Amendment No. 1 to Form 10-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-K/A

 

 

Amendment No. 1

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 0-16914

 

 

THE E. W. SCRIPPS COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

Ohio   31-1223339

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification Number)

312 Walnut Street
Cincinnati, Ohio
  45202
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (513) 977-3000

 

 

 

Title of each class

  

Name of each exchange on which registered

Securities registered pursuant to Section 12(b) of the Act:

   New York Stock Exchange

Class A Common Shares, $.01 par value

  

Securities registered pursuant to Section 12(g) of the Act:

Not applicable

  

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of Class A Common shares of the registrant held by non-affiliates of the registrant, based on the $45.69 per share closing price for such stock on June 30, 2007, was approximately $3,973,000,000. All Class A Common shares beneficially held by executives and directors of the registrant and The Edward W. Scripps Trust have been deemed, solely for the purpose of the foregoing calculation, to be held by affiliates of the registrant. There is no active market for our common voting shares.

As of January 31, 2008, there were 126,218,917 of the registrant’s Class A Common shares, $.01 par value per share, outstanding and 36,568,226 of the registrant’s Common Voting Shares, $.01 par value per share, outstanding.

 

 

 

 


Explanatory Note

The Company is filing this Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the year ended December 31, 2007 to furnish the information required in Part III (Items 10, 11, 12, 13 and 14). This report is limited in scope to the items identified above and should be read in conjunction with the Form 10-K. Other than the furnishing of the information identified above, this report does not modify or update the disclosure in the Form 10-K in any way.

 


PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

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.

 

Name

   Age    Director
Since
  

Principal Occupation or Occupation/Business

Experience for Past Five Years

Nominees for Election by Holders of Class A Common Shares

William R. Burleigh (1)

   72    1990    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.

David A. Galloway (2)

   64    2002   

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).

David M. Moffett (3)

   55    2007    Senior Advisor with The Carlyle Group since August 2007 and Vice Chairman and Chief Financial Officer of U.S. Bancorp from September 1993 until his retirement in February 2007.

Jarl Mohn (4)

   56    2002    Trustee of the Mohn Family Trust since September 1991, Interim CEO at MobiTV from May 2007 to October 2007, 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.
Nominees for Election by Holders of Common Voting Shares

John H. Burlingame (5)

   74    1988    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

   57    2000   

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.

Nicholas B. Paumgarten (6)

   62    1988    Chairman, Corsair Capital LLC (an investment firm) since March 2006, Managing Director of J.P. Morgan

 

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Name

   Age    Director
Since
  

Principal Occupation or Occupation/Business

Experience for Past Five Years

         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).

Jeffrey Sagansky (7)

   56    2003   

Co-Chairman and CEO of Peace Arch Entertainment since November 2007, Chairman of Elm Tree Partners since January 2007, Chairman of People’s 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)(8)

   62    1999   

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).

Paul K. Scripps (8)(9)

   62    1986    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.

Ronald W. Tysoe (10)

   54    1996    Senior Advisor of Perella Weinberg Partners LP from October 2006 to September 2007, Vice Chairman from April 1990 to October 2006 of Federated Department Stores, Inc. (now Macy’s Inc.)

 

(1) Mr. Burleigh is a director of Ohio National Financial Services Company (a mutual insurance and financial services company).
(2) Mr. Galloway is chairman of the board of directors of the Bank of Montreal and of Harris Bankmont (a Montreal bank and subsidiary of the Bank of Montreal) and a director of Toromont Industries (a Caterpillar machinery dealer and gas compression company).
(3) Mr. Moffett is a director of eBay, Inc., MBIA Insurance Corp. and BMHC Building Material Holding Company (a building services company).
(4) Mr. Mohn is a director and non-executive chairman of CNET (an advertising supported collection of special interest Web sites) and a director of XM Satellite Radio Holdings, Inc. (a satellite radio service provider), MobiTV (a private company that provides live television and video programming to cell phones), KickApps (a software company with applications to create social networks and community), and Vuze (a peer to peer video distribution platform).
(5) Mr. Burlingame, Ms. Peirce and Ms. Scagliotti are the trustees of The Edward W. Scripps Trust. Ms. Peirce is expected to become a director of the Company on July 1, 2008.
(6) Mr. Paumgarten is a director of Compucredit (a credit card company) and Sparta Insurance (an insurance company).
(7) Mr. Sagansky is a director of American Media (a publishing company).
(8) Mrs. Scagliotti is an income beneficiary of The Edward W. Scripps Trust. Mr. Paul K. Scripps is a second cousin to Mrs. Scagliotti. Mrs. Scagliotti and Ms. Pierce, who is expected to become a director on July 1, 2008 and is also an income beneficiary of The Edward W. Scripps Trust, are first cousins.

 

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(9) 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.”
(10) Mr. Tysoe is a director of Canadian Imperial Bank of Commerce, Cintas (a company providing specialized services, including uniform programs and other products, to businesses), NRDC Acquisition Corp. (a special purpose acquisition corporation) and Taubman Centers, Inc. (a real estate company that owns and operate regional shopping centers).

Information regarding executive officers is included in Part 1 of the Form 10-K as permitted by General Instruction G(3).

REPORT ON SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and officers, and owners of more than ten percent of the Company’s Class A Common Shares (“10% shareholders”), to file with the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange initial reports of ownership and reports of changes in ownership of Class A Common Shares and other equity securities of the Company. Officers, directors and 10% shareholders are required by SEC regulations to furnish the Company with copies of all forms they file pursuant to Section 16(a).

To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2007, all Section 16(a) filing requirements applicable to its officers, directors and 10% shareholders were complied with.

CODE OF ETHICS

We have adopted a code of ethics that applies to all employees, officers and directors of Scripps. We also have a code of ethics for the CEO and Senior Financial Officers. This code of ethics meets the requirements defined by Item 406 of Regulation S-K and the requirement of a code of business conduct and ethics under NYSE listing standards. Copies of our codes of ethics are posted on our Web site at www.scripps.com.

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.

 

   

The engagement of the Company’s independent auditors.

 

   

The determination as to the independence and performance of the independent auditors.

 

   

The determination as to the performance of the internal auditors.

 

   

Review of the scope of the independent audit and the internal audit plan.

 

   

Preapproval of audit and nonaudit services.

 

   

Review of disclosure controls and procedures.

 

   

Review of management’s annual report on internal controls over financial reporting.

 

   

Review of annual SEC filings.

 

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Review of quarterly SEC filings and other communications required to be reported to the committee by the independent auditors.

 

   

Review of certain regulatory and accounting 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 employing former employees of the independent auditors.

 

   

Establishment of “whistleblowing” procedures.

 

   

Review of legal and regulatory compliance.

 

   

Evaluation of enterprise risk issues.

 

   

Review of certain transactions with directors and related parties.

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, 2007, 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 Tohmatsu, and its respective affiliates (collectively the “Deloitte Entities”), the overall scope and plan for their respective audits. The committee meets with the internal auditor and the Deloitte Entities, 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.

CORPORATE GOVERNANCE

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. Tysoe is an audit committee financial expert as defined in the SEC rules adopted under the Sarbanes-Oxley Act.

 

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Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis explains the Company’s compensation program for its President and Chief Executive Officer (CEO), Mr. Kenneth W. Lowe, its Executive Vice President and Chief Financial Officer (CFO), Mr. Joseph G. NeCastro, and its other three most highly compensated executive officers, Mr. Richard W. Boehne, Executive Vice President and Chief Operating Officer, Mr. John F. Lansing, Senior Vice President/Scripps Networks and A. B. Cruz, Executive Vice President and General Counsel. These individuals are referred to collectively as the named executive officers (NEOs).

Overview of Compensation Program

Objectives

The compensation program for the NEOs is designed to meet the following three objectives that align with and support the Company’s strategic business goals:

 

   

Attract and retain executives who lead the Company’s efforts to build long-term value for shareholders.

 

   

Reward annual operating performance and increases in shareholder value.

 

   

Emphasize the variable performance-based components of the compensation program more heavily than the fixed components.

Compensation Elements

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

 

Program

     Form      Fixed or
Variable
    

Objectives

Base salary      Cash      Fixed     

•     Serves as attraction and retention incentive

•     Rewards individual performance

Annual incentive      Cash      Variable     

•     Rewards annual operating results

•     Emphasizes variable performance-based compensation

Long-term incentive, which includes:

performance-based restricted shares, and

stock options

     Equity      Variable     

•     Serves as attraction and retention incentive

•     Rewards for increasing stock price and enhancing long-term value

•     Aligns interests with shareholders

•     Rewards annual operating results

•     Emphasizes variable performance-based compensation

Retirement benefits, including the pension plan, the Supplemental Executive Retirement Plan and the Executive Deferred Compensation Plan      Cash      Fixed     

•     Serves as attraction and retention incentive

 

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Use of Market Data

The Company believes that each element of the compensation program should remain competitive in order to attract and retain key executive talent. To help determine the competitive market, the Compensation Committee relies, in part, on market compensation data of comparable executive positions within similarly-sized media companies.

The Company considers this market information when establishing base salary, annual incentive and long-term equity opportunities, and generally strives to structure each element close to the median of the market data. However, the Compensation Committee retains the flexibility to make adjustments in order to respond to market conditions, promotions, individual performance or other circumstances. In addition, the Compensation Committee considers the value of the total compensation package when making decisions for each element of compensation. The Compensation Committee also monitors the competitiveness of the Company’s retirement and perquisite programs on an annual basis; although, these benefit programs generally do not change from year-to-year.

As in prior years, the corporate compensation department prepared a market analysis for each of the NEO positions using the media industry survey data. The market analysis included compensation at the median and 75th percentile for each of the following elements:

 

   

Base salary.

 

   

Total cash compensation, which is base salary plus actual cash incentive compensation.

 

   

Total direct compensation, which is total cash compensation plus equity awards.

The Compensation Committee selected a peer group of companies from the survey that were comparable in size and business focus to the Company and therefore compete with the Company for executive talent. A revenue-based regression analysis for each NEO position was included in the market analysis to further refine the comparison. The following table lists the companies included in this group as of 2007:

 

Towers Perrin Media Survey Public Companies with Revenues > $500 million

ADVO

   McGraw-Hill

Belo

   Media General

Cablevision Systems

   Meredith

CBS

   New York Times

Charter Communications

   R.R. Donnelley

Clear Channel Communications

   Sinclair Broadcast Group

Comcast Cable Communications

   Thomson

Discovery Communications

   Time Warner

Dow Jones

   Tribune

Gannett

   Univision Communications

Hearst-Argyle Television

   Viacom

IAC/InterActive

   Walt Disney

John Wiley & Sons

   Washington Post

Lions Gate Entertainment Corp.

   Yahoo!

McClatchy

  

The market analysis included market data for each component described above, plus historical base salary, annual incentive and equity grants of the NEOs for the prior three years. The Compensation Committee used this report in establishing each component of compensation, as described in more detail under “Analysis of Each Compensation Element”.

Variable Compensation

The Company’s long-term success is based on achieving key strategic, financial and operational goals from year-to-year. As a result, a significant portion of the NEOs’ compensation is “variable” or “at risk”. This means that a significant portion of their

 

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compensation is directly contingent upon achieving specific results that are essential to the Company’s long-term success and growth in stockholder value. As described in the table above, the variable components of the compensation program include annual incentives, performance-based restricted shares and stock options. Each of these components is described in more detail under the heading “Analysis of Each Compensation Element”.

The Compensation Committee has not established a specific formula for the allocation of fixed and variable compensation components and instead retains the discretion to modify the allocation from year to year. For 2007, an average of 67 percent of the total pay mix for the NEOs was weighted towards variable components. The pay mix for the CEO was roughly 81 percent variable which reflects a greater focus on performance-based pay as a percent of total compensation. The Compensation Committee believes this approach directly aligns the CEO with shareholder interests and is reflective of his greater responsibilities.

As illustrated below for the NEOs, the Company’s pay mix between fixed and variable is relatively consistent with the market:

LOGO

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:

 

   

It is not variable or “at risk”, meaning that it provides a degree of financial stability for the executives.

 

   

It compensates NEOs for the value of their role and contributions to the Company.

Base salary also forms the basis for calculating other compensation opportunities for NEOs:

 

   

It is used to establish annual incentive opportunities (see “Annual Incentive”).

 

   

It is included in “final average compensation” for purposes of determining retirement benefits (see “Retirement Plans”).

 

   

It is included in the formula for calculating separation pay due upon a qualifying termination of employment (see “Employment Agreements and Change in Control Plan”).

Base salaries are designed to be competitive with those paid by the companies in the market survey data to executives with similar responsibilities. In order to ensure that the Company paid a competitive base salary in 2007, the Compensation Committee considered the market analysis prepared for each NEO, which reflected the median and 75th percentile base salary levels.

