Washington, D.C. 20549

SCHEDULE 14A INFORMATION

 

THE E. W. SCRIPPS COMPANY

 

Scripps Center
312 Walnut Street
Cincinnati, Ohio 45202

 

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

TO BE HELD MAY 5, 2009

 

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, 331 East Fourth Street, Cincinnati, Ohio, on Tuesday, May 5, 2009, at 10:00 a.m., local time, for the following purposes:

 

1. to elect directors; and

 

2. to transact such other business as may properly come before the meeting.

 

The board of directors has fixed the close of business on March 6, 2009, 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 secretary’s office.

 

We are furnishing our proxy materials to you under Securities and Exchange Commission rules that allow companies to deliver proxy materials to their shareholders on the Internet. On or about March 18, 2009, you were provided with a Notice of Internet Availability of Proxy Materials (“Notice”) and provided access to our proxy materials over the Internet. The proxy materials include the 2008 Annual Report to Shareholders and the Proxy Statement.

 

We encourage you to attend the Annual Meeting. However, it is important that your shares be represented whether or not you are personally able to attend. Even if you plan to attend the Annual Meeting, please vote as instructed on the Notice, via the internet or the telephone as promptly as possible to ensure that your vote is recorded. Alternatively, you may follow the procedures outlined in the Notice to request a paper proxy card to submit your vote by mail. If you attend the meeting and your shares are registered in your name, you may withdraw your proxy at that time and vote your shares in person.

 

Your proxy is being solicited by the board of directors.

 

Mary Denise Kuprionis, Esq.
Vice President, Secretary,
Chief Ethics & Compliance Officer

 

March 18, 2009

 

 

The E. W. Scripps Company

 

312 Walnut Street

Cincinnati, Ohio 45202

 

 

PROXY STATEMENT

 

2009 ANNUAL MEETING
MAY 5, 2009

 

This Proxy Statement is being 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 Company’s Annual Meeting of Shareholders (the “Annual Meeting”) which will be held on Tuesday, May 5, 2009, at the Queen City Club, 331 East Fourth Street, Cincinnati, Ohio, at 10:00 a.m. local time.

 

The close of business on March 6, 2009, has been fixed as the record date for the determination of shareholders entitled to notice of and to vote at the meeting.

 

INTERNET AVAILABILITY OF PROXY MATERIALS

 

We are furnishing proxy materials to our shareholders primarily via the Internet under rules adopted by the U.S. Securities and Exchange Commission, instead of mailing printed copies of those materials to each shareholder. On March 18, 2009, we mailed to our shareholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Proxy Statement and our Annual Report to Shareholders. The Notice of Internet Availability of Proxy Materials also instructs you on how to access your proxy card to vote via the Internet or by telephone.

 

This process is designed to expedite shareholders’ receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources. If you would prefer to continue to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.

 

VOTING PROCEDURES

 

On March 6, 2009, the Company had outstanding 41,944,559 Class A Common Shares, $.01 par value per share (“Class A Common Shares”), and 11,933,401 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.

 

SOLICITATION OF PROXIES

 

The solicitation of proxies is made by and on behalf of the board of directors. The Company will pay the cost of the solicitor of proxies, including the cost of printing and mailing proxy materials. In addition to the solicitation of proxies by mail, solicitation may be made by directors, officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid to such persons for such solicitation. The Company will reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to beneficial owners of shares. The Company has retained Georgeson Inc., at an estimated cost of $2,000, to assist the Company in the solicitation of proxies from brokers, nominees, institutions and individuals.

 

PROPOSAL 1

 

Election of Directors

 

A board of nine directors is to be elected, three by the holders of Class A Common Shares voting separately as a class and six by the holders of Common Voting Shares voting separately as a class. The Nominating & Governance committee recommended to the board of directors each of the nominees set forth below. In the election, the nominees receiving the greatest number of votes will be elected. Each director’s term lasts until the 2010 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 three directors hereinafter shown as nominees for such class of shares, unless otherwise indicated on such proxy. Each proxy for Common Voting Shares executed and returned by a holder of such shares will be voted for the election of the six 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.

 

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.

 

 

 

 

Mr. William R. Burleigh, a director of the Company since 1990, chose not to be a nominee for director at the May 2009 annual meeting of shareholders. The Company wishes to publicly acknowledge his service and expresses its gratitude for his many contributions to the Company. Ms. Scagliotti will succeed Mr. Burleigh as chair of the board of directors.

 

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, 2008, of more than 5 percent of the Company’s outstanding Class A Common Shares or Common Voting Shares. Unless otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares shown therein as being beneficially owned by them.

 

 

 

 

REPORT ON THE SECURITY OWNERSHIP OF MANAGEMENT

 

The following information is set forth with respect to the Company’s Class A Common Shares and Common Voting Shares beneficially owned as of January 31, 2009, 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.

 

 

 

 

 

REPORT ON THE BOARD OF DIRECTORS AND ITS COMMITTEES

 

2008 Board Meetings

 

During 2008, the board held four regularly scheduled meetings and six special meetings. All directors attended at least 75 percent of the meetings of the board and of the committees on which they served during the year ended December 31, 2008.

 

Executive Sessions of Directors

 

Executive sessions of nonmanagement directors are held regularly. The director who presides at these meetings is the chair of the board of directors or another director selected by the board at the time of such meeting.

 

Committee Charters

 

The charters of the audit, compensation and nominating & governance committees are available for review on the Company’s Web site at www.scripps.com by first clicking on “Shareholders,” and then on, “Corporate Governance,” and then on “Highlights.” Copies are available in print to any shareholder who requests a copy by contacting the Company’s secretary at 312 Walnut Street, Suite 2800, Cincinnati, Ohio, 45202.

