Financial Inc, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances
Vie Mutuelle, AXA Courtage Assurance Mutuelle, and AXA. |
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(4) |
Capital Research and Management Company filed a
Schedule 13G with the Securities and Exchange Commission
with respect to the Companys Class A Common Shares on
February 6, 2006. The information in the table is based on
the information contained in such filing for the year ended
2005. Such report states that Capital Research and Management
Company has sole voting power over 6,372,800 shares and
sole investment power over 7,372,800 shares. |
6
REPORT ON THE SECURITY OWNERSHIP OF MANAGEMENT
The following information is set forth with respect to the
Companys Class A Common Shares and Common Voting
Shares beneficially owned as of January 31, 2006 by each
director and each nominee for election as a director of the
Company, by each named executive, and by all directors and
executive officers of the Company as a group. Unless otherwise
indicated, the persons named in the table have sole voting and
investment power with respect to all shares shown therein as
being beneficially owned by them. Also included in the table are
shares owned by The Edward W. Scripps Trust, the trustees of
which are directors of the Company.
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Common | |
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Name of Individual or |
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Class A | |
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Voting | |
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Number of Persons in Group |
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Common Shares(1) | |
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William R. Burleigh
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394,830 |
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* |
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John H. Burlingame (2)
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51,428 |
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* |
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David A. Galloway
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27,000 |
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* |
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Kenneth W. Lowe
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1,490,972 |
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* |
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Jarl Mohn (3)
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30,600 |
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* |
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Nicholas B. Paumgarten (4)
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60,300 |
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* |
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Jeffrey Sagansky
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15,000 |
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* |
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Nackey E. Scagliotti (2)
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54,400 |
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* |
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Edward W. Scripps (2)
|
|
|
56,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Paul K. Scripps (5)
|
|
|
31,230 |
|
|
|
* |
|
|
|
3,232,226 |
|
|
|
8.81 |
% |
Ronald W. Tysoe
|
|
|
60,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Julie A. Wrigley
|
|
|
117,344 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Richard A. Boehne
|
|
|
601,399 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Joseph G. NeCastro
|
|
|
142,798 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
Mark G. Contreras
|
|
|
13,436 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
William B. Peterson
|
|
|
50,585 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group
(24 persons) (6)
|
|
|
43,001,503 |
|
|
|
33.88 |
% |
|
|
35,312,226 |
|
|
|
96.30 |
% |
|
|
|
|
* |
Shares owned represent less than one percent of the outstanding
shares of such class of stock. |
|
|
(1) |
The shares listed for each of the officers and directors include
Class A Common Shares underlying exercisable options and
options that are exercisable within 60 days of
January 31, 2006, held by him or her. The shares listed do
not include the balances held in any of the directors
phantom share accounts that are the result of an election to
defer compensation under the 1997 Deferred Compensation and
Stock Plan for Directors. |
|
(2) |
These persons are trustees of the Trust and have the power to
vote and dispose of the 39,192,222 Class A Common Shares
and the 32,080,000 Common Voting Shares of the Company held by
the Trust. Mr. Burlingame disclaims any beneficial interest
in the shares held by the Trust. |
|
(3) |
The shares for Mr. Mohn include shares held jointly with
other family members and shares owned as a trustee of a family
trust. |
|
(4) |
The shares listed for Mr. Paumgarten include
1,700 shares owned by his wife. Mr. Paumgarten
disclaims beneficial ownership of such shares. |
|
(5) |
The shares listed for Mr. Paul K. Scripps include 239,040
Common Voting Shares and 816 Class A Common Shares held in
various trusts for the benefit of certain of his relatives and
208 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 2,890,906 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 698,036 |
7
|
|
|
Common Voting Shares. He disclaims beneficial ownership of the
shares held in the other four trusts. |
|
(6) |
Please see footnote 1 under Report on the Security
Ownership of Certain Beneficial Owners. |
GOVERNANCE
The board of directors is committed to good corporate
governance, good business practices and transparency in
financial reporting. The nominating & governance
committee annually reviews the Companys corporate
governance principles and the charters of the audit,
compensation and nominating & governance committees.
The committee charters comply with the governance provisions of
the Sarbanes-Oxley Act of 2002 and the listing requirements of
the New York Stock Exchange. The governance principles and
committee charters are available for review on the
Companys Web site and are available in print to any
shareholder who requests a copy.
The Company has in place a Code of Business Conduct and Ethics
for the Chief Executive Officer and Senior Financial Officers,
which is available for review on the Companys Web site. It
is the responsibility of the audit committee and the chief
financial officer to make sure that this policy is operative and
has effective reporting and enforcement mechanisms.
The Companys Statement of Policy on Ethics and
Professional Conduct was established in 1996 and was updated,
renamed the Code of Ethics and approved by the board of
directors in February 2005. Training and distribution of the
updated Code began in the spring of 2006. The Code is applicable
to all employees and is available for review on the
Companys Web site. It is also available to any shareholder
who requests a printed copy.
The Company has not made any charitable contributions, where the
amount has exceeded $1 million or 2% of such charitys
consolidated gross revenues, to any charitable organization for
which a director serves as an executive officer.
In accordance with the Companys corporate governance
principles, the non-management directors met in executive
session at least four times in 2005. The director who presides
at these meetings is selected by the board of directors.
When first elected to the board of directors, new members attend
a training session that introduces them to the Companys
operations and to the members of management. Thereafter,
directors are informed on a regular basis of various director
educational programs offered by governance and director
organizations. The Company pays for the continuing education of
its directors.
Section 303A of the listing standards of the New York Stock
Exchange defines a controlled company as a listed company
of which more than 50% of the voting power is held by an
individual, a group or another company. The Edward W.
Scripps Trust holds a majority of the Companys outstanding
Common Voting Shares, which qualifies the Company as a
controlled company. As such, the Company could avail
itself of an exemption such status affords it from compliance
with the Exchanges requirements to have a majority of
independent directors and an independent nominating and
corporate governance committee and an independent compensation
committee. However, the board of directors has determined that a
majority of its board of directors is independent. On
May 16, 2005 the Company filed with the New York Stock
Exchange its executed Annual Written Affirmation. An exhibit to
the Annual Written Affirmation was the Companys annual
Section 303A.12(a) CEO Certification.
The Company does not have a policy with regard to attendance by
board members at the Annual Meeting of Shareholders.
Messrs. Burleigh, Lowe and Tysoe attended the
Companys 2005 annual meeting of shareholders.
8
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Committee
The members are Mr. Ronald W. Tysoe (chairman),
Mr. Jeffrey Sagansky and Ms. Julie A. Wrigley. The
board of directors of the Company has determined that none of
the current members of the committee has any relationship with
the Company that could interfere with his or her exercise of
independence from management and the Company. Each of the
members satisfies the definitions of independence set forth in
the rules promulgated under the Sarbanes-Oxley Act and the
listing standards of the New York Stock Exchange. The board
determined that each member of the committee is financially
literate as defined under the current NYSE rules and that
Mr. Tysoe is an audit committee financial expert as defined
in the SEC rules adopted under the Sarbanes-Oxley Act.
Charter
The committees charter is available for review on the
Companys Web site.
Purpose
The committee provides assistance to the board of directors in
fulfilling its responsibility to shareholders, potential
shareholders, and the investment community. The purpose of the
committee is to assist the board in fulfilling its oversight
responsibility relating to (i) the integrity of the
companys financial statements and financial reporting
process and the companys systems of internal accounting
and financial controls; (ii) the performance of the
internal audit services function; (iii) the annual
independent audit of the Companys financial statements,
the engagement of the independent auditors and the evaluation of
the independent auditors qualifications, independence,
performance and fees; (iv) the compliance by the company
with legal and regulatory requirements, including the
Companys disclosure controls and procedures; (v) the
evaluation of enterprise risk issues; and (vi) the
fulfillment of all other responsibilities as outlined in its
charter. Additionally, the audit committee members have reviewed
the Companys Code of Ethics and have established
guidelines for receiving reports on issues raised by employees
using the Companys HelpLine. The committee meets privately
with representatives of the Companys independent auditors,
with the Companys internal auditors and with management.
