PREC14A
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

Filed by the Registrant     Filed by a Party other than the Registrant

 

Check the appropriate box:

 

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 Pursuant to §240.14a-12

 

TEGNA Inc.

 


(Name of Registrant as Specified In Its Charter)

 

                  


 

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Table of Contents

LOGO


Table of Contents
LOGO    March     , 2020

 

 

Dear Shareholder:

 

  LOGO

Howard D. Elias

  LOGO

David T. Lougee

 
     
 

 

Key Financial

and Strategic Highlights:

 

•  4% revenue growth to $2.3 billion

 

•  $708 million Adjusted EBITDA in
2019, Adjusted EBITDA margin of 31%

 

•  20% subscription revenue growth

 

•  56.4% one-year total shareholder return

 

•  $2.1 billion bonds issued to refinance debt at lower rates

 

•  Completed $1.5 billion of strategic acquisitions in 2019

 

•  Repriced roughly half of subscribers in 2019 through new multi-year
distribution agreements

 

 

2019 marked another exciting year of growth and innovation at TEGNA as we continue to drive our five-pillar strategy to create shareholder value. We further positioned TEGNA for success in a changing media landscape by delivering strong operating performance, successfully completing several value-enhancing acquisitions, further innovating our offerings, and strengthening our balance sheet while increasing financial flexibility.

These strong results reflect the continued execution of our long-term strategy, which is overseen by our highly qualified, independent, diverse and engaged Board of Directors. The Board is comprised of industry leaders with a depth of expertise that is aligned with our business. Our Board is actively engaged in reviewing, guiding and overseeing the development and execution of our value-creation strategy, and discussing feedback provided by our shareholders. This level of engagement, combined with the Board’s diversity of thought, experience and skills, ensures we continuously evaluate new opportunities to maximize shareholder value.

The varied perspectives and experiences of the Board have been achieved by our on-going commitment to director refreshment. TEGNA has added six highly qualified independent directors over the past five years, including four since December 2017, specifically adding skills and diverse, fresh perspectives that complement the institutional knowledge of our other directors to reflect our business needs and help us stay ahead of evolving industry trends. We will continue to seek out directors who will add relevant skills and experience to drive value creation for all TEGNA shareholders.

Additionally, TEGNA maintains the highest commitment to corporate and social responsibility issues—driven by our strongly held purpose to serve the greater good and to make a difference in our work, our company and our communities. In addition to our local community engagement and corporate giving, we empower our local journalists to seek out the stories that matter the most to their audience and aggressively pursue investigations that expose wrongdoing, while continuing to maintain the highest ethical standards. We are proud that as a result, in 2019 we were honored with two Alfred I. duPont-Columbia University Awards, four Walter Cronkite Awards for Excellence in Television Political Journalism, 10 National Edward R. Murrow Awards for excellence in local journalism, and 91 Regional Edward R. Murrow Awards.

Our 2019 operating results reinforce our confidence in TEGNA’s direction. Looking ahead to 2020, we expect the positive momentum from our organic growth and recent acquisitions to further strengthen our business, bolstered by our successful renegotiation of subscription fees, the upcoming political spending cycle, and our position in key battleground markets. We are confident in our ability to capitalize on the value-creation opportunities ahead of us.

On behalf of our Board, management team and employees, we thank you for your continued trust and support.

 

LOGO   LOGO

Howard D. Elias

Chairman of the Board

 

Dave Lougee

President and Chief Executive Officer

 


Table of Contents
LOGO        

 

 

 

Notice of Annual Meeting of Shareholders

 

To Our Shareholders:

 

The 2020 Annual Meeting of Shareholders of TEGNA Inc. will be held for the following purposes:

 

 

 

    MEETING INFORMATION

 

    DATE: [                    ], 2020

 

    TIME: [                        ]

 

    LOCATION:

 

    [                             ]

 

       LOGO

 

to consider and act upon a proposal to elect twelve director nominees to the Company’s Board of Directors to hold office until the Company’s 2021 Annual Meeting of Shareholders;

 

 

       LOGO

  to consider and act upon a Company proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2020 fiscal year;

 

 

       LOGO

 

to consider and act upon a Company proposal to approve, on an advisory basis, the compensation of our named executive officers;

 

 

       LOGO

 

to consider and act upon a Company proposal to approve the TEGNA Inc. 2020 Omnibus Incentive Compensation Plan; and

 

 

       LOGO

  to transact such other business, if any, as may properly come before the Annual Meeting or any adjournment or postponement of the meeting.

Your Board of Directors unanimously recommends that you vote FOR all twelve nominees listed on the enclosed GOLD proxy card or voting instruction form and FOR all other Company proposals.

Please note that Standard General L.P. and certain of its affiliates (collectively, “Standard General”) have notified us that they intend to nominate five persons for election as directors to the Board at the Annual Meeting. You may receive solicitation materials from Standard General, including a proxy statement and White proxy card. We are not responsible for the accuracy of any information provided by or relating to Standard General or its nominees contained in solicitation materials filed or disseminated by or on behalf of Standard General or any other statements that Standard General may make. Standard General chooses which shareholders receive its proxy solicitation materials.

The Board does not endorse any Standard General nominee and unanimously recommends that you vote “FOR” the election of all twelve nominees proposed by the Board on the GOLD proxy card or voting instruction form. Our Board strongly urges you not to vote using any White proxy card sent to you by Standard General. Please note that voting to “withhold” with respect to any Standard General nominee on a White proxy card sent to you by Standard General is not the same as voting for your Board’s nominees, because a vote to “withhold” with respect to a Standard General nominee on its White proxy card will revoke any GOLD proxy you may have previously submitted. To support the Board’s nominees, you should vote FOR the Board’s nominees on the GOLD proxy card and disregard, and not return, any White proxy card sent to you by Standard General. If you have previously submitted a White proxy card sent to you by Standard General, you can revoke that proxy and vote for our Board’s nominees by using the enclosed GOLD proxy card or voting instruction card which will automatically revoke your prior proxy. Only the latest validly executed proxy that you submit will be counted.

We have enclosed the annual report, proxy statement (together with the notice of Annual Meeting), and GOLD proxy card or voting instruction form. For specific instructions on how to vote your shares, please refer to the instructions on the GOLD proxy card or voting instruction form to vote by Internet, telephone, or by mail.

The Board of Directors has set the close of business on [                    ], 2020 as the record date to determine the shareholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

An admission ticket is required for attendance at the Annual Meeting. Please see page [] of the Proxy Statement for instructions about obtaining tickets.

By Action of the Board of Directors,

 

 

LOGO

Akin S. Harrison

Senior Vice President, General Counsel and Secretary

Tysons, Virginia

[                    ], 2020


Table of Contents
LOGO    Notice of Annual Meeting of Shareholders

 

 

 

Your Vote Is Important. Please vote by proxy TODAY to ensure that your shares are represented at the Annual Meeting whether or not you currently plan to attend. If you later decide to attend the meeting, your vote in person will revoke any proxy previously submitted. Please review “Questions and Answers about the Proxy Materials and the Annual Meeting” on page [] of the proxy statement for information about attending and voting at the Annual Meeting.

If you hold your shares through a broker, bank, or other nominee and that nominee has also provided you with Standard General’s proxy materials, the nominee will only be able to vote your shares with respect to any proposals at the Annual Meeting if you have instructed them how to vote. Please instruct your broker, bank, or other nominee how to vote your shares using the enclosed GOLD voting instruction card form. Please promptly mark, sign, date and return the GOLD voting instruction form to your broker, bank, or other nominee. Many brokers, banks, or other nominees also permit voting via the Internet or by telephone – please follow the simple directions on the enclosed GOLD voting instruction form.

 

INTERNET

   TELEPHONE    MAIL    IN PERSON
LOGO    LOGO    LOGO    LOGO

 

Access the website indicated

on the enclosed

GOLD proxy card or voting

instruction form.

  

 

Call the number indicated on the enclosed GOLD proxy

card or voting instruction

form.

  

 

Sign, date and return the

enclosed GOLD proxy card or voting instruction form in the postage-paid envelope

provided.

  

 

Attend the meeting and vote by ballot in person.