 

Committees of the Board of Directors

 

Executive Committee.  William R. Burleigh (chair), Nackey E. Scagliotti and Richard A. Boehne have been the members of the executive committee since July 1, 2008, the effective date of the Company’s distribution of Scripps Networks Interactive, Inc’s stock to Company shareholders (the “Spin-Off”). Prior to the Spin, the members of the executive committee were Mr. Burleigh, Mr. John H. Burlingame and Mr. Kenneth W. Lowe. This committee may exercise 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. Effective on the date of the 2009 annual meeting of shareholders, Ms. Scagliotti, will become chair of the executive committee and Mr. John W. Hayden will join the committee. The executive committee held one meeting in 2008.

 

Audit Committee.  J. Marvin Quin (chair), William R. Burleigh, John W. Hayden and Kim Williams are the members of the audit committee. Prior to the Spin-Off, committee members were Messrs. Ronald W. Tysoe (chair), David Moffett, Jeffrey Sagansky, and Ms. Julie A. Wrigley. Mr. Moffett became chair of the committee on July 1, 2008 but resigned from the board of directors in November 2008. Effective with Mr. Moffett’s resignation, Mr. Hayden was elected chair of the committee and Mr. Burleigh joined the committee. Mr. Quin was elected a member of the board of directors on January 9, 2008 and elected chair of the committee on February 17, 2009. The purpose of the committee is to assist the board in fulfilling its oversight responsibility relating to (1) the integrity of the company’s financial statements and financial reporting process and the company’s systems of internal accounting and financial controls; (2) the performance of the internal audit services function; (3) the annual independent audit of the Company’s financial statements, the engagement of the independent auditors and the evaluation of the independent auditors’ qualifications, independence, performance and fees; (4) the compliance by the company with legal and regulatory requirements, including the Company’s disclosure controls and procedures; (5) the evaluation of enterprise risk issues; and (6) the fulfillment of all other responsibilities as outlined in its charter. 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. During 2008 the audit committee held six meetings.

Compensation Committee.  Roger L. Ogden (chair), John H. Burlingame and Kim Williams have been the members of the compensation committee since July 1, 2008. Prior to the Spin-Off, committee members were Messrs. David A. Galloway (chair), John H. Burlingame, Jarl Mohn and Ronald W. Tysoe. The committee is appointed by the board of directors to discharge the board’s responsibilities relating to compensation of the company’s directors and officers. The committee reviews and approves the company’s goals and objectives relevant to compensation of senior management and evaluates the performance of senior management in light of those goals and objectives. With respect to the senior managers, the committee establishes base compensation levels, the terms of incentive compensation plans and equity-based plans and post-service arrangements. The committee approves all awards under the Company’s Long-Term Incentive Plan and approves awards under the Company’s Executive Annual Incentive Plan. The committee reviews all of the components of the chief executive officer’s compensation, including goals and objectives and makes recommendations to the board of directors.

 

With respect to any funded employee benefit plan covering employees of the Company, the Committee has the definitive authority to appoint and terminate the named fiduciary or named fiduciaries of such plan(s). On an annual basis, the committee reviews the operation of the Company’s compensation program to evaluate its coordination and execution and reviews any management perquisites. The committee reviews succession planning relating to positions held by senior officers of the Company and reviews director compensation and makes recommendations with respect thereto to the board of directors. The committee has the authority to engage outside consultants to assist in determining appropriate compensation levels for the chief executive officer, other senior managers or directors. In 2008, the committee did not engage any consultants but received survey data from a consultant engaged by management. The committee is also responsible for producing an annual report for inclusion in the Company’s proxy statement and reviewing and approving the Compensation Discussion and Analysis and related compensation disclosures included in the Company’s proxy statement. During 2008, the compensation committee held seven meetings.

 

Nominating & Governance Committee.  Nackey E. Scagliotti (chair), William R. Burleigh, John W. Hayden, Mary McCabe Peirce and Paul K. Scripps are the members of the nominating & governance committee. Prior to the Spin-Off, the members were Ms. Scagliotti, Mr. Burleigh, Mr. John H. Burlingame, Mr. Nicholas B. Paumgarten, Mr. Scripps and Ms. Julie A. Wrigley. The purpose of the committee is (1) to assist the board by identifying individuals qualified to become board members and to recommend director nominees to the board; (2) to recommend to the board corporate governance principles that might be applicable to the Company; (3) to lead the board in its annual review of the board’s performance; and (4) to recommend to the board nominees for each committee of the board. During 2008, the nominating & governance committee held four meetings.

 

CORPORATE 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 Company’s corporate governance principles, a copy of which is available on the Company’s Web site by first clicking on “Shareholders,” and then on, “Corporate Governance,” and then on “Highlights.” Copies are available in print to any shareholder who requests a copy by contacting the Company’s secretary at 312 Walnut Street, Suite 2800, Cincinnati, Ohio, 45202.

 

Code of Ethics

 

The Company demonstrates its commitment to operate at the highest ethical standards by enforcing the principles in its Code of Ethics which is applicable to all employees. The Company’s chief ethics and compliance officer is responsible for implementation and oversight of the ethics program. Additionally, the Company has in place a Code of Business Conduct and Ethics for the Chief Executive Officer and the Senior Financial and Accounting Officers. 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. Both the Code of Business Conduct and Ethics for the Chief Executive Officer and Senior

Financial Officers and the Code of Ethics are available for review on the Company’s Web site and to any shareholder who requests a printed copy.