The base salaries for the NEOs are targeted at the median level within the survey data, adjusted to reflect the individual’s scope of responsibilities, level of experience and skill, and the caliber of his or her performance over time. When making these adjustments, the Compensation Committee considers the historical base salary level for each NEO for the past three years and the

 

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impact that base salary increases would have on the amount of NEOs’ retirement benefits. The Compensation Committee also takes into account the total direct compensation levels which includes base salary, annual and long-term incentives, when setting the base salary or any of the other elements of total direct compensation. Mr. Lowe, as Chief Executive Officer, also provides the Compensation Committee an annual evaluation of the performance of each executive officer that reports to him and his recommendations for base salary adjustments.

After discussing the individual performance of each NEO and pay recommendations, and after making its own assessment of the performance of each such executive officer, the Compensation Committee established the base salaries for each NEO. As seen in the chart below, base salary increases are larger for those NEOs whose base salary is substantially lower than the market median (Messrs. NeCastro, Lansing and Cruz) in order to be more competitive with the market and in the case of Mr. Cruz to reflect his promotion to executive vice president. Each of Mr. Lowe and Mr. Boehne received a base salary increase that maintains his base salary at a level close to the market median.

 

NEO

  

2006 Base Salary as Percent of
Market Median

    

2007 Base Salary
Increase Percent

Lowe

   100%        4.8%

Boehne

   103%        5.4%

NeCastro

     79%        9.1%

Lansing

     75%      13.0%

Cruz

     83%      16.9%

Please refer to the “Salary” column of the Summary Compensation Table of this Form 10-K/A for the 2007 base salaries of the NEOs.

Annual Incentive

The Company maintains the Executive Annual Incentive Plan under which NEOs are eligible to receive annual cash payments based on the extent to which certain operational goals are achieved. This plan was most recently approved by the Company’s shareholders in 2005. The Compensation Committee believes that a competitive annual incentive program is an important component of total compensation because:

 

   

It rewards executives for achieving annual operating results.

 

   

It is a performance-based component that provides variable or “at risk” compensation.

 

   

It is included in the “Final Average Compensation” for purposes of determining Retirement benefits (See “Retirement Benefits”).

 

   

It is included in the formula for calculating separation pay due upon a qualifying termination of employment (see “Employment Agreements and Change in Control Plan”).

Target Incentive Opportunities

Under the Executive Annual Incentive Plan, 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 by the Compensation Committee according to each executive’s position and level of responsibility.

In order to ensure that the Company offered competitive annual incentive opportunities in 2007, the Compensation Committee considered the overall performance of each NEO as well as the market survey data and recommendations of the CEO. The survey data reflected the median and 75th percentile total cash compensation, which is base salary plus actual cash incentive compensation.

In general, the Compensation Committee attempted to target the total cash compensation of the NEOs to the median total cash compensation levels of the survey data. However, the Compensation Committee also believes that it is important to provide similar annual incentive opportunities for each group of NEOs that has similar levels of operational responsibility within the Company.

Performance Goals

 

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The annual incentive awards are based on a formula that takes into consideration the achievement of segment profit and earnings per share goals during the year. The goals are established by the compensation committee in the February meeting and take into account the strategic business plans approved by the Board. In 2007, the target segment profit and earnings per share goals, and the weighting for each goal, were:

 

NEO

    

Target
Annual
Incentive

(as % of
base pay)

    

Weights

Segment
Profit/EPS

    

Targets

Segment Profit/EPS

    

Actual

Segment Profit/EPS

    

Percent of

Target

Achieved

Segment

Profit/EPS

Lowe

     120%      60/40      $890.3 mil/$2.44      $826.1 mil/$2.31        92.79%/94.67%

Boehne

       70%      60/40      $890.3 mil/$2.44      $826.1 mil/$2.31        92.79%/94.67%

NeCastro

       60%      60/40      $890.3 mil/$2.44      $826.1 mil/$2.31        92.79%/94.67%

Cruz

       55%1      60/40      $890.3 mil/$2.44      $826.1 mil/$2.31        92.79%/94.67%

Lansing

       60%      60/40      $595.9 mil/$2.44      $603.5 mil/$2.31      101.27%/94.67%

 

1 From January through May Mr. Cruz had a target annual incentive of 50% which was increased to 55% upon his promotion in June.

These performance goals were used because:

 

   

Segment profit. Segment profit is the measure by which the Company evaluates the operating performance of each business segment and the measure of performance most frequently used by investors to determine the value of the Company. Segment profit is defined as the Company’s net income determined in accordance with accounting principles generally accepted in the United States excluding interest, income taxes, depreciation and amortization, divested operating units, restructuring activities, investment results and certain other items. For NEOs whose primary responsibilities are corporate-wide (Messrs. Lowe, Boehne, NeCastro, and Cruz), the segment profit goal was based on the consolidated performance of all the divisions of the Company. For Mr. Lansing, whose primary responsibility is managing Scripps Networks, the segment profit goal was based on performance of that division.

 

   

Earnings per share. Earnings per share represents the portion of a company’s profit allocated to each outstanding share of common stock and is the most comprehensive measure of the company’s profitability.

 

   

The Company’s actual segment profit and earnings per share results will be adjusted to determine the percent of target achieved. Adjustments are made to eliminate the impact of extraordinary events on the Company’s financial results and to ensure that sound business decisions are not postponed until the current compensation cycle is complete. These items are excluded because the Company does not want NEOs to be inappropriately rewarded or penalized for unexpected events. The Company also wants to encourage NEOs to make sound operating decisions without being influenced by fluctuations in annual incentive payouts.

Payout Percentages

For 2007, the annual incentive opportunity could vary from 0 percent to 165 percent of the targeted percentage of base salary, according to the level of overall performance achieved for the year relative to the established performance goal. This payout schedule is a sliding scale that is designed to motivate and reward exceptional performance. The payout percentage decreases if targeted performance is not achieved, and the payout percentage increases if the Company surpasses its targeted goals. For example:

 

   

If performance is less than 75 percent of target, no annual incentive is earned.

 

   

If performance equals 75 percent of target, only 5 percent of the incentive award is earned.

 

   

If performance equals 100 percent of target, then the entire award is achieved.

 

   

If performance equals or exceeds 125 percent of target, then 165 percent of the award is achieved.

Achievement at maximum performance results in total cash compensation levels at approximately the 75th percentile of the market survey data. The following table reflects the actual achievement level for each performance goal along with the payout percentage for each performance goal for 2007. Based on criteria established at the beginning of the performance period, the Compensation Committee was required to adjust the consolidated segment profit and earnings per share results in 2007 to take into account severance costs associated with staff reductions at several of the Company’s newspapers, costs related to the upcoming company separation, and an impairment charge related to losses and challenging business conditions at uSwitch. Furthermore, the

 

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Compensation Committee exercised negative discretion by decreasing the earnings per share portion of the annual incentive payout for Messrs. Lowe, Boehne, NeCastro and Cruz by 50 percent to reflect the disappointing business results that led to the impairment charge.

 

NEO

  

Percent of Target Achieved

Segment Profit/EPS

  

Preliminary Payout Percent

Segment Profit/EPS

  

Final Payout Percent

Segment Profit/EPS

(After negative discretion)

Lowe

     92.79%/94.67%      83.37%/89.01%      83.37%/44.51%

Boehne

     92.79%/94.67%      83.37%/89.01%      83.37%/44.51%

NeCastro

     92.79%/94.67%      83.37%/89.01%      83.37%/44.51%

Cruz

     92.79%/94.67%      83.37%/89.01%      83.37%/44.51%

Lansing

   101.27%/94.67%    102.54%/89.01%    102.54%/89.01%

Additional Information

For more information on the 2007 annual incentive opportunity for NEOs, please refer to the “Grants of Plan-Based Awards” table in this Form 10-K/A. 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. 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 Executive Annual Incentive Plan for the 2007 performance period.

Long-Term Incentives

The Company maintains the 1997 Long-Term Incentive Plan, which was most recently approved by the Company’s shareholders in 2005. In 2007, the Compensation Committee granted awards of performance-based restricted shares and stock options to the NEOs under this plan. The Compensation Committee believes that a competitive long-term incentive program is an important component of total compensation because it:

 

   

Enhances retention.

 

   

Rewards executives for increasing stock price and enhancing long-term value.

 

   

Provides executives with an opportunity for stock ownership to align their interests with shareholders.

 

   

Helps to emphasizes variable or “at risk” compensation.

 

   

Rewards executives for achieving annual operating results.

Long-Term Incentive Opportunities

Under the long-term incentive program, the NEOs are granted equity awards as recommended by the CEO and approved by the Compensation Committee. The Compensation Committee approves the target value of the equity award for each NEO based on each NEOs position and level of responsibility, the historical equity grants and a total assessment of the market analysis. The Compensation Committee does not consider existing ownership levels in establishing long-term incentive opportunities, as it wants to encourage stock ownership among the NEOs. Decisions regarding long-term incentive grants are made based on role, amount of impact and retention objectives. Survey data is referenced but is unreliable since it fluctuates from year-to-year.

For 2007 the target value of the equity award for each executive was as follow:

 

NEO

  

Target Value of 2007

Long-Term
Incentive Equity Award

Lowe

   $3.285 million

Boehne

   $1.971 million

NeCastro

   $1.314 million

Cruz

   $0.657 million

Lansing

   $0.854 million

 

12


Once the Compensation Committee establishes the target value of each NEO’s equity award, one half of the value is awarded as stock options while the other half is awarded as performance-based restricted shares. The Compensation Committee believes that using a combination of performance-based restricted shares and stock options strikes an appropriate balance between focusing executives on achieving specified operational goals and increasing long-term shareholder value, as more fully described below.

Stock Options

Stock options are granted with an exercise price equal to the fair market value of the Company’s Class A common shares on the date of grant, have an eight-year term and vest in three annual installments, beginning on the first anniversary of the date of grant.

Because the value of stock options increases when the stock price increases, stock options align the interests of NEOs with those of shareholders. In addition, stock options are intended to help retain key executives because they vest over three years and, if not vested, are forfeited if the employee leaves the Company before retirement.

For more information on the stock options granted to NEOs in 2007, including the number of shares underlying each option grant and its exercise price, please refer to the “Grants of Plan-Based Awards” table in this Form 10-K/A. For information about the total number of stock options outstanding as of the end of 2007 with respect to each NEO, please refer to the “Outstanding Equity Awards at Fiscal Year-End” table in this Form 10-K/A.

Performance-Based Restricted Stock Awards

The performance-based restricted stock awards provide NEOs with an opportunity to receive restricted shares. The performance-based restricted shares are consistent with the overall objective of rewarding operational performance, since the number of shares earned depends on the extent to which the Company attains specified levels of segment profit during the year. The restricted shares that are earned vest in installments on each March 15 of the succeeding three years (25 percent in the year after the end of the performance period, 25 percent in the second year, and 50 percent in the third year). Half of the vesting occurs in the third year to further enhance retention and helps focus NEOs on increasing the value of the Company over time.

The segment profit goal was based on the consolidated performance of all the divisions of the Company. This goal was selected for all of the NEOs instead of a combination of consolidated and divisional because, as a long-term reward vehicle, the Company wanted the focus to be on increasing the value of the Company as a whole. This approach encourages cooperation among the operating divisions of the Company. For 2007, the goal for consolidated segment profit was $890.3 million.

The actual number of restricted shares earned is determined based on the achievement of the consolidated segment profit goal for the year. The number of restricted shares earned may vary, from 0 percent to 165 percent of the targeted number of shares granted, according to the level of consolidated performance achieved for the year relative to the performance goal. The payout schedule is the same as the one used for the annual incentive program. It is designed to motivate and reward superior performance. The payout percentage decreases if targeted performance is not achieved, and the payout percentage increases if the Company surpasses its targeted goals. For 2007, the earned number of restricted shares was 83.37 percent of the targeted number of restricted shares. This was based on a consolidated segment profit achievement of 92.79 percent of the targeted consolidated segment profit goal.

In addition, Mr. Cruz received a second grant, valued at $495,800 in recognition of his promotion to Executive Vice President and General Counsel, effective June 1, 2007. This grant was a combination of stock options and restricted shares that vest equally over three years.

Additional Information

For more information on the performance-based restricted stock awards granted to NEOs in 2007, please refer to the “Grants of Plan-Based Awards” table in this Form 10-K/A. The “Estimated Future Payouts Under Equity Incentive Plan Awards” column of that table provides the estimated number of restricted shares earned for each NEO at Threshold, Target and Maximum performance levels. For information about the total number of restricted shares outstanding as of the end of 2007 with respect to each NEO, please refer to the “Outstanding Equity Awards at Fiscal Year-End” table of this Form 10-K/A.

 

13


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 Compensation 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.

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:

 

   

The Company supplements the pension plan for all executives whose pay and contributions exceed the IRS limitations through the Scripps Supplemental Executive Retirement Plan (SERP). For more information on the pension plan and the SERP, please refer to the “Pension Benefits” table of this Form 10-K/A.

 

   

NEOs may also defer specified portions of their compensation under the Executive Deferred Compensation Plan and receive matching contributions in each case in excess of what they are able to defer under the 401(k) plan due to IRS limitations. For more information about the Executive Deferred Compensation Plan, please refer to the “Non-Qualified Deferred Compensation” table of this Form 10-K/A.