 

 

If you have questions about how to vote your shares or need additional

copies of the proxy materials, please call the firm assisting us with the

solicitation of proxies:

 

INNISFREE M&A INCORPORATED

 

Shareholders may call:

1(877) 687-1865 (toll-free from the U.S. and Canada), or

+1(412) 232-3651 (from other countries)

 

Banks & Brokers may call:

(212) 750-5833 (collect)

 

This Notice of Annual Meeting and Proxy Statement is first being delivered to shareholders on or about [                    ], 2020.


Table of Contents
LOGO   

 

 

 

Table of Contents

 

    Summary Information     i    
       
     
PROPOSAL 1 – ELECTION OF
DIRECTORS
     
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
       1     Election of Directors           
    1     Your Board of Directors    
    1     Board Leadership Structure    
    v     Information About Directors    
    9     Committees of the Board of Directors    
    11     Committee Charters    
    11     Corporate Governance    
    12     Shareholder Engagement    
    12     The Board’s Role in Risk Oversight    
    13     The Board’s Role in Corporate Strategy    
    ESG, Sustainability and Corporate Social Responsibility Matters    
    Director Independence    
    18     Annual Board Performance Evaluation    
    18     Ethics Policy    
    Compensation Committee Interlocks and Insider Participation; Related Transactions    
      19     Report of the Audit Committee      
       
     

PROPOSAL 2 – RATIFICATION OF
APPOINTMENT OF THE INDEPENDENT
AUDITOR FOR 2020
     
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
      20     Ratification of Appointment of Independent Registered Public Accounting Firm      
       
      EXECUTIVE COMPENSATION      
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
    21     Compensation Discussion and Analysis    
    21     Executive Summary    
    25     Overview of Executive Compensation Program    
    25     How the Committee Determines NEO Compensation    
    43     Leadership Development and Compensation Committee Report    
    44     Summary Compensation Table    
    45     Grants of Plan-based Awards    
    46     Outstanding Equity Awards at Fiscal Year-end    
    47     Option Exercises and Stock Vested    
    47     Pension Benefits    
    48     Non-qualified Deferred Compensation    
      49     Other Potential Post-Employment Payments      
      

PROPOSAL 3 – ADVISORY VOTE TO
APPROVE NAMED EXECUTIVE
OFFICER COMPENSATION
     
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
       56     Approval, on an Advisory Basis, of the Compensation of Our Named Executive Officers      
       
     

PROPOSAL 4 – APPROVAL OF THE
TEGNA INC. 2020 OMNIBUS
INCENTIVE COMPENSATION PLAN
     
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
      57     Approval of TEGNA Inc. 2020 Omnibus Incentive Compensation Plan      
    DIRECTOR COMPENSATION     63    
   
OUTSTANDING DIRECTOR EQUITY
AWARDS AT FISCAL YEAR-END
    65    
   
EQUITY COMPENSATION PLAN
INFORMATION
    66    
   


SECURITIES BENEFICIALLY OWNED
BY DIRECTORS, EXECUTIVE
OFFICERS AND PRINCIPAL
SHAREHOLDERS
    67    
   

INVESTMENT IN TEGNA STOCK BY
DIRECTORS AND EXECUTIVE
OFFICERS
    69    
    COST OF SOLICITING PROXIES     70    
       
      OTHER      
   

Page

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

   
      71     Incorporation by Reference      
 


Table of Contents
LOGO   

 

 

 

PRELIMINARY PROXY STATEMENT

SUBJECT TO COMPLETION DATED [], 2020

TEGNA Inc.

2020 Proxy Statement Summary

This summary highlights information about TEGNA Inc. (“TEGNA” or the “Company”) and the upcoming 2020 annual meeting of shareholders (the “Annual Meeting”). As it is only a summary, please review the complete proxy statement and TEGNA’s annual report for the fiscal year ended December 31, 2019 (the “2019 Annual Report”) before you vote. The proxy statement and the 2019 Annual Report will first be mailed or released to shareholders on or about [], 2020.

 

 

ANNUAL MEETING OF SHAREHOLDERS

 

•  Time and Date:

 

•  Place:

 

•  Record Date:

 

•  Admission:

 

[            ] on [            ], 2020

 

[            ]

 

[            ], 2020

 

You are entitled to attend the Annual Meeting if you were a TEGNA shareholder as of the close of business on the record date. If you plan to attend the meeting, you must obtain an admission ticket and abide by the agenda and procedures for the Annual Meeting (which will be distributed at the meeting). If your shares are held by a broker, bank or other holder of record in “street name” (including shares held in certain TEGNA employee benefit plans), you must also provide proof of your ownership of the shares as of the record date in order to attend the meeting. See “Questions and Answers About the Proxy Materials and Annual Meeting – What must I do if I want to attend the Annual Meeting in person?” on page [] of this proxy statement for additional information and instructions.

 

 

Company Strategy

 

 

 

Five Pillars of Value Creation Driving Strong Growth

 

   

        

 

Best in class

operator

      

Aggressive pursuit

of accretive M&A

      

Growth through

innovation and

adjacent businesses

 

      

Leverage balance

sheet strength

      

Free cash flow generation &

balanced capital

allocation

   
 

 

TEGNA’s Board Has Taken Decisive Actions to Transform the Company

 

LOGO

 

 

   

 

2020 PROXY STATEMENT    |   i


Table of Contents
LOGO    2020 Proxy Statement Summary: Performance Highlights

 

 

 

Performance Highlights

TEGNA achieved strong financial results in 2019, returning substantial value to shareholders, and is well positioned for growth into the future.

 

 

Operational Excellence,

Strong Financial Performance

 

   

 

Well Positioned for

2020 and Beyond

 

           
       

 

 

$2.3B

 

Operating Revenues

 

   

 

 

$708M

 

Adjusted EBITDA in 2019

 

   

 

 

+mid-twenties %

 

Subscription revenue

growth projected in 2020

 

 

   

 

 

>$300M

 

in political revenue

projected in 2020

 

 

           
       

 

 

31%

 

Adjusted EBITDA Margin

 

 

   

 

 

56.4%

 

1 Year TSR

 

 

   

 

 

19-20%

 

FCF as a percent of revenue

expected over 2019/2020

and 2020/2021 periods

 

 

   

 

 

~4x

 

Projected leverage

by year-end 2020

 

 

Highlights of our 2019 performance included:

Revenues. Our total revenues were $2.3 billion, up 4% year-over-year.

Total Shareholder Return. We achieved a total shareholder return of 56.4% in 2019.

Acquisitions. In 2019, we completed $1.5 billion in transactions expected to provide annualized revenues of approximately $500 million, Adjusted EBITDA of approximately $200 million and approximately $100 million of additional free cash flow over 2020 and 2021:

 

   

January 2019: WTOL, the CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in Midland-Odessa, TX.

 

   

June 2019: Leading 24/7 multicast networks Justice Network and Quest.

 

   

August 2019: #1 rated stations WTHR (NBC) in Indianapolis, IN, and WBNS (CBS) in Columbus, OH.

 

   

September 2019: 11 local television stations, including eight Big Four affiliates, from Nexstar.

Adjusted EBITDA. Our Adjusted EBITDA totaled $708 million (representing net income from continuing operations before income taxes, interest expense, equity income, other non-operating items, special items, depreciation and amortization).

Strong subscription revenue growth. Our subscription revenue grew 20% for the year. In addition, we reached multi-year distribution agreements with major cable providers representing 50 percent of our paid subscribers.

Affiliation Agreement renewals. We executed multi-year affiliation agreement renewals with ABC, CBS and Fox.

Non-GAAP EPS. Our non-GAAP earnings per diluted share from continuing operations were $1.38.

Reconciliations of the following non-GAAP financial measures to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed March 2, 2020: adjusted EBITDA – page 27; non-GAAP earnings per share – page 25; and free cash flow – page 27.

 

ii   |    2020 PROXY STATEMENT


Table of Contents
LOGO    2020 Proxy Statement Summary: Voting Matters and Board Recommendations

 

 

 

Voting Matters and Board Recommendations

 

Voting Matter

 

 

Voting Standard

 

 

Board Vote
Recommendation

 

 

See
Page

 

Proposal 1   Election of Directors   Twelve nominees receiving greatest number of votes cast   FOR ALL NOMINEES
RECOMMENDED BY YOUR BOARD
  1
Proposal 2   Ratification of Appointment of Independent Registered Public Accounting Firm   Majority of the shares of common stock present in person or represented by proxy.   FOR   20
Proposal 3   Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers   Majority of the votes that could be cast by the shareholders present in person or represented by proxy.   FOR   56
Proposal 4   Approval of TEGNA Inc. 2020 Omnibus Incentive Compensation Plan  

Majority of the votes that could be cast by the shareholders present in person or represented by proxy.