 

The Company believes it has an obligation to provide employees with the guidance and support needed to ensure that the best, most ethical choices are made at work. To support this commitment, the Company established a means for employees to submit confidential and anonymous reports of suspected or actual violations of the Company’s Code of Ethics relating, among other things, to: accounting and auditing matters; antitrust activity; confidentiality and misappropriation; conflict of interest; discrimination or harassment; diverting of product or business activity; embezzlement; employee relations; falsification of contracts, reports or records; gifts or entertainment; improper supplier or contractor activity; leadership or management issues; securities violations; sexual harassment; substance abuse; theft; or unsafe working conditions; violence or threat. To submit a report, an employee may call a toll-free number that is answered by a trained professional of EthicsPoint, an independent firm. This number (888-397-4911) is operational 24 hours a day, seven days a week. Employees may also raise questions online through the Internet (www.ethicspoint.com). The Company also provides employees a direct phone number to contact its chief ethics officer.

 

Charitable Contributions

 

The Company has not made any charitable contributions, where the amount has exceeded $1 million or two percent of such charity’s consolidated gross revenues, to any charitable organization of which a director is an executive officer.

 

Communications with the Directors

 

Shareholders and other interested parties wishing to communicate with the board of directors may do so by addressing letters to the secretary of the Company at 312 Walnut Street, Suite 2800, Cincinnati, Ohio, 45202. For those who wish to send such communications via e-mail, they can do so at kuprionis@scripps.com. The board has instructed the secretary to review all communications so received (via regular mail or e-mail), and to exercise her discretion not to forward to the directors correspondence that is not germane to the business affairs of the Company. Correspondence not forwarded will be retained for one year and any director may request the secretary to forward any and all such communications to the directors.

 

Director Attendance at Annual Meetings of Shareholders

 

The Company does not have a policy with regard to attendance by board members at the Annual Meeting of Shareholders. Mr. Burleigh and Mr. Kenneth W. Lowe, a director of the Company until June 30, 2008, attended the Company’s 2008 annual meeting of shareholders.

 

Director Education

 

New directors attend a training session that introduces them to the Company’s 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. The director orientation policy is reviewed by the nominating & governance committee annually.

 

Director Independence — Audit Committee

 

The board of directors of the Company has determined that none of the current members of the audit 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 in 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. Hayden and Mr. Quin are audit committee financial experts as defined in the SEC rules adopted under the Sarbanes-Oxley Act.

Director Independence — Controlled Company Status

 

The New York Stock Exchange requires listed companies to have a majority of independent directors on their boards and to ensure that their audit committee, compensation committee and governance committee are composed of a majority of independent directors as well. A company that qualifies as a “controlled company” does not have to comply with these independence rules so long as it discloses to shareholders that the company qualifies as a “controlled company” and is relying on this exemption in not having a majority of independent directors on the board or a majority of independent directors on either of the aforementioned committees. A “controlled company” is a listed company of which more than 50 percent of the voting power is held by an individual, a group, or another company. The Edward W. Scripps Trust holds a majority of the Company’s outstanding Common Voting Shares, and as such the Company qualifies as a “controlled company” and may rely on the NYSE exemption. The Company is not relying at present on that exemption.

 

Director Independence

 

The Company has determined that the following directors are independent under the standards established by the NYSE: William R. Burleigh, John H. Burlingame, John W. Hayden, Roger L. Ogden, Mary McCabe Peirce, J. Marvin Quin, Nackey E. Scagliotti, Paul K. Scripps, and Kim Williams. Additionally, all of the members of its nominating & corporate governance committee and its compensation committee are independent under such standards.

 

Director Service on Other Audit Committees

 

None of the Company’s directors currently serves on the audit committees of more than four public companies.

 

Nominations for Directors

 

The nominating & governance committee will review any candidate recommended by the shareholders of the Company in light of the committee’s criteria for selection of new directors. If a shareholder wishes to recommend a candidate, he or she should send the recommendation, with a description of the candidate’s qualifications, to: Chair, Nominating & Governance Committee, c/o Ms. Mary Denise Kuprionis, The E. W. Scripps Company, 312 Walnut 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.

 

Nomination for Directors — Qualification Standards

 

When selecting new director nominees, the nominating & governance committee considers requirements of applicable law and listing standards, as well as the director qualification standards highlighted in the Company’s corporate governance principles. The committee is responsible for reviewing with the board the requisite skills and characteristics of new board candidates as well as the diversity and composition of the board as a whole. A person considered for nomination to the board must be a person of high integrity. Other factors considered are independence, age, skills, and experience in the context of the needs of the board. The nominating & governance committee makes recommendations to the board regarding the selection of director nominees.

 

NYSE Annual Written Affirmation

 

On July 14, 2008, the Company filed with the New York Stock Exchange the Annual Written Affirmation and the CEO Certification required under NYSE rules.

 

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

 

Responsibilities

 

The audit committee is comprised solely of independent directors and, among other things, is responsible for the following reviews, approvals and processes. Additionally, the audit committee members have reviewed the Company’s Code of Ethics and have established guidelines for receiving and reviewing reports on issues raised by employees using the Company’s HelpLine.

 

 

In discharging its oversight responsibility as to the audit process, the audit committee reviewed and discussed the audited financial statements of the Company for the year ended December 31, 2008, with the Company’s management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements. The committee also discussed with the Company’s internal auditor, and with Deloitte & Touche LLP (“Deloitte”), the overall scope and plan for their respective audits. The committee meets with the internal auditor and Deloitte, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

 

Independence of the External Auditors

 

The committee has established a pre-approval policy and procedures for audit, audit-related and tax services that can be performed by the independent auditors without specific authorization from the committee subject to certain restrictions. The policy sets out the specific services pre-approved by the committee and the applicable limitations, while ensuring the independence of the independent auditors to audit the Company’s financial statements is not impaired.