The Compensation Committee believes that the SERP and the Executive Deferred Compensation Plan are important retention and recruitment tools, as many of the companies in which the Company competes for executive talent provide similar benefits to their senior executives.

Health, Welfare and Other Personal Benefits

In addition to the principal compensation components described above, 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 with a financial planning benefit pursuant to the terms of their employment agreements, plus an additional payment to cover taxes associated with the compensation value of this benefit. 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 Mr. Lowe, a country club membership per his employment agreement.

For more information about the perquisites provided in 2007 to each NEOs, please refer to the “All Other Compensation” column of the Summary Compensation Table of this Form 10-K/A.

Employment Agreements and Change in Control Plan

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

Employment Agreements

Each NEO would be entitled to severance benefits under his employment agreement 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

 

14


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, the NEOs agree not to disclose the Company’s confidential information and agree 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.

Please refer to the “Potential Payments Upon Termination or Change in Control” section of this Form 10-K/A for information regarding potential payments and benefits, if any, that each NEO is entitled to receive under his employment agreement in connection with his termination of employment. Please refer to the narrative following the Summary Compensation Table of this Form 10-K/A for a description of the compensation and benefits provided under the employment agreements.

Change in Control Plan

All NEOs are provided change in control protection. For Mr. Lowe, the terms of his change in control protection are covered in his employment agreement. The other NEOs are covered under the Senior Executive Change in Control Plan. 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. For Mr. Lansing, whose primary responsibility is managing Scripps Networks, his employment agreement also provides change in control protection in the event of a sale of Scripps Networks. 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 Compensation Committee believes NEOs should have the same opportunity to realize value as common shareholders.

Please refer to the “Potential Payments Upon Termination or Change in Control” section of this Form 10-K/A for information regarding potential payments and benefits, if any, that each executive is entitled to receive in connection with a change in control.

Summary Compensation Table

The following table sets forth certain information regarding the compensation earned in 2006 and 2007 by the Named Executive Officers (NEOs) of the Company:

 

15


Name and Principal Position

   Year    Salary
($)
   Bonus
($)
   Stock
Awards
($) (1)
   Option
Awards
($) (1)
   Non-Equity
Incentive Plan
Compensation
($) (2)
   Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($) (3)
   All Other
Compensation
($) (4)
   Total
($)

Kenneth W. Lowe

   2007    1,100,000    0    2,598,016    2,399,907    895,277    840,348    75,973    7,909,521

President & Chief

   2006    1,050,000    0    3,536,808    2,923,091    1,260,000    1,083,392    69,980    9,923,271

Executive Officer

                          

Richard A. Boehne

   2007    685,000    0    728,616    674,015    325,216    211,085    52,319    2,676,251

Executive Vice

   2006    650,000    0    623,312    641,106    455,000    253,089    47,960    2,670,467

President & Chief

                          

Operating Officer

                          

Joseph G. NeCastro

   2007    600,000    0    493,274    453,140    244,166    85,598    137,557    2,013,735

Executive Vice

   2006    550,000    0    426,705    433,832    330,000    61,247    129,648    1,931,432

President & Chief

                          

Financial Officer

                          

John F. Lansing

   2007    650,000    0    400,540    311,144    378,799    183,198    36,750    1,960,431

President / Scripps

   2006    575,000    0    363,056    297,820    306,176    128,919    34,250    1,705,221

Networks

                          

Anatolio B. Cruz III

   2007    493,750    0    266,881    256,417    177,826    51,476    34,115    1,280,465

Executive Vice

                          

President and General

                          

Counsel

                          

 

(1) Represents the expense recognized in the Company’s financial statement related to restricted stock and stock option awards granted in 2007 and in prior years. Because Mr. Lowe is eligible for retirement, the entire grant date fair value of his awards was fully expensed in the year of grant. The expense was determined in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment (“FAS 123R”), but disregards the impact of estimated forfeitures relating to service-based vesting conditions. See footnote 20 of the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (“2007 Annual Report”) for an explanation of the assumptions made by the Company in the valuation of these awards. For information about the awards granted in 2007, please refer to the Grants of Plan-Based Awards section of this Form 10-K/A and to the Compensation Discussion and Analysis (“CD&A”) section of this Form 10-K/A. For information on all outstanding equity awards as of December 31, 2007, please refer to the Outstanding Equity Awards at Fiscal Year-End section of this Form 10-K/A.
(2) Represents the annual incentive earned by each NEO under the Executive Annual Incentive Plan for the applicable calendar year. For additional information about the 2007 annual incentive opportunities under the Executive Annual Incentive Plan, please refer to the Grants of Plan-Based Awards and CD&A sections of this Form 10-K/A.
(3) Represents the increase in the present value of the accumulated benefits under the pension plan and the Scripps Supplemental Executive Retirement Plan (“SERP”) for the applicable calendar year. For information on these plans, please refer to the Pension Benefits section of this Form 10-K/A. The Company’s NEOs did not accrue any preferential or above-market earnings on non-qualified deferred compensation.
(4) Represents the perquisites and other benefits outlined in the table below. For more information about these benefits, please refer to the CD&A section of this Form 10-K/A.

 

 

 

16


Name

   Financial
Planning
($) (i)
   Club Dues
($) (ii)
   Tax
Gross-Up
($) (iii)
   Matching
Contribution
($) (iv)
   Total
($)

Mr. Lowe

   15,000    13,964    14,009    33,000    75,973

Mr. Boehne

   15,000    6,010    10,759    20,550    52,319

Mr. NeCastro

   10,000    2,060    107,497    18,000    137,557

Mr. Lansing

   10,000    0    7,250    19,500    36,750

Mr. Cruz

   10,000    2,060    7,242    14,813    34,115

 

  (i) Represents all amounts paid by the Company for financial planning services.
  (ii) Represents all amounts paid by the Company for dining, business and country clubs.
  (iii) Represents reimbursement of taxes imposed on the financial planning benefit. This column also includes the tax gross-up paid to Mr. NeCastro on his loan repayment. To assist Mr. NeCastro in satisfying an obligation with his previous employer, the Company loaned him $356,905 in 2002. Mr. NeCastro was obligated to repay the loan, with interest at 4.75% per year, by July 26, 2007. Until such time, the Company withheld an amount of his annual incentive to repay interest and principal on the loan in an amount equal to the lesser of (i) 50% of his annual incentive earned for each year, or (ii) $80,000. The Company agreed to pay Mr. NeCastro an additional bonus, the net amount of which equaled the taxes applicable to the portion of the annual incentive withheld for the loan payment. Mr. NeCastro’s obligation was paid in full in 2007.
  (iv) Represents the amount of all matching contributions made under the Company’s 401(k) Plan and Executive Deferred Compensation Plan.

 

 

Salary and Bonus in Proportion to Total Compensation

The Company’s NEOs generally receive 37% to 55% of their total direct compensation in the form of base salary and cash incentive awards under the Executive Annual Incentive Plan. Please see the CD&A section of this Form 10-K/A for a description of the objectives of the Company’s compensation program and overall compensation philosophy.

Employment Agreements

All five of the NEOs have entered into employment agreements with the Company. These employment agreements enhance retention incentives for NEOs 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.

Employment Agreement for Mr. Lowe

On June 16, 2003, the Company entered into an employment agreement with Mr. Lowe, pursuant to which he serves as President and Chief Executive Officer and as a member of the board of directors. On July 31, 2007, the agreement was extended through June 30, 2010. During the term, Mr. Lowe is entitled to: (i) a base salary that is not less than that paid to him for the immediately preceding year and an annual target bonus opportunity equal to no less than 80% of his salary; (ii) participate in all equity incentive, employee pension, welfare benefit plans and fringe benefit programs on a basis no less favorable than the most favorable basis provided other senior executives of the Company; (iii) life insurance equal to his base salary; and (iv) reimbursement for tax and financial planning up to maximum of $15,000 per year, the annual membership fees and other dues associated with one country club and one luncheon club, and the costs of an annual physical examination.

Employment Agreement for Mr. Lansing

Effective January 1, 2004, the Company entered into an employment agreement with Mr. Lansing. The term of the agreement expires on December 31, 2008. During the term, Mr. Lansing is entitled to an annual base salary of no less than $550,000 and a target annual incentive opportunity of no less than 50% of base salary. Mr. Lansing is also entitled to all benefits provided to senior level executives in accordance with the Company’s policies from time to time in effect.

 

17


Other Employment Agreements

In June 2006, the Company entered into an employment agreement with each of Mr. Boehne and Mr. NeCastro. On July 31, 2007, the Company entered into an employment agreement with Mr. Cruz in connection with his promotion to the position of Executive Vice President. The agreements have a three year term that extends for an additional year on each anniversary of the first day of the terms, unless the Company provides notice not to extend. During the term, (i) the annual base salary for each executive will be no less than $650,000 for Mr. Boehne, $550,000 for Mr. NeCastro, and $525,000 for Mr. Cruz; (ii) the target bonus opportunity will be 70% of base salary for Mr. Boehne, 60% of base salary for Mr. NeCastro and 55% of base salary for Mr. Cruz; (iii) each executive is eligible to participate in all equity incentive plans, employee retirement, pension and welfare benefit plans available to similarly situated executives of the Company; and (iv) each executive is also entitled to reimbursement for tax and financial planning up to a maximum of $15,000 per year, the annual membership fees and other dues associated with one luncheon club, and the costs of an annual physical examination.

Please refer to the “Potential Payments Upon Termination or Change in Control” section of this Form 10-K/A 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.

Grants of Plan-Based Awards

The following table sets forth information for each NEO regarding (i) estimated payouts of the annual cash incentive opportunities granted under the Executive Annual Incentive Plan during 2007, (ii) estimated number of restricted shares that could be delivered under the performance-based restricted stock awards granted during 2007, (iii) restricted stock awards granted during 2007, and (iv) stock options granted in 2007:

 

          Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards (1)
   Estimated Possible Payouts
Under Equity Incentive

Plan Awards (1)
   All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) (2)
   All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (3)
   Exercise
or Base
Price of
Option
Awards
($/SH)
(4)
   Grant
Date Fair
Value of
Stock and
Stock
Option
Awards
($) (5)

Name

   Grant
Date
   Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
           

Mr. Lowe

      66,000    1,320,000    2,178,000                     
   2/22/2007             1,786    35,714    58,928             1,743,557
   2/22/2007                         125,000    48.82    1,572,500

Mr. Boehne

      23,975    479,500    791,175                     
   2/22/2007             1,071    21,429    35,358             1,046,164
   2/22/2007                         75,000    48.82    943,500

Mr. NeCastro

      18,000    360,000    594,000                     
   2/22/2007             714    14,286    23,572             697,443
   2/22/2007                         50,000    48.82    629,000

Mr. Lansing

      19,500    390,000    643,500                     
   2/22/2007             464    9,286    15,322             453,343
   2/22/2007                         32,500    48.82    408,850

Mr. Cruz

      13,109    262,188    432,610                     
   2/22/2007             357    7,143    11,786             348,721
   2/22/2007                         25,000    48.82    314,500
   8/1/2007                         20,000    40.70    251,600
   8/1/2007                      6,000          244,200

 

(1) Represents the incentive opportunities granted in 2007 under the Executive Annual Incentive Plan and the 1997 Long-Term Incentive Plan. The “Threshold”, “Target” and “Maximum” columns reflect the range of potential payouts under these plans when the performance goals were established by the Compensation Committee. The threshold equals 5% of the target award and the maximum equals 165% of the target award. The actual 2007 annual incentive awards were determined on February 22, 2008 and are set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table of this Form 10-K/A. The actual number of restricted shares delivered under the 1997 Long-Term Incentive Plan was determined on February 22, 2008 and is set forth in the “Number of Shares or Units of Stock that have Not Vested” column of the Outstanding Equity Awards at Fiscal Year-End table of this Form 10-K/A. The executives have no rights to vote or receive cash dividends with respect to the underlying restricted shares until the date on which the actual number of restricted shares are determined and issued to the executive. For information on the applicable performance goals and performance periods for each award, please refer to the CD&A section of this Form 10-K/A.

 

18


(2) Represents the restricted shares granted to Mr. Cruz in connection with his promotion to Executive Vice President. Mr. Cruz has all the rights of a shareholder with respect to these restricted shares, including the right to vote the restricted shares and receive any cash dividends that may be paid thereon. The restricted shares vest in three annual installments beginning on the first anniversary of the date of grant for so long as he remains employed by the Company. Vesting accelerates upon the executive’s death, disability, or retirement, or in the event of a change in control.
(3) Represents the number of shares that may be issued to the NEO on exercise of stock options granted in 2007. These stock options vest in three annual installments beginning on the first anniversary of the date of grant for so long as the executive remains employed by the Company. Vesting accelerates upon the executive's death, disability or retirement, or in the event of a change in control of the Company.
(4) Represents the exercise price of each stock option reported in the table, which equals the closing market price of the underlying option shares on the date of grant.
(5) Represents the grant date fair value, as determined in accordance with FAS 123R, of each equity award listed in the table. See footnote 20 of the 2007 Annual Report for the assumptions used in the valuation of these awards.