 

  FOR   57

 

You may receive solicitation materials from Standard General, including a White proxy card. Our Board of Directors does not endorse any of the Standard General nominees and unanimously recommends that you not sign or return the White proxy card sent to you by Standard General. If you previously have signed a White proxy card sent to you by Standard General, you can revoke it by using the enclosed GOLD proxy card to vote by Internet or by telephone, or by signing, dating and returning the enclosed GOLD proxy card in the postage-paid envelope provided. Only your latest-dated proxy will count.

 

2020 PROXY STATEMENT    |   iii


Table of Contents
LOGO    2020 Proxy Statement Summary: Snapshot of 2020 Director Nominees

 

 

 

Snapshot of 2020 Director Nominees

Director Nominees

The Board of Directors has nominated the director candidates below. All director nominees have stated that they are willing to serve if elected. Personal information about each director nominee is available beginning on page [].

 

Name

 

 

Principal Occupation

 

 

Age

 

      

Director
Since

 

      

Independent

 

 

Committee Memberships

 

Gina L. Bianchini   Founder and CEO, Mighty Networks   47       2018         Nominating and Governance
Howard D. Elias   Chairman of TEGNA; President, Services and Digital, Dell Technologies   62       2008        

Executive (Chair);

Leadership Development and Compensation

Stuart J. Epstein   Chief Financial Officer, DAZN Group   57       2018         Audit
Lidia Fonseca   EVP and Chief Digital and Technology Officer, Pfizer Inc.   51       2014        

Audit;

Leadership Development and Compensation

Karen H. Grimes   Retired Partner, Senior Managing Director and Equity Portfolio Manager, Wellington Management Company   63     2020       N/A
       NEW

 

     
         
           
               
David T. Lougee   President and CEO, TEGNA Inc.   61       2017           Executive
Scott K. McCune  

Founder, MS&E Ventures;

Former Vice President of Global Media and Integrated Marketing, The Coca-Cola Company

  63       2008        

Audit;

Executive;

Leadership Development and Compensation (Chair)

Henry W. McGee   Senior Lecturer, Harvard Business School; Former President, HBO Home Entertainment   67       2015         Nominating and Governance; Public Policy and Regulation
Susan Ness   Principal, Susan Ness Strategies; Former FCC Commissioner   71       2011        

Executive;

Nominating and Governance; Public Policy and Regulation (Chair)

Bruce P. Nolop   Retired CFO, E*Trade Financial Corporation   69       2015        

Audit (Chair);

Executive

Neal Shapiro   President and CEO, public television company WNET   62       2007        

Executive;

Nominating and Governance (Chair);

Public Policy and Regulation

Melinda C. Witmer   Founder, LookLeft Media; Former Executive Vice President, Chief Video & Content Officer; Time Warner Cable   58       2017        

Leadership Development and Compensation;

Public Policy and Regulation

We believe that all of our 2020 director nominees exhibit the following characteristics:

 

High Degree of Integrity

 

Innovative Thinking

Proven Track Records of Success

 

Knowledge of Corporate Governance Requirements and Best Practices

 

 

iv   |    2020 PROXY STATEMENT


Table of Contents
LOGO    2020 Proxy Statement Summary: Information About Directors

 

 

 

Information About Directors

In addition, our Board members have a diverse set of qualifications, skills and experiences and also reflect diversity of age, tenure, gender and race/ethnicity. The Board regularly evaluates its composition to determine if there are areas for improvement. Our recent director refreshment activities led the Board to elect four highly qualified independent directors since December 2017, supplementing the existing skills and experience of our Board and resulting in 4 of our 11 independent directors having less than 3 years of tenure.

 

Age   Tenure
LOGO   LOGO

 

Gender Diversity   Racial & Ethnic Diversity
LOGO   LOGO

Director Skills Matrix

 

LOGO

Elias Lougee Bianchini Epstein Fonseca Grimes McGee Ness Nolop Shapiro Witmer TotalsSkills Matrix Financial 6 Leadership 12 ESG 7 Marketing 6 Media 10 M&A 6 Public Co. Board Experience 5 Public Co. C-Suite Experience 6 Digital/Technology 6 Operational 10

See the director nominee biographies beginning on page [] for further detail.

 

2020 PROXY STATEMENT    |   v


Table of Contents
LOGO    2020 Proxy Statement Summary: Corporate Governance Highlights

 

 

 

Corporate Governance Highlights

 

Board Practices

 

u 11 of 12 directors are independent

 

u Standing Board Committees are fully independent: Audit, Leadership Development and Compensation, Nominating and Governance, Public Policy and Regulation

 

u Separate CEO and Chairman roles with an independent Chairman of the Board

 

u All directors stand for election annually

 

u Single class share capital structure with all shareholders entitled to vote for director nominees

 

u Majority voting standard for uncontested director elections with a director resignation policy

 

u No shareholder rights plan (poison pill) in place

 

u Annual review by the Board of TEGNA’s major risks with certain oversight delegated to Board committees

    

Other Best Practices

 

u Long standing commitment to sustainability, with initiatives on sustainability, environmental matters and social responsibility

 

u Compensation recoupment (“clawback”) policy covering restatements and misconduct applicable to all current and former executive officers

 

u Hedging and pledging of TEGNA securities by TEGNA employees and directors is prohibited

 

u All new change-in-control arrangements are “double trigger”

 

u Annual board performance evaluation

 

u Clear CEO and executive officer succession plan

 

u Board gender diversity—5 female directors (42% of Board)

 

Board Refreshment

 

u The Board maintains an ongoing board refreshment process, which has resulted in our adding 6 independent directors during the past five years, the transition of the chairman role in 2018 and low tenures of our existing directors

 

u Robust director nominee selection process

      

Shareholder Engagement

 

u Long standing, significant shareholder engagement

 

u TEGNA maintains an active dialogue with its shareholders year-round

 

u During 2019 and early 2020, the Company actively engaged with shareholders representing, in the aggregate, more than 53% of our outstanding shares in order to understand their viewpoints concerning a variety of topics

 

u Annual “say on pay” vote—average vote support of 94.9% over last 4 years

 

u Adoption of proxy access

 

Director Engagement

 

u 6 full Board meetings in 2019; overall attendance at all of the meetings of the Board and Board committees was 94%

 

u Frequent meetings of non-management directors in executive session without any TEGNA officer present (6 in 2019)

 

u Directors prohibited from serving on more than 3 other public company boards

 

Director Access

 

u Directors have full and free access to senior management team

 

u Directors have ability to hire outside experts and consultants and to conduct independent investigations

 

vi   |    2020 PROXY STATEMENT


Table of Contents
LOGO    2020 Proxy Statement Summary: Questions and Answers about the Proxy Materials and Annual Meeting

 

 

 

Questions and Answers about the

Proxy Materials and Annual Meeting

Why am I receiving these proxy materials?

These proxy materials are being furnished to you in connection with the solicitation of proxies by our Board of Directors for the 2020 Annual Meeting of Shareholders to be held on [                    ], 2020 at [                ] a.m. ET at [                    ]. This Proxy Statement furnishes you with the information you need to vote, whether or not you attend the Annual Meeting.

What items will be voted on at the annual meeting?

Shareholders will vote on the following items if each is properly presented at the Annual Meeting.

 

    

TEGNA Board’s
Recommendation

 

 

More Information
(Page No.)

 

Proposal 1   Election of Directors   FOR ALL NOMINEES RECOMMENDED BY YOUR BOARD   1
Proposal 2   Ratification of Appointment of Independent Registered Public Accounting Firm   FOR   20
Proposal 3   Approval, on an Advisory Basis, of the Compensation of the Named Executive Officers   FOR   56
Proposal 4   Approval of the TEGNA Inc. 2020 Omnibus Incentive Compensation Plan   FOR   57

What are the Board’s voting recommendations on each item?

Your Board of Directors recommends that you vote FOR ALL the nominees listed in Proposal 1 and FOR Proposals 2 through 4 using the enclosed GOLD proxy card or voting instruction form. The Board of Directors urges you not to sign, return or vote any WHITE proxy card that may be sent to you by Standard General, even as a protest vote, as only your latest-dated proxy card will be counted. If you have previously voted using a proxy card sent to you by Standard General, you can revoke it at any time prior to the annual meeting by voting using the enclosed GOLD proxy card.