Service Fees Paid to the Independent Registered Public Accounting Firm

 

The following table sets forth fees for all professional services rendered by Deloitte to the Company for the years ended December 31, 2008 and 2007.

 

 

 

 

Report of the Audit Committee

 

In connection with the financial statements for the fiscal year ended December 31, 2008, the Audit Committee has:

 

 

Based upon these reviews and discussions, the audit committee at its February 16, 2009, meeting, approved the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, with the United States Securities and Exchange Commission.

 

The Audit Committee

 

J. Marvin Quin, Chair
William R. Burleigh
John W. Hayden
Kim Williams

 

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

 

The compensation committee of the Company’s board of directors (collectively, the “Committee”) has submitted the following report for inclusion in this Proxy Statement:

 

Our Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on our Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for filing with the SEC.

 

The foregoing report is provided by the following directors, who constitute the Committee:

 

The Compensation Committee

 

Roger L. Ogden, Chair
John H. Burlingame
Kim Williams

 

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis explains the Company’s compensation program for our named executive officers during 2008.

 

Background

 

On May 8, 2008, our Board of Directors approved a plan to separate the Company into two publicly traded companies effective July 1, 2008: one comprising the networks and interactive media businesses operated by Scripps Networks Interactive, Inc. (“SNI”) and one comprising the newspaper, broadcast television, licensing and other media businesses, which continues to be owned and operated by the Company. We refer to this transaction as the “spin-off.”

 

In anticipation of the spin-off transaction, the Compensation Committee made several changes to our compensation program. For example, it did not reference market survey data when setting compensation levels, it divided the annual incentive plan into two six-month performance periods, and it issued time-based restricted shares, in lieu of performance-based restricted shares. These changes are all described in more detail below.

 

The spin-off also changed the composition of the named executive officers included in our proxy statement (“NEOs”). In general, our NEOs include the following individuals who served as executive officers of the Company as of December 31, 2008:

 

 

This Compensation Discussion and Analysis describes the compensation program for these NEOs for the entire year. In general, the Compensation Committee established the compensation levels for these executives during the annual review process in February 2008 (with the exception of Mr. Stautberg and Ms. Knutson, who were reviewed by their supervisors). At the time of the spin-off, Richard A. Boehne was appointed President and Chief Executive Officer, Timothy E. Stautberg was appointed Senior Vice President and Chief Financial Officer, and Lisa A. Knutson was appointed Senior Vice President/Human Resources. The Compensation Committee used applicable market data and adjusted the compensation levels for these three executives effective July 1, 2008 to reflect their expanded roles and additional responsibilities.

 

Certain of our executive officers, however, terminated employment with us at the time of the spin-off and became executive officers of SNI, including:

 

 

Although these former executives no longer work for the Company, the SEC requires that we treat them as our NEOs for 2008. This Compensation Discussion and Analysis only provides compensation information for these individuals through the effective date of the spin-off.

Overview of Compensation Program

 

Objectives

 

The 2008 executive compensation program was designed to meet the following three objectives that align with and support our strategic business goals:

 

 

Compensation Elements

 

The key elements of the Company’s executive compensation program were base salary, annual incentives, long-term incentives consisting of stock options and restricted shares, and retirement benefits. The NEOs also received certain perquisites, but these perquisites were not a key element of compensation. The chart below illustrates how each element of compensation fulfills the Company’s compensation objectives discussed above.

 

 

Use of Market Survey Data

 

The Company believes that each element of its compensation program should remain competitive in order to attract and retain key executive talent. To help determine the competitive market, the Compensation Committee has relied in the past on market compensation data of comparable executive positions within similarly-sized media companies. During 2008, market survey data was used as follows:

 

 

 

•   Belo Corp.		•   Meredith Corporation
•   Dow Jones		•   The New York Times Company
•   Gannett Co., Inc.		•   Sinclair Broadcast Group, Inc.
•   Hearst-Argyle Television, Inc.		•   Tribune Company
•   The McClatchy Company		•   Washington Post
•   Media General, Inc.

 

 

•   A. H. Belo Corporation		•   LIN TV Group
•   Belo Corp.		•   The McClatchy Company
•   Gannett Co., Inc.		•   Media General, Inc.
•   GateHouse Media, Inc.		•   Meredith Corporation
•   Gray Television, Inc.		•   The New York Times Company
•   Hearst-Argyle Television, Inc.		•   Nexstar Broadcasting Group, Inc.
•   Journal Communications, Inc.		•   Sinclair Broadcast Group, Inc.
•   Lee Enterprises, Incorporated

 

Analysis of Each Compensation Element

 

Following is a brief summary of each element of the compensation program for NEOs.

 

Base Salary

 

The Company provides competitive base salaries to attract and retain key executive talent. The Compensation Committee believes that a competitive base salary is an important component of total compensation because:

 

 

Base salary also is included in the calculation for other compensation opportunities for NEOs:

 

 

Pre-Spin Base Salary Adjustments

 

In early 2008, as part of our annual executive and management performance evaluation process, the Compensation Committee established the base salaries of our NEOs, other than Mr. Stautberg and Ms. Knutson. Because they were in non-executive positions, the base salary level for each of Mr. Stautberg and Ms. Knutson was established by his or her direct supervisor. The Compensation Committee (or in the case of Mr. Stautberg and Ms. Knutson, their supervisors) considered the overall performance of each NEO as well as the recommendations of Mr. Lowe, as Chief Executive Officer.

