UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Information
Required in Proxy Statement
Schedule
14a Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 2)
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Filed by a Party other than the Registrant ☒
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| ☒ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Under Rule 14a-12 |
|
LEE ENTERPRISES,
INCORPORATED |
| (Name of Registrant as Specified in Its Charter) |
| |
MNG
ENTERPRISES, INC.
MNG
INVESTMENT HOLDINGS, LLC
STRATEGIC
INVESTMENT OPPORTUNITIES LLC
ALDEN
GLOBAL CAPITAL LLC
HEATH
FREEMAN
|
| (Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant) |
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REVISED PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED FEBRUARY 16, 2022
STRATEGIC INVESTMENT OPPORTUNITIES LLC
__________________, 2022
Dear Fellow Lee Stockholders:
Strategic
Investment Opportunities LLC (“Opportunities”), an affiliate of Alden Global Capital LLC (“Alden”), and the other
participants in this solicitation (collectively, the “Stockholder Group” or “we”) are significant stockholders
of Lee Enterprises, Incorporated, a Delaware corporation (“Lee” or the “Company”), and beneficially own in the
aggregate 371,117 shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company, constituting approximately
6.2% of the shares of Common Stock outstanding.
As a significant investor
in American newspapers, with platforms including MediaNews Group, Inc. and Tribune Publishing Company, and as a long-term investor in
the Company, we have demonstrated a long-standing commitment to investment in the local newspaper business and serving communities with
robust independent journalism over the long term. We believe the Company and its news and information platform have untapped potential
and, with the right enhanced strategy and improved leadership, can provide significant value for stockholders while improving the quality
of journalism for readers and subscribers. Unfortunately, the current Board of Directors’ (the “Board”) decision to
prioritize their own interests over the interests of the Company and its stockholders by invalidating our highly qualified director nominees
confirms our belief that the current Board lacks the commitment to good corporate governance and has very little, if any, regard for
the stockholder franchise.
Fortunately, we, as stockholders,
have another voting platform at the Annual Meeting to demonstrate our severe dissatisfaction with the current Board and the highly problematic
and value destructive status quo at Lee. Accordingly, we are seeking your support to vote AGAINST the re-election of Mary E. Junck
and Herbert W. Moloney III as directors at the Annual Meeting, the two directors whom we believe are most responsible for the Company’s
history of poor performance and poor governance. By voting AGAINST Ms. Junck and Mr. Moloney, stockholders will be sending a strong
message to the Board that they are dissatisfied with the status quo and that meaningful Board and leadership changes are required at
the Company.
Your vote AGAINST
the election of these two incumbent directors will serve as a referendum on directors Moloney and Junck for their poor stewardship of
stockholder value and unfair enrichment at our expense. Importantly, despite the Board’s best efforts to eliminate corporate democracy
at this year’s Annual Meeting, we still have an important opportunity to have our voices heard.
We
are seeking stockholder support to compel the resignations of Ms. Junck and Mr. Moloney for their lead roles in overseeing Lee’s
poor corporate governance practices and the Company’s significant underperformance since the acquisition of Berkshire Hathaway's
BH Media Group publications. Ms. Junck and Mr. Moloney have each served on the Board for extremely long tenures of over 20 years, and
have both been re-nominated by the Board in apparent contravention of the Company’s own director retirement policy set forth in
its Corporate Governance Guidelines. In addition, on top of currently serving as Chair of the Board, Ms. Junck previously served as CEO
and Executive Chair of the Company, while Mr. Moloney currently serves as lead independent director and as a member or Chair of each
of the Board’s four main committees. Further, Ms. Junck also serves as Chair of the Executive Committee of the Board, which includes
Mr. Moloney and President and CEO Kevin D. Mowbray. Given their positions on the Board and its committees, Ms. Junck and Mr. Moloney
exercise a high degree of control over the Board and, when coupled with their excessively lengthy tenures, we believe Ms. Junck and Mr.
Moloney should bear much of the responsibility for the Company’s underperformance and entrenched governance practices.
We
note that the Company’s Corporate Governance Guidelines include a director retirement policy effective if a director would be age
70 or older at the time of the election, subject to waiver in “extraordinary circumstances”. Both Ms. Junck and Mr. Moloney
will be at or past the retirement age at the time of the Annual Meeting, however, despite their re-nomination being in clear contravention
of the Company’s own policies, the Company has decided to re-nominate both of these directors and has not provided a clear explanation
as to what “extraordinary circumstances” warrant their continued service on the Board. This appears to be yet another tool
for this entrenched Board to maintain the status quo in defiance of the stockholder franchise and we question the Board’s decision
to re-nominate Ms. Junck and Mr. Moloney given the clear retirement policy set forth in the Company’s Corporate Governance Guidelines.
We further question the ability of the Board to genuinely and independently review the merits of Ms. Junck’s and Mr. Moloney’s
continued service given their high degree of control over the Board relating to their lengthy tenures and current positions on the Board’s
key committees, and as Chairman and Lead Independent Director, respectively.
Further, we note that,
based on publicly available information, neither Ms. Junck nor Mr. Moloney has personally purchased a single share of the Company for
more than a decade, since 2011 and 2008, respectively. Instead, the vast majority of their LEE holdings were acquired via equity awards
granted during their service as directors and/or employees. Accordingly, we question their continued personal commitment to the Company
and whether their economic interests are truly aligned with and acting in the best interest of stockholders.
With
long-tenured directors, like Ms. Junck and Mr. Moloney, occupying almost all of the leadership positions in the boardroom, we do not
believe the Board is capable of providing appropriate independent oversight of management and serving its critical accountability function.
For these reasons, among others, we believe stockholders should send a message to the Board by voting against Ms. Junck and Mr. Moloney
at the Annual Meeting.
Under Lee’s Second
Amended and Restated By-laws (the “Bylaws”), in an uncontested election of directors, each director’s election requires
the vote of a majority of the votes cast with respect to that director. Of note, the Bylaws also contain a director resignation policy
for uncontested elections, whereby any incumbent director up for re-election that doesn’t receive a majority of votes cast for
their re-election must submit their resignation to the Board. The Nominating and Corporate Governance Committee will make a recommendation
to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating
and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days
from the date of the certification of the election results.
However, in yet another
attempt to further entrench the Board, the Company has taken the position that, regardless of whether or not our nominees are eligible
to stand for election, the election of directors at the Annual Meeting is “contested”, meaning directors are elected by a
plurality of the votes cast and the director resignation policy does not apply. We cannot understand how the Company could make this
determination that the election of directors is “contested” when the Company invalidated our director nominees more than
two months ago on December 3, 2021. Under the plurality vote standard, with no opposition, Ms. Junck and Mr. Moloney would be re-elected
to the Board even if they were to receive just one vote each. This flies in the face of best corporate governance
practices and corporate democracy.
If our proxy solicitation
results in any director failing to receive a majority of the votes cast for his or her election, then we believe it would clearly be
inappropriate for any such director to continue to serve on the Board. In our view such director’s continued service on the Board
would be an egregious violation of proper corporate governance, and in direct opposition to the will of the stockholders.
We urge you to carefully consider
the information contained in the accompanying Proxy Statement and support our efforts by signing, dating and returning the enclosed BLUE
proxy card today. The accompanying Proxy Statement and the enclosed BLUE proxy card are first being mailed to stockholders on or
about ______, 2022.
If you have already voted
for the Company’s nominees, you have every right to change your vote by signing, dating and returning a later dated BLUE
proxy card or by voting in person at the Annual Meeting.
If you have any questions
or require any assistance with your vote, please contact Innisfree M&A Incorporated (“Innisfree”),
which is assisting us, at its address and toll-free numbers listed below.
| |
Thank you for your support,
Strategic Investment Opportunities LLC
|
If you have any questions, require assistance
in voting your BLUE proxy card,
or need additional copies of our proxy materials,
please contact Innisfree at the phone numbers
listed below.