 

 

 

19


Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information for each NEO with respect to (i) each option to purchase stock that had not been exercised and remained outstanding as of December 31, 2007, and (ii) each award of restricted stock that had not vested and remained outstanding as of December 31, 2007:

 

     Option Awards         Stock Awards

Name

   Number of
Securities
Underlying
Unexercised
Options
(#) (1)
Exercisable
   Number of
Securities
Underlying
Unexercised
Options
(#) (2)
Unexercisable
   Option
Exercise
Price
($) (3)
   Option
Expiration
Date
        Number of
Shares or
Units of
Stock that
have not
Vested
(#) (4)
   Market
Value of
Shares
or Units
of Stock
that have
not
Vested
($) (5)
   Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested

(#)
   Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested

($)

Mr. Lowe

   120,000       24.500    1/23/2010                
   120,000       26.395    9/30/2010                
   200,000       32.125    1/24/2011                
   250,000       37.555    2/19/2012                
   83,333    41,667    46.460    2/9/2013                
   250,000       39.985    2/25/2013                
   41,667    83,333    48.980    2/22/2014                
   83,333    41,667    48.980    2/22/2014                
   187,500       48.710    3/22/2014                
      125,000    48.820    2/21/2015                
                                           

Total

   1,335,833    291,667              90,707    4,082,722      
                                           

Mr. Boehne

   40,000       23.655    1/18/2009                
   30,000       20.765    2/24/2009                
   80,000       24.500    1/23/2010                
   100,000       32.125    1/24/2011                
   120,000       37.555    2/19/2012                
   110,000       39.985    2/25/2013                
   90,000       48.710    3/22/2014                
   40,000    20,000    46.460    2/9/2013                
   25,000    50,000    44.750    3/28/2014                
      75,000    48.820    2/21/2015                
                                           

Total

   635,000    145,000              43,581    1,961,581      
                                           

Mr. NeCastro

   10,000       38.115    5/22/2012                
   28,333    14,167    46.460    2/9/2013                
   60,000       39.985    2/25/2013                
   60,000       48.710    3/22/2014                
   16,667    33,333    44.750    3/28/2014                
      50,000    48.820    2/21/2015                
                                           

Total

   175,000    97,500              29,433    1,324,779      
                                           

Mr. Lansing

   24,000       32.125    1/24/2011                
   70,000       37.555    2/19/2012                
   21,667    10,833    46.460    2/9/2013                
   60,000       39.985    2/25/2013                
   10,834    21,666    48.910    2/21/2014                
   30,000       48.710    3/22/2014                
      32,500    48.820    2/21/2015                
                                           

Total

   216,501    64,999              31,760    1,429,518      
                                           

Mr. Cruz

   22,500       53.390    4/27/2014                
   13,333    6,667    46.460    2/9/2013                
   7,500    15,000    48.910    2/21/2014                
      25,000    48.820    2/21/2015                
      20,000    40.700    7/31/2015                
                                           

Total

   43,333    66,667              19,549    879,900      
                                           

 

20


 

(1) Represents the number of shares underlying the outstanding stock options that have vested as of December 31, 2007.
(2) Represents the number of shares underlying the outstanding stock options that have not vested as of December 31, 2007. Vesting can be accelerated based on death, disability, retirement or change in control. The vesting dates for each unexercisable stock option award are as follows:

 

Name

   Grant Date    Total Number of
Unvested Stock
Options Outstanding
  

Vesting Date

Mr. Lowe

   2/10/2005    41,667    41,667 on 2/15/2008
   2/23/2006    41,667    41,667 on 12/31/2008: No accelerated vesting upon retirement
   2/23/2006    83,333    41,666 on 2/23/2008, 41,667 on 2/23/2009
   2/22/2007    125,000    41,667 on 2/22/2008, 41,666 on 2/22/2009, 41,667 on 2/22/2010
            
                           Total    291,667   
            

Mr. Boehne

   2/10/2005    20,000    20,000 on 2/15/2008
   3/29/2006    50,000    25,000 on 3/29/2008, 25,000 on 3/29/2009
   2/22/2007    75,000    25,000 on 2/22/2008, 25,000 on 2/22/2009, 25,000 on 2/22/2010
            
   Total    145,000   
            

Mr. NeCastro

   2/10/2005    14,167    14,167 on 2/15/2008
   3/29/2006    33,333    16,666 on 3/29/2008, 16,667 on 3/29/2009
   2/22/2007    50,000    16,667 on 2/22/2008, 16,666 on 2/22/2009, 16,667 on 2/22/2010
            
   Total    97,500   
            

Mr. Lansing

   2/10/2005    10,833    10,833 on 2/15/2008
   2/22/2006    21,666    10,833 on 2/22/2008, 10,833 on 2/22/2009
   2/22/2007    32,500    10,834 on 2/22/2008, 10,833 on 2/22/2009, 10,833 on 2/22/2010
            
   Total    64,999   
            

Mr. Cruz

   2/10/2005    6,667    6,667 on 2/15/2008
   2/22/2006    15,000    7,500 on 2/22/2008, 7,500 on 2/22/2009
   2/22/2007    25,000    8,334 on 2/22/2008, 8,333 on 2/22/2009, 8,333 on 2/22/2010
   8/1/2007    20,000    6,667 on 8/1/2008, 6,666 on 8/1/2009, 6,667 on 8/1/2010
            
   Total    66,667   
            

 

(3) The exercise price equals the fair market value per share of the underlying option shares on the date of grant.
(4) Represents the number of restricted shares for each NEO outstanding as of December 31, 2007. Vesting can be accelerated based on death, disability, retirement or change in control. The vesting dates for each outstanding restricted stock award are as follows:

 

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Name

   Grant Date    Total
Number of
Restricted
Shares
Outstanding
  

Vesting Date

Mr. Lowe

   2/10/2005    18,968    18,968 on 2/15/2008
   2/22/2006    25,297    8,432 on 3/15/2008, 16,865 on 3/15/2009
   2/23/2006    16,667    16,667 on 12/31/2008: No accelerated vesting upon retirement
   2/22/2007    29,775    7,444 on 3/15/2008, 7,444 on 3/15/2009, 14,887 on 3/15/2010
            
                           Total    90,707   
            

Mr. Boehne

   2/10/2005    9,104    9,104 on 2/15/2008
   3/29/2006    16,612    5,537 on 3/15/2008, 11,075 on 3/15/2009
   2/22/2007    17,865    4,466 on 3/15/2008, 4,466 on 3/15/2009, 8,933 on 3/15/2010
            
   Total    43,581   
            

Mr. NeCastro

   2/10/2005    6,449    6,449 on 2/15/2008
   3/29/2006    11,074    3,692 on 3/15/2008, 7,382 on 3/15/2009
   2/22/2007    11,910    2,978 on 3/15/2008, 2,978 on 3/15/2009, 5,954 on 3/15/2010
            
   Total    29,433   
            

Mr. Lansing

   1/1/2004    12,500    12,500 on 12/31/2008
   2/10/2005    4,932    4,932 on 2/15/2008
   2/22/2006    6,586    2,196 on 3/15/2008, 4,390 on 3/15/2009
   2/22/2007    7,742    1,936 on 3/15/2008, 1,936 on 3/15/2009, 3,870 on 3/15/2010
            
   Total    31,760   
            

Mr. Cruz

   2/10/2005    3,034    3,034 on 2/15/2008
   2/22/2006    4,560    1,520 on 3/15/2008, 3,040 on 3/15/2009
   2/22/2007    5,955    1,489 on 3/15/2008, 1,489 on 3/15/2009, 2,977 on 3/15/2010
   8/1/2007    6,000    2,000 on 8/1/2008, 2,000 on 8/1/2009, 2,000 on 8/1/2010
            
   Total    19,549   
            

 

(5) The value was calculated using the closing market price of the Company’s stock on December 31, 2007 ($45.01 per share).

 

 

Option Exercises and Stock Vested

The following table sets forth information for each NEO with respect to the exercise of options to purchase shares of the Company’s stock during 2007, and the vesting of restricted stock and restricted stock unit awards during 2007:

 

       Option Awards      Stock Awards

Name

     Number of
Shares
Acquired on
Exercise (#)
     Value
Realized on
Exercise
($)
     Number of
Shares
Acquired
on Vesting
(#) (1)
     Value
Realized on
Vesting
($) (2)

Mr. Lowe

     0      0      119,338      5,790,580

Mr. Boehne

     0      0      13,497      612,951

Mr. NeCastro

     0      0      9,190      417,991

Mr. Lansing

     0      0      5,799      265,780

Mr. Cruz

     0      0      3,814      173,305

 

(1) Includes 40,000 restricted share units for Mr. Lowe that vested on January 2, 2007. Mr. Lowe will not receive the shares underlying the stock units until he retires.
(2) Represents the product of the number of shares of stock covered by the restricted share or share unit award that vested and the closing price per share of stock for the vesting date.

 

 

 

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Pension Benefits

The following table sets forth information regarding the pension benefits for each NEO:

 

Name

  

Plan Name

   Number of
Years
Credited
Service

(#) (1)
   Present Value
of
Accumulated
Benefit

($) (1)
   Payments
During Last
Fiscal Year

($)

Mr. Lowe

   Scripps Pension Plan    27.68    626,660    0
  

SERP

   27.68    5,477,713    0

Mr. Boehne (2)

   Scripps Pension Plan    22.42    349,659    0
  

Cincinnati Newspaper Guild and

   2.42    5,039    0
  

Post Retirement Income Plan

        
  

SERP

   22.42    1,330,433    0

Mr. NeCastro

   Scripps Pension Plan    5.67    85,682    0
  

SERP

   5.67    228,717    0

Mr. Lansing

   Scripps Pension Plan    12.42    181,218    0
  

SERP

   12.42    527,579    0

Mr. Cruz (3)

   Scripps Pension Plan    3.75    52,804    0
  

SERP

   3.75    79,859    0

 

(1) The number of years of credited service and the present value of accumulated benefit are calculated as of December 31, 2007. The present value of accumulated benefits was calculated using the same assumptions included in the 2007 Annual Report, except that (i) no pre-retirement decrements were assumed, and (ii) a single retirement age of 62 was used instead of retirement decrements.
(2) Mr. Boehne’s benefit from the Scripps Pension Plan is calculated based on all service, including his service with the Cincinnati Post, with an offset for the benefit earned in the Cincinnati Newspaper Guild and Post Retirement Income Plan. Mr. Boehne was a participant in the Cincinnati Newspaper Guild and Post Retirement Income Plan from July 28, 1985 to January 5, 1988.
(3) Mr. Cruz has not yet vested in his benefits under either plan, as he does not have the required five years of credited service.

 

 

Description of Retirement Plans

Pension Plan

The Scripps Pension Plan (the “Pension Plan”) is a tax-qualified pension plan covering substantially all eligible non-union employees of the Company. The material terms and conditions of the Pension Plan as they pertain to the NEOs include the following:

Benefit Formula: Subject to applicable Internal Revenue Code limits on benefits, the monthly normal retirement benefit is equal to 1% of the participant’s average monthly compensation up to an integration level plus 1.25% of the participant’s average monthly compensation in excess of the integration level, multiplied by the participant’s years of service. The integration level is the average of the Social Security taxable wage bases for the thirty-five years prior to the participant’s termination (or disability, if applicable). Average monthly compensation is the monthly average of the compensation earned during the five consecutive years in the eleven years before termination for which the participant’s compensation was the highest.

Compensation: Subject to the applicable Internal Revenue Code limit ($225,000 for 2007), compensation includes salary, bonuses earned during the year and paid by March 15 of the following calendar year, and amounts deferred pursuant to the Scripps Retirement and Investment Plan and the Scripps Choice Plan.

Normal Retirement: A participant is eligible for a normal retirement benefit based on the benefit formula described above if his or her employment terminates on or after age 65.

 

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Early Retirement: A participant is eligible for an early retirement benefit if his or her employment terminates on or after age 55 and he or she has completed 10 years of service. The early retirement benefit is equal to the normal retirement benefit described above, reduced by 0.4167% for each month the benefit commences before age 62. Mr. Lowe is the only NEO currently eligible for an early retirement benefit. The Company does not grant extra years of service to any NEO under the Pension Plan.

Disability Retirement: A participant is eligible for a disability retirement benefit if his or her employment terminates due to disability, but only if he or she is not receiving disability benefits under another company plan and only if the participant has completed 15 years of service. The monthly disability retirement benefit is equal to the monthly normal retirement benefit, except that the monthly disability retirement benefit for any month prior to age 65 that the participant does not receive Social Security benefits is equal to 1.25% of average monthly compensation multiplied by years of service.

Deferred Vested Benefits: A participant who is not eligible for a normal, early or disability retirement benefit but has completed five years of service is eligible for a deferred retirement benefit following termination of employment, beginning at age 55, subject to a reduction of 0.5% for each month the benefit commences before age 65.