 

The pre-spin base salary adjustments ranged from 2.9% to 10.2% for Messrs. Lowe, Cruz, Hale, Boehne, Stautberg, Contreras and Peterson and Ms. Knutson. Mr. NeCastro and Mr. Lansing received 12.5% and 7.7% increases in base salary respectively as part of a longer-term plan to increase their base salary relative to their substantial contributions to the leadership of the Company.

 

Adjustments for the Spin-Off

 

In preparation for the spin-off, the Compensation Committee reviewed the base salaries of Messrs. Boehne and Stautberg and Ms. Knutson to determine if any adjustments would be advisable in light of their promotions in connection with the spin-off transaction. Messrs. Peterson and Contreras did not receive a post-spin salary adjustment as their responsibilities were relatively unchanged as a result of the transaction.

 

The Compensation Committee used the market survey data described above and consulted with Mr. Boehne in light of his appointment as our new Chief Executive Officer. In general, the Compensation Committee took into consideration the expanded roles and additional responsibilities that Messrs. Boehne, Stautberg, and Ms. Knutson would have after the spin-off transaction and made appropriate adjustments based on their new roles, knowledge, skills and potential. The adjusted base salary levels for these executives were targeted and established at or below the market median of the salaries for executives with similar roles within the survey data. The resulting post-spin base salaries were as follows, effective July 1, 2008:

 

 

For 2009 as part of its cost-cutting initiative, the Company implemented a program to temporarily reduce the base salaries of our senior executives. As a result, Mr. Boehne voluntarily agreed to reduce his 2009 base salary by 15% and Messrs. Stautberg and Contreras and Ms. Knutson voluntarily agreed to reduce their 2009 base salaries by 10%. Mr. Peterson retired effective December 31, 2008.

Annual Incentive

 

The Company maintains an annual incentive program, under which our NEOs are eligible to receive annual cash payments based on the extent to which certain operational goals are achieved. The Compensation Committee believes that a competitive annual incentive program is an important component of total compensation because:

 

 

In the past, the annual incentive payout was based on the extent to which the Company achieved certain pre-established performance goals during the year. As a result of the spin-off transaction, however, the Compensation Committee decided to establish two separate plans — one based on performance during the year up to the date of the spin-off and one based on performance during the year after the spin-off. These two plans are referred to as the “pre-spin plan” and the “post-spin plan.” The pre-spin plan covered all of our NEOs. The post-spin plan, however, only applied to Messrs. Boehne, Stautberg, Peterson and Contreras and Ms. Knutson. This is because Messrs. Lowe, NeCastro, Lansing and Cruz terminated employment with the Company effective as of the spin-off.

 

Target Incentive Opportunities

 

Under the annual incentive program, NEOs have the opportunity to earn targeted incentive cash payments that are calculated as a percentage of each executive’s annual base salary. These percentages are developed according to each executive’s position and level of responsibility.

 

In early 2008, the Compensation Committee reviewed the pre-spin plan target incentive opportunities of our NEOs, other than Mr. Stautberg and Ms. Knutson. Because they were in non-executive positions, the pre-spin plan target incentive opportunities for each of Mr. Stautberg and Ms. Knutson were reviewed by his or her direct supervisor. The Compensation Committee (or in the case of Mr. Stautberg and Ms. Knutson, their supervisors) considered the overall performance of each NEO as well as the recommendations of Mr. Lowe, as Chief Executive Officer. The pre-spin plan target incentive opportunities were as follows:

 

 

At the time of the spin-off, the Compensation Committee established the post-spin plan target incentive opportunities of Messrs. Boehne and Stautberg and Ms. Knutson. Messrs. Peterson and Contreras did not receive a post-spin adjustment to their target incentive opportunities because their responsibilities were relatively unchanged as a result of the transaction.

 

The Compensation Committee used the post-spin market survey data described above and consulted with Mr. Boehne in light of his appointment as our new Chief Executive Officer. The Compensation Committee took into consideration the expanded roles and additional responsibilities that Messrs. Boehne

and Stautberg and Ms. Knutson would have after the spin-off transaction and made appropriate adjustments based on their new roles, knowledge, skills and potential. In general, the Compensation Committee attempted to target the post-spin total cash compensation of the executives to the median total cash compensation levels of the survey data. The total cash compensation for Messrs. Boehne and Stautberg as well as Ms. Knutson is targeted below the market median, reflecting the fact that each is new to his or her current role. The post-spin plan target incentive opportunities for Messrs. Boehne and Stautberg and Ms. Knutson were as follows:

 

 

Performance Goals

 

The annual incentive payouts for 2008 were based on the extent to which the Company achieved pre-established performance goals during each six-month performance period. The Company established different performance goals for the pre-spin and post-spin plans.

 

For the pre-spin plan, the Company used both segment profit and earnings per share as performance goals.

 

 

For the post-spin plan, the Company used only segment profit as the performance goal. The Compensation Committee wanted to focus our executives on segment profit goals to be consistent with the Company’s business objectives for the remainder of the year.

 

Payout Percentages

 

For both of the pre-spin plan and the post-spin plan, the annual incentive opportunity could vary from 0% to 165% of the targeted percentage of base salary, according to the level of overall performance achieved for the performance period relative to the established performance goals for each plan.

 

The payout schedule for each plan was a sliding scale designed to motivate and reward exceptional performance. In this regard, the payout percentage decreases if targeted performance is not achieved, and the payout percentage increases if the Company surpasses its targeted goals. Moreover, it also imposes substantial downside risk for the executives, as a failure to attain threshold performance results in no payout. For example:

 

 

 

The following tables reflect the actual achievement level for each performance goal along with the payout percentage for each performance goal for the pre-spin plan and the post-spin plan. Based on criteria established at the beginning of the performance period, the Compensation Committee was required to (i) adjust the pre-spin consolidated segment profit and earnings per share results to take into account costs related to the spin-off, a gain on the sale of property in Denver and the impairment charge related to newspaper goodwill; and (ii) adjust the post-spin consolidated segment profit to take into account costs related to the spin-off and a reduction in force program at several of the newspapers, and operating losses from Denver as we looked for a buyer or considered a shutdown of this facility.