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (866) 239-1762
Banks and Brokers may call collect: (212) 750-5833
REVISED PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED FEBRUARY 16, 2022
2022 ANNUAL MEETING OF STOCKHOLDERS
OF
LEE ENTERPRISES, INCORPORATED
_________________________
PROXY STATEMENT
OF
STRATEGIC INVESTMENT OPPORTUNITIES LLC
_________________________
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD TODAY
Strategic
Investment Opportunities LLC (“Opportunities”), an affiliate of Alden Global Capital, LLC (“Alden”) and the other
participants in this solicitation (collectively, the “Stockholder Group” or “we”) are significant stockholders
of Lee Enterprises, Incorporated, a Delaware corporation (“Lee” or the “Company”), and beneficially own in the
aggregate 371,117 shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company, constituting approximately
6.2% of the shares of Common Stock outstanding.
This Proxy Statement and the
enclosed BLUE proxy card are first being mailed to stockholders on or about ____________, 2022.
As a significant investor
in American newspapers, with platforms including MediaNews Group, Inc. and Tribune Publishing Company, and as a long-term investor in
the Company, we have demonstrated a long-standing commitment to investment in the local newspaper business and serving communities with
robust independent journalism over the long term. We believe the Company and its news and information platform have untapped potential
and, with the right enhanced strategy and improved leadership, can provide significant value for stockholders while improving
the quality of journalism for readers and subscribers. Unfortunately, the current Board of Directors’ (the “Board”)
decision to prioritize their own interests over the interests of the Company and its stockholders by invalidating our highly qualified
director nominees confirms our belief that the current Board lacks the commitment to good corporate governance and has very little, if
any, regard for the stockholder franchise. Accordingly, we believe that meaningful change to the
composition of the Board is necessary to ensure that the Company is run in a manner consistent with the best interests of Lee’s
stockholders.
We are therefore seeking
your support at the Company’s 2022 annual meeting of stockholders scheduled to be held on March 10, 2022, at 9:00 a.m., central
time, at 4620 E. 53rd Street, Room 120, Davenport, Iowa 52807 (including any adjournments, postponements or continuations
thereof and any meeting which may be called in lieu thereof, the “Annual Meeting”), to vote AGAINST the election of
directors Mary E. Junck and Herbert W. Moloney III (the “Lee Withhold Nominees”) to the Board.
Our BLUE proxy
card will also allow stockholders to vote on the following proposals under consideration at the Annual Meeting:
| · | The
Company’s proposal to ratify the selection of BDO USA, LLP (“BDO”) as the
Company’s independent registered public accounting firm for the fiscal year ending
September 25, 2022; and |
| · | Such
other business that is properly brought before the Annual Meeting. |
The Company has a classified
Board that is currently composed of eight directors divided into three classes, with directors elected for staggered terms of three years.
Based on publicly available information, the terms of three directors currently serving on the Board will expire at the Annual Meeting.
Through this Proxy Statement, we are soliciting proxies to vote AGAINST the Lee Withhold Nominees. The names, backgrounds and
qualifications of the Company’s nominees, and other information about them, can be found in the Company’s proxy statement.
As of the date of this
Proxy Statement, the Participants (as defined below) collectively beneficially own 371,117 shares of Common Stock (the “Stockholder
Group Shares”). The Participants intend to vote the Stockholder Group Shares AGAINST the election of the Lee Withhold Nominees
and FOR the Company’s proposal to ratify the selection of BDO as the Company’s independent registered public accounting
firm for fiscal year 2022. Stockholders should understand, however, that all shares of Common Stock represented by the enclosed BLUE
proxy card will be voted at the Annual Meeting as marked and, in the absence of specific instructions, will be voted in accordance
with Opportunities’ recommendations and voting instructions specified herein and in accordance with the discretion of the persons
named on the BLUE proxy card with respect to any other matters that may be voted upon at the Annual Meeting. Please see the “Voting
and Proxy Procedures” section of this Proxy Statement and the BLUE proxy card for additional detail.
Please note that the Lee
Withhold Nominees are not the nominees of Opportunities and have not consented to be named in this Proxy Statement. Because the Lee Withhold
Nominees are not Opportunities’ nominees and have not consented to be named in this Proxy Statement, they are not participants
in this solicitation. We can provide no assurance that any of the Lee Withhold Nominees will serve as directors if elected.
According to the Company’s
proxy statement, the Company has set the close of business on January 12, 2022 as the record date for determining stockholders entitled
to notice of and to vote at the Annual Meeting (the “Record Date”). The mailing address of the principal executive offices
of the Company is 4600 E 53rd Street, Davenport, Iowa, 52807. Stockholders of record at the close of business on the Record
Date will be entitled to vote at the Annual Meeting. According to the Company, as of the Record Date, there were 5,874,189 shares of Common
Stock outstanding.
MNG Enterprises, Inc. (“MNG
Enterprises”), an affiliate of Alden, and certain of its and Alden’s other affiliates, operate in the same business sector
as the Company. However, we do not believe that any of MNG Enterprises, Alden, or any of their respective subsidiaries is a competitor
of the Company, as none of the foregoing operates in the same local or regional markets as the Company for subscribers and/or advertisement
sales.
As discussed in more detail
elsewhere in this Proxy Statement, Alden, which, together with certain affiliates, collectively beneficially owns 6.2% of the Company’s
common stock, previously submitted a non-binding proposal to acquire the Company. The proposal was rejected by the Board (without any
engagement with Alden) and there is no other offer currently pending from Alden or its affiliates. Since the Board has rejected the offer,
no Participant nor any of their respective affiliates or associates has a material interest in the matters to be acted upon at the Annual
Meeting (other than in their capacities as stockholders of the Company). However, depending on various factors, including, without limitation,
Lee’s financial position and strategic direction, actions taken by the Board, price levels of Lee’s securities, conditions
in the securities market and general economic and industry conditions, Alden or its affiliates may consider submitting a revised non-binding
proposal to acquire the Company on such terms as it deems advisable based on, among other things, the foregoing factors.
THIS SOLICITATION IS BEING
MADE BY THE STOCKHOLDER GROUP AND NOT ON BEHALF OF THE BOARD OR MANAGEMENT OF THE COMPANY. WE ARE NOT AWARE OF ANY OTHER MATTERS TO BE
BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN AS SET FORTH IN THIS PROXY STATEMENT. SHOULD OTHER MATTERS, WHICH WE ARE NOT AWARE OF A REASONABLE
TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED BLUE PROXY CARD
WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
WE URGE YOU TO SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD AGAINST THE ELECTION OF MARY E. JUNCK AND HERBERT W. MOLONEY III TO THE BOARD AT THE
ANNUAL MEETING.
IF YOU HAVE ALREADY SENT A
PROXY CARD FURNISHED BY THE COMPANY, YOU MAY REVOKE THAT PROXY AND VOTE ON EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT BY
SIGNING, DATING AND RETURNING THE ENCLOSED BLUE PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING
OR BY VOTING AT THE ANNUAL MEETING.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting—This Proxy Statement and our proxy card are available at
_______________.com
IMPORTANT
Your vote is important,
no matter how few shares of Common Stock you own. We urge you to sign, date, and return the enclosed BLUE proxy card today to vote AGAINST
the election of Mary E. Junck and Herbert W. Moloney III and in accordance with our recommendations on the other proposal(s) on the agenda
for the Annual Meeting.
| · | If your shares of Common Stock are registered in your own name, please sign and date the enclosed BLUE
proxy card and return it to us, c/o Innisfree M&A Incorporated (“Innisfree”),
in the enclosed postage-paid envelope today. |
| · | If your shares of Common Stock are held in a brokerage account or bank, you are considered the beneficial
owner of the shares of Common Stock, and these proxy materials, together with a BLUE voting form, are being forwarded to you by
your broker or bank. As a beneficial owner, if you wish to vote, you must instruct your broker, trustee or other representative how to
vote. Your broker cannot vote your shares of Common Stock on your behalf without your instructions. As a beneficial owner, you may vote
the shares at the Annual Meeting only if you obtain a legal proxy from the broker or bank giving you the rights to vote the shares. |
| · | Depending upon your broker or custodian, you may be able to vote either by toll-free telephone or by the
Internet. Please refer to the enclosed voting form for instructions on how to vote electronically. You may also vote by signing, dating
and returning the enclosed voting form. |
Since only your latest
dated proxy card will count, we urge you not to return any proxy card you receive from the Company. Even if you return the Company proxy
card marked “withhold” as a protest against the incumbent directors, it will revoke any proxy card you may have previously
sent to us. So please make certain that the latest dated proxy card you return is the BLUE proxy card.