Form of Benefit Payment: The benefit formula calculates the amount of benefit payable in the form of a monthly life annuity (which is the normal form of benefit for an unmarried participant). The normal form of payment for a married participant is a joint and 50% survivor annuity, which provides a reduced monthly amount for the participant’s life with the surviving spouse receiving 50% of the reduced monthly amount for life. Married participants with spousal consent can elect any optional form. Optional forms of benefits include a joint and 50% or 100% survivor annuity (which provides a reduced monthly amount for the participant’s life with the survivor receiving 50% or 100% of the monthly amount for life), or a monthly life annuity with a 10-year certain or 5-year certain guarantee (which provides a reduced monthly amount for the participant’s life and, if the participant dies within 10 or 5 years of benefit commencement, equal payments to a designated beneficiary for the remainder of the 10-year or 5-year certain period, as applicable).

All forms of benefit payment are the actuarially equivalent of the monthly life annuity form.

Preretirement Death Benefits: A vested participant’s surviving spouse is generally eligible for a preretirement death benefit if the participant dies before benefit commencement. This monthly benefit is equal to an amount based on the joint and 50% survivor annuity and will begin on the later of the month following the participant’s death or the date the participant would have been eligible to commence a benefit.

Postretirement Death Benefits: A vested participant’s designated beneficiary is generally eligible for a postretirement death benefit if the participant dies after normal retirement, early retirement or disability retirement benefit. This lump sum benefit is equal to three times the participant’s average monthly compensation, with a minimum benefit of $2,500 and a maximum benefit of $10,000.

The Cincinnati Newspaper Guild and Post Retirement Income Plan

Mr. Boehne was a participant in this plan from July 28, 1985 to January 5, 1988. Mr. Boehne’s benefit from the Scripps Pension Plan is calculated based on all service, including his service with the Cincinnati Post, with an offset for the benefit earned in the Cincinnati Newspaper Guild and Post Retirement Income Plan. Mr. Boehne’s accrued benefit is frozen in this plan. The benefits are payable at age 65 in the form of a life annuity.

SERP

The Scripps Supplemental Executive Retirement Plan (“SERP”) is intended to attract and retain executive talent by supplementing benefits payable under the Pension Plan. The material terms and conditions of the SERP as they pertain to the NEOs include the following:

Eligibility: An executive generally is eligible to participate in the SERP if he or she qualifies for a Pension Plan benefit that was limited by application of the Internal Revenue Code limits on compensation and benefits.

Benefit Formula: The SERP benefit is equal to the difference between the Pension Plan benefit calculated using the SERP definition of compensation and the actual Pension Plan benefit, plus a 2.9% gross-up for the combined employer/employee Medicare tax. Compensation includes all compensation included under the Pension Plan (without application of the IRS limit described under the Pension Plan), plus bonuses paid if earned more than one year prior to the payment date and certain deferred compensation and executive compensation payments designated by the Pension Board.

 

24


Benefit Entitlement: A participant becomes entitled to a SERP benefit when he or she becomes entitled to a Pension Plan benefit. Benefits are paid from the SERP at the same time and in the same form of payment as elected under the Pension Plan.

Impact of Section 409A: Section 409A was added to the Internal Revenue Code in the fall of 2004. Section 409A imposes new restrictions on the SERP with respect to amounts deferred after December 31, 2004 and earnings thereon. These new restrictions generally define the earliest date that payments may commence under the plan and limit the ability of participants to receive accelerated payments or to tie the time and form of payment to a qualified plan election. As permitted under existing guidance, the Company will amend the SERP on or before December 31, 2008 to conform to Section 409A pending final regulations. In the meantime, the SERP will be administered in good faith compliance with the new rules, as permitted by current IRS guidance.

Nonqualified Deferred Compensation

The following table sets forth information regarding the nonqualified deferred compensation for each NEO as of December 31, 2007:

 

Name

   Executive
Contributions in
Last FY

($) (1)
   Registrant
Contributions in
Last FY

($) (2)
   Aggregate
Earnings in
Last FY

($)
    Aggregate
Withdrawals/
Distributions
($)
   Aggregate
Balance at
Last FYE
($) (3)

Mr. Lowe

   52,500    2,036,650    (177,963 )   0    2,558,234

Mr. Boehne

   27,600    13,800    53,189     0    600,804

Mr. NeCastro

   88,500    11,250    35,575     0    467,162

Mr. Lansing

   181,500    12,750    30,330     0    745,779

Mr. Cruz

   56,137    8,063    4,387     0    91,160

 

(1) Represents the base salary and annual incentive deferred by each NEO during 2007. The deferrals of base salary are included in the Salary column of the Summary Compensation Table.
(2) Represents the matching contribution credited to each NEO during 2007. These matching contributions are included in the All Other Compensation column of the Summary Compensation Table. For Mr. Lowe, represents an additional amount attributable to the vesting of 40,000 restricted share units.
(3) The aggregate balance as of December 31, 2007 for each Named Executive Officer includes the following amounts that were previously earned and reported as compensation in the 2006 Summary Compensation Table:

 

Name

   2006 Base
Deferred
   2006 Bonus
Deferred
   2006 Matching
Contributions

Mr. Lowe

   49,800       24,900

Mr. Boehne

   25,800       12,900

Mr. NeCastro

   19,800       9,900

Mr. Lansing

   130,550       10,650

Mr. Cruz

   9,900    40,012    4,950

 

 

Description of Executive Deferred Compensation Plan

Each NEO is eligible to defer up to 50% of his pre-tax base salary and up to 100% of his pre-tax annual incentive compensation under the terms of the Executive Deferred Compensation Plan. The plan is available to a select group of highly compensated employees and is unfunded and unsecured. After a participant completes one year of service with the Company, he or she is also entitled to a 50% matching credit on base salary deferrals, up to 6% of base salary over the applicable Internal Revenue Code limit ($225,000 for 2007). Payments are made in cash at certain future dates specified by participants or upon earlier termination of employment or death. Payments are made in the form of a lump sum or in monthly installments of 5, 10 or 15 years, as elected by the participants. The Company may accelerate payments in the event of a participant’s disability, death or severe hardship. Payments are automatically accelerated and paid in a lump sum in the event of a change in control of the Company. The deferred compensation is credited with earnings, gains and losses in accordance with deemed investment elections made by participants from among various crediting options established by the Company from time to time. Participants are permitted

 

25


to change their deemed investment elections daily. For 2007, the investment options tracked returns under publicly available and externally managed investment funds such as mutual funds.

Potential Payments Upon Termination or Change in Control

The Company has entered into certain agreements and maintains certain plans and arrangements that require it to pay or provide compensation and benefits to its NEOs in the event of certain terminations of employment or a change in control. The estimated amount payable or provided to each NEO in each situation is summarized below. These estimates are based on the assumption that the various triggering events occurred on the last day of 2007, along with other material assumptions noted below. The actual amounts that would be paid to a NEO upon termination or a change in control can only be determined at the time the actual triggering event occurs.

The estimated amount of compensation and benefits described below does not take into account compensation and benefits that a NEO has earned prior to the applicable triggering event, such as earned but unpaid salary or accrued vacation pay or annual incentives or equity awards that vested on or prior to the triggering event in accordance with their terms. The estimates also do not take into account benefits to which each NEO would be entitled upon termination of employment under the retirement plans and programs described in the Pension Benefits section and the Nonqualified Deferred Compensation section of this Form 10-K/A (unless those benefits are enhanced or accelerated).

Voluntary Termination for “Good Reason” or Involuntary Termination without “Cause”

Employment Agreement for Mr. Lowe

Under Mr. Lowe’s employment agreement, if the Company terminates the agreement without “cause” or the executive terminates it for “good reason” (other than within two years following a change in control), the Company must make the following payments to or on behalf of the executive:

 

   

Continued salary payments for the greater of three years or the balance of the term.

 

   

A lump sum payment equal to the target annual incentive for the greater of two years or the balance of the term (prorated for partial years).

 

   

A lump sum payment equal to his pro-rated target annual incentive opportunity for the year.

 

   

Continued participation in all employee benefit plans for the greater of two years or the balance of the term of the agreement (reduced by any substantially equivalent benefits provided to him by another employer).

 

   

Full vesting of all equity awards, with the options remaining exercisable for the remainder of the original term.

For purposes of Mr. Lowe’s employment agreement, the term “cause” generally means: (i) gross misconduct or gross neglect of duties; (ii) a material breach of the employment agreement or applicable policy; or (iii) the commission of a felony involving embezzlement or theft or any other crime involving moral turpitude. The term “good reason” generally means: (i) a reduction in base salary, target annual incentive or long-term incentive opportunities; (ii) a material reduction in duties, removal from the board, or an adverse change in reporting structure; (iii) relocation more than 25 miles outside of Cincinnati, Ohio; or (iv) a material breach of the employment agreement by the Company.

Employment Agreement for Mr. Lansing

Under Mr. Lansing’s employment agreement, if the Company terminates the agreement without “cause” or the executive terminates it for “good reason” (other than within one year following a change in control), the Company must pay him a lump sum amount equal to three times his annual base salary. If the executive voluntarily terminates employment, the Company may make monthly continued salary payments to the executive for up to 12 months. In return, the executive may not engage in conflicting business activities, work for a competitor or solicit Scripps’ employees while receiving monthly payments. The term “cause” generally means (i) a commission of a felony or an act that impairs the Company’s reputation, or the willful failure to perform his duties; or (ii) a material breach of the employment agreement. The term “good reason” generally means (i) a reduction in base salary or annual incentive; (ii) reduction in duties or offices; or (iii) the material breach of the employment agreement by the Company.

Other Employment Agreements

Under the employment agreements for each of Messrs. Boehne, NeCastro and Cruz, if the Company terminates the executive’s agreement without “cause” or the executive terminates it for “good reason” (other than within two years following a change in control), the Company must make the following payments to or on behalf of the executive for the greater of 18 months or the balance of the term (or for 12 months if the Company gives proper notice that it does not intend to employ the executive beyond the end of the term):

 

26


   

Continued salary payments in accordance with Company payroll practices (payable in a lump sum for Mr. Cruz).

 

   

Payments equal to the target annual incentive then in effect, payable pursuant to the terms of the annual incentive plan.

 

   

Premiums for continued medical and dental coverage for the remainder of the term.

 

   

Continued life insurance coverage.

In general, Messrs. Boehne, NeCastro and Cruz may not engage in conflicting business activities or work for a competitor throughout the term of the agreement, or, if earlier, until the end of the sixth month following a qualifying termination of employment described above. In addition, they may not solicit Scripps’ employees or make disparaging or derogatory comments about the Company during the term of the agreement and for twelve months thereafter, they must also protect the Company’s confidential information during the term of the agreement and thereafter.

For purposes of these employment agreements, the term “cause” generally means: (i) embezzlement, fraud or a felony; (ii) willful unauthorized disclosure of confidential information; (iii) a material breach of the agreement; (iv) gross misconduct or gross neglect of duties; (v) willful failure to cooperate with an internal or regulatory investigation; or (vi) willful and material violation of the Company’s written conduct policies or ethics code. The term “good reason” generally means: (i) a material reduction in duties or reporting structure; (ii) relocation outside of Cincinnati; or (iii) a material breach of the employment agreement by the Company.

 

Termination without Cause

or for Good Reason

     Mr. Lowe      Mr. Boehne      Mr. NeCastro      Mr. Lansing      Mr. Cruz

Cash Severance

     7,260,000      1,710,000      1,440,000      1,950,000      1,220,625
                                  

Equity

                        

Restricted Stock (1)

     4,082,722      N/A      N/A      N/A      N/A

Unexercisable Options (2)

     0      N/A      N/A      N/A      N/A
                                  

Sub-Total

     4,082,722      0      0      0      0
                                  

Other Benefits

                        

Health & Welfare (3)

     180,980      21,000      26,063      0      22,688

Retirement (4)

     1,601,978      0      0      0      0
                                  

Sub-Total

     1,782,958      21,000      26,063      0      22,688
                                  

Total

     13,125,680      1,731,000      1,466,063      1,950,000      1,243,313
                                  

 

(1) Represents the product of (i) the number of restricted stock awards outstanding as of December 31, 2007, multiplied by (ii) $45.01 per share (the closing market price of the Company’s stock on December 31, 2007). The number of restricted stock awards outstanding on December 31, 2007 includes the restricted shares earned pursuant to the performance-based restricted stock awards granted in 2007.
(2) All of Mr. Lowe’s unvested stock options had an exercise price in excess of the fair market value of the underlying shares on December 31, 2007, and are therefore not included in these calculations.
(3) For Mr. Lowe, this amount represents the premiums for continued medical, dental, disability, life and accidental death insurance, along with continued perquisites and other benefits included in the All Other Compensation column of the Summary Compensation Table. For Messrs. Boehne, NeCastro and Cruz, the amounts represent premiums for continued medical, dental and life insurance coverage.
(4) For Mr. Lowe, this amount represents the actuarial present value of continued pension benefits, calculated using the pension plan’s provisions for a lump sum payment on January 1, 2008, including a 6.25% interest rate and the RP2000 mortality table.

 

 

Death or Disability

Employment Agreement for Mr. Lowe

Under Mr. Lowe’s employment agreement, if he dies or suffers a “permanent disability”, the executive, his estate and/or his family become entitled to the following benefits:

 

   

Continued salary payments for two years (subject to reduction for any proceeds received under any life insurance policy or the Company’s disability plans).