Responsibilities
The principal responsibilities of the committee include, but are
not limited to, the following:
|
|
|
|
|
the engagement of the independent auditors; |
|
|
|
the determination as to the independence and performance of the
independent auditors; |
|
|
|
the determination as to the performance of the internal auditors; |
|
|
|
preapproval of audit and non-audit services; |
|
|
|
review of disclosure controls and procedures; |
|
|
|
review of managements annual report on internal controls
over financial reporting; |
|
|
|
review of annual SEC filings; |
|
|
|
review of quarterly SEC filings and other communications; |
|
|
|
review of certain matters with internal and independent auditors; |
|
|
|
consultation with independent auditors; |
|
|
|
preparation of its report for the proxy statement; |
|
|
|
committee performance evaluation; |
|
|
|
review of policies for employment of former independent auditors; |
|
|
|
establishment of whistleblowing procedures; |
|
|
|
review of legal and regulatory compliance; and |
|
|
|
review of certain transactions with directors and related
parties. |
9
Meetings
The committee held six meetings during 2005 and, as of
March 31, 2006, has had four meetings in 2006. During such
meetings, the committee spent a significant amount of time
reviewing the progress of managements annual report on
internal controls over financial reporting as required by
section 404 of the Sarbanes-Oxley Act. Management reported
to the committee that there were no material weaknesses in the
Companys system of internal control over financial
reporting. Additionally, management represented to the committee
that the Companys quarterly financial statements and
consolidated financial statements as of and for the year ended
December 31, 2005 were prepared in accordance with
generally accepted accounting principles. The committee reviewed
and discussed such financial statements with management and the
Companys independent auditors, Deloitte & Touche,
LLP, the member firms of Deloitte Touche Tohmatsu, and their
respective affiliates (collectively the Deloitte
Entities), and discussed such other matters deemed
relevant and appropriate by the committee. The committee
discussed with Deloitte Entities the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended, (Communications with Audit Committees). Deloitte
Entities also provided to the committee the written disclosures
and letter, required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees). The
committee and Deloitte Entities discussed independence and
whether the auditors provision of non-audit services is
compatible with maintaining such independence. It is the policy
of the committee that the Company notify the audit committee and
obtain its approval prior to engaging the Deloitte Entities for
any non-audit work.
In reliance on the reviews and discussions referred to above,
the committee recommended to the board of directors that the
audited financial statements be included in the Companys
Annual Report on
Form 10-K for the
year ended December 31, 2005 and be filed with the
Securities and Exchange Commission.
Audit Fees
The following table sets forth fees for all professional
services rendered by Deloitte Entities to the Company for the
years ended December 31, 2005 and 2004.
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
|
| |
|
| |
Audit fees (1)
|
|
$ |
1,589,000 |
|
|
$ |
1,552,500 |
|
Audit-related fees (2)
|
|
|
374,800 |
|
|
|
88,765 |
|
|
|
|
|
|
|
|
|
Total audit and audit related
|
|
|
1,964,700 |
|
|
|
1,641,265 |
|
|
|
|
|
|
|
|
Tax compliance and preparation:
|
|
|
|
|
|
|
|
|
|
Amended returns, claims for refunds and tax payment-planning
|
|
|
827,900 |
|
|
|
1,104,100 |
|
|
Employee benefit plans
|
|
|
7,000 |
|
|
|
1,700 |
|
Other tax-related fees
|
|
|
|
|
|
|
|
|
|
Tax consultation and planning (3)
|
|
|
|
|
|
|
20,700 |
|
|
Other
|
|
|
15,200 |
|
|
|
145,800 |
|
|
|
|
|
|
|
|
|
Total tax fees
|
|
|
850,100 |
|
|
|
1,272,300 |
|
|
|
|
|
|
|
|
|
Total fees
|
|
$ |
2,814,800 |
|
|
$ |
2,913,565 |
|
|
|
|
|
|
|
|
|
|
(1) |
This includes fees for the audit of the parent company and
certain subsidiary companies, quarterly reviews, accounting
consultations, comfort letters and consents. |
|
(2) |
This includes fees for due diligence assistance and other
assurance-related services. |
|
(3) |
This includes fees primarily for tax compliance services and
federal and state tax planning services related to tax credits
and incentives. |
|
|
|
The Audit Committee |
|
|
Ronald W. Tysoe, Chairman |
|
Jeffrey Sagansky |
|
Julie A. Wrigley |
10
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS ON EXECUTIVE COMPENSATION
The Committee
The compensation committee of the board of directors, which
consists entirely of non-employee directors of the company, is
responsible for reviewing and approving the Companys
executive compensation program. The members are
Messrs. David A. Galloway (chairman), John H. Burlingame,
Ronald W. Tysoe, Jarl Mohn and Edward W. Scripps.
The incentive plan committee, a subcommittee of the compensation
committee, approves awards under the Companys Long-Term
Incentive Plan and the Executive Bonus Plan. Messrs. Tysoe,
Galloway and Mohn are members of the incentive plan committee.
Overview of the Companys Compensation Philosophy
The Companys executive compensation program is based on a
philosophy that combines pay for company performance and
market-competitive compensation levels. The objective of the
program is to provide a comprehensive compensation package that
will reward for enhancing Company performance and maximizing
shareholder value and that also allows the Company to attract,
retain and motivate a highly-qualified management team.
The value of an individuals role and his or her overall
contributions are taken into consideration when determining
executive pay levels and incentive opportunities. The Company
relies on a variety of published compensation surveys to assess
the competitiveness of its executives compensation levels.
Components of the Compensation Program
All elements of the executive compensation program are reviewed
annually by the compensation committee to ensure alignment with
Company objectives and consistency with competitive practices.
The program consists of base salary, annual bonus and long-term
incentives that include grants of nonqualified stock options and
performance-based restricted stock under the Companys
Long-Term Incentive Plan (hereinafter referred to as total
direct compensation). Performance-based compensation should be
commensurate with the level of performance achieved. Total
direct compensation is targeted at a level commensurate with
Company performance. The committee has determined that total
direct compensation for the named executive officers is
reasonable and appropriate when taking into consideration
comparable positions in the market. The committee will continue
to review the alignment of executive pay with Company
performance and make adjustments, as necessary, to support
retention goals.
Base salary levels for executive officers of the Company are
targeted to be at the median of the market in comparison to
their respective industry and professional peers. Salary
adjustments are a function of multiple factors including:
competitive market levels for comparable positions; an
executives responsibilities; an executives job
performance and contributions; and the Companys
performance. The performance factors are not assigned specific
weights. Rather, the Committee applies its own judgment in
evaluating the aggregate impact of these factors and in making
base salary determinations.
The Committee takes into consideration the recommendation of the
chief executive officer when determining base salary increases
for the other named executive officers. The 2005 base salary
levels for named executive officers were generally close to the
market median when Company size is taken into consideration.
Short-term incentives for 2005 were provided to the named
executive officers through the Executive Bonus Plan. The
Committee established objectives for two key financial measures,
operating cash
11
flow and earnings per share. These measures represented 60% and
40%, respectively, of each named executive officers bonus
opportunity. The operating cash flow targets for
Messrs. Gardner, Contreras, and Peterson were based on the
performance of their respective divisions. The operating cash
flow for Mr. Boehne was based 30% on the performance of the
newspaper division and 30% on the Companys consolidated
performance. The operating cash flow target for Mr. NeCastro was
based on the Companys consolidated performance.
The target bonus opportunity for Mr. Boehne was set at 60%
of base salary. The target bonus opportunities for
Messrs. Gardner, Peterson, and NeCastro were set at 50% of
base salary. The target bonus opportunity for Mr. Contreras
was set at 45% of base salary. No bonus is paid for performance
levels less than the established threshold. Performance levels
that meet the targeted level are paid out at 100%. In no case
would the actual bonus exceed 150% of the targeted bonus
opportunity.
The bonus award is typically paid during the first quarter of
the calendar year following the actual plan year, although
executives may elect to defer payment of the bonus until
retirement or another predetermined date.
For 2005, the Company exceeded its earnings per share target and
its consolidated operating cash flow target. Scripps Networks
and United Media divisions also exceeded the divisional
operating cash flow targets. Therefore, the actual bonus awards
for Messrs. Boehne, Gardner, and NeCastro were more than
the targeted award. Scripps newspaper, television and Shop
at Home divisions did not meet the divisional operating cash
flow targets. Therefore, the actual bonus awards for
Messrs. Peterson and Contreras were less than the targeted
award.
The purpose of the 1997 Long-Term Incentive Plan is to encourage
stock ownership by management and better align the interests of
shareholders and management. The Plan allows for several
different types of stock-based awards, including stock options,
stock appreciation rights, restricted stock, and restricted
share unit grants.
Named executive officers typically receive an annual grant of
stock options. The 2005 award was a combination of stock options
and performance-based restricted stock. This is part of an
ongoing effort to provide stronger ties to performance and the
interests of shareholders.
Compensation of the Chief Executive Officer
The chief executive officers 2005 compensation package
consisted of a base salary of $1,050,000 and a target annual
bonus opportunity of 100% of such salary ($1,050,000). Like
other senior executives, Mr. Lowes 2005 bonus plan
was based on the Company attaining its consolidated operating
cash flow target and earnings per share target. These measures
represented 60% and 40%, respectively of Mr. Lowes
bonus opportunity. Because the Company exceeded these financial
targets, Mr. Lowes actual bonus award was more than
the targeted award.
Mr. Lowe continues to be covered under an employment
contract that was effective June 16, 2003 and expires
December 31, 2006. The details of Mr. Lowes
contract can be found under Other Transactions.
Mr. Lowe was awarded an option on February 10, 2005 to
purchase 125,000 of the Companys Class A Common
shares under the Long-Term Incentive Plan in recognition of his
performance. The options will be exercisable in three equal
installments beginning on February 15, 2006. In addition,
Mr. Lowe was awarded a target of 36,833 performance-based
restricted shares. Because the Company exceeded its operating
cash flow budget for 2005, Mr. Lowe actually earned
37,938 shares. Of these earned shares, 9,485 vested on
February 15, 2006, another 9,485 will vest on
February 15, 2007 and the remaining 18,968 shares will
vest on February 15, 2008.