If you have any questions, require assistance
in voting your BLUE proxy card,
or need additional copies of our proxy materials,
please contact Innisfree at the phone numbers
listed below.
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (866) 239-1762
Banks and Brokers may call collect: (212) 750-5833
BACKGROUND TO THE SOLICITATION
The following is a chronology
of material events leading up to this proxy solicitation:
| · | On
January 29, 2020, Opportunities, a Delaware limited liability company, MNG Enterprises, a
Delaware corporation, MNG Investment Holdings, LLC, a Delaware limited liability company
(“MNG Holdings”), Alden, a Delaware limited liability company, and Heath Freeman
(collectively, “MNG”), filed an initial Schedule 13D, disclosing its ownership
of 5.9% of the outstanding Common Stock. |
| · | On June 10, 2020, MNG filed Amendment No. 1 to its Schedule 13D, disclosing its ownership of 7.2% of the
outstanding Common Stock. |
| · | On November 22, 2021, Alden delivered a letter to the Board including a non-binding proposal to acquire
the Company for $24.00 per share in cash (the “Alden Proposal”), representing a 30% premium over the closing share price for
the Common Stock of $18.49 on Friday, November 19, 2021 (the last trading day prior to the public announcement of Alden’s non-binding
proposal). On the same date, Alden also issued a press release including a copy of the Alden Proposal. |
| · | On November 22, 2021, the Company issued a press release confirming its receipt of the Alden Proposal. |
| · | On
November 22, 2021, Opportunities delivered a letter to the Company’s Secretary and
General Counsel requesting the form of questionnaire and written representation and agreement
(collectively, the “Nominee Forms”) purportedly required under the Bylaws in
connection with a stockholder nomination of candidates for election to the Board. |
| · | On November 23, 2021, the Company sent a letter to our counsel denying our request for the Nominee Forms
on the grounds that we were not a stockholder of record of the Company. |
| · | On November 23, 2021, MNG filed Amendment No. 2 to its Schedule 13D, disclosing its ownership of 6.1%
of the outstanding Common Stock and the delivery of the Alden Proposal to the Company. |
| · | On November 24, 2021, the Company implemented a shareholder rights plan (commonly referred to as a “poison
pill”) designed to deter any stockholder from acquiring beneficial ownership of 10% or more of the Common Stock outstanding (subject
to certain exceptions), with a term expiring on November 23, 2022. The Company also issued a press release announcing the adoption of
the poison pill and stating that the poison pill was adopted in response to the Alden Proposal. |
| · | On November 26, 2021, Opportunities delivered a nomination notice to the Company, nominating three candidates
for election to the Board (the “Nomination Notice”). Alden also issued a press release announcing its delivery of the Nomination
Notice, and expressing its hope that the Board would engage meaningfully and expeditiously with Alden regarding the Alden Proposal and
that a proxy contest at the Annual Meeting would prove unnecessary. |
| · | On
November 29, 2021, MNG filed Amendment No. 3 to its Schedule 13D, disclosing its ownership
of 6.3% of the outstanding Common Stock and the delivery of the Nomination Notice to the
Company by Opportunities. |
| · | On November 29, 2021, the Company issued a press release acknowledging its receipt of the Nomination Notice. |
| · | On December 3, 2021, counsel to the Company delivered a letter to Opportunities stating that the Nomination
Notice and the director candidate nominations made thereunder were invalid. The letter stated that the purported grounds for the invalidation
of the Nomination Notice included that (1) the record holder of the shares beneficially owned by Opportunities, Cede & Co. (the name
used by The Depository Trust Company when it holds the shares on behalf of banks and brokers, which in turn hold shares on behalf of their
clients), allegedly did not comply with certain of the Company’s nomination notice requirements, and (2) the Nomination Notice did
not include the Nominee Forms, which the Company had refused to provide upon our request. The Company also issued a press release announcing
that it had determined that the Nomination Notice was invalid. |
| · | On December 9, 2021, the Company issued a press release announcing that the Board rejected the Alden Proposal.
The Company did not engage with us in any manner regarding the Alden Proposal prior to such announcement, or since such announcement. |
| · | On December 15, 2021, Opportunities filed a complaint against the Company in the Court of Chancery of
the State of Delaware seeking, among other things, a finding that the Nomination Notice complies with the nomination notice requirements
set forth in Bylaws (to the extent they are valid and enforceable) and a declaration that the nominees included in the Nomination Notice
are permitted to stand for election at the Annual Meeting (the “Opportunities Complaint”). |
| · | On
December 16, 2021, MNG filed Amendment No. 4 to its Schedule 13D disclosing its ownership
of 6.3% of the outstanding Common Stock and the filing of the Opportunities Complaint. |
| · | On January 14, 2022, the Company filed its preliminary proxy statement with respect to the Annual Meeting
with the SEC. |
| · | On January 24, 2022, the Company filed its definitive proxy statement with respect to the Annual Meeting
with the SEC. |
| · | On January 27, 2022, Opportunities delivered a letter to the Company withdrawing the nomination of Carlos Salas, one of its original Board
candidates, in light of the decision by Opportunities to focus its proxy contest efforts on the replacement of two of the Company’s
director nominees, Ms. Junck and Mr. Moloney, both of whom are extremely long-tenured and have been re-nominated in apparent contravention
of the Company’s director retirement policy, and whom Opportunities believes should be held accountable for the Company’s
poor corporate governance practices and significant underperformance since the acquisition of Berkshire Hathaway's BH Media Group publications. |
| · | On
January 27, 2022, Opportunities delivered a letter to the Company withdrawing the nomination
of Carlos Salas, one of its original Board candidates, in light of the decision by Opportunities
to focus its proxy contest efforts on the replacement of two of the Company’s director
nominees, Ms. Junck and Mr. Moloney, both of whom are extremely long-tenured and have been
re-nominated in apparent contravention of the Company’s director retirement policy,
and whom Opportunities believes should be held accountable for the Company’s poor corporate
governance practices and significant underperformance since the acquisition of Berkshire
Hathaway's BH Media Group publications in March 2020. |
| · | On
January 27, 2022, the Stockholder Group filed its preliminary proxy statement. |
| · | On
February 8, 2022, the Stockholder Group filed its revised preliminary proxy statement. |
| · | On
the evening of February 14, 2022, the Delaware Court of Chancery ruled that Opportunities
did not meet the requirements under the Bylaws to nominate director candidates at the Annual
Meeting. |
| · | On
February 16, 2022, the Stockholder Group filed this revised preliminary proxy statement. |
REASONS FOR THE SOLICITATION
The Stockholder Group Believes That Immediate
Change Is Needed to Refresh the Company’s Entrenched, Staggered Board
Opportunities, is a significant
long-term stockholder of the Company, owning approximately 6.2% of the Company’s outstanding shares of Common Stock. We believe
the Company and its news and information platform have untapped potential and, with the right enhanced strategy and improved leadership,
can provide significant value for stockholders while improving the quality of journalism for readers and subscribers. Unfortunately,
the current Board of Directors’ (the “Board”) apparent decision to prioritize their own interests over the interests
of the Company and its stockholders confirms our belief that the current Board lacks the experience
and commitment to good corporate governance needed to achieve that end. We believe that a vote against the Lee Withhold Nominees
at the Annual Meeting is necessary to send a strong message to the Board that change is urgently needed on the Board in order to improve
the Company’s corporate governance, and put the Company on a path toward enhancing value for all stockholders.
The Company has markedly
poor corporate governance in our view. The Company has a classified Board divided into three classes, meaning its directors are only
subject to re-election by stockholders once every three years. The inability of stockholders to elect all directors each year insulates
the Board from appropriate accountability to stockholders and, we believe, has enabled the Board to take actions to further entrench
itself. This includes the Board’s recent adoption of a defensive poison pill and its concerning actions that prevented us from
exercising our fundamental rights as a stockholder to nominate and seek the election of candidates to the Board at the Annual Meeting.
The Board includes three directors
who have served on the Board for more than 20 years, and a fourth director who has served for over 10 years, each of whom serves in leadership
positions on the Board: Mary Junck, current non-independent Chair, former Company CEO and Chair of the Executive Committee; Herbert Moloney
III, current Lead Director, Chair of the Executive Compensation Committee and member of the Audit Committee, the Nominating and Corporate
Governance Committee and the Executive Committee; Gregory Schermer, former Company employee and Chair of the Nominating and Corporate
Governance Committee; and Brent Magid, Chair of the Audit Committee and member of the Executive Compensation Committee. We believe these
long-tenured directors have significant influence over the Board and the Company through their leadership positions, and their length
of service and prior relationships with the Company outside of their Board service, particularly the three directors who have served for
over 20 years, bring into question the ability of these directors to act in a manner truly independent of management.