 

   

In the event of permanent disability, annual payments equal to 60% of his base salary, commencing on the second anniversary of his disability and ending at age 65.

 

27


   

Continued medical and dental benefits for two years.

 

   

A lump sum payment equal to a pro-rated target annual incentive.

 

   

Immediate vesting of all outstanding equity awards, with the options remaining exercisable for the remainder of the original terms.

The term “permanent disability” means the executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities under his employment agreement for a period of 150 consecutive days as determined by a medical doctor selected by the executive and the Company.

Employment Agreement for Mr. Lansing

Under Mr. Lansing’s employment agreement, if he dies or becomes permanently disabled (as defined under and covered by the Company’s disability plan), the Company must pay his annual incentive that he otherwise would have earned for the year of his death or disability, prorated for the portion of the year through his death or disability.

Other Employment Agreements

Under the employment agreements for each of Messrs. Boehne, NeCastro and Cruz, if the executive dies or becomes disabled (as defined under and covered by the Company’s disability plan), the Company must provide him, his beneficiary and/or his family the following benefits:

 

   

Continued salary payments for one year following death or disability.

 

   

A lump sum amount equal to his pro-rated target annual incentive for the period commencing January 1 and ending one year after death or disability.

 

   

Continued medical and dental benefits for covered family members for one year following the death or disability.

Long-Term Incentive Plan

If a NEO dies or becomes disabled (as defined under and covered by the Company’s disability plan), then any equity awards issued under the Company’s Long-Term Incentive Plan will become fully vested, and in the case of stock options, be exercisable until their expiration date. With respect to performance-based restricted stock awards, those shares will vest based on the extent to which the applicable performance goals have been achieved for the entire performance period.

 

        Mr. Lowe      Mr. Boehne      Mr. NeCastro      Mr. Lansing      Mr. Cruz

Termination Due to Death or Disability

     Death      Disability      Either      Either      Either      Either

Cash Severance

     3,520,000      7,004,800      1,644,000      1,320,000      390,000      1,102,500
                                         

Equity

                             

Restricted Stock (1)

     4,082,722      4,082,722      1,961,581      1,324,779      1,429,518      879,900

Unexercisable Options (2)

     0      0      13,000      8,667      0      86,200
                                         

Sub-Total

     4,082,722      4,082,722      1,974,581      1,333,446      1,429,518      966,100
                                         

Other Benefits

                             

Health & Welfare (3) (4)

     19,424      19,424      12,109      13,235      0      13,235
                                         

Sub-Total

     19,424      19,424      12,109      13,235      0      13,235
                                         

Total

     7,622,146      11,106,946      3,630,690      2,666,682      1,819,518      2,081,836
                                         

 

(1) Represents the product of (i) the number of restricted stock awards outstanding as of December 31, 2007, multiplied by (ii) $45.01 per share (the closing market price of the Company’s stock on December 31, 2007). For each NEO, the number of restricted stock awards outstanding on December 31, 2007 includes the restricted shares earned pursuant to the performance-based restricted stock awards granted in 2007.
(2) Represents the product of (i) the number of shares underlying the unvested stock options as of December 31, 2007, multiplied by (ii) the excess of $45.01 per share (the closing market price of the Company’s stock on December 31, 2007), over the per share exercise price of the stock option. The unvested stock options held by Messrs. Lowe and Lansing had an exercise price in excess of the fair market value of the underlying shares on December 31, 2007, and are therefore not included in these calculations.
(3) For Mr. Lowe, this amount represents premiums for continued medical benefits along with an annual supplemental disability benefit equal to 60% of his base salary, payable during the period from January 1, 2010 through April 7, 2015 (age 65).
(4) For Messrs. Boehne, NeCastro and Cruz, this amount represents the premiums for continued medical and dental insurance coverage.

 

 

Change in Control

 

28


Employment Agreement for Mr. Lowe

Under Mr. Lowe’s employment agreement, all outstanding equity awards held by him will vest upon a change in control with the options remaining exercisable for the remainder of the original terms.

Senior Executive Change in Control Plan

Under the terms of the Senior Executive Change in Control Plan, all outstanding equity awards held by all NEOs except Mr. Lowe will vest upon a change in control with the options remaining exercisable for the remainder of the original terms. Under the terms of the Executive Deferred Compensation Plan, the vested account balance of each NEO will be valued and payable in a lump sum upon a change in control.

For purposes of these plans and agreements, a change in control generally means (i) the acquisition of a majority of the Company’s voting common shares by someone other than The Edward W. Scripps Trust or a party to the Scripps Family Agreement; (ii) the disposition of assets accounting for 90% or more of the Company’s revenues, unless the Trust or the parties to the Scripps Family Agreement have a direct or indirect controlling interest in the acquiring entity, or (iii) for Mr. Lowe’s agreement only, a change in the membership of the Company’s board of directors, such that the current incumbents and their approved successors no longer constitute a majority.

 

Change in Control (Single Trigger)

     Mr. Lowe      Mr. Boehne      Mr. NeCastro      Mr. Lansing      Mr. Cruz

Equity

                        

Restricted Stock (1)

     4,082,722      1,961,581      1,324,779      1,429,518      879,900

Unexercisable Options (2)

     0      13,000      8,667      0      86,200
                                  

Total

     4,082,722      1,974,581      1,333,446      1,429,518      966,100
                                  

 

(1) Represents the product of (i) the number of restricted stock awards outstanding as of December 31, 2007, multiplied by (ii) $45.01 per share (the closing market price of the Company’s stock on December 31, 2007). For each NEO, the number of restricted stock awards outstanding on December 31, 2007 includes the restricted shares earned pursuant to the performance-based restricted stock awards granted in 2007.
(2) Represents the product of (i) the number of shares underlying the unvested stock options as of December 31, 2007, multiplied by (ii) the excess of $45.01 per share (the closing market price of the Company’s stock on December 31, 2007), over the per share exercise price of the stock option. The unvested stock options held by Messrs. Lowe and Lansing had an exercise price in excess of the fair market value of the underlying shares on December 31, 2007, and are therefore not included in these calculations.

 

 

Qualifying Termination Following a Change in Control

Employment Agreement for Mr. Lowe

Under Mr. Lowe’s employment agreement, if the Company terminates the employment agreement without “cause” within two years after a “change in control” or the executive terminates it for “good reason” within such two-year period, the Company or its successor must provide him with the following benefits:

 

   

A lump sum amount equal to three times his base salary and annual incentive. For this purpose, annual incentive generally means the greater of: (i) target in the year of termination or (ii) the highest annual incentive earned in the prior three years.

 

   

Benefits substantially equivalent to those received immediately prior to the date of termination or change in control for a period of three years (or until death or obtaining substantially equivalent benefits).

 

   

Reasonable outplacement services for a period of eighteen months and reimbursement for reasonable legal expenses (up to $75,000) if he is required to enforce the agreement.

The terms “cause” and “good reason” under the executive’s employment agreement are described above under the heading Voluntary Termination for “Good Reason” or Involuntary Termination without “Cause”. The term “change in control” is defined above under the heading Change in Control.

 

29


Senior Executive Change in Control Plan

Each NEO, except Mr. Lowe, participates in the Senior Executive Change in Control Plan. Under this plan, if the executive’s employment is terminated by us other than for “cause”, death or disability or if the executive resigns for “good reason,” within two years after a “change in control”, then the Company or its successor will be obligated to pay or provide the following benefits:

 

   

A lump sum payment equal to 2.5 times for Messrs. Boehne, NeCastro and Cruz, and 2.0 times for Mr. Lansing, of the executive’s annual base salary and annual incentive. For this purpose, annual incentive generally means the greater of (i) target in the year of termination or (ii) the highest annual incentive earned in the prior three years.

 

   

Continued medical, dental, disability, life and accidental death insurance coverage for 30 months for Messrs. Boehne, NeCastro and Cruz, and 24 months for Mr. Lansing.

 

   

A lump sum payment equal to the actuarial value of the additional benefits under the Company’s qualified and supplemental defined benefit plans the executive would have received if his age and years of service at the time of termination were increased by 2.5 years for Messrs. Boehne, NeCastro and Cruz, and 2.0 years for Mr. Lansing.

Under the change in control plan, the terms “cause” generally means: (i) a commission of a felony or an act that impairs the Company’s reputation; (ii) willful failure to perform duties; or (iii) breach of any material term, provision or condition of employment. The term “good reason” means (i) a material reduction in base salary or annual incentive opportunity; (ii) a material reduction in duties or offices; (iii) a relocation of more than 50 miles; (iv) the failure by any successor to assume the employment agreement; or (v) a material breach of the employment terms by the Company.

Executive Annual Incentive Plan

Under the Executive Annual Incentive Plan, in the event that a participant’s employment terminates within one year of a “change in control,” the Company or its successor would be required to pay a lump sum amount to the participant equal to the target annual incentive opportunity for the performance period in which the termination occurs.

 

Change in Control (Double Trigger)

   Mr. Lowe    Mr. Boehne    Mr. NeCastro    Mr. Lansing    Mr. Cruz

Cash Severance

   7,260,000    2,911,250    2,400,000    2,080,000    1,967,970

Interrupted Bonus

   1,320,000    479,500    360,000    390,000    262,188
                        

Other Benefits

              

Health & Welfare (1)

   44,854    33,484    32,942    26,850    31,296

Life Insurance

   0    0    0    0    0

Outplacement

   50,000    0    0    0    0

Tax Gross-Ups (2)

   0    0    1,264,829    914,940    1,210,556

Retirement (3)

   2,455,795    182,893    136,062    112,730    220,455
                        

Sub-Total

   2,550,649    216,377    1,433,833    1,054,520    1,462,307
                        

Total (4)

   11,130,649    3,607,127    4,193,833    3,524,520    3,692,465
                        

 

(1) For Mr. Lowe, this amount represents premiums for continued medical, dental, disability, life and accidental death insurance along with continued perquisites and other benefits included in the “All Other Compensation” column of the Summary Compensation Table. For the other NEOs, the amounts represent premiums for continued medical, dental, disability, life and accidental death insurance.
(2) Section 280G of the Internal Revenue Code applies if there is a change in control of the Company, compensation is paid to an NEO as a result of the change in control (“parachute payments”), and the present value of the parachute payments is 300% or more of the executive’s “base amount”, which equals his average W-2 income for the five-calendar-year period immediately preceding the change in control (e.g., 2002-2006 if the change in control occurs in 2007). If Section 280G applies, then the NEO is subject to an excise tax equal to 20% of the amount of the parachute payments in excess of his base amount (the “excess parachute payments”), in addition to income and employment taxes. Moreover, the Company is denied a federal income tax deduction for the excess parachute payments. The amounts in the Tax Gross-Ups row reflect a tax gross-up for the excise and related taxes, as required under the terms of the arrangements described above. The amounts are merely estimates based on the following assumptions: (i) an excise tax rate of 20% and a combined federal, state and local income and employment tax rate of 43.01% for Messrs. NeCastro and Cruz and 36.45% for Mr. Lansing, and (ii) no amounts were allocated to the non-solicitation or non-competition covenants contained in the employment agreements.
(3) Represents the actuarial present value of continued pension benefits, calculated using the pension plan’s provisions for a lump sum payment on January 1, 2008, including a 6.25% interest rate and the RP2000 mortality table.
(4) These amounts are in addition to the payments and benefits described under the “Change in Control” caption, above.

 

 

 

30


Retirement

Only Mr. Lowe is eligible for retirement as of December 31, 2007. Under Mr. Lowe’s employment agreement, if he voluntarily terminates employment with the Company on or after January 1, 2007, all outstanding equity awards granted pursuant to his employment agreement will vest with the options remaining exercisable for the remainder of the original terms.

 

Termination Due to Retirement

   Mr. Lowe

Equity

  

Restricted Stock (1)

   4,082,722

Unexercisable Options (2)

   0
    

Sub-Total

   4,082,722
    

Total

   4,082,722
    

 

(1) Represents the product of (i) the number of restricted stock awards outstanding as of December 31, 2007, multiplied by (ii) $45.01 per share (the closing market price of the Company’s stock on December 31, 2007). The number of restricted stock awards outstanding on December 31, 2007 includes the restricted shares earned pursuant to the performance-based restricted stock awards granted in 2007.
(2) All of Mr. Lowe’s unvested stock options had an exercise price in excess of the fair market value of the underlying shares on December 31, 2007, and are therefore not included in these calculations.