12
At the request of the Company, on September 30, 2004,
Mr. Lowe converted 40,000 of his restricted shares to
restricted share units as provided by the Long-Term Incentive
Plan. These units will vest on January 2, 2007.
Response to Omnibus Budget Reconciliation Act of 1993
Section 162(m) of the Internal Revenue Code, enacted
in 1993, generally disallows a tax deduction to public companies
for compensation of more than $1 million paid in any one
year to a companys chief executive officer and each of its
four other most highly compensated executives. Performance-based
compensation, if approved by shareholders, is exempt from
Section 162(m). The Companys Executive Bonus Plan and
its Long-Term Incentive Plan have been approved by shareholders
and, accordingly, performance-based compensation awarded under
such plans is generally intended to satisfy those requirements.
The committee reserves the right to grant awards from time to
time that do not qualify as performance-based compensation to
the extent that it is necessary to attract and retain senior
executives.
The compensation tables that follow are intended to better
enable our shareholders to understand the compensation practices
of the Company.
|
|
|
The Compensation Committee |
|
|
David A. Galloway, Chairman |
|
John H. Burlingame |
|
Jarl Mohn |
|
Edward W. Scripps |
|
Ronald W. Tysoe |
13
Summary Compensation Table
The following table sets forth information regarding the
compensation earned by, paid to or awarded to the Companys
chief executive officer, and each of the Companys five
other most highly compensated executive officers, during each of
the Companys last three fiscal years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Compensation | |
|
|
|
|
|
|
|
|
Awards | |
|
|
|
|
|
|
Annual | |
|
| |
|
|
|
|
|
|
Compensation | |
|
Restricted | |
|
Securities | |
|
All Other | |
|
|
|
|
| |
|
Stock | |
|
Underlying | |
|
Compen- | |
Name and |
|
|
|
Salary | |
|
Bonus | |
|
Award(s) | |
|
Options/ | |
|
sation | |
Principal Position |
|
Year | |
|
$ | |
|
$ | |
|
(1)($) | |
|
SARs(#) | |
|
(2)($) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Kenneth W. Lowe
|
|
|
2005 |
|
|
|
1,050,000 |
|
|
|
1,105,398 |
|
|
|
1,762,599 |
|
|
|
125,000 |
|
|
|
36,628 |
|
President and Chief
|
|
|
2004 |
|
|
|
975,000 |
|
|
|
733,980 |
|
|
|
1,037,036 |
|
|
|
187,500 |
|
|
|
31,775 |
|
|
Executive Officer (3)(4)(5)(6) |
|
|
2003 |
|
|
|
925,000 |
|
|
|
804,232 |
|
|
|
12,402,222 |
|
|
|
250,000 |
|
|
|
30,145 |
|
Richard A. Boehne
|
|
|
2005 |
|
|
|
585,000 |
|
|
|
359,979 |
|
|
|
859,975 |
|
|
|
60,000 |
|
|
|
18,510 |
|
Executive Vice President (5)(6)
|
|
|
2004 |
|
|
|
565,000 |
|
|
|
318,999 |
|
|
|
497,816 |
|
|
|
90,000 |
|
|
|
17,873 |
|
|
|
|
|
2003 |
|
|
|
550,000 |
|
|
|
358,644 |
|
|
|
0 |
|
|
|
110,000 |
|
|
|
17,397 |
|
Frank Gardner
|
|
|
2005 |
|
|
|
555,000 |
|
|
|
300,133 |
|
|
|
564,071 |
|
|
|
40,000 |
|
|
|
20,640 |
|
Senior Vice President and
|
|
|
2004 |
|
|
|
540,000 |
|
|
|
284,688 |
|
|
|
332,202 |
|
|
|
60,000 |
|
|
|
20,056 |
|
|
Chairman, Scripps Networks, |
|
|
2003 |
|
|
|
525,000 |
|
|
|
351,120 |
|
|
|
0 |
|
|
|
50,000 |
|
|
|
3,762 |
|
|
Inc. (5)(6)(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph G. NeCastro
|
|
|
2005 |
|
|
|
470,000 |
|
|
|
337,237 |
|
|
|
599,288 |
|
|
|
42,500 |
|
|
|
14,853 |
|
Senior Vice President and
|
|
|
2004 |
|
|
|
450,000 |
|
|
|
300,628 |
|
|
|
332,202 |
|
|
|
60,000 |
|
|
|
16,344 |
|
|
Chief Financial Officer (5)(6)(8) |
|
|
2003 |
|
|
|
425,000 |
|
|
|
282,243 |
|
|
|
0 |
|
|
|
60,000 |
|
|
|
9,602 |
|
William P. Peterson
|
|
|
2005 |
|
|
|
365,000 |
|
|
|
176,131 |
|
|
|
246,796 |
|
|
|
17,500 |
|
|
|
10,950 |
|
Senior Vice President/
|
|
|
2004 |
|
|
|
339,583 |
|
|
|
126,700 |
|
|
|
124,698 |
|
|
|
22,500 |
|
|
|
9,365 |
|
|
Television Station Group (5)(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark G. Contreras (6)(9)(10)
|
|
|
2005 |
|
|
|
448,125 |
|
|
|
393,085 |
|
|
|
403,012 |
|
|
|
15,000 |
|
|
|
440 |
|
Vice President/ Newspaper
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The dollar amounts listed in this table reflect the value of the
restricted shares on the date of the award. The aggregate number
and value of restricted share holdings for each named executive
officer as of the end of 2005 were as follows: Mr. Lowe
held 199,057 shares, with a value of $9,544,873;
Mr. Boehne held 25,023 shares, with a value of
$1,199,853; Mr. NeCastro held 17,445 shares, with a
value of $836,488, Mr. Peterson held 7,218 shares,
with a value of $346,103 and Mr. Contreras held
8,553 shares, with a value of $410,116. Dividends were paid
during 2005 on shares of restricted stock held by each named
executive officer at a rate of $.10 per share for the first
quarter and $.11 per share for the second, third and fourth
quarters. The value of the restricted shares is based on the
average of the high and low sale prices of the Companys
shares on December 31, 2005, which was $47.95.
Additionally, Mr. Lowe has 40,000 restricted share units
with a value of $1,918,000. |
|
(2) |
Represents compensation contributed pursuant to the Scripps
Retirement and Investment Plan and the Scripps Executive
Deferred Compensation and Savings Restoration Plan, and imputed
income as a result of life insurance coverage exceeding $50,000
annually. |
|
(3) |
Mr. Lowe entered into an employment agreement with the
Company as of June 16, 2003. The terms of this agreement
are disclosed under Other Transactions. |
|
(4) |
Mr. Lowe entered into a restricted share award agreement
with the Company on January 2, 2003. Such agreement awarded
him 310,638 shares vesting in equal installments on the
anniversary date of the award in 2004, 2005, 2006 and 2007. |
|
(5) |
The 2004 restricted stock awards were granted on March 23 and
vest equally on the anniversary date of the award in 2005, 2006
and 2007. |
14
|
|
(6) |
The 2005 restricted stock awards were granted on February 10.
