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A Final Fling on Pulitzer's Bling?

Pulitzer Inc. shareholders are expected to accept Lee Enterprises' $1.46 billion takeover offer in a special shareholders' meeting Friday, June 3.

A good copy editor would see the phrase "special shareholders' meeting" and ask if it means a "special meeting for shareholders" or "a meeting for special shareholders."

It's yes on both counts.

Merger votes are usually conducted at special meetings. But read on to find out what could make this a meeting for special shareholders. There's something a little peculiar about the venue. Pulitzer Inc. has called St. Louis home for more than a century, and since going public, has traditionally held its annual meetings at an upscale St. Louis hotel. (The annual meeting came to Tucson and the Arizona Inn after StarNet launched--apparently to figure out why the Arizona Daily Star's Internet service provider business was outperforming the flagship St. Louis Post-Dispatch's online operation. But I digress.) Not this time.

Instead, chairman of the board Michael E. Pulitzer and the posse will head for New York City and gather at 9 a.m. Eastern Daylight Time (6 a.m. for the good folks in Tucson) in the New York Palace Hotel's L'Orangerie Room to count the proxies.

It's pretty amazing, because the trip could severely strain the travel allowances of the non-employee directors, who receive base compensation of $20,000 a year, plus a $1,500 attendance fee for every meeting they attend (in person or telephonically). They also receive a $1,500-per-trip travel allowance, plus $300 per day. According to the hotel's Web site, room rates range from $430 a night (single occupancy, package pricing) for a 350-square-foot room with two double beds, to $1,600 a night for a one-bedroom corner suite. It's just shy of 1,200 square feet, has a half-bath in the foyer, a full kitchen with dining room that seats eight, two sofas, two chairs, one coffee table, a king bed, a deep-soaking tub and a separate shower. Not to mention your choice of modern art deco or European classic décor. What a place for a victory shindig.

The question--and in light of the following item, someone might want to have an answer ready should some attorney ask this during a deposition, or maybe an IRS auditor--is: Why such a blowout? How many shareholders do they expect to attend? Can't be too many, seeing as the family voting trust controls more than 88 percent of the votes. And everyone else can either vote by mail, online or by phone.


PASS THE GAVEL

As noted last week, there's one last hurdle in the Pulitzer merger steeplechase--a lawsuit filed by a pair of unhappy Pulitzer shareholders who contend that company insiders have engaged in self-dealing at the expense of the company's public shareholders. The suit also questions the completeness of the proxy information sent to shareholders.

"Specifically, the defendants have tilted the playing field in favor of Lee by failing to seek a sale of Pulitzer that maximizes values for stockholders rather than management and the Pulitzer family; and (2) agreeing to unreasonable termination fee provisions in the merger agreement. Moreover, plaintiffs and the Class will be irreparably harmed, as defendants have not provided them with material and accurate information concerning the Merger," the suit alleges.

The suit combines two complaints filed in February. And it makes for some fascinating reading.

Part of it attacks the bonuses and severance packages going to various executives, especially CEO Robert Woodworth, who'll pocket about $8.8 million through the company's executive termination plan. (For the record, Woodworth will cash out various stock options and restricted stock deals totaling nearly $19.8 million when the deal closes. In comparison, chairman of the board Michael Pulitzer has a mere $6.2 million in options and restricted stock deals outside the shares he owns.)

A portion of it focuses on why Pulitzer felt a need to retain two financial advisors when it began to explore its strategic options last fall. One of them is Huntleigh Securities Corp., whose executive vice president, James M. Snowden Jr., is a longtime Pulitzer director. Pulitzer documents state that Huntleigh is on retainer as a company financial advisor. According to the company's proxy statement, Huntleigh was paid $500,000 to act as a financial adviser, along with Goldman Sachs, on the merger.

But, the suit alleges, the proxy materials say nothing about any work Huntleigh did in connection with the deal.

In addition, the suit alleges, Pulitzer made no disclosures regarding the process used for selecting any of the consultants involved, and made no information available regarding potential conflicts of interest. And, it continues, the proxy statement includes references to an unidentified consulting firm and "other advisers."


NOTABLE

The Rocky Mountain Southwest chapter of the National Television Academy recently honored Jack Parris, director and general manager of the KUAT Communications Group, as the inaugural inductee of its Gold Circle Society. Members must have worked in broadcasting for at least 50 years and have made major contributions to the industry.

Parris, whose career started in 1956 in Lincoln, Neb., has been with KUAT since 1988, and became director and general manager in 1998. He was station and program manager at KGUN Channel 9 from 1978 to 1983, and was its general manager until 1987.


YOUNG SCRIBES

KUAT-TV Channel 6 announced the winners of the Reading Rainbow Young Writers and Illustrators Contest. The contest was open to children from kindergarten through third grade, who wrote and illustrated their own books.

The first-place winners received $50 savings bonds, and their works will be entered in the national competition, to be judged in June.

Look for the winning entries online at kuat.org by early June.

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