 

 

 

 

 

In February 2009, Mr. Boehne asked that he not be considered to receive an annual incentive for the second half of 2008 due to his desire to further support the Company’s cost cutting initiatives and in response to the current economic environment. The Compensation Committee honored Mr. Boehne’s request, and also decided to eliminate the annual incentives for the second half of 2008 for the other NEOs due to the challenging economic environment facing the Company.

 

Additional Information

 

For more information on the pre-spin plan and post-spin plan annual incentive opportunities, please refer to the “Grants of Plan-Based Awards” table in this proxy statement. The “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column of that table provides the estimated payouts for NEOs at Threshold, Target and Maximum performance levels for each plan. Please refer to the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for the actual amounts earned by each NEO under the pre-spin plan and post-spin plan.

 

Changes to Annual Incentives for 2009

 

In February 2009, the Committee established the 2009 annual incentive program for our NEOs. The Committee modified the 2008 program to focus solely on subjective assessments of strategic measures and individual performance. Achievement of these measures will focus our NEOs on our mid-term and long-term success and position the Company for the future even if short-term financial results are negatively impacted by current economic conditions. Moreover, in light of the Company’s cost-cutting initiatives, the target annual incentive opportunity for each NEO was reduced by 75%. As a result, the 2009 target incentive opportunity for Mr. Boehne is 23.75% and the target incentive opportunity for each of Messrs. Stautberg, Peterson, Contreras and Ms. Knutson is 12.5%.

 

Long-Term Incentives

 

The Company maintains the 1997 Long-Term Incentive Plan, which was most recently approved by the Company’s shareholders in 2008. In 2008, the Compensation Committee granted awards of restricted shares and stock options to the NEOs under this plan. This was a change from the grants in prior years which included performance-based restricted shares.

 

The Committee believes that a competitive long-term incentive program is an important component of total compensation because:

 

 

Long-Term Incentive Opportunities

 

In February 2008, the Compensation Committee approved the target value of the equity award for each NEO (other than Ms. Knutson) based on each NEO’s position and level of responsibility, and the historical equity grants. Decisions regarding long-term incentive grants are made based on role, amount of impact and retention objectives. The grant date fair value of the awards is listed in the “Grants of Plan-Based Awards” tables in this proxy statement.

 

One half of the target value for our officers was awarded in the form of stock options while the other half was awarded in the form of restricted shares. The Compensation Committee believed that using a combination of stock options and restricted shares for our officers prior to the spin-off struck an appropriate balance between establishing strong retention incentives during the spin-off transaction and increasing long-term shareholder value, as more fully described below. Because Ms. Knutson was not an officer of the Company in February 2008, her target value was established by her supervisor, was approved by Mr. Lowe, as Chief Executive Officer, and was allocated entirely in the form of stock options.

 

 

 

In preparation for the spin-off, the Compensation Committee reviewed the target value of the equity awards of Messrs. Boehne and Stautberg and Ms. Knutson to determine if any adjustments would be advisable in light of their promotions in connection with the spin-off transaction. The Compensation Committee used the market survey data described above and consulted with Mr. Boehne in light of his appointment as our new Chief Executive Officer. In general, the Compensation Committee took into consideration the expanded roles and additional responsibilities that the executives would have after the spin-off transaction and made appropriate adjustments based on their new roles, knowledge, skills and potential. In light of the above, the Compensation Committee decided to make additional equity awards to these NEOs, effective August 1, 2008, based on the following target values:

 

 

Messrs. Peterson and Contreras did not receive a post-spin equity grant as their responsibilities were relatively unchanged as a result of the transaction.

 

The target value listed above was awarded entirely in the form of restricted shares (with the same terms as those granted prior to the spin-off). The restricted shares are intended to enhance our retention program after the spin-off for executives who received significant promotions.

 

Adjustments to Equity Awards in the Spin-Off

 

Effective as of the spin-off, each Company stock option, restricted share and restricted share unit held by individuals who became employees of SNI (including Messrs. Lowe, NeCastro, Lansing and Cruz) was converted to a comparable award covering SNI Class A common shares. The number of shares covered by each award and the exercise price of each stock option were adjusted to maintain the award’s economic value. All other terms of the awards, including the terms and conditions relating to vesting, the post-termination exercise period, and the applicable exercise and tax withholding methods, remained the same. These conversion awards are subject to the terms and conditions of the SNI equity plan. The Compensation Committee adopted this approach in an effort to directly align the interests of SNI employees with the new company and the potential growth value of its stock.

 

All Company stock options and restricted shares held by individuals who remained employed by the Company (including Messrs. Boehne, Stautberg, Peterson, Contreras and Ms. Knutson) were adjusted as follows: (i) vested stock options were split 80% — 20% between SNI stock options and Company stock options, (ii) unvested stock options remained unvested Company stock options, and (iii) restricted shares were split between Company restricted shares and SNI restricted shares based on the 1-to-1 distribution ratio. In each case, the number of shares covered by each award and the exercise price of each stock option were adjusted to maintain the award’s economic value. All other terms of the awards, including the terms and conditions relating to vesting, the post-termination exercise period, and the applicable exercise and tax withholding methods, remained the same. For purposes of applying the vesting schedules and termination provisions of the SNI awards held by Company employees, continued service with Scripps and its subsidiaries from and after the spin-off will be deemed to constitute service with SNI. The Committee believed that these adjustments balanced its goals of allowing employees to participate in the potential growth of SNI after the spin-off, in a manner similar to our shareholders, while at the same time providing incentives to continue to increase the long-term value of the Company.