Twenty-five percent of the award vested on February 15,
2006, twenty-five percent vests on February 15, 2007 and
fifty percent vests on February 15, 2008. |
|
(7) |
Mr. Gardner retired on December 31, 2005. Immediately
prior to his retirement, he held 16,687 restricted shares and,
in accordance with the terms of the Long-Term Incentive Plan,
all of such shares vested upon his retirement. |
|
(8) |
Mr. NeCastros 2005 bonus amount includes an annual
performance-based bonus of $247,399 and a bonus of $89,838 that
relates to a loan he received from the Company on his hiring
date. See Other Transactions for additional details. |
|
(9) |
Mr. Contreras 2005 bonus amounts includes an annual
performance-based bonus of $193,085, a sign-on bonus of
$150,000, and a special bonus of $50,000. See Other
Transactions for additional details. |
|
|
(10) |
Mr. Contreras was awarded 4,000 performance-based
restricted shares on January 4, 2005. Because the first
performance objective was attained, 1,000 shares vested on
February 15, 2006. Provided certain additional performance
objectives are achieved, 1,000 shares will vest on
February 15, 2007; and 2,000 shares will vest on
February 15, 2008. |
Option/SAR Grants in 2005
The following table sets forth certain information regarding
options for Class A Common Shares granted in 2005 under the
Companys Long-Term Incentive Plan to named executives who
participate therein.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants | |
|
|
|
|
|
Potential Realizable | |
|
|
| |
|
|
|
|
|
Value at Assumed | |
|
|
Number of | |
|
% of Total | |
|
|
|
|
|
Annual Rates of Share | |
|
|
Securities | |
|
Options/SARs | |
|
Exercise | |
|
|
|
Price Appreciation for | |
|
|
Underlying | |
|
Granted to | |
|
Or Base | |
|
|
|
Option Term | |
|
|
Options/SARs | |
|
Employees in | |
|
Price | |
|
Expiration | |
|
| |
Name |
|
Granted(#) | |
|
2005 | |
|
($/Sh) | |
|
Date | |
|
5%($) | |
|
10%($) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Kenneth W. Lowe
|
|
|
125,000 |
|
|
|
6.6 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
3,652,306 |
|
|
|
9,255,659 |
|
Richard A. Boehne
|
|
|
60,000 |
|
|
|
3.2 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
1,753,107 |
|
|
|
4,442,716 |
|
Frank Gardner
|
|
|
40,000 |
|
|
|
2.1 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
1,168,738 |
|
|
|
2,961,811 |
|
Joseph G. NeCastro
|
|
|
42,500 |
|
|
|
2.2 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
1,241,784 |
|
|
|
3,146,924 |
|
William B. Peterson
|
|
|
17,500 |
|
|
|
0.9 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
511,323 |
|
|
|
1,295,792 |
|
Mark G. Contreras
|
|
|
15,000 |
|
|
|
0.8 |
% |
|
|
46.46 |
|
|
|
2013 |
|
|
|
438,277 |
|
|
|
1,110,679 |
|
Total awards to all employees
|
|
|
1,895,250 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth certain information regarding the
number and value of options for Class A Common Shares held
by the named executives at December 31, 2005. Three
executives exercised options during 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
|
|
Securities | |
|
|
|
|
|
|
|
|
Underlying | |
|
Value of Unexercised | |
|
|
|
|
|
|
Unexercised | |
|
In-the-Money | |
|
|
|
|
|
|
Options/SARs at | |
|
Options/SARs at | |
|
|
|
|
|
|
12/31/05(#) | |
|
12/31/05($) | |
|
|
Shares Acquired | |
|
Value | |
|
Exercisable/ | |
|
Exercisable/ | |
Name |
|
on Exercise(#) | |
|
Realized($) | |
|
Unexercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
Kenneth W. Lowe
|
|
|
107,000 |
|
|
|
3,145,584 |
|
|
|
919,167/333,333 |
|
|
|
12,488,169/849,581 |
|
Richard A. Boehne
|
|
|
50,000 |
|
|
|
1,450,245 |
|
|
|
473,334/156,666 |
|
|
|
7,075,539/381,261 |
|
Frank Gardner
|
|
|
154,000 |
|
|
|
3,496,870 |
|
|
|
430,000/0 |
|
|
|
5,634,100/0 |
|
Joseph G. NeCastro
|
|
|
|
|
|
|
|
|
|
|
70,000/102,500 |
|
|
|
416,700/222,525 |
|
William B. Peterson
|
|
|
|
|
|
|
|
|
|
|
24,167/35,833 |
|
|
|
156,969/52,606 |
|
Mark G. Contreras
|
|
|
|
|
|
|
|
|
|
|
0/15,000 |
|
|
|
0/22,350 |
|
15
Equity Compensation Plan Information for 2005
The following table sets forth certain information as of
December 31, 2005 for each category of equity compensation
plan under which equity securities are authorized for issuance
to employees and directors in exchange for consideration in the
form of services.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- | |
|
Number of securities | |
|
|
|
|
average exercise | |
|
remaining available for | |
|
|
|
|
price of | |
|
future issuance under | |
|
|
Number of securities to | |
|
outstanding | |
|
equity compensation | |
|
|
be issued upon exercise | |
|
options, | |
|
plans (excluding | |
|
|
of outstanding options, | |
|
warrants and | |
|
securities reflected in | |
Plan Category |
|
warrants and rights(#) | |
|
rights($) | |
|
column (a))(#) | |
|
|
| |
|
| |
|
| |
|
|
(a) | |
|
(b) | |
|
(c) | |
Equity compensation plans approved by security holders
|
|
|
24,317,400 |
|
|
|
37.89 |
|
|
|
6,926,914 |
|
Equity compensation plans not approved by security holders
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
24,317,400 |
|
|
|
37.89 |
|
|
|
6,926,914 |
|
|
|
|
|
|
|
|
|
|
|
16
REPORT ON STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
return on the Companys Class A Common Shares,
assuming an initial investment of $100 as of December 31,
1999, and based on the market prices at the end of each year and
assuming reinvestment of dividends, with the cumulative total
return of the Standard & Poors Composite-500
Stock Index and an index based on a peer group of media
companies.
The companies in the peer group index are Belo Corporation,
Gannett Co. Inc., Knight Ridder, Inc., Lee Enterprises, Inc.,
The New York Times Company, Tribune Company, and the Washington
Post Company. The index is weighted based on market
capitalization. The companies included in the peer group were
approved by the compensation committee.
REPORT ON COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Messrs. John H. Burlingame, David A. Galloway, Jarl Mohn,
Edward W. Scripps and Ronald W. Tysoe are the members of the
Companys compensation committee.
Mr. John H. Burlingame is a member of the executive
committee of the Companys board of directors. He is also a
retired partner of Baker & Hostetler LLP.
Baker & Hostetler was a provider of legal services to
the Company and to The Edward W. Scripps Trust in 2005 and is
expected to provide legal services to the Company and to the
Trust in 2006.
Mr. Edward W. Scripps is a lifetime Emeritus Trustee of the
Scripps Howard Foundation.
Mr. Burlingame, Mrs. Scagliotti and Mr. Edward W.
Scripps are the trustees of The Edward W. Scripps Trust and for
2006 are expected to continue to serve as trustees. The trustees
have the power to vote and dispose of the 39,192,222
Class A Common Shares and 32,080,000 Common Voting Shares
of the Company held by the Trust. Mr. Burlingame disclaims
any beneficial interest in the shares held by the Trust.
Mr. Scripps and Mrs. Scagliotti are income
beneficiaries of the Trust. See Security Ownership of
Certain Beneficial Owners.
17
REPORT ON THE COMPANYS PENSION PLAN
The Companys executive officers and substantially all
other non-union employees of the Company are participants in a
non-contributory defined benefit pension plan maintained by the
Company (the Pension Plan). Contributions to the
Pension Plan are based on separate actuarial computations for
each business unit and are made by the business unit
compensating the particular individual.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years of Services | |
|
|
| |
Remuneration | |
|
15 Years | |
|
20 Years | |
|
25 Years | |
|
30 Years | |
|
35 Years | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
300,000 |
|
|
$ |
55,000 |
|
|
$ |
73,000 |
|
|
$ |
91,000 |
|
|
$ |
109,000 |
|
|
$ |
127,000 |
|
|
400,000 |
|
|
|
73,000 |
|
|
|
98,000 |
|
|
|
122,000 |
|
|
|
147,000 |
|
|
|
171,000 |
|
|
500,000 |
|
|
|
92,000 |
|
|
|
123,000 |
|
|
|
154,000 |
|
|
|
184,000 |
|
|
|
215,000 |
|
|
600,000 |
|
|
|
111,000 |
|
|
|
148,000 |
|
|
|
185,000 |
|
|
|
222,000 |
|
|
|
259,000 |
|
|
700,000 |
|
|
|
130,000 |
|
|
|
173,000 |
|
|
|
216,000 |
|
|
|
259,000 |
|
|
|
302,000 |
|
|
800,000 |
|
|
|
148,000 |
|
|
|
198,000 |
|
|
|
247,000 |
|
|
|
297,000 |
|
|
|
346,000 |
|
|
900,000 |
|
|
|
167,000 |
|
|
|
223,000 |
|
|
|
279,000 |
|
|
|
334,000 |
|
|
|
390,000 |
|
|
1,000,000 |
|
|
|
186,000 |
|
|
|
248,000 |
|
|
|
310,000 |
|
|
|
372,000 |
|
|
|
434,000 |
|
|
1,500,000 |
|
|
|
280,000 |
|
|
|
373,000 |
|
|
|
466,000 |
|
|
|
559,000 |
|
|
|
652,000 |
|
|
1,750,000 |
|
|
|
326,000 |
|
|
|
435,000 |
|
|
|
544,000 |
|
|
|
653,000 |
|
|
|
762,000 |
|
|
2,500,000 |
|
|
|
467,000 |
|
|
|
623,000 |
|
|
|
779,000 |
|
|
|
934,000 |
|
|
|
1,090,000 |
|
The above table shows the annual normal retirement benefits
which, absent the maximum benefit limitations (the Benefit
Limitations) imposed by Section 415(b) of the
Internal Revenue Code of 1986, as amended (the
Code), would be payable pursuant to the Pension Plan
upon retirement at age 65 (based upon the 2005 social
security integration level under the Pension Plan), pursuant to
a straight life annuity option, for employees in the
compensation ranges specified and under various assumptions with
respect to average final annual compensation and years of
credited services.
In general, the Benefit Limitations limit the annual retirement
benefits that may be paid pursuant to the Pension Plan to
$170,000 (subject to further
cost-of-living
increases promulgated by the United States Secretary of the
Treasury). The Company supplements payments under the Pension
Plan with direct pension payments equal to the amount, if any,
by which the benefits that otherwise would be payable under the
Pension Plan exceed the benefits that are permitted to be paid
under the Benefit Limitations. Annual normal retirement benefits
are computed at the rate of 1% of average final annual
compensation up to the applicable social security integration
level plus 1.25% of average final annual compensation in excess
of the social security integration level, multiplied by the
employees years of credited service. An employees
benefits are actuarially adjusted if paid in a form other than a
life annuity.