In addition, as shown
in the following table, these directors have presided over years of poor operational and financial performance by the Company.
| Cumulative
Total Stockholder Returns¹ |
| |
|
|
|
|
|
| |
Howard
Acquisition2 |
Pulitzer
Acquisition3 |
5YR |
3YR |
Berkshire
Acquisition4 |
| Proxy peer group Average5 |
159% |
287% |
40% |
(9%) |
(6%) |
| S&P 500 Index |
506% |
449% |
136% |
84% |
48% |
| Russell 2000 Index |
502% |
371% |
90% |
63% |
45% |
| LEE |
(94%) |
(95%) |
(39%) |
(20%) |
(12%) |
LEE
underperformance
relative to: |
|
|
|
|
|
| Proxy
peer group |
(253%) |
(382%) |
(79%) |
(12%) |
(7%) |
| S&P
500 Index |
(600%) |
(544%) |
(175%) |
(106%) |
(60%) |
| Russell
2000 Index |
(596%) |
(465%) |
(128%) |
(84%) |
(57%) |
(1) Total returns
for all periods include dividends, and performance is measured as of November 19, 2021. November 19, 2021 is last trading day prior to
the public disclosure of Alden’s non-binding proposal to acquire LEE.
(2) Performance measured
since LEE completed acquisition of Howard Publications as of April 1, 2002; Excludes Gannett from Proxy peer group average as it spun
off from TEGNA on June 29, 2015 and excludes DallasNews Corporation formerly known as A. H. Belo Corporation from Proxy peer group average
as it started trading in the public markets on February 11, 2008.
(3) Performance measured
since LEE completed acquisition of Pulitzer as of June 3, 2005; Excludes Gannett from Proxy peer group average as it spun off from TEGNA
on June 29, 2015 and excludes DallasNews Corporation formerly known as A. H. Belo Corporation from Proxy peer group average as it started
trading in the public markets on February 11, 2008.
(4) Performance measured
since LEE announced acquisition of Berkshire Hathaway Newspaper Operations as of January 29, 2020.
(5) Proxy peers include
DallasNews Corporation, Gannett Co. Inc., The New York Times Company, and Sinclair Broadcast Group Inc., as disclosed in LEE's 2020 Proxy
Statement; Excludes McClatchy, Meredith Corp. and Tribune, Inc., as they are privately held companies.
Source: S&P Capital
IQ
Meanwhile, based on publicly
available information, neither Ms. Junck nor Mr. Moloney has personally purchased a single share of the Company for more than a decade,
since 2011 and 2008, respectively. Instead, the vast majority of their LEE holdings were acquired via equity awards granted during their
service as directors and/or employees. Accordingly, we question their continued personal commitment to the Company and whether their
economic interests are truly aligned with and acting in the best interest of stockholders.
Further,
the Company’s Corporate Governance Guidelines include a director retirement policy effective if a director would be age 70 or older
at the time of the election, subject to waiver in “extraordinary circumstances”. Both Ms. Junck and Mr. Moloney will be at
or past the retirement age at the time of the Annual Meeting, however, despite their re-nomination being in contravention of the Company’s
own policies, the Company has decided to re-nominate both of these directors and has not provided a clear explanation as to what “extraordinary
circumstances” warrant their continued service on the Board. This appears to be yet another tool for this entrenched Board to maintain
the status quo in defiance of the stockholder franchise and we question the Board’s decision to re-nominate Ms. Junck and Mr. Moloney
given the clear retirement policy set forth in the Company’s Corporate Governance Guidelines. We further question the ability of
the Board to genuinely and independently review the merits of Ms. Junck’s and Mr. Moloney’s continued service given their
high degree of control over the Board relating to their lengthy tenures and current positions on the Board’s key committees and
as Chairman and Lead Independent Director, respectively.
With Ms. Junck and Mr.
Moloney up for election at the Annual Meeting, the Annual Meeting presents the Company’s stockholders with a critical opportunity
to signal to the Board that stockholders are incredibly dissatisfied with the status quo and instill a greater sense of accountability
on the Board. The Annual Meeting also presents an opportunity for stockholders to demonstrate their concerns regarding the Company’s
operational and financial underperformance. We believe that the Company’s subpar performance can, in large part, be directly attributed
to the Company’s poor corporate governance practices and the entrenched mindset of the Board, whose efforts to maintain the status
quo have seemed to stand in the way of the Company unlocking its full potential.
As stockholders owning approximately
6.2% of the outstanding Common Stock, we have a vested interest in making certain that the right Board is in place – a Board that
will keep stockholders’ best interests at the forefront of Boardroom deliberations; a Board that is willing to explore all potential
avenues for maximizing stockholder value; and a Board that is willing to evaluate all strategic alternatives available to the Company
that may deliver value to the stockholders.
The Company’s Bylaws
contain a director resignation policy in place for uncontested elections, whereby any incumbent director up for re-election that does
not receive a majority of votes cast for their re-election must submit their resignation to the Board. The Nominating and Corporate Governance
Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken.
The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and
the rationale behind it within 90 days from the date of the certification of the election results.
However, in yet another
attempt to further entrench the Board, the Company has taken the position that, regardless of whether or not our nominees are eligible
to stand for election, the election of directors at the Annual Meeting is “contested”, meaning directors are elected by a
plurality of the votes cast and the director resignation policy does not apply. We cannot understand how the Company could make this
determination that the election of directors is “contested” when the Company invalidated our director nominees more than
two months ago on December 3, 2021. Under the plurality vote standard, with no opposition, Ms. Junck and Mr. Moloney would be re-elected
to the Board even if they were to receive just one vote each. This flies in the face of best corporate governance practices
and corporate democracy.
Irrespective of the voting
standard actually employed for this year’s election of directors, if our proxy solicitation results in any director failing to
receive a majority of the votes cast for his or her election, then we believe it would clearly be inappropriate for any such director
to continue to serve on the Board. In our view such directors continued service on the Board would be an egregious violation of proper
corporate governance, and in direct opposition to the voice of the will of the stockholders. To that end, we believe that a vote AGAINST
the Lee Withhold Nominees is appropriate now more than ever.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company has a classified
Board that is currently composed of eight directors divided into three classes, with directors elected for staggered terms of three years.
According to the Company’s proxy statement for the Annual Meeting, the terms of three directors currently serving on the Board will
expire at the Annual Meeting, and the Company intends to nominate three candidates for election as directors at the Annual Meeting.
For the reasons stated
above, we are seeking your support at the Annual Meeting to vote AGAINST the election of Mary E. Junck and Herbert W. Moloney
III.
The Company claims that
the election of directors at the Annual Meeting is a “contested election” under its Bylaws and, accordingly the Company has
adopted a plurality vote standard for the election of directors at the Annual Meeting. Under the plurality voting provisions of the Bylaws,
directors will be elected by the vote of a plurality of the shares represented in person or by proxy at the Annual Meeting and entitled
to vote on the election of directors. Therefore, the three nominees for director who receive the most votes cast by the shares represented
in person or by proxy at the Annual Meeting and entitled to vote in the election will be elected at the Annual Meeting.
Please note that the Lee
Withhold Nominees are not the nominees of the Stockholder Group, have not consented to be named in these proxy materials, and are the
nominees of Lee. Because the Lee Withhold Nominees are not the Stockholder Group’s nominees and have not consented to be named
in this proxy statement, they are not participants in this solicitation. We can provide no assurance that any of the Lee Withhold Nominees
will serve as directors if elected. The names, backgrounds and qualifications of the Company’s nominees, and other information
about them, can be found in the Company’s proxy statement.
WE STRONGLY URGE YOU TO VOTE “AGAINST”
THE ELECTION OF THE MARY E. JUNCK AND HERBERT W. MOLONEY III ON THE ENCLOSED BLUE PROXY CARD.
PROPOSAL 2
RATIFICATION OF SELECTION OF BDO USA, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As discussed in further detail
in the Company’s proxy statement, the Audit Committee of the Board (the “Audit Committee”) has appointed BDO as the
Company’s independent registered public accounting firm for the Company’s fiscal year 2022.