Have other candidates been nominated for election as directors at the Annual Meeting in opposition to the Board’s nominees?

Yes. Standard General, a Company shareholder, has notified us that it intends to nominate five persons for election as directors to the Board at the Annual Meeting. You may receive solicitation materials from Standard General, including a proxy statement and a WHITE proxy card.

The Board does not endorse any Standard General nominee and unanimously recommends that you vote “FOR” the election of all twelve nominees proposed by the Board on the GOLD proxy card or voting instruction form. The Board strongly urges you not to sign or return any WHITE proxy card sent to you by Standard General. If you have previously submitted a WHITE proxy card sent to you by Standard General, you can vote for our Board’s nominees by using the enclosed GOLD proxy card or voting instruction form which will automatically revoke your prior proxy. Any later-dated WHITE proxy card that you may send to Standard General will revoke your proxy, including GOLD proxies that you have voted FOR our Board’s nominees, and we strongly urge you not to vote using any WHITE proxy cards sent to you by Standard General. Only the latest-dated, validly executed proxy that you submit will be counted.

 

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What must I do if I want to attend the Annual Meeting in person?

Admission to the Annual Meeting is by ticket only. We will provide each shareholder with one admission ticket upon request. Either you or your proxy may use your ticket. If you are a shareholder of record and plan to attend the Annual Meeting, please call the Company’s shareholder services department at (703) 873-6677 to request a ticket. If you hold shares through an intermediary, such as a bank or broker, and you plan to attend the Annual Meeting, please send a written request for a ticket, along with proof of share ownership, such as a bank or brokerage firm account statement or a letter from the intermediary holding your shares, confirming ownership to: Secretary, TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102. Requests for admission tickets will be processed in the order in which they are received and must be received no later than [                    ], 2020. To obtain directions to attend the Annual Meeting, please call the Company’s shareholder services department at (703) 873-6677.

Who may vote at the Annual Meeting?

If you owned Company stock at the close of business on [                    ], 2020, which is the record date for the Annual Meeting (the “Record Date”), then you may attend and vote at the meeting. Please bring proof of your common stock ownership, such as a current brokerage statement, and photo identification.

If you hold shares through a bank, broker, or other intermediary, you must obtain a valid legal proxy, executed in your favor, from the holder of record if you wish to vote those shares at the meeting. As a beneficial shareholder, you must provide voting instructions to your broker, bank, or other nominee by the deadline provided in the proxy materials you receive from your broker, bank, or other nominee in order for your shares to be voted. A broker non-vote occurs when shares held by a broker are not voted with respect to a particular proposal because the broker does not have discretionary authority to vote on the matter and has not received voting instructions from its clients. In uncontested situations, under NYSE rules, brokers are permitted to exercise discretionary voting authority on “routine” matters, but beneficial shareholders must provide voting instructions with respect to non-routine matters. However, the rules of the NYSE governing brokers’ discretionary authority do not permit brokers to exercise discretionary authority regarding any of the proposals to be voted on at the Annual Meeting, whether “routine” or not, in contested elections where brokers provide competing proxy materials. Therefore, and subject to brokers providing such competing materials to beneficial owners, we currently expect that your broker may not vote on any item considered at the Annual Meeting without your instruction.

[Participants in the TEGNA 401(k) Saving Plan may not vote their plan shares in person at the Annual Meeting.]

At the close of business on the Record Date, we had approximately [            ] shares of common stock outstanding and entitled to vote. Each share is entitled to one vote on each proposal.

What constitutes a quorum for the Annual Meeting?

The presence, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the Record Date will constitute a quorum to conduct business. Shares held by an intermediary, such as a banker or a broker, that are voted by the intermediary on any or all matters will be treated as shares present for purposes of determining the presence of a quorum. Abstentions and any broker non-votes (defined below) will be counted for the purpose of determining the existence of a quorum.

What is the difference between holding shares as a shareholder of record and as a beneficial owner of shares held in street name?

Shareholder of Record. If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the shareholder of record with respect to those shares, and the proxy materials are being sent directly to you by the Company.

Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the proxy materials

 

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are being forwarded to you by your bank, broker or other intermediary. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.

If I am a shareholder of record of Company shares, how do I vote?

If you are a shareholder of record, you may vote by proxy via the Internet or by telephone by following the instructions provided in the enclosed GOLD proxy card. You may also vote by signing, dating and returning the enclosed GOLD proxy card in the postage-paid envelope provided.

You may vote in person by ballot at the Annual Meeting. We will give you a ballot when you arrive at the meeting.

Even if you currently plan to attend the Annual Meeting, we encourage you to vote by proxy TODAY to ensure that your shares are represented at the Annual Meeting. Your vote in person at the Annual Meeting will revoke any proxies previously submitted.

If I am a beneficial owner of shares held in street name, how do I vote?

As described above, as a beneficial shareholder, you may vote by proxy by following the instructions provided to you by your bank, broker or other intermediary on the GOLD voting instruction form. You must provide your voting instructions to your broker, bank, or other nominee by the deadline provided in the proxy materials you receive from your broker, bank, or other nominee in order for your shares to be voted.

If you are a beneficial owner of shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain a valid legal proxy from the organization that holds your shares.

Can I change or revoke my vote?

Yes. If you deliver a proxy by mail, by telephone or via the Internet, you have the right to revoke your proxy in writing (by mailing another proxy bearing a later date), by phone (by another call at a later time), via the Internet (by voting online at a later time), by attending the Annual Meeting and voting in person, or by notifying the Company before the Annual Meeting that you want to revoke your proxy. Submitting your vote by mail, telephone or via the Internet will not affect your right to vote in person if you decide to attend the Annual Meeting.

In addition, if you have already voted using the White proxy card, you can revoke that proxy and vote for our Board’s nominees by using the enclosed GOLD proxy card or voting instruction form. Any later-dated White proxy card that you send to Standard General will revoke any previously submitted proxies, including GOLD proxies that you have voted FOR our Board’s nominees, and we strongly urge you not to sign or return any White proxy cards sent to you by Standard General. Only the latest-dated, validly executed proxy that you submit will be counted.

What are the votes required to adopt the proposals?

Each share of our common stock outstanding on the Record Date is entitled to one vote on each of the director nominees and one vote on each other matter. The director nominees will be elected by the vote of a plurality of the votes cast at the Annual Meeting. The “plurality of votes cast” means that the twelve director nominees receiving the greatest number of “FOR” votes cast will be elected. Ratification of the selection of our independent registered public accounting firm, the non-binding advisory vote to adopt the resolution to approve the Company’s executive compensation program described in this Proxy Statement and the approval of the Company’s 2020 Omnibus Incentive Compensation Plan each require the affirmative vote of the majority of the shares of common stock present or represented by proxy and entitled to vote at the meeting. Abstentions, if any, will have no effect on the election of any director, but will have the same effect as votes “against” each of the other three proposals.

 

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How do I vote my shares in the Company’s Dividend Reinvestment and 401(k) Plans?

If you participate in the Company’s Dividend Reinvestment Plan, your shares of stock in that plan can be voted in the same manner as shares held of record. If you do not give instructions, your shares held in the Dividend Reinvestment Plan will not be voted. If you participate in the TEGNA 401(k) Savings Plan (the “401(k) Plan”), only the trustee for the 401(k) Plan may vote the shares on your behalf. Please direct the trustee(s) how to vote your shares by using the enclosed GOLD voting instruction form. All shares in the 401(k) Plan for which no instructions are received will be voted in the same proportion as instructions provided to the trustee by other 401(k) Plan participants.

How do I submit a shareholder proposal or nominate a director for election at the 2021 Annual Meeting?

To be eligible for inclusion in the proxy materials for the Company’s 2021 Annual Meeting, a shareholder proposal must be submitted in writing to TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary and must be received by [                    ], 2020. A shareholder who wishes to present a proposal or nomination at the Company’s 2021 Annual Meeting, but who does not request that the Company solicit proxies for the proposal or nomination, must submit the proposal or nomination to the Company at the same address no earlier than [                    ], 2020 and no later than [                    ], 2021. The Company’s By-laws require that any proposal or nomination must contain specific information in order to be validly submitted for consideration.