An employees remuneration is defined as the average annual
amount of his pensionable compensation (generally salary and
bonus, excluding the Scripps Retirement & Investment
Plan match and any other annual or long-term compensation
reflected in the Summary Compensation Table) for service during
the five consecutive years within the last eleven years of his
employment for which his total compensation was greatest. The
employees years of credited service equal the number of
years of his employment with the Company (subject to certain
limitations). As of December 31, 2005, the years of
credited service of the individuals named in the cash
compensation table were as follows: Mr. Lowe
26; Mr. Gardner 21; Mr. Boehne
20; Mr. NeCastro 4;
Mr. Peterson 4; and
Mr. Contreras 1.
In May 1996, the board of directors of the Company adopted a
Selected Officer Retirement Program, the purpose of which is to
provide supplemental retirement benefits to certain key
employees of the Company who meet the eligibility requirements.
Participants in the program must be specifically designated as
participants by the compensation committee. As of
December 31, 2005, the Program has three retired employee
participants. No active employee has been designated for
participation in such plan. A participant begins to receive
benefits under the plan upon retirement. The amount of the
benefit
18
is a percentage of the participants highest three-year
average earnings subject to certain offsets and maximums.
REPORT ON THE COMPANYS CHANGE IN CONTROL PLAN
In 2004, the directors of the Company approved the Senior
Executive Change in Control Plan (the Change in Control
Plan) for the named executive officers and certain other
executive officers of the Company. Under this Plan, if there is
a Change in Control (as defined in the Plan) of the Company, the
participating executives will be entitled to termination
payments if their employment with the Company is terminated
without Cause (as defined in the Plan) or if they terminate such
employment for Good Reason (as defined in the Plan), in either
case within two (2) years of the Change in Control. The
amount of the termination payment payable to each executive
under the Plan equals a specific multiple (termination pay
multiple) of such executives Base Salary and Bonus (as
such terms are defined in the Plan). Base Salary equals the
executives highest annualized rate of Base Salary in
effect at any time during the year of termination and the three
full prior calendar years preceding termination. Bonus means the
higher of (i) an executives target bonus in the year
of termination or (ii) the executives highest actual
annual Bonus in the three full calendar years prior to
termination of employment. Executives who participate in the
Plan have termination pay multiples ranging from 1.5 to 2.5. Of
the named executives of the Company, the termination pay
multiple for Mr. Boehne is 2.5, and for the remaining named
executives (other than Mr. Lowe) the multiple is 2.
Mr. Lowe is not covered under this Plan since his
employment agreement provides for payments in the event of a
change in control. See Other Transactions. In
addition to termination payments, the Plan provides for
(i) continued benefits coverage for the number of months
following termination of employment equal to 12 times an
executives termination pay multiple and (ii) a cash
sum equal to the actuarially determined value of a pension
enhancement equal to the difference in the present value of
(x) the actual pension the executive is entitled to receive
under the Companys Pension Plan and Supplemental Executive
Retirement Plan and (y) the assumed pension such executive
would be entitled to receive under such plans if age and years
of credited service at the time of termination were increased by
a number equal to his termination pay multiple. The Plan also
provides that upon termination as described above all
outstanding equity awards held by an executive, including stock
options and restricted stock, will immediately vest and not be
subject to forfeiture, with all options remaining exercisable
for the remainder of their terms. Executives who receive
termination payments under the Plan are also entitled to
gross-up payments
intended to cover any excise taxes (and interest or penalties
imposed with respect to such taxes) under Section 4999 of
the Internal Revenue Code.
REPORT ON THE COMPANYS DEFERRED COMPENSATION PLAN
In 2004, the Company replaced the 1997 Deferred Compensation and
Phantom Stock Plan for Senior Officers and Selected Employees,
effective May 22, 1997, and the Scripps Executive Savings
and Restoration Plan, effective May 1, 1999, with the
Scripps Executive Deferred Compensation and Savings Restoration
Plan. To be eligible to participate in the Plan, an employee
must be eligible to participate in both the Companys
Long-Term Incentive Plan and the Scripps Retirement and
Investment Plan (401(k) Plan) and must earn compensation in
excess of the Internal Revenue Code Section 401(a)(17)
limit in any one year. The Plan is a non-qualified plan and
participants may defer to the Plan, before taxes are deducted,
up to 50% of base pay and up to 100% of an annual bonus. After a
participant completes one year of service with the Company, the
Company adds a 50% match to base pay deferrals, up to 6% of base
pay. The Plan is intended to help restore amounts that a
participant cannot contribute to the Companys 401(k) plan,
due to federal contribution limits.
REPORT ON CERTAIN TRANSACTIONS
Scripps Family Agreement
General. The Company and certain persons and trusts are
parties to an agreement (the Scripps Family
Agreement) restricting the transfer and governing the
voting of Common Voting Shares that such persons and trusts may
acquire or own at or after the termination of the Trust. Such
persons and
19
trusts (the Signatories) consist of certain
grandchildren of Robert Paine Scripps who are beneficiaries of
the Trust, descendants of John P. Scripps, and certain trusts of
which descendants of John P. Scripps are trustees and
beneficiaries. Robert Paine Scripps was a son of the founder of
the Company. John P. Scripps was a grandson of the founder and a
nephew of Robert Paine Scripps.
If the Trust were to have terminated as of January 31,
2006, the Signatories would have held in the aggregate
approximately 93% 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 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
Trust and may be renewed for additional ten-year periods.
Transfer Restrictions. No Signatory will be able to
dispose of any Common Voting Shares (except as otherwise
summarized below) without first giving other Signatories and the
Company the opportunity to purchase such shares. Signatories
will not be able to convert Common Voting Shares into
Class A Common Shares except for a limited period of time
after giving other Signatories and the Company the aforesaid
opportunity to purchase and except in certain other limited
circumstances.
Signatories will be permitted to transfer Common Voting Shares
to their lineal descendants or trusts for the benefit of such
descendants, or to any trust for the benefit of such a
descendant, or to any trust for the benefit of the spouse of
such descendant or any other person or entity. Descendants to
whom such shares are sold or transferred outright, and trustees
of trusts into which such shares are transferred, must become
parties to the Scripps Family Agreement or such shares shall be
deemed to be offered for sale pursuant to the Scripps Family
Agreement. Signatories will also be permitted to transfer Common
Voting Shares by testamentary transfer to their spouses provided
such shares are converted to Class A Common Shares and to
pledge such shares as collateral security provided that the
pledgee agrees to be bound by the terms of the Scripps Family
Agreement. If title to any such shares subject to any trust is
transferred to anyone other than a descendant of Robert Paine
Scripps or John P. Scripps, or if a person who is a descendant
of Robert Paine Scripps or John P. Scripps acquires outright any
such shares held in trust but is not or does not become a party
to the Scripps Family Agreement, such shares shall be deemed to
be offered for sale pursuant to the Scripps Family Agreement.
Any valid transfer of Common Voting Shares made by Signatories
without compliance with the Scripps Family Agreement will result
in automatic conversion of such shares to Class A Common
Shares.
Voting Provisions. The Scripps Family Agreement provides
that the Company will call a meeting of the Signatories prior to
each annual or special meeting of the shareholders of the
Company held after termination of the Trust (each such meeting
hereinafter referred to as a Required Meeting). At
each Required Meeting, the Company will submit for decision by
the Signatories, each matter, including election of directors,
that the Company will submit to its shareholders at the annual
meeting or special meeting with respect to which the Required
Meeting has been called. Each Signatory will be entitled, either
in person or by proxy, to cast one vote for each Common Voting
Share owned of record or beneficially by him on each matter
brought before the meeting. Each Signatory will be bound by the
decision reached with respect to each matter brought before such
meeting, and, at the related meeting of the shareholders of the
Company, will vote his Common Voting Shares in accordance with
decisions reached at the meeting of the Signatories.
John P. Scripps Newspapers
In connection with the merger in 1986 of the John P. Scripps
Newspaper Group (JPSN) into a wholly owned
subsidiary of the Company (the JPSN Merger), the
Company and The Edward W. Scripps Trust entered into certain
agreements discussed below.
JPSN Board Representation Agreement. The Edward W.
Scripps Trust and John P. Scripps entered into a Board
Representation Agreement dated March 14, 1986 in connection
with the JPSN Merger. Under this agreement, the surviving adult
children of Mr. John P. Scripps who are shareholders
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of the Company have the right to designate one person to serve
on the Companys board of directors so long as they
continue to own in the aggregate 25% of the sum of (i) the
shares issued to them in the JPSN Merger and (ii) the
shares received by them from John P. Scripps estate. In
this regard, The Edward W. Scripps Trust has agreed to vote its
Common Voting Shares in favor of the person designated by John
P. Scripps children. Pursuant to this agreement, Paul K.
Scripps currently serves on the Companys board of
directors and is a nominee for election at the annual meeting.
The Board Representation Agreement terminates upon the earlier
of the termination of The Edward W. Scripps Trust or the
completion of a public offering by the Company of Common Voting
Shares.