According to the Company’s
proxy statement, the Bylaws do not require that the Company’s stockholders ratify the appointment of BDO as the Company’s
independent registered public accounting firm, but the Board is requesting the stockholders to ratify this appointment as a means of soliciting
stockholders’ opinions and as a matter of good corporate practice. According to the Company’s proxy statement, if the stockholders
do not ratify the appointment, the Audit Committee will consider any information submitted by the stockholders in determining whether
to retain BDO as the Company’s independent registered public accounting firm for 2022. Even if the appointment is ratified, the
Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that a change would be in
the best interests of the Company and its stockholders.
WE MAKE NO RECOMMENDATION WITH RESPECT TO
THE RATIFICATION OF THE SELECTION OF BDO AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2022, AND
INTEND TO VOTE OUR SHARES “FOR” THIS PROPOSAL.
VOTING AND PROXY PROCEDURES
Only stockholders of record
on the Record Date will be entitled to notice of and to vote at the Annual Meeting. Stockholders who sell their shares of Common Stock
before the Record Date (or acquire them without voting rights after the Record Date) may not vote such shares. Stockholders of record
on the Record Date will retain their voting rights in connection with the Annual Meeting even if they sell such shares after the Record
Date. According to the Company’s proxy statement, each share of our Common Stock has one vote on each proposal at the Annual Meeting.
Shares of Common Stock
represented by properly executed BLUE proxy cards will be voted at the Annual Meeting as marked and, in the absence of specific
instructions, will be voted AGAINST the election of the Lee Withhold Nominees and FOR the ratification of BDO as the Company’s
independent registered public accounting firm for fiscal year 2022.
According to the Company’s
proxy statement for the Annual Meeting, the terms of three directors currently serving on the Board will expire at the Annual Meeting,
and the Company intends to nominate three candidates for election as directors at the Annual Meeting. This Proxy Statement does not include
authority to vote for the Lee Withhold Nominees. Should you choose to vote in favor of either of Ms. Junck or Mr. Moloney you must use
the Company’s proxy card. Please note that the Lee Withhold Nominees are not the nominees of the Stockholder Group, have not consented
to be named in this Proxy Statement, and are the nominees of Lee. The names, backgrounds and qualifications of the Company’s nominees,
and other information about them, can be found in the Company’s proxy statement. We can provide no assurance that any of the Lee
Withhold Nominees will serve as directors if elected.
QUORUM; BROKER NON-VOTES; DISCRETIONARY VOTING
A quorum is the minimum number
of shares of Common Stock that must be represented at a duly called meeting in person or by proxy in order to legally conduct business
at the meeting. According to the Company’s proxy statement, the presence, in person or by proxy, of the holders of at least a majority
of the shares entitled to vote at the Annual Meeting will be considered a quorum for the transaction of business.
According to the Company’s
proxy statement, abstentions and broker non-votes (if any) are counted as present for purposes of establishing a quorum at the Annual
Meeting. However, if you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be
voted on any proposal on which your broker does not have discretionary authority to vote (a “broker non-vote”). Under applicable
rules, your broker will not have discretionary authority to vote your shares at the Annual Meeting on any of the proposals.
If you are a stockholder of
record or hold your shares in street name, such as in a stock brokerage account or through a bank or other nominee, you may vote in the
following ways: by phone; by internet; by mail or by attending the meeting and voting.
VOTES REQUIRED FOR APPROVAL
Election
of Directors ─ Under the Bylaws, the Company has adopted a plurality vote standard
for contested director elections and majority vote standard for uncontested director elections.
According to the Company’s proxy statement, directors will be elected by the vote of
a plurality of the shares represented in person or by proxy at the Annual Meeting and entitled
to vote on the election of directors. Therefore, the three nominees for director who receive
the most votes cast by the shares represented in person or by proxy at the Annual Meeting
and entitled to vote in the election will be elected at the Annual Meeting.
Ratification of the
Selection of Accounting Firm ─ According to the Company’s proxy statement, the affirmative vote of a majority of the shares
of Common Stock, represented in person or by proxy at the Annual Meeting and entitled to vote on the matter, is required to ratify the
selection of BDO.
Under applicable Delaware
law, none of the holders of Common Stock is entitled to appraisal rights in connection with any matter to be acted on at the Annual Meeting.
If you sign and submit your BLUE proxy card without specifying how you would like your shares voted, your shares will be voted
in accordance with Opportunities’ recommendations specified herein and in accordance with the discretion of the persons named on
the BLUE proxy card with respect to any other matters that may be voted upon at the Annual Meeting.
REVOCATION OF PROXIES
Stockholders of the Company
may revoke their proxies at any time prior to exercise by attending the Annual Meeting and voting (although attendance at the Annual
Meeting will not in and of itself constitute revocation of a proxy) or by delivering a written notice of revocation. The delivery of
a subsequently dated proxy which is properly completed will constitute a revocation of any earlier proxy. The revocation may be delivered
either to Opportunities in care of Innisfree at the address set forth on the back cover of this
Proxy Statement or to the Company at 4600 E 53rd Street, Davenport, Iowa, 52807 or any other address provided by the Company. Although
a revocation is effective if delivered to the Company, we request that either the original or photostatic copies of all revocations be
mailed to Opportunities in care of Innisfree at the address set forth on the back cover of this Proxy Statement so that we will be aware
of all revocations and can more accurately determine if and when proxies have been received from the holders of record on the Record
Date of a majority of the shares entitled to be voted at the Annual Meeting. Additionally, Innisfree
may use this information to contact stockholders who have revoked their proxies in order to solicit later dated proxies for a vote against
the Lee Withhold Nominees.
IF YOU WISH TO AGAINST THE ELECTION OF MARY
E. JUNCK AND HERBERT W. MOLONEY III TO THE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED BLUE PROXY CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
Proxies may be solicited
by mail, facsimile, telephone, electronic mail, in person and by advertisements. Solicitations may also be made by certain of the respective
directors, officers, members and employees of the Stockholder Group (as applicable), none of whom will, except as described elsewhere
in this Proxy Statement, receive additional compensation for such solicitation.
Opportunities has entered
into an agreement with Innisfree for solicitation and advisory services in connection with this solicitation, for which Innisfree will
receive a fee not to exceed $_____, together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified against
certain liabilities and expenses, including certain liabilities under the federal securities laws. Innisfree will solicit proxies from
individuals, brokers, banks, bank nominees and other institutional holders. Opportunities has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares of Common Stock on
whose behalf they hold shares. Opportunities will reimburse these record holders for their reasonable out-of-pocket expenses in so doing.
It is anticipated that Innisfree will employ approximately ___ persons to solicit stockholders for the Annual Meeting.
The entire expense of soliciting
proxies is being borne by Opportunities. Costs of this solicitation of proxies are currently estimated to be approximately $___________
(including, but not limited to, fees for attorneys, solicitors and other advisors, and other costs incidental to the solicitation). Opportunities
estimates that through the date of this Proxy Statement its expenses in connection with this solicitation are approximately $___________.
To the extent legally permissible, if Opportunities is successful in its proxy solicitation, Opportunities intends to seek reimbursement
from the Company for the expenses it incurs in connection with this solicitation. Opportunities does not intend to submit the question
of such reimbursement to a vote of security holders of the Company.
ADDITIONAL PARTICIPANT INFORMATION
The
participants in the solicitation are anticipated to be Opportunities, MNG Enterprises, MNG
Holdings, Alden and Heath Freeman (each, a “Participant” and collectively, the
“Participants”).
The principal business of
Opportunities is investing in securities and related instruments. The principal business of MNG Enterprises is to serve as the parent
company and manager of MediaNews Group, Inc., a leading newspaper publisher in local, multi-platform news and information. The principal
business of MNG Holdings is to serve as the managing member of Opportunities. The principal business of Alden is investment management.
The principal occupation of Mr. Freeman is serving as the President of Alden.
The principal business address
of each of Opportunities, MNG Enterprises and MNG Holdings is 5990 Washington Street, Denver, Colorado 80216. The principal business address
of each of Alden and Mr. Freeman is 777 South Flagler Drive, Suite 800W, West Palm Beach, Florida 33401.
Mr. Freeman is a citizen of
the United States of America.