Can shareholders and other interested parties communicate directly with our Board?

Yes. The Company invites shareholders and other interested parties to communicate directly and confidentially with the full Board of Directors, the Chairman of the Board or the non-management directors as a group by writing to the Board of Directors, the Chairman or the Non-Management Directors, TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary. The Secretary will forward such communications to the intended recipient and will retain copies for the Company’s records.

How can I obtain a shareholder list?

A list of shareholders entitled to vote at the 2020 Annual Meeting will be open to examination by any shareholder, for any purpose germane to the 2020 Annual Meeting, during normal business hours, for a period of ten days before the 2020 Annual Meeting and during the 2020 Annual Meeting at the Company’s offices at 8350 Broad Street, Suite 2000, Tysons, Virginia 22102.

How may I obtain a copy of the Company’s 2019 Annual Report?

A copy of our 2019 Annual Report, which includes the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, accompanies this proxy statement. If you need additional copies, please contact the firm assisting us with the solicitation of proxies, Innisfree M&A Incorporated TOLL-FREE at 1(877) 687-1865 (from the U.S. and Canada), or +1(412) 232-3651 (from other countries).

You may also obtain a copy without charge by writing to: TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary. Our 2019 Annual Report and 2019 Form 10-K are also available through the Company’s website at www.tegna.com. The Company’s Annual Report and Form 10-K are not proxy soliciting materials.

 

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How can I obtain an additional GOLD proxy card or voting instruction form?

If you lose, misplace, or otherwise need to obtain a GOLD proxy card or voting instruction form:

 

 

If you are a shareholder of record, please contact Innisfree M&A Incorporated, the Company’s proxy solicitor, toll free at (877) 687-1865 (from the U.S. and Canada) or +1(412-232-3651 (from other countries); or

 

 

If you are the beneficial owner of shares held indirectly through a broker, bank, or other nominee, contact your account representative at that organization.

What happens if the meeting is postponed or adjourned?

If the meeting is postponed or adjourned, your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted. See “Can I change or revoke my vote?” above.

Who pays for the cost of proxy preparation and solicitation?

Our Board is responsible for the solicitation of proxies for the Annual Meeting. All costs of the solicitation of proxies will be borne by us. We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or nominees for forwarding proxy materials to street name holders.

In addition, our directors, officers, and employees may solicit proxies by telephone or other means of communication personally. Our directors, officers and employees will receive no additional compensation for these services other than their regular compensation. Appendix A sets forth information relating to certain of our directors, officers and employees who are considered “participants” in this proxy solicitation under the rules of the SEC by reason of their positions or because they may be soliciting proxies on our behalf.

 

If you have questions about how to vote your shares or need

additional copies of the proxy materials, please call the firm assisting

us with the solicitation of proxies:

INNISFREE M&A INCORPORATED

Shareholders may call:

1(877) 687-1865 (toll-free from the U.S. and Canada), or

+1(412) 232-3651 (from other countries)

Banks & Brokers may call:

(212) 750-5833 (collect)

 

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Background of the Solicitation

The Board of Directors has driven a significant transformation of the Company and its portfolio of businesses since 2015. This transformation included spinning off its newspaper publishing business in 2015, and spinning off its Cars.com business (the “Cars.com Spin-off”) and selling its controlling interest in CareerBuilder in 2017. The Board of Directors took these actions to complete the Company’s evolution into a pure-play broadcasting company. Subsequent to these transactions, the Board of Directors and management have proactively implemented a robust acquisition strategy. Through this portfolio realignment that began in 2015 and the Company’s subsequent acquisitions, the Board of Directors and management have turned the Company into one of the largest broadcasting groups in the U.S. and a leading local news and media content provider in the markets it serves. Throughout this period, the Board of Directors has acted on its commitment to maintain a board with deep expertise that is aligned with its business portfolio and strategy. Accordingly, the Board of Directors has added four new directors since December 2017 and six new independent directors over the past five years, with skills that enhance the Board of Directors’ expertise with regard to the evolving media and digital landscape, as well as financial and M&A expertise. In December 2019 as part of its ongoing board refreshment efforts, the Board of Directors re-engaged Spencer Stuart, a director and executive search and leadership consulting firm to aid the Board of Directors in its search for new directors.

On August 14, 2019, Standard General L.P. filed a beneficial ownership report on Schedule 13G (available only to beneficial holders with passive investment intent) with the SEC, reporting beneficial ownership on behalf of itself and certain of its affiliates (collectively, “Standard General”), including Soohyung Kim, its managing partner, of 9.2% of the Company’s outstanding common stock. The Company has not received any notice of a filing by Standard General under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), and does not know what, if any, exemption Standard General claims from the HSR Act’s requirements. There had been no interactions between Standard General and the Company prior to this filing. As part of its shareholder engagement efforts, the Company hosts regular investor meetings to provide direct channels of communication between investors and members of the Board of Directors and management. Some of these meetings were attended by representatives of Standard General in August and September 2019.

On September 30, 2019, Standard General filed a beneficial ownership report on Schedule 13D with the SEC, reporting beneficial ownership of 9.8% of the Company’s outstanding common stock and disclosing that it now intended to “become actively engaged” with the Company.

Between October and November 2019, members of management and the Board of Directors engaged in two discussions with Mr. Kim—the first on October 10, 2019 with Dave Lougee, the President and Chief Executive Officer of the Company and Victoria Harker, the Executive Vice President and Chief Financial Officer of the Company; the second on November 4, 2019 with Howard Elias, the Company’s Independent Chairman, and Akin Harrison, the Senior Vice President, General Counsel and Secretary of the Company. These two discussions covered matters relating to corporate strategy and effectiveness, governance and shareholder engagement. During these meetings Mr. Kim indicated that Standard General was interested in placing himself and possibly one other person on the Company’s Board of Directors. When Mr. Kim was asked if he had someone in mind for the second seat, he answered no; he noted that if he was “welcomed” onto the Board, it would be possible that he would not ask for a second seat (or that he would suggest an “independent” and not a “partisan” candidate), but that “for the record” he was asking for two seats. Mr. Kim noted that the Company was well-run and he had no criticisms on its operations or assets, but he did express a desire for the Company to engage in “transformative” M&A transactions instead of the “incremental” ones it was pursuing. However, when Mr. Kim was asked whether he had any particular strategic partner or transaction in mind, he replied that he did not, and instead only offered statements that if he were on the Board of Directors, he would have a unique ability to source and execute such transactions.

On December 19, 2019, members of the Board of Directors and the Nominating and Governance Committee (the “Committee”) interviewed Mr. Kim to determine his suitability as a director candidate. In addition, the Committee conducted a detailed assessment of his professional experience and current and historical investments, including confidential interviews with references he provided and other individuals with whom Mr. Kim had served on other boards. After deliberation and upon the recommendation of the Committee, the Board of Directors determined that it would not be advisable for Mr. Kim to be appointed to the Board of Directors at this time, in part because of the Board of Directors’ views, in accordance with the Company’s Ethics Policy, that Mr. Kim had conflicts of interest through his and Standard General’s involvement in Standard

 

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Media Group LLC (“Standard Media”) and Mediaco Holding Inc. (“Mediaco”), two companies in the broadcasting industry. The Board of Directors believed that it was highly inappropriate for Mr. Kim to have access to the Company’s proprietary information, including its M&A pipeline, product development plans, R&D efforts, and partnership and affiliation strategies.

On January 3, 2020, a representative of Fried, Frank, Harris, Shriver & Jacobson LLP, Standard General’s outside counsel (“Fried Frank”), contacted a representative of Wachtell, Lipton, Rosen & Katz, the Company’s outside counsel (“Wachtell Lipton”), and asked for the anticipated timing of the Company’s response to Mr. Kim’s request to be elected to the Board of Directors. The representative of Wachtell Lipton notified the representative of Fried Frank that Mr. Kim would receive the Company’s response the following week. The representative of Fried Frank also asked for various shareholder nominee materials, including a directors’ and officers’ questionnaire and representation agreement.

On January 8, 2020, the Company sent Standard General its form of directors’ and officers’ questionnaire and representation agreement.