Stockholder Agreement. The former shareholders of the
John P. Scripps Newspaper Group, including John P. Scripps and
Paul K. Scripps, entered into a Stockholder Agreement with the
Company in connection with the JPSN Merger. This agreement
restricts to certain transferees the transfer of Common Voting
Shares received by such shareholders pursuant to the JPSN
Merger. These restrictions on transfer will terminate on the
earlier of the termination of The Edward W. Scripps Trust or
completion of a public offering of Common Voting Shares. Under
the agreement, if a shareholder has received a written offer to
purchase 25% or more of his Common Voting Shares, the
Company has a right of first refusal to purchase
such shares on the same terms as the offer. On the death of any
of these shareholders, the Company is obligated to purchase from
the shareholders estate a sufficient number of the Common
Voting 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 Voting Shares of the Company
owned by such shareholder. Under the agreement, stockholders
owning 25% or more of the outstanding Common Voting Shares
issued pursuant to the JPSN Merger may require the Company to
register Common Voting Shares (subject to the right of first
refusal mentioned above) under the Securities Act of 1933 for
sale at the shareholders expense in a public offering. In
addition, the former shareholders of the John P. Scripps
Newspaper Group will be entitled, subject to certain conditions,
to include Common Voting Shares (subject to the right of first
refusal) that they own in any registered public offering of
shares of the same class by the Company. The registration rights
expire three years from the date of a registered public offering
of Common Voting Shares.
Other Transactions
Mr. John H. Burlingame is a retired partner of
Baker & Hostetler LLP, which provided legal services to
the Company and to The Edward W. Scripps Trust (the
Trust) in 2005 and is expected to perform such
services in 2006.
During 2005, Mr. Nicholas B. Paumgarten was a managing
director of J.P. Morgan Chase
(J.P. Morgan). J.P. Morgan Chase Bank (an
affiliate of J.P. Morgan) is a lender to the Company under
its Competitive Advance/ Revolving Credit Agreement.
J.P. Morgan has performed investment banking services for
the Company in the past and may again perform investment banking
services for the Company. Effective March 15, 2006,
Mr. Paumgarten left his position at J.P. Morgan and became
Chairman of Corsair Capital LLC (an investment firm).
Mr. Kenneth W. Lowe entered into an employment agreement
with the Company on June 16, 2003, pursuant to which he
serves as President and Chief Executive Officer and as a member
of the board of directors. The agreement continues through
December 31, 2006, and thereafter renews for successive
one-year terms unless terminated. During the term, Mr. Lowe
is entitled to an annual salary, to be set by the Compensation
Committee of the Company, that is not less than that paid to him
for the immediately preceding year. Under the agreement,
Mr. Lowe participates in the Companys annual bonus
plan for senior executives with an annual target bonus
opportunity equal to no less than 80% of his salary. A
description of Mr. Lowes compensation for 2005,
including awards granted pursuant to his employment agreement,
is included in the Compensation Committees report under
Compensation of the Chief Executive Officer.
Mr. Lowes agreement was amended on September 30,
2004. Such amendment converted 40,000 restricted shares to
40,000 restricted share units under the terms of the
Companys Long-Term Incentive Plan. Effective
January 1, 2005, Mr. Lowes annual base salary
was increased to $1,050,000 and his target bonus opportunity was
increased to 100% of his annual base salary.
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Lowe Deferred Stock Units. In recognition of
the value Mr. Lowe created in the Companys national
television networks and to provide him with an incentive to
enhance the profitability of the Company in the future,
Mr. Lowe received a grant of 192,076 deferred stock units
in 1999 under his previous employment agreement. As of the date
of his current employment agreement, 80% of these deferred stock
units had matured and 153,662 Class A Common Shares of the
Company had been issued in exchange for such units. On
January 15, 2004, under his employment agreement, the
remaining deferred stock units matured and were exchanged for
38,414 Class A Common Shares, and Mr. Lowe received
$50,706, which equals the amount of the cash dividends that
would have been paid on such shares had they been outstanding
between July 20, 1999 and January 15, 2004.
Lowe Restricted Stock. In connection with his
employment agreement, the Company granted Mr. Lowe 310,638
restricted Class A Common Shares under the Companys
Incentive Plan, vesting in equal annual installments from 2004
through 2007. As of the date of this proxy statement, 232,980 of
such shares have vested. On September 30, 2004, 40,000 of
these shares were converted to restricted share units.
Furthermore, 31,608 restricted Class A Common shares
granted in connection with his previous employment agreement
will continue to vest in accordance with their original vesting
schedules. As of this date of this proxy statement, 251,985 of
such shares have vested. All restricted shares that have not
vested shall be forfeited if Mr. Lowe elects Early
Retirement (as defined in the Agreement) before January 1,
2007, or if the Company terminates his employment as a result of
criminal conviction. If Mr. Lowes employment is
terminated for any other reason (including a Change in Control),
all restricted shares shall vest immediately.
Lowe Termination. If the Company terminates
the employment agreement for Cause (as defined in the agreement)
or if Mr. Lowe terminates the agreement for any reason
other than Good Reason (as defined in the agreement),
Mr. Lowe will not be entitled to any further compensation
or other benefits and, except in certain circumstances, will
forfeit all outstanding equity awards.
If Mr. Lowe dies or suffers Permanent Disability, the
Company must continue to pay Mr. Lowe (or his estate) his
salary and provide him (and his family) with medical benefits
for two years. Also, all outstanding equity awards will vest
with the options remaining exercisable for the remainder of the
original terms.
If the Company terminates the agreement without Cause or
Mr. Lowe terminates it for Good Reason (other than within
two years following a Change in Control), the Company must
continue to pay Mr. Lowe his salary for the greater of
three years or the balance of the term remaining at the time of
such termination. Mr. Lowe will also be entitled to receive
an amount equal to the target bonus then in effect times the
greater of two or the number of years remaining under the term
of the agreement, and he will be entitled to all benefits for
the greater of two years or the balance of the term of the
agreement, subject to certain offsets. Also, outstanding equity
awards will vest with the options remaining exercisable for the
remainder of the original term.
Lowe Change in Control. If the Company
terminates the employment agreement without Cause within two
years after a Change in Control or Mr. Lowe terminates it
for Good Reason within such two-year period, the Company must
pay him an amount equal to three times the greater of his then
current salary or his salary at the highest annualized rate paid
in the three calendar years prior to the date of termination and
in addition an amount equal to three times the greater of 100%
of his target bonus for the year of such termination or the
highest annual bonus he received for the three calendar years
prior to termination. Until the earliest of the third
anniversary of the Change in Control termination or
Mr. Lowes death or his securing of full-time
employment which provides substantially equivalent benefits, the
Company will provide Mr. Lowe and his eligible dependents
with benefits substantially equivalent to those which were
received immediately prior to the date of termination or a
Change in Control. The Company shall also provide Mr. Lowe
with reasonable outplacement services for a period of eighteen
months and will reimburse him for his reasonable legal expenses
in an amount not to exceed $75,000 should he have to institute
legal proceedings to enforce the Change in Control provisions of
the agreement. All outstanding equity awards will vest upon a
Change in Control with the options remaining exercisable for the
remainder of the original term.
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Lowe Indemnification. Under the agreement,
the Company is required to indemnify Mr. Lowe to the full
extent permitted under Ohio law and must maintain directors and
officers liability insurance covering him at a level and on
terms and conditions no less favorable than the coverage the
Company currently provides its directors and senior level
officers.
Lowe Legal Fees. In 2003, the Company
reimbursed Mr. Lowe $100,000 of the legal fees he incurred
in the negotiation of the employment agreement.
The Company employed Mr. Joseph G. NeCastro as its senior
vice president and chief financial officer effective May 3,
2002. To assist Mr. NeCastro in satisfying an obligation
with his previous employer, the Company paid him a $661,626
signing bonus (including the
gross-up for
withholding taxes) and loaned him $356,905. If Mr. NeCastro
voluntarily resigns between three and five years of his date of
hire, he will be required to pay the Company $175,000 of the
signing bonus. Mr. NeCastro must repay the loan, with
interest at 4.75% per year, by July 26, 2007. A
portion of Mr. NeCastros annual performance bonus, if
any, will be used to repay interest and principal on the loan.
Simultaneously with such payment, the Company has agreed to pay
Mr. NeCastro an additional bonus, the net amount of which
will equal withholding taxes applicable to the portion of the
bonus used for the loan payment. Each year, from 2003-2006,
Mr. NeCastro repaid $80,000 of his loan balance. If his
employment with the Company is terminated for any reason, all
outstanding principal and accrued interest must be paid within
thirty (30) days of the date of such termination.
The Company employed Mr. Mark G. Contreras as its vice
president of newspaper operations effective January 4,
2005. Under the terms of his compensation arrangement, Mr.
Contreras received the following: (i) an annualized base
salary of $450,000; (ii) an annual bonus target amount
equal to 45% of his annual base salary; (iii) a signing
bonus of $150,000; (iv) a one-time bonus of $50,000; and
(v) a grant of 4,000 performance-based restricted shares
pursuant to the Companys Long-Term Incentive Plan.
Mr. Contreras is also eligible for a severance payment
equal to one and one-half times his base salary and annual bonus
if he is terminated without cause or if he leaves the Company
for good reason prior to December 31, 2006, other than
within 18 months following a change in control. Cause is
defined in the Companys Senior Executive Change in Control
Plan. Good reason is defined as (a) a material reduction in
his starting pay or target bonus, (b) an assignment of
duties that is materially inconsistent with, or materially less
than his duties as vice president of newspaper operations or
(c) an assignment or relocation without his consent. In no
event would he receive a severance payment and a payment under
the Change in Control Plan.