See Schedule III for information
regarding the executive officers and directors of MNG Enterprises, MNG Holdings, Opportunities and Alden.
As of the date of this Proxy
Statement, Opportunities directly beneficially owns 371,117 shares of Common Stock. MNG Holdings, as the managing member of Opportunities,
may be deemed the beneficial owner of the 371,117 shares of Common Stock owned directly by Opportunities. MNG Enterprises, as the sole
member of MNG Holdings, may be deemed the beneficial holder of the 371,117 shares of Common Stock owned directly by Opportunities. Alden,
as the investment manager of funds that collectively hold a majority voting interest in MNG Enterprises, may be deemed the beneficial
owner of the 371,117 shares of Common Stock owned directly by Opportunities. Mr. Freeman, as the President of Alden, may be deemed the
beneficial owner of the 371,117 shares of Common Stock owned directly by Opportunities.
The members of MNG may be
deemed to be a member of a “group” with the other respective members therein for the purposes of Section 13(d)(3) of the Exchange
Act, and such group may be deemed to beneficially own the 371,117 shares of Common Stock beneficially owned in the aggregate by all of
the Participants. Each of the Participants disclaims beneficial ownership of shares of Common Stock that he, she or it does not directly
own. For information regarding transactions in the securities of the Company during the past two years by the Participants, please see
Schedule I.
The shares of Common Stock
purchased by Opportunities were purchased with working capital.
Except as set forth in this
Proxy Statement (including the Schedules hereto), (i) during the past 10 years, no Participant has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); (ii) no Participant directly or indirectly beneficially owns any securities of
the Company; (iii) no Participant owns any securities of the Company which are owned of record but not beneficially; (iv) no Participant
has purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price or market value of the
securities of the Company owned by any Participant is represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding such securities; (vi) no Participant is, or within the past year was, a party to any contract, arrangements or understandings
with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
(vii) no associate of any Participant owns beneficially, directly or indirectly, any securities of the Company; (viii) no Participant
owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no Participant or any of his,
her or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last
fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds $120,000; (x) no Participant or any of his, her or its associates
has any arrangement or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect
to any future transactions to which the Company or any of its affiliates will or may be a party; (xi) no Participant has a substantial
interest, direct or indirect, by securities holdings or otherwise, in any matter to be acted on at the Annual Meeting; (xii) no Participant
holds any positions or offices with the Company; (xiii) no Participant has a family relationship with any director, executive officer,
or person nominated or chosen by the Company to become a director or executive officer; and (xiv) no companies or organizations, with
which any of the Participants has been employed in the past five years, is a parent, subsidiary or other affiliate of the Company. There
are no material proceedings to which any Participant or any of his, her or its associates is a party adverse to the Company or any of
its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. With respect to each of the Participants,
none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K of the Exchange Act occurred during the past 10 years.
OTHER MATTERS AND ADDITIONAL INFORMATION
We are unaware of any other
matters to be considered at the Annual Meeting. However, should other matters, which we are not aware of at a reasonable time before this
solicitation, be brought before the Annual Meeting, the persons named as proxies on the enclosed BLUE proxy card will vote on such
matters in their discretion.
Some banks, brokers and other
nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means
that only one copy of this Proxy Statement may have been sent to multiple stockholders in your household. We will promptly deliver a separate
copy of the document to you if you write to our proxy solicitor, Innisfree, at the address set forth on the back cover of this Proxy Statement,
or call toll free at (866) 239-1762. If you want to receive separate copies of our proxy materials in the future, or if you are receiving
multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record
holder, or you may contact our proxy solicitor at the above address and phone number.
The information concerning
the Company and the proposals in the Company’s proxy statement contained in this Proxy Statement has been taken from, or is based
upon, publicly available documents on file with the SEC and other publicly available information. Although we have no knowledge that would
indicate that statements relating to the Company contained in this Proxy Statement, in reliance upon publicly available information, are
inaccurate or incomplete, to date we have not had access to the books and records of the Company, were not involved in the preparation
of such information and statements and are not in a position to verify such information and statements. All information relating to any
person other than the Participants is given only to our knowledge.
This Proxy Statement is dated
____________, 2022. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than
such date, and the mailing of this Proxy Statement to stockholders shall not create any implication to the contrary.
STOCKHOLDER PROPOSALS
According to the Company’s proxy statement, proposals of stockholders
in accordance with Rule 14a-8 of the Exchange Act to be presented at the Company’s 2023 annual meeting of stockholders (the “2023
Annual Meeting”) must be submitted to the Company, at the address shown on the cover of the Company’s proxy statement, sent
by registered, certified or express mail, to be considered for inclusion in the Company’s proxy statement and form of proxy relating
to that meeting by no later than September 26, 2022.
According to the Company’s
proxy statement, under the proxy access provision in the Bylaws, an eligible stockholder or group of up to 20 stockholders owning at least
3% of the Common Stock continuously for three years to nominate up to two individuals or 20% of the Board, whichever is greater, for election
at the 2023 Annual Meeting, and to have those individuals included in the Company’s proxy statement for that meeting. If a stockholder
or group of stockholders wishes to nominate one or more director candidates to be included in the Company’s proxy statement for
the 2023 Annual Meeting pursuant to these proxy access provisions in Article II, Section 12 of the Bylaws, notice must be received by
the Secretary of the Company at the Company’s principal executive offices no earlier than August 26, 2022 and no later than September
26, 2022, and the nomination must otherwise comply with the Bylaws.
According to the Company’s
proxy statement, stockholders who want to nominate individuals to serve as directors or to bring business before the 2023 Annual Meeting
(other than nominations pursuant to the Company’s proxy access bylaw or a stockholder proposal in accordance with Rule 14a-8),
must notify the Secretary of the Company in writing and provide the information required by Article II, Section 2 of the Bylaws. The
notice must be delivered to, or mailed and received at the address of the Company shown on the cover of the Company’s proxy statement,
between November 10, 2022 and December 9, 2022.
The information set forth
above regarding the procedures for submitting stockholder proposals for consideration at the 2023 Annual Meeting is based on information
contained in the Company’s proxy statement and the Bylaws. The incorporation of this information in this Proxy Statement should
not be construed as an admission that such procedures are legal, valid or binding.
CERTAIN ADDITIONAL INFORMATION
WE HAVE OMITTED FROM THIS
PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN THE COMPANY’S PROXY STATEMENT RELATING
TO THE ANNUAL MEETING BASED ON OUR RELIANCE ON RULE 14A-5(C) UNDER THE EXCHANGE ACT. THIS DISCLOSURE IS EXPECTED TO INCLUDE, AMONG OTHER
THINGS, CURRENT BIOGRAPHICAL INFORMATION ON THE COMPANY’S DIRECTORS AND EXECUTIVE OFFICERS, INFORMATION CONCERNING EXECUTIVE COMPENSATION
AND DIRECTOR COMPENSATION, INFORMATION CONCERNING THE COMMITTEES OF THE BOARD AND OTHER INFORMATION CONCERNING THE BOARD, INFORMATION
CONCERNING CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, INFORMATION ABOUT THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM AND OTHER IMPORTANT INFORMATION. SEE SCHEDULE II FOR INFORMATION REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5% OF THE SHARES
AND THE OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF THE COMPANY
The information concerning
the Company contained in this Proxy Statement and the Schedules attached hereto has been taken from, or is based upon, publicly available
information.
________________
Your vote is important.
No matter how many or how few shares you own, please vote against the Lee Withhold Nominees by marking, signing, dating and mailing the
enclosed BLUE proxy card promptly.