Equity Grant Practices

 

The Compensation Committee grants annual equity awards at its February meeting. This meeting date is set typically two years in advance. The Committee does not grant equity compensation awards in anticipation of the release of material nonpublic information. Similarly, the Company does not time the release of material nonpublic information based on equity award grant dates.

 

Additional Information

 

For more information on the equity awards granted to NEOs in 2008, please refer to the “Grants of Plan-Based Awards” tables in this proxy statement. For information about the total number of equity awards outstanding as of the end of 2008 with respect to each NEO, please refer to the “Outstanding Equity Awards at Fiscal Year-End” tables of this proxy statement.

 

Retirement Plans

 

The Company maintains a defined benefit pension plan and a 401(k) plan, which cover NEOs along with substantially all other non-union employees of the Company and its subsidiaries.

 

In order to attract and retain key executive talent at the Company, the Compensation Committee believes that it is important to provide the executive officers, including NEOs, with retirement benefits that are in addition to those generally provided to its employees. As a result:

 

 

In February 2009, the Board of Directors approved the following changes to the Company’s retirement plans as part of an overall cost-savings strategy:

 

 

The details of these changes will be finalized over the next several months and will therefore be described in next year’s proxy statement.

 

Health, Welfare and Other Personal Benefits

 

In addition to the principal compensation components described above, the NEOs are entitled to participate in all health, welfare, fringe benefit and other arrangements generally available to other employees.

 

The Company may also, as considered reasonable and appropriate on a case-by-case basis, provide its officers, including its NEOs, with limited additional perquisites and other personal benefits. For example, NEOs are provided a financial planning benefit, plus an additional payment to cover taxes associated with the compensation value of this benefit. Beginning in 2009, the “tax gross up” related to financial planning was eliminated.

 

The Company also provides perquisites that facilitate involvement of executive officers in the business community by sponsoring membership in luncheon and business clubs, and with respect to

only Mr. Lowe (prior to the spin-off transaction), a country club membership per his employment agreement.

 

Finally, the NEOs are eligible for an annual executive physical. Typically, the majority of the cost associated with this benefit is covered under the established health care plans; however, if certain tests or procedures are not covered, the Company will pay the difference.

 

For more information about the perquisites provided in 2008 to each NEOs, please refer to the “All Other Compensation” column of the Summary Compensation Table of this proxy statement.

 

Employment Agreements, Executive Severance Plan and Change in Control Plan

 

The Compensation Committee believes that severance protections convey the Company’s commitment to each NEO while offering flexibility for any potential changes in compensation or duties. Accordingly, the Company provides severance protections for NEOs under employment agreements, the Executive Severance Plan and the Change in Control Plan.

 

Employment Agreements

 

Each of Mr. Boehne and Mr. Contreras are covered by an employment agreement. The agreements were established in June 2006 and were recently revised to comply with recent tax law changes and to reflect Mr. Boehne’s promotion to CEO. Messrs. Lowe, NeCastro, Lansing and Cruz also were covered by employment agreements, which were assumed by SNI in connection with the spin-off transaction.

 

With respect to Mr. Boehne and Mr. Contreras, they would be entitled to severance benefits under the employment agreements in the event of a termination of employment by the Company without “cause” or a termination by the executive for “good reason”, death or disability. The severance benefits are generally determined as if the executive continued to remain employed by the Company through the remainder of the term covered by his employment agreement, consistent with market practices.

 

In exchange for the severance benefits, each of Mr. Boehne and Mr. Contreras agrees not to disclose the Company’s confidential information and not to compete against the Company or solicit its employees or customers for a period of time after termination. These provisions protect the Company’s interests and help to ensure its long-term success.

 

Mr. Contreras’ contract will expire in June 2009 and upon mutual agreement of Mr. Contreras and the Company, his contract will not be extended. The Company has established a policy of not providing contracts to executives other than the CEO. The Company instead intends to provide standard severance benefits to all senior executives under the Executive Severance Plan and the Change in Control Plan described below.

 

Executive Severance Plan

 

Each of Messrs. Stautberg and Peterson and Ms. Knutson participate in the Executive Severance Plan, which was adopted in connection with the spin-off transaction. Mr. Contreras will participate in this plan upon the expiration of his contract in June 2009.

 

Upon an involuntary termination without “cause”, the covered executives are entitled to a severance benefit. Participants must sign a release of claims against the Company prior to receiving these severance benefits. The Company may amend or terminate the plan at any time, without notice or participant consent.

 

Change in Control Plan

 

Each of Messrs. Boehne, Stautberg, Peterson, Contreras and Ms. Knutson are provided change in control protections under the Senior Executive Change in Control Plan. Messrs. Lowe, NeCastro, Lansing and Cruz also participated in this plan prior to the spin-off transaction.

Under this plan, a NEO would be entitled to certain severance benefits if a “change in control” were to occur and the Company terminated the executive’s employment without “cause” or the executive terminated his employment with the Company for “good reason” within a two-year period following the change in control. The severance levels were established by the Compensation Committee.

 

The Compensation Committee believes that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of NEOs. The Change in Control Plan allows NEOs to focus on the Company’s business and objectively evaluate any future proposals during potential change in control transactions without being distracted by potential job loss. It also enhances retention following a change in control, as the severance benefits are payable only if the executive incurs a qualifying termination within a certain period following a change in control, rather than merely as a result of the change in control.