On January 10, 2020, Mr. Elias notified Mr. Kim of the Board of Directors’ decision. Mr. Elias conveyed to Mr. Kim that after conducting significant due diligence, including confidential interviews with Mr. Kim’s prior board colleagues, and examining Mr. Kim’s involvement in the broadcasting industry, the Committee recommended, and the Board of Directors concluded, that appointing Mr. Kim as a director would not be in the best interests of the Company’s shareholders. Mr. Elias offered other potential paths forward, including offering Mr. Kim opportunities to periodically discuss his ideas with the Board of Directors, and to have constructive dialogue as to the Company’s board refreshment efforts and initiatives.

On the same day, a representative of Wachtell Lipton contacted a representative of Fried Frank and reiterated the Board of Directors’ serious concerns regarding Mr. Kim’s candidacy, including the Board’s views on Mr. Kim’s conflicts of interest and business and board record. The representative of Wachtell Lipton reiterated, and expanded upon, Mr. Elias’s offer to Mr. Kim to explore a consensual resolution by discussing board refreshment efforts (that did not involve adding Mr. Kim) that could be mutually agreeable. The representative of Fried Frank noted that they would discuss the idea with Mr. Kim. Neither the Company nor Wachtell Lipton received a response.

On January 15, 2020, Standard General submitted a notice of nomination of four nominees—Mr. Kim, Deborah McDermott, Colleen B. Brown and Ellen McClain Haime—for election to the Board of Directors at the 2020 Annual Meeting, and issued an open letter to the Company’s shareholders setting forth its views regarding the Company. Other than Mr. Kim, Standard General’s three additional nominees had never been identified to the Company (and as noted above, in conversations with the Company, Mr. Kim had only mentioned the possibility of one additional candidate).

On January 15, 2020, the Company issued a statement in response to Standard General’s letter, noting that after conducting significant due diligence, including confidential interviews with Mr. Kim’s prior board colleagues, and examining Mr. Kim’s business involvement, including in the broadcasting industry, the Committee recommended, and the Board of Directors concluded, that appointing Mr. Kim as a director would not be in the best interests of the Company’s shareholders. The letter also noted that none of the other three director nominees had been identified by Standard General to the Company prior to the January 15 notice of nomination, and that the Committee would evaluate the other three director nominees. In addition, the Company refuted the claims that Mr. Kim had been “stonewalled” by the Company, noting that members of management, the Board of Directors and the Committee had met with Mr. Kim on several occasions, interviewed Mr. Kim and others who served with him on other boards, and conducted a detailed assessment of Mr. Kim’s track record and current investments in the broadcasting industry.

On January 16, 2020, Standard General issued an open letter to the Company’s shareholders responding to the Company’s January 15, 2020 statement.

On January 21, 2020, the Company issued an open letter to its shareholders reiterating the points that it made in its January 15, 2020 statement. In addition, the open letter detailed Mr. Kim’s investments in and significant influence over Standard Media and Mediaco, two companies in the broadcasting industry, as well as his record of poor shareholder returns and negative outcomes at companies where he and other representatives of Standard General held board seats, including American Apparel, Media General, RadioShack and Twin River Worldwide Holdings.

 

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Following the Company’s receipt of Standard General’s nomination, on January 31 and February 5, 2020, respectively, Ms. Brown and Ms. Haime were also interviewed and evaluated by the Committee, with the Committee and the Board each concluding that it would not be in the best interest of the Company’s shareholders to add them as directors of the Company. The Committee and the Board also both concluded that adding Ms. McDermott to the Board of Directors would not be appropriate at this time, among other reasons due to the Company’s belief that she had significant conflicts of interest due to her position as Chief Executive Officer and co-founder of Standard Media and her ownership interest in, Standard Media. The Board of Directors concluded, upon the recommendation of the Committee, that the appointment of Ms. Brown, Ms. Haime and Ms. McDermott would not be in the best interests of the Company’s shareholders.

On February 11, 2020, the Company received a demand to inspect its shareholder list materials pursuant to Section 220 of the Delaware General Corporation Law, as amended, from Standard General (the “220 Demand”). On February 18, 2020, the Company provided Standard General with its response to the 220 Demand.

On February 13, 2020, a representative of Wachtell Lipton contacted a representative of Fried Frank and asked whether it would be possible for the Company and Standard General to have a constructive dialogue with respect to Board refreshment that did not involve adding Mr. Kim himself. The representative of Fried Frank responded immediately that Standard General would not be open to considering this.

After working with Spencer Stuart to identify a variety of candidates for Board refreshment, and interviewing six candidates as part of this process, the Committee determined that Karen Grimes, former partner, senior managing director and equity portfolio manager of Wellington Management Company LLP, had superior qualifications, attributes, knowledge and relevant industry experience to serve as a director of the Company, with skillsets that matched the current needs and strategic focus of the Company. On February 18, 2020, the Committee recommended that the Board of Directors appoint Ms. Grimes as a new independent director. The Board of Directors concluded, upon the recommendation of the Committee and after thorough review and deliberation, to (i) appoint Ms. Grimes to the Board of Directors, (ii) recommend against Standard General’s director nominees and (iii) recommend the nominees listed in Proposal 1—Election of Directors—The TEGNA Nominees below in light of their backgrounds, career experiences and qualifications, as well as their respective contributions to the mix of skills and experiences on the Board of Directors. Subsequent to this recommendation, on February 19, 2020, the Board of Directors elected Ms. Grimes, effective February 19, 2020, and announced that upon the recommendation of the Committee, the Board of Directors had determined that it would not be in the best interests of the Company’s shareholders to add any of the four Standard General nominees to the Board of Directors.

On February 20, 2020, Standard General issued an open letter to the Company’s shareholders responding to the Company’s decision not to add any of its nominees to the Board of Directors. The letter acknowledged that the Company had made a settlement offer to Standard General, which it rejected summarily.

On February 28, 2020, Standard General submitted a notice of nomination of Lawrence Wert for election to the Board of Directors at the 2020 Annual Meeting, and issued a press release with respect to the nomination. The Committee and the Board of Directors will review and consider Mr. Wert’s nomination consistent with its policies and procedures for considering stockholder director nominations.

On March 3, 2020, the Company sent a letter to Standard General requesting additional information regarding (i) Standard General’s option to acquire certain unspecified assets and equity interests of Standard Media, (ii) the nature of Mr. Kim’s and/or Standard General’s participation in or control over Standard Media’s business and (iii) Standard General’s rationale for failing to file a premerger notification with respect to its ownership of the Company’s common stock under the HSR Act. As of the date of this proxy statement, the Company has not received a response from Standard General.

 

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Proposal 1—Election of Directors

(Proposal 1 on the proxy card)

Your Board of Directors

The Board of Directors is currently composed of twelve directors. The Board of Directors held six meetings during 2019. Each director attended at least 94% of the meetings of the Board and its committees on which he or she served that were held during the period for which he or she served as a director or committee member, as applicable, during 2019. All directors then serving on the Board attended the 2019 Annual Meeting in accordance with the Company’s policy that all directors attend the Annual Meeting, except for Lidia Fonseca who was unable to attend the Annual Meeting due to a conflict with the annual meeting of Pfizer Inc., where she is a senior executive.

Nominees elected to our Board at the 2020 Annual Meeting will serve one-year terms expiring at the Company’s 2021 Annual Meeting of Shareholders. The Board, upon the recommendation of its Nominating and Governance Committee, has nominated the following individuals: Gina L. Bianchini, Howard D. Elias, Stuart J. Epstein, Lidia Fonseca, Karen H. Grimes, David T. Lougee, Scott K. McCune, Henry W. McGee, Susan Ness, Bruce P. Nolop, Neal Shapiro and Melinda C. Witmer. The Board believes that each of the nominees will be available and able to serve as a director. If any nominee becomes unable or unwilling to serve, the Board may do one of three things: recommend a substitute nominee, reduce the number of directors to eliminate the vacancy, or fill the vacancy later. The shares represented by all valid proxies may be voted for the election of a substitute if one is nominated.

Under the Company’s By-laws, the 2020 director nominees will be elected by the vote of a plurality of the votes cast at the Annual Meeting. The “plurality of votes cast” means that the twelve director nominees receiving the greatest number of “FOR” votes cast will be elected.

 

The Company’s Board of Directors unanimously recommends that you use the GOLD proxy card to

vote “FOR” the election of each of the Board’s nominees to serve as directors of the Company until the

Company’s 2021 Annual Meeting and until their successors are elected and qualified. The Board does

not endorse any Standard General nominee.