Strategic Investment Opportunities LLC
_________________, 2022
SCHEDULE I
TRANSACTIONS IN SECURITIES OF THE COMPANY
DURING THE PAST TWO YEARS
| Nature of the Transaction |
Amount of Securities Purchased/(Sold)1 |
Date of Purchase / Sale |
STRATEGIC INVESTMENT OPPORTUNITIES LLC
| Purchase of Common Stock |
350,000 |
06/05/2020 |
| Purchase of Common Stock |
81,700 |
06/08/2020 |
| Purchase of Common Stock |
10,700 |
06/09/2020 |
| Purchase of Common Stock |
80,000 |
06/10/2020 |
| Sale of Common Stock |
(200) |
06/23/2021 |
| Sale of Common Stock |
(863) |
06/25/2021 |
| Sale of Common Stock |
(993) |
08/05/2021 |
| Sale of Common Stock |
(4,200) |
08/06/2021 |
| Sale of Common Stock |
(1,756) |
08/09/2021 |
| Sale of Common Stock |
(1,200) |
08/10/2021 |
| Sale of Common Stock |
(1,700) |
08/11/2021 |
| Sale of Common Stock |
(2,880) |
09/14/2021 |
| Sale of Common Stock |
(5,087) |
09/15/2021 |
| Sale of Common Stock |
(879) |
09/16/2021 |
| Sale of Common Stock |
(3,000) |
09/20/2021 |
| Sale of Common Stock |
(3,923) |
09/21/2021 |
| Sale of Common Stock |
(10,186) |
09/22/2021 |
| Sale of Common Stock |
(4,531) |
09/23/2021 |
| Sale of Common Stock |
(2,546) |
09/24/2021 |
| Sale of Common Stock |
(7,006) |
09/27/2021 |
| Purchase of Common Stock |
12,097 |
11/23/2021 |
_____________________________
1 Transactions set
forth herein occurring prior to March 15, 2021, were effected prior to the Company’s 10-1 reverse stock split.
SCHEDULE II
The following table
is reprinted from the Company’s definitive proxy statement filed with the Securities and Exchange Commission on January 24, 2022.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth
information as of January 12, 2022, except as set forth below, as to each person known by us to own beneficially more than 5% of our Common
Stock.
| Name and Address of Beneficial Owner |
|
|
|
Title of
Class |
|
Shares of
Common Stock |
|
Percent of
Class |
| |
|
|
|
|
|
|
|
|
| Cannell Capital, LLC(1) |
|
245 Meriwether Circle,
Alta, WY 83414 |
|
Common Stock |
|
483,267 |
|
8.23% |
| |
|
|
|
|
|
|
|
|
| Praetorian Capital Management LLC(2) |
|
330 Mangrove Thicket Blvd.,
Ponte Vedra,FL 32081 |
|
Common Stock |
|
430,000 |
|
7.32% |
| |
|
|
|
|
|
|
|
|
| Strategic Investment Opportunities LLC(3) |
|
5990 Washington St.,
Denver, CO 80202 |
|
Common Stock |
|
371,117 |
|
6.32% |
(1) Information is based solely on a report on
Schedule 13D/A filed jointly by Cannell Capital LLC and J. Carlo Cannell with the SEC on September 23, 2021. According to the
Schedule 13D/A, Mr. Cannell is the sole managing member of Cannell Capital LLC, which possesses the sole power to vote and
to direct the disposition of the 483,267 reported shares held by certain investment vehicles (of which Mr. Cannell is the investment
adviser).
(2) Information is based solely on a report on
Schedule 13D, filed jointly by Praetorian Capital Fund LLC and Praetorian Capital Management LLC with the SEC on December 8,
2021. According to the Schedule 13D, (i) Praetorian Capital Fund LLC has shared voting and dispositive power with respect
to 353,721 of the reported shares; and (ii) Praetorian Capital Management LLC, the investment adviser to Praetorian Capital Fund LLC,
has (x) sole voting and dispositive power with respect to 353,721 of the reported shares and (y) shared voting and dispositive
power with a private third-party pursuant to an arrangement with respect to 76,279 of the reported shares.
(3) Information is based solely on a report on
Schedule 13D/A filed jointly by MNG Enterprises, Inc., MNG Investment Holdings, LLC, Strategic Investment Opportunities LLC, Alden
Global Capital, LLC, and Heath Freeman with the SEC on December 16, 2021. According to the Schedule 13D/A, each reporting person
may be deemed to share voting and dispositive power for all 371,117 of the reported shares.
The following table sets forth
information as to our Common Stock beneficially owned as of January 12, 2022, by each director and nominee, each of the NEOs listed in
the Summary Compensation Table, and by all of our current directors (including the directors up for election at the Annual Meeting) and
executive officers as a group:
| Beneficial Owner(1) | |
Shares of
Common Stock | |
Percent of
Class |
| Ray G. Farris(2) | |
| 22,716 | | |
| * | |
| Steven C. Fletcher | |
| 6,804 | | |
| * | |
| Mary E. Junck(3) | |
| 175,664 | | |
| 3.0 | % |
| Margaret R. Liberman | |
| 5,804 | | |
| * | |
| Brent M. Magid | |
| 14,641 | | |
| | |
| Timothy R. Millage | |
| 21,817 | | |
| | |
| Kevin D. Mowbray(2) | |
| 110,316 | | |
| 1.9 | % |
| Herbert W. Moloney III | |
| 15,978 | | |
| * | |
| David T. Pearson | |
| 4,804 | | |
| * | |
| Gregory P. Schermer(4) | |
| 140,781 | | |
| 2.4 | % |
| All current directors and executive officers as a group (15 persons)(2)(3)(4)(5) | |
| 602,443 | | |
| 10.2 | % |
* Less than one percent of the class.
(1) Unless otherwise indicated in Appendix A,
the business address of each Beneficial Owner is c/o Lee Enterprises, Incorporated, 4600 E. 53rd St., Davenport, Iowa 52807.
(2) The table includes the following shares of
Common Stock subject to acquisition within 60 days by the exercise of outstanding stock options: Mr. Mowbray — 8,000
and all current directors and executive officers as a group (15 persons) — 15,825.
(3) 84,500 shares of Common Stock beneficially
owned by Ms. Junck are held in joint tenancy with her spouse.
(4) Mr. Schermer disclaims beneficial ownership
of the following shares, included above — 3,182 shares of Common Stock held by a trust for the benefit of his son,
2,782 shares of Common Stock held by a trust for the benefit of a daughter and 4,764 shares of Common Stock held by separate trusts for
the benefit of two other daughters as to which Mr. Schermer shares voting and investment authority.
(5) None of the shares shown in the table as beneficially
owned by current directors and executive officers is hedged or pledged as security for any obligation. The Board has not adopted, and
the Company does not have, any specific practices or policies regarding the ability of the officers and directors of the Company, as well
as employees of the Company, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts,
equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset,
any decrease in the market value of the Company’s equity securities.
Equity Compensation Plan Information
Information as of September 26, 2021 with
respect to equity compensation plans is as follows:
| Plan Category | |
Number of Securities to be
Issued Upon
Exercise of Outstanding
Options, Warrants
and Rights (A)(1) | |
Weighted Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights (Dollars) (B) | |
Number of Securities
Remaining Available for
Future Issuance
Under Equity
Compensation
Plans
(Excluding Shares in
column A)(2)(3) |
| Equity compensation plans approved by shareholders | |
| 35,735 | | |
| 11.40 | | |
| 332,360 | |
(1) LTIP.
(2) Includes the number of securities remaining available for future
issuance under our LTIP.
(3) Those securities not issued as a result of
cancellation, forfeiture, or surrender of previously outstanding options or adjustment of target restricted stock awards remain available
for issuance, at the discretion of the Executive Compensation Committee, under the LTIP. Such shares are excluded from the total presented
as the amount cannot be ascertained. Unvested restricted stock awards are not included in the number of shares presented as they are
no longer available for future issuance once granted.
Additional information is
set forth under the captions “Grants of Plan-Based Awards”, “Outstanding Equity Awards at September 26, 2021,”
and “Option Exercises and Stock Vested”.
SCHEDULE III
Set forth below is the name
and present principal business, occupation or employment, and the name, principal business and address of any corporation or other organization
in which such employment is conducted, of the executive officers and directors of the MNG Enterprises, MNG Holdings, Opportunities and
Alden. To the best of Opportunities’ knowledge, except as set forth herein, none of the persons listed below beneficially owns any
securities of the Company or is a party to any contract, agreement or understanding required to be disclosed herein.