Mr. Gregory L. Ebel retired as vice president/human
resources of the Company on April 15, 2005 but remained an
employee until December 31, 2005. Under the terms of a
compensation agreement with Mr. Ebel, he continued to
receive his annual salary of $281,000 through December 31,
2005 and received an annual bonus in the amount of $100,461. On
December 31, 2005, Mr. Ebel received a special
supplemental payment (the special payment) in the
amount of $569,025. Mr. Ebel will receive $600,000 as
aggregate compensation for lost benefits under the
Companys pension plan. Payment is being made in three
equal installments of $200,000, plus interest. The first such
payment, in the amount of $200,000, was made on January 1,
2006 and the remaining payments will be on January 1, 2007
and January 1, 2008. The remaining payments are subject to
forfeiture under certain conditions. The Company paid
Mr. Ebel $63,750 on January 2, 2006 as a lump-sum
payment for the cost of future financial planning services.
Stock options granted to Mr. Ebel under the Companys
long-term incentive plan fully vested on December 31, 2005,
and are exercisable for the remainder of their respective terms.
At the time of his retirement, Mr. Ebel held 1,706
restricted shares that fully vested as of his retirement date.
Additionally, at the time of his retirement, he held 4,553
performance-based restricted shares. All of such shares vested
on December 31, 2005. The Company is providing, at its
expense, family medical coverage to Mr. Ebel until he
reaches the age of 55. Thereafter, Mr. Ebel will be
eligible to continue such medical coverage at his own expense
until he is eligible for Medicare benefits or age 65,
whichever occurs later. Commencing on January 1, 2006, and
continuing until Mr. Ebel reaches the age of 65, the
Company will provide, at its expense, supplemental term life
insurance with a face value of $50,000. If Mr. Ebel is
deceased at the time any of the base, bonus special payment or
supplemental payment were to be made, such payments shall be
made to his surviving spouse, or in the absence thereof, to his
estate.
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Mr. Frank Gardner retired from his role as senior vice
president of the Company and Chairman of Scripps Networks, Inc.
on December 31 2005. Upon his retirement, the Company
entered into a Consulting Agreement and a Special Retirement
Supplement Agreement with Mr. Gardner. Mr. Gardner
will serve as an independent consultant for the Company for a
two-year term that began on January 1, 2006.
Mr. Gardner will provide the Company and its subsidiaries
and affiliates with business advice and other consulting
services, as may be requested from time to time by the Company.
In consideration for all services performed by Mr. Gardner,
he will be paid an annual fee of $250,000 during the term of the
consulting agreement. The Special Retirement Supplement
Agreement provides Mr. Gardner with a lump sum payment of
$1,000,000 that was paid on January 2, 2006.
PROPOSAL 2
To approve an amendment to the Companys Code of
Regulations.
General
There will be submitted at the annual meeting for action by the
holders of Common Voting Shares a proposal to amend
Article VI, Section 1 of The E. W. Scripps
Companys Code of Regulations. Such amendment will allow a
shareholder to choose to have shares registered through an
uncertificated share registration system. The board of directors
approved the proposed amendment on February 23, 2006. If
approved, the applicable section of the Code of Regulations will
read as follows.
Section 1. Form and Execution.
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(A) Certificates for shares, certifying the number of
full-paid shares owned, shall be issued to each shareholder who
chooses to receive a certificate, in such form as shall be
approved by the board of directors. Such certificates shall be
signed by the chairman of the board of directors or the
president or a vice president and by the secretary or an
assistant secretary or the treasurer or an assistant treasurer;
provided, however, that if such certificates are countersigned
by an incorporated transfer agent or registrar, the signatures
of any of such officers and the seal of the Corporation upon
such certificates may be facsimiled, engraved, stamped or
printed. If any officer or officers who shall have signed, or
whose facsimile signature shall have been used, printed or
stamped on any certificate or certificates for shares, shall
cease to be such officer or officers, because of death,
resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such
certificate or certificates if authenticated by the endorsement
thereon of the signature of a transfer agent or registrar shall
nevertheless be as effective in all respects when delivered as
though signed by a duly elected, qualified and authorized
officer or officers, and as though the person or persons who
signed such certificate or certificates, or whose facsimile
signature or signatures shall have been used thereon, had not
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(B) As an alternative to issuing stock certificates, a
shareholder may choose to have shares registered through an
uncertificated share registration system. |
Vote Necessary for Approval
The affirmative vote of the holders of a majority of the Common
Voting Shares outstanding as of the record date for the annual
meeting is required to approve the amendment to the Code of
Regulations. Broker nonvotes have the effect of a vote against
the proposal. The board of directors recommends that holders of
such shares vote FOR the amended Code. It is expected that
the Common Voting Shares owned by The Edward W. Scripps Trust
will be voted in favor of the amendment to the Companys
Code of Regulations, thus assuring its approval. Proxies for
Common Voting Shares solicited by the board will be voted FOR
the proposal unless shareholders specify a contrary choice in
their proxies.
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REPORT ON SECTION 16(a) BENEFICIAL OWNERSHIP
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys directors and officers, and owners
of more than ten percent of the Companys Class A
Common Shares (10% shareholders), to file with the
Securities and Exchange Commission (the SEC) and the
New York Stock Exchange initial reports of ownership and reports
of changes in ownership of Class A Common Shares and other
equity securities of the Company. Officers, directors and 10%
shareholders are required by SEC regulations to furnish the
Company with copies of all forms they file pursuant to
Section 16(a).
To the Companys knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, during the
year ended December 31, 2005, all Section 16(a) filing
requirements applicable to its officers, directors and 10%
shareholders were complied with, except that one Form 4,
representing one transaction for Mr. Mark S. Hale, Vice
President of Technology Operations, was filed one day late
because of an administrative issue.
ENGAGEMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
At its March 6, 2006 meeting, the audit committee of the
board of directors approved the appointment of
Deloitte & Touche LLP as independent registered public
accountants for the Company for the fiscal year ending
December 31, 2006. A representative of Deloitte &
Touche LLP, the Companys independent registered public
accounting firm during 2005, is expected to be present at the
Annual Meeting of Shareholders and will have an opportunity to
make a statement if he or she desires.
REPORT ON SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
Any shareholder proposals intended to be presented at the
Companys 2007 Annual Meeting of Shareholders must be
received by the Company at 312 Walnut Street, Suite 2800,
Cincinnati, Ohio, 45202, on or before November 10, 2006,
for inclusion in the Companys proxy statement and form of
proxy relating to the 2007 Annual Meeting of Shareholders.
If a shareholder intends to raise a proposal at the
Companys 2007 annual meeting that he or she does not seek
to have included in the Companys proxy statement, the
shareholder must notify the Company of the proposal on or before
January 6, 2007. If the shareholder fails to notify the
Company, the Companys proxies will be permitted to use
their discretionary voting authority with respect to such
proposal when and if it is raised at such annual meeting,
whether or not there is any discussion of such proposal in the
2007 proxy statement.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
Any interested person wishing to communicate with the board may
do so by addressing letters to the Corporate Secretary at 312
Walnut Street, Suite 2800, Cincinnati, Ohio, 45202. All
communications referring to material matters will be relayed to
the directors at their next board meeting.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the
board of directors. The cost of the solicitation will be borne
by the Company. The Company may also reimburse banks, brokerage
firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Companys Class A
Common Shares.
The presence of any shareholder at the meeting will not operate
to revoke his proxy. A proxy may be revoked at any time, insofar
as it has not been exercised, by giving written notice to the
Company or in open meeting.
The persons named in the enclosed proxy, or their substitutes,
will vote the shares represented by such proxy at the meeting.
The forms of proxy for the two respective classes of stock
permit specification of a vote for persons nominated for
election as directors by each such class of stock, as set forth
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under Election of Directors above, and the
withholding of authority to vote in the election of such
directors or the withholding of authority to vote for one or
more specified nominees. Where a choice has been specified in
the proxy, the shares represented thereby will be voted in
accordance with such specification. If no specification is made,
such shares will be voted to elect directors as set forth under
Election of Directors.
Under Ohio law and the Companys Articles of Incorporation,
broker non-votes for Class A Common Shares and abstaining
votes for both Class A Common Shares and Common Voting
Shares will not be counted in favor of, or against, election of
any nominee.
If any other matters shall properly come before the meeting, the
persons named in the proxy, or their substitutes, will vote
thereon in accordance with their judgment. The board does not
know of any other matters which will be presented for action at
the meeting.
A copy of the Companys Annual Report for the year ended
December 31, 2005 is enclosed.
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By order of the board of directors, |
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Mary Denise
Kuprionis, Esq.
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Vice President |
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Corporate Secretary/ Director of Legal Affairs |
March 31, 2006
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
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Please
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE |
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1.
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To vote for the following
nominees for election as directors:
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FOR
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WITHHOLD AUTHORITY |
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(01) David A. Galloway
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(02) Nicholas B. Paumgarten |
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(03) Ronald W. Tysoe and |
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(04) Julie A. Wrigley |
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(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees
name on the line provided below.)