 

The Board strongly urges you not to sign or return any White proxy card sent to you by Standard General. If you have previously submitted a White proxy card sent to you by Standard General, you can vote for the Board’s nominees and on the other matters to be voted on at the Annual Meeting by using the enclosed GOLD proxy card or voting instruction form, which will automatically revoke your prior proxy.

In addition to the information set forth below, Appendix A sets forth information relating to the Company’s directors, the Board’s nominees for election as directors and certain of the Company’s officers who are considered “participants” in our solicitation under the rules of the SEC by reason of their positions as directors, nominees or because they will be soliciting proxies on our behalf.

Board Leadership Structure

Our Board regularly reviews the Company’s Board leadership structure, how the structure is functioning and whether the structure continues to be in the best interest of our shareholders. Our Board has determined that having an independent director serve as the Chairman of the Board is currently the best leadership structure for the Company. Separating the positions of Chairman and CEO allows the CEO to focus on executing the Company’s strategic plan and managing the Company’s operations and performance and permits improved communications between the Board, the CEO and other senior leaders of the Company.

The duties of the Chairman of the Board include:

 

 

presiding over all meetings of the Board and all executive sessions of non-management directors;

 

 

serving as liaison on Board-wide issues between the CEO and the non-management directors, although Company policy also provides that all directors shall have direct and complete access to the CEO at any time as they deem necessary or appropriate, and vice versa;

 

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in consultation with the CEO, reviewing and approving Board meeting schedules, agendas and materials;

 

 

calling meetings of the non-management directors, if desired; and

 

 

being available when appropriate for consultation and direct communication if requested by shareholders.

The TEGNA Nominees

The following director nominees are currently serving on the Board and have been nominated by the Board on the unanimous recommendation of the Nominating and Governance Committee to stand for re-election at the Company’s 2020 Annual Meeting for a one-year term. The principal occupation and business experience of each TEGNA nominee, including the reasons the Board believes each of them should be re-elected to serve another term on the Board, are described below.

 

 

 

The Board of Directors recommends that shareholders “FOR” each of the TEGNA nominees by following the voting instructions contained on the enclosed GOLD proxy card.

 

 

     LOGO

 

 

Gina L. Bianchini

Founder and CEO, Mighty Networks

Age: 47

Director since: 2018

  

 

TEGNA Committees:

•  Nominating and Governance

 

Former Directorships Held During the Past Five Years:

•  Scripps Networks Interactive, Inc. (through 2018)

 

Professional Experience:

Ms. Bianchini is Founder and Chief Executive Officer of Mighty Networks, a position she has held since September 2010. Ms. Bianchini served as Chief Executive Officer of Ning, Inc. from 2004 to March 2010 and Co-founder and President of Harmonic Networks from March 2000 to July 2003.

Qualifications and Strategy-Related Experience:

  Expertise, vision and creativity in the rapidly evolving world of digital media
  Deep knowledge of social media and community building technology platforms
  Experience with oversight of acquisitions, equity investments, and investor relations
  Significant digital and start-up experience
 

 

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Howard D. Elias

Chairman of TEGNA; President, Services and Digital, Dell Technologies

Age: 62

Director since: 2008

  

 

TEGNA Committees:

•  Executive (Chair)

•  Leadership Development and Compensation

 

Professional Experience:

Mr. Elias was named the Chairman of TEGNA in April 2018 and is President, Services and Digital, of Dell Technologies, a position he has held since September 2016. Prior to that, he served as President and Chief Operating Officer, EMC Global Enterprise Services from January 2013 to September 2016 and was President and Chief Operating Officer, EMC Information Infrastructure and Cloud Services from September 2009 to January 2013. From October 2015 through September 2016, Mr. Elias was also responsible for leading the development of EMC Corporation’s integration plans in connection with its transaction with Dell Inc. Previously, Mr. Elias served as President, EMC Global Services and Resource Management Software Group; Executive Vice President, EMC Corporation from September 2007 to September 2009; and Executive Vice President, Global Marketing and Corporate Development, at EMC Corporation from October 2003 to September 2007.

Qualifications and Strategy-Related Experience:

  Extensive operational, managerial, and leadership experience in cloud computing, supply chain management, marketing, corporate development and global customer support
  Experience overseeing M&A, new business development and incubation, and integration of acquisitions
  Comprehensive global business and management experience in information technology
 

 

 

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Stuart J. Epstein

Chief Financial Officer, DAZN Group

Age: 57

Director since: 2018

  

 

TEGNA Committees:

•  Audit

 

Professional Experience:

Mr. Epstein is Chief Financial Officer of DAZN Group, a position he has held since September 2018. Previously, he was Senior Advisor, Evolution Media, from October 2017 to January 2018. He served as Co-Managing Partner of Evolution Media from September 2015 to September 2017 and Executive Vice President and Chief Financial Officer of NBCUniversal from September 2011 to April 2014. Prior to that, Mr. Epstein held various senior positions during his 23 years at Morgan Stanley, including Managing Director and Global Head of the Media & Communications Group within the investment banking division.

Qualifications and Strategy-Related Experience:

  Extensive knowledge of media, technology and capital markets
  Deep transactional experience with complex deals involving a range of constituencies
  Experience in overseeing local broadcast television stations
  Significant expertise in overseeing strategic business initiatives
 

 

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     LOGO

 

 

Lidia Fonseca

EVP and Chief Digital and Technology Officer, Pfizer Inc.

Age: 51

Director since: 2014

  

 

TEGNA Committees:

•  Audit

•  Leadership Development and Compensation

 

Professional Experience:

Ms. Fonseca is Executive Vice President and Chief Digital and Technology Officer of Pfizer Inc., a position she has held since January 2019. Prior to that she served as Chief Information Officer and Senior Vice President of Quest Diagnostics from April 2014 to December 2018. Previously, Ms. Fonseca served as Chief Information Officer and Senior Vice President of Laboratory Corporation of America (LabCorp) from 2008 to 2013. She was named a Healthcare Transformer by Medical, Marketing & Media in 2019 and in 2017 she received the Forbes CIO Innovation Award recognizing CIOs who lead revenue enhancing innovation efforts.

Qualifications and Strategy-Related Experience:

  Significant expertise in overseeing strategic transformations
  Experience leading information technology operations
  Deep knowledge of data analytics, automation, supply chain management and information technology
  Experience developing and implementing digital strategies across organizations
 

 

 

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Karen H. Grimes

Retired Partner, Senior Managing Director and Equity Portfolio Manager, Wellington Management Company

Age: 63

Director since: Feb 2020

  

 

Other Directorships:

•  Toll Brothers, Inc.

 

Professional Experience:

Ms. Grimes held the position of Senior Managing Director, Partner, and Equity Portfolio Manager at Wellington Management Company LLP, an investment management firm, from January 2008 through December 2018. Prior to joining Wellington Management Company in 1995, she held the position of Director of Research and Equity Analyst at Wilmington Trust Company, a financial investment and banking services firm, from 1988 to 1995. Before that, Ms. Grimes was a Portfolio Manager and Equity Analyst at First Atlanta Corporation from 1983 to 1986 and at Butcher and Singer from 1986 to 1988. Ms. Grimes is a member of the Financial Analysts Society of Philadelphia and holds the Chartered Financial Analyst designation.

Qualifications and Strategy-Related Experience:

  Financial acumen, investment expertise and a returns-focused mindset, including in media and advertising
  Extensive executive-level experience and leadership abilities
  Deep understanding of financial accounting and internal financial controls
  Significant risk management experience
  Provides a valuable investor-oriented perspective
 

 

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LOGO    Proposal 1—Election of Directors: Information About Directors

 

 

 

 

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David T. Lougee

President and CEO,TEGNA Inc.

Age: 61

Director since: 2017

  

 

TEGNA Committees:

•  Executive

 

Other Directorships:

•  Broadcast Music, Inc.

•  Broadcasters Foundation of America

 

Professional Experience:

Mr. Lougee became President and Chief Executive Officer and a director of TEGNA in June 2017. He previously served as the President of TEGNA Media from July 2007 to May 2017. Prior to joining TEGNA, he served as Executive Vice President, Media Operations for Belo Corp. from 2005 to 2007. Mr. Lougee serves as chairman of the NBC Affiliates Board. He also is the former joint board chairman of the National Association of Broadcasters (NAB) and past chair of the Television Bureau of Advertising (TVB) Board of Directors.