 

 

Director Compensation

The following table sets forth information regarding the compensation earned in 2007 by non-employee directors:

 

Name

     Fees Earned
or Paid in
Cash
($)
     Option
Awards
($) (1)
     All Other
Compensation
($) (2)
     Total
($)

William R. Burleigh

     171,000      166,663      11,207      348,870

John H. Burlingame

     78,000      166,663           244,663

David A. Galloway

     76,000      166,663           242,663

Jarl Mohn

     68,000      166,663           234,663

Nicholas B. Paumgarten

     68,000      166,663           234,663

Jeffrey Sagansky

     75,000      166,663           241,663

Nackey E. Scagliotti

     71,000      166,663           237,663

Paul K. Scripps

     64,000      166,663           230,663

Edward W. Scripps

     70,000      166,663           236,663

Ronald W. Tysoe

     94,000      166,663           260,663

Julie A. Wrigley

     71,000      166,663           237,663

David Moffett

     50,000      125,800           175,800

 

(1) Represents the expense recognized in the Company’s financial statements related to stock option awards granted in 2007 and in prior years. The expense was determined in accordance with FAS 123R. See footnote 20 of the 2007 Annual Report for the assumptions used by the Company in the valuation of these awards. The grant date fair value of each stock option granted to the directors in 2007 was $43.28.
(2) Represents the fees paid to Mr. Burleigh for country, dining and business club dues, financial planning, tax services, and secretarial assistance pursuant to his retirement agreement, and the charitable contributions made on his behalf under the charitable matching gift program.

 

 

 

31


Description of Director Compensation Program

The Company’s director compensation program is designed to enhance its ability to attract and retain highly qualified directors and to align their interests with the long-term interests of its shareholders. The program includes a cash component, which is designed to compensate non-employee directors for their service on the board, and an equity component, which is designed to align the interests of non-employee directors and shareholders. The Company also provides certain other benefits to non-employee directors, which are described below. Directors who are employees of the Company receive no additional compensation for their service on the board.

Cash Compensation

Each non-employee director is entitled to receive an annual cash retainer of $40,000. The chairman is entitled to receive an additional annual cash retainer of $100,000. Committee chairs also receive an annual retainer as described in the table below. The retainers are paid in equal quarterly installments. Each non-employee director is also entitled to receive a fee for each board meeting and committee meeting attended, as follows:

 

Meeting Fees

    

Board

   $ 2,500

Executive, Compensation and Nominating & Governance Committees

   $ 2,000

Audit Committee

   $ 2,500

Annual Chair Fees

    

Executive Committee

   $ 3,000

Audit Committee

   $ 9,000

Compensation Committee

   $ 6,000

Nominating & Governance Committee

   $ 3,000

Equity Compensation

Consistent with past practice, in May 2007 non-employee directors who were elected at the 2007 annual shareholder meeting received a nonqualified stock option award to purchase 10,000 shares at a price equal to the fair market value of the shares on the date of grant. The stock options have a term of ten years and are exercisable on the anniversary of the date of grant. They may be forfeited only upon removal from the board for cause. The awards were first approved at the February 2007 meeting of the board of directors.

Other Benefits

In addition to the above compensation, the Scripps Howard Foundation, an affiliate of the Company, matches, on a dollar-for-dollar basis up to $3,000 annually, charitable contributions made by non-employee directors to qualifying organizations. This program is also available to all Scripps’ employees.

1997 Deferred Compensation and Stock Plan for Directors

A non-employee director may elect to defer payment of at least fifty percent of the cash compensation received as a director under the Company’s 1997 Deferred Compensation and Stock Plan for Directors. The director may allocate the deferrals between a phantom stock account that credits earnings including dividends, based on the Company’s Class A Common stock, or to a fixed income account that credits interest based on the twelve month average of the 10-year treasury rate (as of November of each year), plus 1%. The deferred amounts (as adjusted for earnings, interest and losses) are paid to the director at the time he or she ceases to serve as a director or upon a date predetermined by the director, either in a lump sum or annual installments over a specified number of years (not to exceed 15) as elected by the director. Payments generally are made in the form of cash, except that the director may elect to receive all or a portion of the amounts credited to his or her phantom stock account in the form of shares of Class A Common stock.

 

32


The following table provides the number of stock options that had not been exercised and remained outstanding as of December 31, 2007. The stock options are exercisable one year from the date of grant, but may be forfeited upon removal from the Board for cause.

 

Name

   Aggregate Number of
Shares Underlying
Stock Options Awards
(#)

Mr. Burleigh

   340,000

Mr. Burlingame

   70,000

Mr. Galloway

   55,000

Mr. Mohn

   60,000

Mr. Paumgarten

   84,000

Mr. Sagansky

   45,000

Ms. Scagliotti

   84,000

Mr. P.K. Scripps

   60,000

Mr. E.W. Scripps

   84,000

Mr. Tysoe

   90,000

Ms. Wrigley

   60,000

Mr. Moffett

   10,000

 

33


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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, 2007, 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.

 

Name and Address of Beneficial Owner

   Class A
Common
Shares
   Percent    Common
Voting
Shares
   Percent

The Edward W. Scripps Trust (1)

13350 Metro Parkway, Suite 301

Fort Meyers, Florida 33966-4796

   39,192,222    31.00%    32,080,000    87.73%

Paul K. Scripps and

John P. Scripps Trust (2)

5360 Jackson Drive, Suite 206

La Mesa, California 91942

   1,230    —      3,232,226    8.84%

FMR LLC (3)

82 Devonshire Street

Boston, Massachusetts 02109

   12,859,514    10.17%    —      —  

Harris Associates L.P. (4)

Two North LaSalle Street, Suite 500

Chicago, Illinois 60602-3790

   7,525,100    5.95%    —      —  

 

(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, Mary Peirce and Nackey E. Scagliotti. (Edward W. Scripps, Jr. was a trustee of the Trust during 2007. He retired in February 2008.) The Trust will terminate upon the death of one individual. 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 certain descendants. Certain of these descendants 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.”

 

(2) See footnote 8 to the table under “Security Ownership of Management” below.

 

(3) FMR, LLC filed a Schedule 13G with the Securities and Exchange Commission with respect to the Company’s Class A Common Shares on January 9, 2008. The information in the table is based on the information contained in such filing for the year ended 2007. Such report states that FMR, LLC has sole voting power over 1,371,996 shares and sole investment power over 12,859,514 shares.

 

(4) Harris Associates L.P. filed a Schedule 13G with the Securities and Exchange Commission with respect to the Company’s Class A Common Shares on February 13, 2008. The information in the table is based on the information contained in such filing for the year ended 2007. Such report states that Harris Associates L.P. has shared voting power over 6,400,000 shares and sole investment power over 1,125,100 shares.

 

34


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, 2008, 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.

 

Name of Individual or

Number of Persons in Group

   Class A
Common Shares(1)
   Exercisable
Options(2)
   Total
Class A
Common
Shares(3)
   Percent     Phantom
Shares(4)
   Common
Voting
Shares
   Percent  

William R. Burleigh

   84,830    330,000    414,830    *     —      —      —    

John H. Burlingame (5)

   1,428    60,000    61,428    *     882    —      —    

David A. Galloway

   2,000    45,000    47,000    *     7,297    —      —    

Kenneth W. Lowe

   357,353    1,460,833    1,818,186    1.44%     —      —      —    

David M. Moffett

   —      —      —      *     —      —      —    

Jarl Mohn (6)

   600    50,000    50,600    *     —      —      —    

Nicholas B. Paumgarten (7)

   2,500    74,000    76,500    *     9,408    —      —    

Jeffrey Sagansky

   —      35,000    35,000    *     —      —      —    

Nackey E. Scagliotti (5)

   400    74,000    74,400    *     —      —      —    

Edward W. Scripps

   2,000    74,000    76,000    *     —      —      —    

Paul K. Scripps (8)

   1,230    50,000    51,230    *     —      3,232,226    8.84 %

Ronald W. Tysoe

   —      80,000    80,000    *     23,861    —      —    

Julie A. Wrigley

   64,144    50,000    114,144    *     17,345    —      —    

Richard A. Boehne

   51,013    705,000    756,013    *     —      —      —    

Joseph G. NeCastro

   28,964    222,500    251,464    *     —      —      —    

Anatolio B. Cruz III

   18,139    65,834    83,973    *     —      —      —    

John F. Lansing

   28,250    249,001    277,251    *     —      —      —    

All directors and executive officers as a group (21 persons) (9)

   39,873,793    3,906,004    43,779,797    34.69 %   58,794    35,312,226    96.57 %

 

* Shares owned represent less than 1 percent of the outstanding shares of such class of stock.

 

(1) The shares listed for each of the officers and directors represent his or her direct or indirect beneficial ownership of Class A Common Shares.

 

(2) The shares listed for each of the officers and directors include Class A Common Shares underlying exercisable options at January 31, 2008 and exercisable options at March 31, 2008.

 

(3) 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. None of the shares listed for any officer or director is pledged as security for any obligation, such as pursuant to a loan arrangement or agreement or pursuant to any margin account agreement.

 

(4) The shares listed are the shares held in 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.

 

(5) 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.

 

(6) The shares for Mr. Mohn include shares held in an S corporation that is owned by The Mohn Family Trust.

 

(7) The shares listed for Mr. Paumgarten include 1,700 shares owned by his wife. Mr. Paumgarten disclaims beneficial ownership of such shares.

 

(8) 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 Common Voting Shares. He disclaims beneficial ownership of the shares held in the other four trusts.

 

(9) Please see footnote 1 under Report on the Security Ownership of Certain Beneficial Owners.

 

35


Equity Compensation Plan Information

The following table provides information as of December 31, 2007 about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans, including The E. W. Scripps 1997 Long-Term Incentive Plan (LTIP), The E. W. Scripps Company Employee Stock Purchase Plan (ESPP), and the 1997 Deferred Compensation and Stock Plan for Directors (DCSPD).

In March 1997, the Company adopted the LTIP, which was subsequently amended November 1998, February 1999, February 2000, and February 2002. The LTIP was amended and restated April 2004, and amended April 2005 and February 2007. In January 1998, the Company adopted the ESPP, which was subsequently amended in February 2007. In March 1997, the Company adopted the DCSPD. The Company’s shareholders have approved each plan. Equity compensation plan information, as of December 31, 2007, is as follow:

 

Plan Category

   Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
   Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights
(b)
   Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a)) (c)
 

Equity compensation plans approved by security holders (1)(3)(4)

   13,429,287    $ 41.50    4,022,309 (2)

Equity compensation plans not approved by security holders

   —        —      —    
                  

Total

   13,429,287    $ 41.50    4,022,309  
                  

 

(1) Includes the following plans: LTIP, which encompasses the issuance of stock options, restricted shares, performance-based restricted shares, restricted stock units, ESPP, and DSCPD.

 

(2) Includes 161,090 shares reserved for future issuance of shares related to the ESPP. The maximum number of shares that may be issued pursuant to awards other than stock options under the LTIP is 3,861,219.

 

(3) Includes 142,145 performance-based restricted shares at the target level. These shares are not included in the weighted average exercise price. The actual number of restricted shares delivered under the LTIP was determined on February 22, 2008 and is set forth in the “Number of Shares or Units of Stock that have Not Vested” column of the Outstanding Equity Awards at Fiscal Year-End table of this proxy statement. The executives have no rights to vote or receive cash dividends with respect to the underlying restricted shares until the date on which the actual number of restricted shares are determined and issued to the executive.

 

4) Includes 59,586 phantom shares credited to the accounts of directors under the DCSPD. These shares are not included in the weighted average exercise price. Under the DCSPD, a non-employee director may elect to defer payment of the cash compensation received as a director. The director may allocate the deferrals between a phantom stock account that credits earnings including dividends, based on the Company’s Class A Common stock, or to a fixed income. The deferrals are paid to the director at the time he or she ceases to serve as a director or upon a date predetermined by the director. Payments may be made in cash, shares of Class A Common stock, or a combination of cash and shares.

 

36


Item 13. Certain Relationships and Related Transactions, and Director Independence

REPORT ON RELATED PARTY TRANSACTIONS

Related Party Transactions

There were no related party transactions in fiscal 2007. Under its charter, the audit committee of the board of directors is responsible for reviewing any proposed related party transaction. The audit committee has approved a “Statement of Policy With Respect to Related Party Transactions” which recognizes that related party transactions can present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof). This policy defines a “related party,” requires that management present to the audit committee for its approval any related party transaction, and defines disclosure procedures.

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 The Edward W. Scripps Trust. Such persons and trusts (the “Signatories”) consist of certain descendants 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, 2008, 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 21 years after the death of the last survivor of the descendants of Robert Paine Scripps and John P. Scripps alive when the Trust terminates. The provisions of the Scripps Family Agreement governing the voting of Common Voting Shares will be effective for a 10-year period after termination of the Trust and may be renewed for additional 10-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 Required Meeting. Each Signatory will be bound by the decision reached by majority vote with respect to each matter brought before the Required Meeting, and at the related annual or special meeting of the shareholders of the Company each Signatory will vote his Common Voting Shares in accordance with decisions reached at the Required Meeting of the Signatories.

 

37


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 of the Company have the right to designate one person to serve on the Company’s board of directors so long as they continue to own in the aggregate 25% of the sum of (i) the shares issued to them in the JPSN Merger and (ii) the shares received by them from John P. Scripps’ estate. In this regard, The Edward W. Scripps Trust has agreed to vote its Common Voting Shares in favor of the person designated by John P. Scripps’ children. Pursuant to this agreement, Paul K. Scripps currently serves on the Company’s board of directors and is a nominee for election at the annual meeting. The Board Representation Agreement terminates upon the earlier of the termination of The Edward W. Scripps Trust or the completion of a public offering by the Company of Common Voting Shares.