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2.
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On such other business as may properly come before the meeting.
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The proxies will vote as specified above, or if a choice is not specified, they
will vote FOR the nominees listed in item 1. |
Receipt of the
Notice of Meeting of Shareholders and the related Proxy
Statement dated March 31, 2006 is hereby acknowledged.
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Dated:
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, 2006 |
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(Please date your Proxy) |
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Signature of Shareholder |
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Please sign exactly as your
name appears hereon, indicating, where
proper, official position or representative capacity.
When signing as Attorney, Executor, Administrator, Trustee, etc., give
full title as such.
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p FOLD AND DETACH HERE p
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
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Internet
http://www.proxyvoting.com/ssp-cla
Use the Internet to vote your proxy.
Have your proxy card in hand
when you access the web site.
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OR
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Telephone
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call.
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OR
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Mail
Mark, sign and date
your proxy card and
return it in the
enclosed postage-paid
envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
THE E.W. SCRIPPS COMPANY
PROXY FOR
CLASS A COMMON SHARES
The undersigned hereby appoints KENNETH W. LOWE, RICHARD A. BOEHNE
and MARY DENISE KUPRIONIS and each of them,
as the undersigneds proxies, with full power of substitution,
to attend the Annual Meeting of Shareholders of The E. W. Scripps Company,
to be held at the Queen City Club, Cincinnati, Ohio, on Thursday, May 4, 2006 at 10:00 A.M., local time, and
any adjournment or adjournments thereof, and to vote thereat the number of shares which the undersigned would be entitled to
vote, with all the power the undersigned would posses if present in person, as follows:
(Continued, and to be
signed, on other side)
Address Change / Comments (Mark the corresponding box on the reverse side)
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p FOLD AND DETACH HERE p
You can now access your account for THE E. W. SCRIPPS COMPANY online.
Access your shareholder account for The E. W. Scripps Company online via Investor
ServiceDirect® (ISD).
Mellon Investor Services LLC, Transfer Agent for The E. W. Scripps Company, now makes it easy and
convenient to get
current information on your shareholder account.
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View account status
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View payment history for dividends |
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View certificate history
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Make address changes |
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View book-entry information
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Obtain a duplicate 1099 tax form |
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Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
@
3/17/06
Vote by Telephone 1-xxx-xxx-xxx (provided by Mellon)
Have your proxy card available when you call the....
Language provided by Mellon or ComputerShare
Vote
by Internet https://www.proxyvotenow.com/ssp (provided by Mellon)
Vote by Mail
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THE E.W. SCRIPPS COMPANY
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PROXY FOR
CLASS A COMMON SHARES |
The
undersigned hereby appoints KENNETH W. LOWE, RICHARD A. BOEHNE and MARY
DENISE KUPRIONIS and each of them, as the undersigneds proxies, with full power
of substitution, to attend the Annual Meeting of Shareholders of The E. W.
Scripps Company, to be held at The Queen City Club, Cincinnati, Ohio, on
Thursday, May 4, 2006 at 10:00 A.M., local time, and any adjournment or
adjournments thereof, and to vote thereat the number of shares which the
undersigned would be entitled to vote, with all the power the undersigned would
possess if present in person, as follows:
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1.
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o FOR,
or o WITHHOLD AUTHORITY to vote for the following nominees for election as directors: (01) David A. Galloway,
(02) Nicholas B. Paumgarten, (03) Ronald W. Tysoe and (04) Julie A. Wrigley. |
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees name on the line provided below.)
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2.
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On such other business as may properly come before the meeting. |
The
proxies will vote as specified above, or if a choice is not
specified, they will vote FOR the nominees listed in Item 1.
(Continued, and to be signed, on the other side)
side
2:
Receipt of the Notice of Meeting of Shareholders and the related Proxy Statement dated March 31, 2006 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
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Dated
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, 2006
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(Please date
your Proxy) |
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Signature of
Shareholder |
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Please sign exactly as your name appears hereon,
indicating, where proper, official position or representative
capacity. |
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When signing as Attorney, Executor, Administrator,
Trustee, etc., give full title as such. |
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
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Please
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE |
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1.
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To vote for the following
nominees for election as directors:
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FOR
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WITHHOLD AUTHORITY |
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(01) William R. Burleigh
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(02) John H. Burlingame |
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(03) Kenneth W. Lowe |
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(04) Jarl Mohn |
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(05) Jeffrey Sagansky |
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(06) Nackey E. Scagliotti |
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(07) Edward W. Scripps and |
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(08) Paul K. Scripps. |
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(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees
name on the line provided below.)
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FOR
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AGAINST
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ABSTAIN |
2.
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WITH RESPECT TO, amending as
prosposed the Company's Code of Regulations.
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3.
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On such other business as may properly come before the meeting.
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The proxies will vote as specified above, or if a choice is not specified, they
will vote FOR the nominees listed in item 1 and FOR the
proposal set forth in item 2. |
Receipt of the
Notice of Meeting of Shareholders and the related Proxy
Statement dated March 31, 2006 is hereby acknowledged.
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Dated:
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, 2006 |
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(Please date your Proxy) |
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Signature of Shareholder |
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Please sign exactly as your
name appears hereon, indicating, where
proper, official position or representative capacity.
When signing as Attorney, Executor, Administrator, Trustee, etc., give
full title as such.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
p FOLD AND DETACH HERE p
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
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Internet
http://www.proxyvoting.com/ssp
Use the Internet to vote your proxy.
Have your proxy card in hand
when you access the web site.
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OR
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Telephone
1-866-540-5760
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call.
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OR
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Mail
Mark, sign and date
your proxy card and
return it in the
enclosed postage-paid
envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
THE E.W. SCRIPPS COMPANY
PROXY FOR
COMMON VOTING SHARES
The
undersigned hereby appoints KENNETH W. LOWE, RICHARD A. BOEHNE and
MARY DENISE KUPRIONIS and each of them, as the undersigned's proxies,
with full power of substitution, to attend the Annual Meeting of
Shareholders of the E.W. Scripps Company, to be held at The Queen City
Club, Cincinnati, Ohio, on Thursday, May 4, 2006 at 10:00 A.M., local
time, and any adjournment or adjournments thereof, and to vote
thereat the number of shares which the undersigned would be entitled
to vote, with all the power the undersigned would possess if present
in person, as follows.
(Continued and to be signed on other side)
Address Change / Comments (Mark the corresponding box on the reverse side)
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p
FOLD AND DETACH HERE p
You can now access your account for THE E. W. SCRIPPS COMPANY online.
Access your shareholder account for The E. W. Scripps Company online via Investor ServiceDirect® (ISD).
Mellon Investor Services LLC, Transfer Agent for The E. W. Scripps Company, now makes it easy and
convenient to get current information on your shareholder account.
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View account status
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View payment history for dividends |
View certificate history
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Make address changes |
View book-entry information
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Obtain a duplicate 1099 tax form |
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Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
@
3/17/06
Vote by Telephone 1-xxx-xxx-xxx (provided by Mellon)
Have your proxy card available when you call the....
Language provided by Mellon or ComputerShare
Vote
by Internet https://www.proxyvotenow.com/ssp (provided by Mellon)
Vote by Mail
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THE E.W. SCRIPPS COMPANY
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PROXY FOR
COMMON VOTING SHARES |
The undersigned hereby appoints KENNETH W. LOW, RICHARD A. BOEHNE and MARY
DENISE KUPRIONIS and each of them, as the undersigneds proxies, with full power
of substitution, to attend the Annual Meeting of Shareholders of The E. W.
Scripps Company, to be held at The Queen City Club, Cincinnati, Ohio, on
Thursday, May 4, 2006 at 10:00 A.M., local time, and any adjournment or
adjournments thereof, and to vote thereat the number of shares which the
undersigned would be entitled to vote, with all the power the undersigned would
possess if present in person, as follows:
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1.
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o FOR, or
o WITHHOLD AUTHORITY
to vote for the following nominees for election as directors:
(01) William R. Burleigh, (02) John H. Burlingame,
(03) Kenneth W. Lowe, (04) Jarl Mohn, (05) Jeffrey
Sagansky, (06) Nackey E. Scagliotti, (07) Edward W. Scripps
and (08) Paul K. Scripps. |
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees name on the line provided below.)
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2.
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o FOR, or
o AGAINST,
or
o ABSTAIN WITH RESPECT TO,
amending as proposed the Companys Code of Regulations.
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3.
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On such other business as may properly come before the meeting. |
The
proxies will vote as specified above, or if a choice is not
specified, they will vote FOR the nominees listed in
Item 1 and FOR the proposal set forth in item 2.
(Continued, and to be signed, on the other side)
side 2:
Receipt of the Notice of Meeting of Shareholders and the related Proxy Statement dated
March 31, 2006 is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
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Dated
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, 2006
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(Please date
your Proxy) |
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Signature of
Shareholder |
|
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|
|
Please sign exactly as your name appears hereon,
indicating, where proper, official position or representative
capacity. |
|
|
|
When signing as Attorney, Executor, Administrator,
Trustee, etc., give full title as such. |