 

All equity awards held by NEOs would immediately vest upon a change in control. Unlike the cash severance described above, the vesting is not contingent upon a qualifying termination within a certain period following a change in control. This “single trigger” is appropriate because the Company’s equity will change in the event of a change in control and the Compensation Committee believes NEOs should have the same opportunity to realize value as common shareholders.

 

Additional Information

 

Please refer to the “Potential Payments Upon Termination or Change in Control” section of this proxy statement for information regarding potential payments and benefits, if any, that each NEO is entitled to receive under his employment agreement, the Executive Severance Plan or in connection with a change in control.

Summary Compensation Table

 

The following Summary Compensation Table provides information regarding the compensation earned in 2006, 2007 and 2008 by our Named Executive Officers (NEOs). In general, the 2008 compensation information included in the Summary Compensation Table reflects the amounts earned by our NEOs for the entire year. This is the case for the following individuals, who served as executive officers of the Company as of December 31, 2008: Richard A. Boehne, President and Chief Executive Officer; Timothy E. Stautberg, Senior Vice President and Chief Financial Officer; William B. Peterson, Senior Vice President/Television; Mark G. Contreras, Senior Vice President/Newspapers; and Lisa A. Knutson, Senior Vice President/Human Resources.

 

However, the 2008 compensation information for the other individuals listed in the Summary Compensation Table only reflects amounts earned through June 30, 2008 (except as specifically noted below). This is the case for Kenneth W. Lowe, who served as our President and Chief Executive Officer; Joseph G. NeCastro, who served as our Executive Vice President and Chief Financial Officer; John F. Lansing, who served as our Senior Vice President/Scripps Networks; and Anatolio B. Cruz III, who served as our Executive Vice President and General Counsel. In connection with the spin-off transaction, these executive officers terminated employment with us and became executive officers of SNI effective July 1, 2008. Although they no longer work for the Company, the SEC requires that we treat them as our NEOs for 2008.

 

 

 

 

		FY08				2008				Total FAS
		Expense per				Modification				123R				In-The-Money
		FAS 123R				Charge				Expense				Value as of
Name		($)				($)				($)				12/31/2008($)
Mr. Boehne			838,523				1,064,894				1,903,417				0
Mr. Lowe			1,452,473				0				1,452,473				0
Mr. Stautberg			167,125				183,018				350,143				0
Mr. NeCastro			271,356				0				271,356				0
Mr. Peterson			595,792				143,035				738,827				0
Mr. Contreras			304,155				45,984				350,139				0
Ms. Knutson			106,029				10,814				116,843				0
Mr. Lansing			192,397				0				192,397				0
Mr. Cruz			172,831				0				172,831				0

 

 

 

										Tax				Matching
		Financial				Club				Gross-				Charitable				Executive				Matching
		Planning				Dues				Up				Contributions				Physicals				Contribution				Total
Name		($)(i)				($)(ii)				($)(iii)				($)(iv)				($)(v)				($)(vi)				($)
Mr. Boehne			15,000				6,356				10,500				0				0				22,875				54,731
Mr. Lowe			0				7,946				0				0				0				17,250				25,196
Mr. Stautberg			9,250				2,056				6,475				3,000				0				9,975				30,756
Mr. NeCastro			0				1,028				0				3,000				1,744				10,025				15,797
Mr. Peterson			10,000				0				7,000				0				3,545				13,500				34,045
Mr. Contreras			10,000				2,056				7,000				1,000				0				15,750				35,806
Ms. Knutson			8,500				514				5,950				0				0				6,900				21,864
Mr. Lansing			0				0				0				0				0				10,500				10,500
Mr. Cruz			400				1,028				280				0				0				6,900				8,608

 

 

 

 

Salary and Bonus in Proportion to Total Compensation

 

The Company’s NEOs generally receive 40% to 60% of their total direct compensation in the form of base salary and cash incentive awards under the annual incentive plan. Please see the CD&A section of this proxy statement for a description of the objectives of the Company’s compensation program and overall compensation philosophy.

 

Employment Agreements

 

The Company maintains an employment agreement for each of Messrs. Boehne and Contreras. The employment agreements enhance retention incentives for these executives and also protect the Company’s interests by imposing confidentiality, noncompetition, nonsolicitation and other restrictive covenants on the executives. Following is a brief summary of the employment agreements for Mr. Boehne and Mr. Contreras:

 

 

 

Please refer to the “Potential Payments Upon Termination or Change in Control” section of this proxy statement for information regarding potential payments and benefits, if any, that each executive is entitled to receive under his employment agreement in connection with his termination of employment or change in control, along with a brief description of the applicable non-competition, non-solicitation, confidentiality and other restrictions applicable to each executive.

 

Prior to the spin-off transaction, the Company maintained employment agreements for Messrs. Lowe, NeCastro, Lansing and Cruz. These employment agreements were assumed by SNI in connection with the spin-off transaction. Following is a summary of these employment agreements as they existed prior to the spin-off transaction:

 

 

Grants of Plan-Based Awards

 

The following table sets forth information for each NEO regarding (i) estimated payouts of the annual cash incentive opportunities during 2008, (ii) restricted stock awards granted during 2008, and (iii) stock options granted in 2008. All of the information related to the equity awards granted in 2008 reflects the equitable adjustments to the number and type of shares and the exercise price that occurred in connection with the spin off and the related one-for-three reverse stock split. These adjustments are described in detail in the CD&A under the heading “Adjustments to Equity Awards in the Spin-Off”.

 

Grants of Plan Based Awards for E.W. Scripps Employees