Stockholder Agreement. The former shareholders of the John P. Scripps Newspaper Group, including John P. Scripps and Paul K. Scripps, entered into a Stockholder Agreement with the Company in connection with the JPSN Merger. This agreement restricts to certain transferees the transfer of Common Voting Shares received by such shareholders pursuant to the JPSN Merger. These restrictions on transfer will terminate on the earlier of the termination of The Edward W. Scripps Trust or completion of a public offering of Common Voting Shares. Under the agreement, if a shareholder has received a written offer to purchase 25% or more of his Common Voting Shares, the Company has a “right of first refusal” to purchase such shares on the same terms as the offer. 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.

CORPORATE GOVERNANCE

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. Messrs. Burleigh, Burlingame and Lowe attended the Company’s 2007 annual meeting of shareholders.

Director Education

When first elected to the board of directors, new members 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 — 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 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 strictures 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.

 

38


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, David M. Moffett, David A. Galloway, Jarl Mohn, Nicholas B. Paumgarten, Jeffrey Sagansky, Nackey E. Scagliotti, Paul K. Scripps, Edward W. Scripps, Ronald W. Tysoe and Julie A. Wrigley. 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

Mr. Ronald B. Tysoe currently serves on the audit committees of four public companies, in addition to service on the audit committee of the Company. The Company’s board of directors reviewed this service commitment and determined that such simultaneous service does not impair his ability to effectively serve on the Company’s audit committee.

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 Mrs. 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.

 

39


Item 14. Principal Accounting Fees and Services

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 Entities to the Company for the years ended December 31, 2007 and 2006.

 

     2007    2006

Audit fees (1)

   $ 2,638,000    $ 1,931,100

Audit-related fees (2)

     137,100      420,500
             

Total audit and audit-related fees

     2,775,100      2,351,600
             

Tax compliance and preparation:

     

Amended returns, claims for refunds and tax payment-planning

     548,700      571,200

Employee benefit plans

     7,200      7,100

Other tax-related fees

     197,100      11,900
             

Total tax fees

     753,000      590,200
             

Total fees

   $ 3,528,100    $ 2,941,800
             

 

(1) The 2007 fees include audit of the parent company and certain subsidiary companies, quarterly reviews and accounting consultations. It also includes audit fees associated with the Company’s decision to separate its networks and interactive media divisions into a separately traded company and the required filing of a Registration Statement on Form 10 with the Securities and Exchange Commission.

 

(2) This includes fees for due diligence assistance.

Report of the Audit Committee

In connection with the financial statements for the fiscal year ended December 31, 2007, the Audit Committee has:

(1) reviewed and discussed the audited financial statements with management; and

(2) discussed with the 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).

Based upon these reviews and discussions, the audit committee at its February 20, 2008, meeting, approved the filing of the Company’s annual report on Form 10-K for the year ended December 31, 2007, with the United States Securities and Exchange Commission.

The Audit Committee

Ronald W. Tysoe, Chairman

David M. Moffett

Jeffrey Sagansky

Julie A. Wrigley

PART IV

 

Item 15. Exhibits and Financial Statement Schedules

Exhibits

See exhibit index filed as part of this Form 10-K/A.

 

40


Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  THE E. W. SCRIPPS COMPANY
Dated: April 29, 2008   By:    /s/ Kenneth W. Lowe
     Kenneth W. Lowe
     President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities indicated, on April 29, 2008.

 

Signature

       

Title

/s/ Kenneth W. Lowe

Kenneth W. Lowe

      President, Chief Executive Officer and Director
(Principal Executive Officer)

/s/ Joseph G. NeCastro

Joseph G. NeCastro

      Executive Vice President and Chief Financial Officer

                *

William R. Burleigh

      Chairman of the Board of Directors

                *

John H. Burlingame

      Director

                *

David A. Galloway

      Director

                *

David M. Moffett

      Director

                *

Jarl Mohn

      Director

                *

Nicholas B. Paumgarten

      Director

                *

Jeffrey Sagansky

      Director

                *

Nackey E. Scagliotti

      Director

                *

Paul K. Scripps

      Director

                *

Ronald W. Tysoe

      Director

                *

Julie A. Wrigley

      Director

 

* Filed with original Form 10-K Filing.

 

41


The E. W. Scripps Company

Index to Exhibits

 

Exhibit
Number

  

Description of Item

   Page     Exhibit No
Incorporated

2.01

   Agreement and Plan or Merger and Reorganization between The E.W. Scripps Company, Green Monster Acquisition Corp., and Shopzilla, Inc.    (15 )   10.22

2.02

   Agreement Relating to Sale and Purchase of Major Part of Issued Share Capital of uSwitch Limited    (19 )   2.02

2.02B

   Minority (1) Share Sale Agreement relating to the sale and purchase of a minority part of the issued share capital of uSwitch Limited    (19 )   2.02B

2.02C

   Minority (2) Share Sale Agreement relating to the sale and purchase of a minority part of the issued share capital of uSwitch Limited    (19 )   2.02C

3.01

   Articles of Incorporation    (10 )   3(i)

3.02

   Amended and Restated Code of Regulations    (20 )   3.02

4.01

   Class A Common Share Certificate    (2 )   4

4.02C

   Form of Indenture: 5.75% notes due in 2012    (3 )   4.1

4.02D

   Form of Indenture: 4.25% notes due in 2009    (8 )   4.1

4.02E

   Form of Indenture: 3.75% notes due in 2008    (8 )   4.1

4.02F

   Form of Indenture: 4.30% notes due in 2010    (8 )   4.1

4.03C

   Form of Debt Securities: 5.75% notes due in 2012    (3 )   4.2

4.03D

   Form of Debt Securities: 4.25% notes due in 2009    (8 )   4.2

4.03E

   Form of Debt Securities: 3.75% notes due in 2008    (8 )   4.2

4.03F

   Form of Debt Securities: 4.30% notes due in 2010    (8 )   4.2

10.01

   Amended and Restated Joint Operating Agreement, dated January 1, 1979 among Journal Publishing Company, New Mexico State Tribune Company and Albuquerque Publishing Company, as amended    (1 )   10.01

10.03

   Joint Operating Agreement, dated September 23, 1977, between the Cincinnati Enquirer, Inc. and the Company, as amended    (1 )   10.03

10.04

   Joint Operating Agreement Among The Denver Post Corporation, Eastern Colorado Production Facilities, Inc., Denver Post Production Facilities LLC and The Denver Publishing Company dated as May 11, 2000, as amended    (7 )   10.04

10.08

   Amended and Restated 1997 Long-Term Incentive Plan    (12 )   10.01

10.09

   Form of Executive Officer Nonqualified Stock Option Agreement    (12 )   10.03A

10.10

   Form of Independent Director Nonqualified Stock Option Agreement    (12 )   10.03B

10.11

   Form of Performance-Based Restricted Share Agreement    (12 )   10.03C

10.12

   Form of Restricted Share Agreement (Nonperformance Based)    (17 )   10.02C

10.12

   Performance-Based Restricted Share Agreement between The E. W. Scripps Company and Mark G. Contreras    (12 )   10.03D

10.13

   Executive Bonus Plan, as amended April 14, 2005    (12 )   10.04

10.14

   Consulting agreement between the Company and Alan Horton    (13 )   99.01

10.15

   Special Retirement Supplement Agreement between the Company and Alan Horton    (13 )   99.02

 

E-1


The E. W. Scripps Company

Index to Exhibits (continued)

 

Exhibit
Number

  

Description of Item

   Page     Exhibit No
Incorporated

10.16

   Consulting agreement between the Company and Frank Gardner    (16 )   10.16

10.17

   Special Retirement Supplement Agreement between the Company and Frank Gardner    (16 )   10.17

10.40

   5-Year Competitive Advance and Revolving Credit Facility Agreement    (18 )   10.40

10.55

   Board Representation Agreement, dated March 14, 1986, between The Edward W. Scripps Trust and John P. Scripps    (1 )   10.44

10.56

   Shareholder Agreement, dated March 14, 1986, between the Company and the Shareholders of John P. Scripps Newspapers    (1 )   10.45

10.57

   Scripps Family Agreement dated October 15, 1992    (4 )   1

10.59

   Non-Employee Directors’ Stock Option Plan    (5 )   4A

10.61

   1997 Deferred Compensation and Stock Plan for Directors    (6 )   10.61

10.63

   Employment Agreement between the Company and Kenneth W. Lowe    (9 )   10.63

10.63.B

   Amendment No. 2 to Employment Agreement between the Company and Kenneth W. Lowe    (18 )   10.63.B

10.63.C

   Amendment No. 3 to Employment Agreement between the Company and Kenneth W. Lowe    (21 )   10.63.C

10.64

   Employment Agreement between the Company and John F. Lansing, as amended November 12, 2005    (16 )   10.64

10.65

   Employment Agreement between the Company and Richard A. Boehne    (18 )   10.65

10.66

   Employment Agreement between the Company and Joseph G. NeCastro    (18 )   10.66

10.67

   Employment Agreement between the Company and Mark G. Contreras    (18 )   10.67

10.74

   Amended and Restated Scripps Supplemental Executive Retirement Plan    (11 )   10.64

10.75

   Scripps Senior Executive Change in Control Plan    (11 )   10.65

10.76

   Scripps Executive Deferred Compensation Plan    (11 )   10.66

12 *

   Computation of Ratio of Earnings to Fixed Charges for the Three Years Ended December 31, 2007     

14

   Code of Ethics for CEO and Senior Financial Officers    (14 )   14

21 *

   Subsidiaries of the Company     

23 *

   Consent of Independent Registered Public Accounting Firm     

31(a) **

   Section 302 Certifications     

31(b) **

   Section 302 Certifications     

32(a) **

   Section 906 Certifications     

32(b) **

   Section 906 Certifications     

 

E-2


 

(1) Incorporated by reference to Registration Statement of The E. W. Scripps Company on Form S-1 (File No. 33-21714).
(2) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 1990.
(3) Incorporated by reference to Registration Statement on Form S-3 (File No. 33-36641).
(4) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated October 15, 1992.
(5) Incorporated by reference to Registration Statement of The E. W. Scripps Company on Form S-8 (File No. 333-27623).
(6) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 1998.
(7) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 2000.
(8) Incorporated by reference to Registration Statement S-3 (file No. 333-100390) of The E. W. Scripps Company.
(9) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 2003.
(10) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated July 15, 2004.
(11) Incorporated by reference to The E. W. Scripps Company Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004.
(12) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated February 9, 2005.
(13) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated December 16, 2004.
(14) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 2004.
(15) Incorporated by reference to The E. W. Scripps Company Quarterly Report on Form 10-Q for the quarterly period ended June 2005.
(16) Incorporated by reference to The E. W. Scripps Company Annual Report on Form 10-K for the year ended December 31, 2005.
(17) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated February 28, 2006.
(18) Incorporated by reference to The E. W. Scripps Company Quarterly Report on Form 10-Q for the quarterly period ended June 2006.
(19) Incorporated by reference to The E. W. Scripps Company Amended Quarterly Report on Form 10-Q/A for the quarterly period ended June 2006.
(20) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated May 10, 2007.
(21) Incorporated by reference to The E. W. Scripps Company Current Report on Form 8-K dated July 31, 2007.

 

 

* Filed with original Form 10-K Filing.
** Filed herewith.

 

E-3

Section 302 CEO Certification
Section 302 Certifications    Exhibit 31(a)

Certifications

I, Kenneth W. Lowe, certify that:

 

1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K/A of The E. W. Scripps Company;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: April 29, 2008

BY:

 

/s/ Kenneth W. Lowe

Kenneth W. Lowe

President and Chief Executive Officer

 

Section 302 CFO Certification
Section 302 Certifications    Exhibit 31(b)

Certifications

I, Joseph G. NeCastro, certify that:

 

1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K/A of The E. W. Scripps Company;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: April 29, 2008

BY:

 

/s/ Joseph G. NeCastro

Joseph G. NeCastro

Executive Vice President and Chief Financial Officer

 

Section 906 CEO Certification
Section 906 Certifications    Exhibit 32(a)

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

I, Kenneth W. Lowe, President and Chief Executive Officer of The E. W. Scripps Company (the “Company”), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) This Amendment No. 1 to the Annual Report on Form 10-K/A of the Company for the year ended December 31, 2007 (the “Report”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Kenneth W. Lowe

Kenneth W. Lowe

President and Chief Executive Officer

April 29, 2008

Section 906 CFO Certification
Section 906 Certifications    Exhibit 32(b)

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

I, Joseph G. NeCastro, Executive Vice President and Chief Financial Officer of The E. W. Scripps Company (the “Company”), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) This Amendment No. 1 to the Annual Report on Form 10-K/A of the Company for the year ended December 31, 2007 (the “Report”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Joseph G. NeCastro
Joseph G. NeCastro
Executive Vice President and Chief Financial Officer

April 29, 2008