Directors and Officers of MNG Enterprises
Unless otherwise indicated
below: (i) each occupation set forth opposite an individual’s name refers to employment with MNG Enterprises, and (ii) for each
person, the business address is 5990 Washington St., Denver, CO 80216.
| Name |
Present Position with MNG
Enterprises (or Other Principal
Occupation or Employment) |
Address of Employer if other
than MNG Enterprises
|
| Maz Akram |
Director |
|
| Heath Freeman |
Director |
c/o Alden Global Capital LLC
777 South Flagler Drive
Suite 800W
West Palm Beach, Florida 33401
|
| R. Joseph Fuchs |
Director |
98 Herrick Road
Southhampton, NY 11968
|
| Christopher Minnetian |
Director |
1 Engle Street, Suite 201
Englewood, NJ 07631
|
| Martin Wade |
Director |
422 Berkley Road
Stone Harbor, NJ 08247
|
| Guy Gilmore |
Chief Operating Officer |
5990 Washington St.
Denver, CO 80216
|
| Michael Koren |
Senior Vice President, Chief Financial Officer |
5990 Washington St.
Denver, CO 80216
|
| Marshall Anstandig |
Senior Vice President, General Counsel and Secretary |
4 North 2nd Street, Suite 700
San Jose, CA 95113
|
Directors and Officers of MNG Holdings
Unless otherwise indicated
below: (i) each occupation set forth opposite an individual’s name refers to employment with MNG Holdings, and (ii) for each person,
the business address is 101 W. Colfax Avenue, Denver, CO 80202.
| Name |
Present Position with MNG
Holdings (or Other Principal
Occupation or Employment)
|
Address of Employer if other
than MNG Holdings |
| Michael Koren |
Chief Financial Officer |
5990 Washington St.
Denver, CO 80216
|
| Marshall Anstandig |
General Counsel and Secretary |
4 North 2nd Street, Suite 700
San Jose, CA 95113
|
Directors and Officers of Opportunities
Unless otherwise indicated
below: (i) each occupation set forth opposite an individual’s name refers to employment with Opportunities, and (ii) for each person,
the business address is 5990 Washington St., Denver, CO 80216.
| Name |
Present Position with
Opportunities (or Other
Principal Occupation or
Employment)
|
Address of Employer if other
than Opportunities |
| Michael Koren |
Senior Vice President, Chief Financial Officer |
5990 Washington St.
Denver, CO 80216
|
| Marshall Anstandig |
Senior Vice President, General Counsel and Secretary |
4 North 2nd Street, Suite 700
San Jose, CA 95113
|
Directors and Officers of Alden
Unless otherwise indicated
below: (i) each occupation set forth opposite an individual’s name refers to employment with Alden, and (ii) for each person, the
business address is 777 South Flagler Drive, Suite 800W, West Palm Beach, FL 33401.
| Name |
Present Position with Alden (or
Other Principal Occupation or
Employment)
|
Address of Employer if other
than Alden |
| Heath Freeman |
President
|
|
| Joshua Kleban |
Chief Financial Officer
|
|
| Michael Monticciolo |
Chief Legal Officer and Chief Compliance Officer |
|
IMPORTANT
Tell the Board what you
think! Your vote is important. No matter how many shares of Common Stock you own, please give Opportunities your proxy AGAINST
the election of the Lee Withhold Nominees and in accordance with Opportunities’ recommendations on the other proposal(s) on the
agenda for the Annual Meeting by taking three steps:
| · | SIGNING the enclosed BLUE proxy card; |
| · | DATING the enclosed BLUE proxy card; and |
| · | MAILING the enclosed BLUE proxy card TODAY in the envelope provided (no postage is required if mailed
in the United States). |
If any of your shares of
Common Stock are held in the name of a brokerage firm, bank, bank nominee or other institution, only it can vote such shares of Common
Stock and only upon receipt of your specific instructions. Depending upon your broker or custodian, you may be able to vote either
by toll-free telephone or by the Internet. Please refer to the enclosed voting form for instructions on how to vote electronically. You
may also vote by signing, dating and returning the enclosed BLUE voting form.
If you have any questions
or require any additional information concerning this Proxy Statement, please contact Innisfree at
the address set forth below.
If you have any questions, require assistance
in voting your BLUE proxy card,
or need additional copies of our proxy materials,
please contact Innisfree at the phone numbers
listed below.
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (866) 239-1762
Banks and Brokers may call collect: (212) 750-5833
REVISED PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED FEBRUARY 16, 2022
LEE ENTERPRISES, INCORPORATED
2022 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF STRATEGIC INVESTMENT OPPORTUNITIES LLC AND THE OTHER PARTICIPANTS IN ITS PROXY SOLICITATION
THE BOARD OF DIRECTORS OF LEE ENTERPRISES, INCORPORATED
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints
Heath Freeman, Scott Winter, Jonathan Salzberger and Andrew M. Freedman, and each of them, attorneys and agents with full power of substitution
to vote all shares of common stock of Lee Enterprises, Incorporated (the “Company”) which the undersigned would be entitled
to vote if personally present at the 2022 annual meeting of stockholders of the Company scheduled to be held on March 10, 2022, at 9:00
a.m., local time, at 4620 E. 53rd Street, Room 120, Davenport, Iowa 52807 (including any adjournments or postponements thereof
and any meeting called in lieu thereof, the “Annual Meeting”).
The undersigned hereby
revokes any other proxy or proxies heretofore given to vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named attorneys and proxies, their substitutes, or any of them
may lawfully take by virtue hereof. If properly executed, this Proxy will be voted as directed on the reverse and in the discretion of
the herein named attorneys and proxies or their substitutes with respect to any other matters as may properly come before the Annual
Meeting that are unknown to Strategic Investment Opportunities LLC (“Opportunities”) a reasonable time before this solicitation.
STOCKHOLDERS ARE ADVISED THAT THE COMPANY NOMINEES ARE NOT THE NOMINEES OF OPPORTUNITIES, HAVE NOT CONSENTED TO BE NAMED IN THESE
PROXY MATERIALS, AND ARE THE NOMINEES OF THE COMPANY. BECAUSE THE COMPANY NOMINEES ARE NOT OPPORTUNITIES’S NOMINEES AND HAVE NOT
CONSENTED TO BE NAMED IN THIS PROXY STATEMENT, THEY ARE NOT PARTICIPANTS IN THIS SOLICITATION.
THIS PROXY WILL BE
VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS PROXY WILL BE VOTED “AGAINST”
THE ELECTION OF MARY E. JUNCK AND HERBERT W. MOLONEY III, “FOR” THE OTHER COMPANY NOMINEE, AND “FOR” PROPOSAL
2.
This Proxy will be valid until
the completion of the Annual Meeting. This Proxy will only be valid in connection with Opportunities’ solicitation of proxies for
the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS
PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
BLUE
PROXY CARD
[X] Please mark vote as in this example
OPPORTUNITIES
STRONGLY RECOMMENDS THAT STOCKHOLDERS VOTE “AGAINST” THE ELECTION OF MARY E.
JUNCK AND HERBERT W. MOLONEY III LISTED BELOW IN PROPOSAL 1. OPPORTUNITIES MAKES NO RECOMMENDATION
WITH RESPECT TO THE ELECTION OF THE OTHER COMPANY NOMINEE OR PROPOSAL 2.
| 1. | Election of Directors. |
| |
AGAINST
MARY E JUNCK AND HERBERT W MOLONEY III AND FOR THE OTHER COMPANY NOMINEE
|
AGAINST
ALL COMPANY NOMINEES |
AGAINST
MARY E JUNCK AND HERBERT W MOLONEY III AND FOR THE OTHER COMPANY NOMINEE, EXCEPT NOMINEE(S) WRITTEN
BELOW |
|
Nominees:
|
Mary E. Junck
Herbert W. Moloney III
Kevin D. Mowbray |
¨ |
¨ |
¨
________________
________________
|
Opportunities intends
to use this proxy to vote “AGAINST” Ms. Junck and Mr. Moloney. The names, backgrounds and qualifications of the candidates
who have been nominated by the Company, and other information about them, can be found in the Company’s proxy statement.
INSTRUCTIONS: If you
do not wish for your shares to be voted “AGAINST” a particular nominee, mark the “AGAINST ALL EXCEPT NOMINEE(S) WRITTEN
BELOW” box and write the name(s) of the nominee(s) you do support on the line(s) above. Your shares of common stock will be voted
against the remaining nominee(s).
| 2. | The Company’s proposal to ratify the selection of BDO USA, LLP as the Company’s independent
registered public accounting firm for fiscal year 2022. |
| ¨ |
FOR |
¨ |
AGAINST |
¨ |
ABSTAIN |
DATED: ____________________________, 2022
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD
EACH SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS
ON THIS PROXY.
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