Qualifications and Strategy-Related Experience:

  Extensive expertise in management and operations
  Experience in oversight of strategic acquisitions
  Deep and intimate knowledge of the media industry
  25 years of experience in a variety of senior leadership roles
 

 

 

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Scott K. McCune

Founder, MS&E Ventures; Former VP, Global Media and Integrated Marketing, The Coca Cola Company

Age: 63

Director since: 2008

  

 

TEGNA Committees:

•  Audit

•  Executive

•  Leadership Development and Compensation (Chair)

 

Other Directorships:

•  First Tee of Atlanta

•  College Football Hall of Fame

 

Professional Experience:

Mr. McCune is the Founder of MS&E Ventures, a firm focused on creating new business value for brands through media, sports and entertainment. Prior to his retirement in March 2014, Mr. McCune spent 20 years at The Coca-Cola Company serving in a variety of roles, including Vice President, Global Partnerships & Experiential Marketing from 2011-2014, Vice President Global Media and Integrated Marketing from 2005-2011, and Vice President, Global Media, Sports & Entertainment Marketing and Licensing from 1994-2004. He also spent 10 years at Anheuser-Busch Inc. where he held a variety of positions in marketing and media.

Qualifications and Strategy-Related Experience:

  Significant experience as a marketing executive, with an outstanding record of creating value, developing people and building organizational capabilities
  Deep knowledge of multiple aspects of marketing, including integrated marketing media, advertising, digital, licensing, sports & entertainment and experiential
  Experience building global brands, leading and inspiring diverse organizations, planning and executing complex operations innovating new approaches to business, driving productivity and managing P&L
 

 

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LOGO    Proposal 1—Election of Directors: Information About Directors

 

 

 

 

     LOGO

 

 

Henry W. McGee

Senior Lecturer, Harvard Business School

Age: 67

Director since: 2015

  

 

TEGNA Committees:

•  Nominating and Governance

•  Public Policy and Regulation

 

Other Directorships:

•  AmerisourceBergen Corporation

•  Pew Research Center

•  The Black Filmmaker Foundation

 

Professional Experience:

Mr. McGee has been a Senior Lecturer at Harvard Business School since July 2013. Previously, he served as a consultant to HBO Home Entertainment from April 2013 to August 2013 after serving as President of HBO Home Entertainment from 1995 until his retirement in March 2013. Mr. McGee held the position of Senior Vice President, Programming, HBO Video, from 1988 to 1995 and prior to that, Mr. McGee served in leadership positions in various divisions of HBO. Mr. McGee is also a former President of the Alvin Ailey Dance Theater Foundation and the Film Society of Lincoln Center. He was recognized by Savoy Magazine in 2016 and 2017 as one of the Most Influential Black Corporate Directors and in 2018 the National Association of Corporate Directors named Mr. McGee to the Directorship 100 as one of the country’s most influential boardroom members.

Qualifications and Strategy-Related Experience:

  Significant business, leadership and management experience in media industry
  Expertise in new business planning, operations, marketing and wholesale distribution
  Deep understanding of the use of technology in and all aspects of wholesale distribution and international market
  Extensive knowledge of leadership, corporate governance and corporate accountability
 

 

 

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Susan Ness

Principal, Susan Ness Strategies; Former FCC Commissioner

Age: 71

Director since: 2011

  

 

TEGNA Committees:

•  Executive

•  Nominating and Governance

•  Public Policy and Regulation (Chair)

 

Other Directorships:

•  Vital Voices Global Partnership

 

Professional Experience:

Ms. Ness is a principal of Susan Ness Strategies, a communications policy consulting firm, which she founded in 2002. She is also a Distinguished Fellow at The German Marshall Fund of the United States and at the Annenberg Public Policy Center of the University of Pennsylvania, positions she has held since 2018. She served as a commissioner of the Federal Communications Commission from 1994 to 2001. From 2005 to 2007, she was the founding president and CEO of GreenStone Media, LLC, which produced talk programming targeting female audiences. Previously, Ms. Ness held positions of increasing responsibility at American Security Bank, which she left in 1992 as a Corporate Vice President & Group Head with a broadcast and media portfolio. She has served on the Board of Vital Voices Global Partnership since 2011 (Audit Committee Chair from 2017 – present), and from 2011 to 2014 she served on the J. William Fulbright Foreign Scholarship Board (elected Vice Chair in 2012 and 2013). Ms. Ness previously served on the board of LCC International, Inc. from 2001 to 2008, and on the board of Adelphia Communications Corp. from 2003 to 2007, post-bankruptcy filing.

Qualifications and Strategy-Related Experience:

  Deep knowledge of industry-specific matters including broadcast and spectrum management
  Extensive experience and expertise in global and domestic communications and media policy
  Deep regulatory expertise, particularly in the communications sector
  Experience facilitating the deployment of new communications technologies and advising communications companies
  Senior lender to broadcast companies
 

 

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LOGO    Proposal 1—Election of Directors: Information About Directors

 

 

 

 

     LOGO

 

 

Bruce P. Nolop

Retired CFO, E*Trade Financial Corporation

Age: 69

Director since: 2015

  

 

TEGNA Committees:

•  Audit (Chair)

•  Executive

 

Other Directorships:

•  Marsh & McClellan Companies, Inc.

•  On Deck Capital, Inc.

•  CLS Group

 

Professional Experience:

Mr. Nolop retired in 2011 from E*Trade Financial Corporation, where he served as Executive Vice President and Chief Financial Officer from September 2008 through 2010. Mr. Nolop was Executive Vice President and Chief Financial Officer of Pitney Bowes Inc. from 2000 to 2008 and Managing Director of Wasserstein Perella & Co. from 1993 to 2000. Previously, he held positions with Goldman, Sachs & Co., Kimberly-Clark Corporation and Morgan Stanley & Co.

Qualifications and Strategy-Related Experience:

  Experience in financial, marketing and shared services operations, expense management, and recapitalizations
  Deep understanding of financial accounting, corporate finance, and internal financial controls
  Experience in strategic transactions and restructurings
 

 

 

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Neal Shapiro

President and CEO, public television company WNET

Age: 62

Director since: 2007

  

 

TEGNA Committees:

•  Executive

•  Nominating and Governance (Chair)

•  Public Policy and Regulation

 

Other Directorships:

•  Public Broadcasting Service (PBS)

•  Institute for Non-profit News

 

Professional Experience:

Mr. Shapiro is President and CEO of the public television company WNET which operates three public television stations in the largest market in the country: Thirteen/WNET, WLIW and NJTV. He is an award-winning producer and media executive with a 35-year career spanning print, broadcast, cable and online media. Before joining WNET in February 2007, Mr. Shapiro served in various executive capacities with the National Broadcasting Company beginning in 1993 and was president of NBC News from May 2001 to September 2005. During his career, Mr. Shapiro has won numerous journalism awards, including 32 Emmys, 31 Edward R. Murrow Awards and 3 Columbia DuPont awards. He also serves on the Board of Trustees at Tufts University.

Qualifications and Strategy-Related Experience:

  Strong broadcast industry experience
  Expertise in overseeing operations and strategy of news networks
  Expertise in news production and reporting, journalism and First Amendment issues
  Deep experience in programming and content sharing
 

 

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LOGO    Proposal 1—Election of Directors: Information About Directors

 

 

 

 

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Melinda C. Witmer

Founder, LookLeft Media; Former Executive Vice President, Chief Video & Content Officer, Time Warner Cable

Age: 58

Director since: 2017

  

 

TEGNA Committees:

•  Leadership Development and Compensation

•  Public Policy and Regulation

 

Experience:

Ms. Witmer is the Founder of LookLeft Media, a startup company focused on the development of new real estate technology and media products, a position she has held since March 2018. Prior to starting LookLeft Media, Ms. Witmer was Executive Vice President, Chief Video & Content Officer of Time Warner Cable, a position she held from January 2012 until May 2016 when Time Warner Cable was acquired by Charter Communications. Prior to that, she served as Time Warner Cable’s Executive Vice President and Chief Programming Officer from January 2007, after holding multiple senior roles with Time Warner Cable beginning in 2001. Prior to joining Time Warner Cable, Ms. Witmer was Vice President and Senior Counsel at Home Box Office, Inc.

Qualifications and Strategy-Related Experience:

  Significant experience in the industry including media operations, telecommunications programming and content
  Expert in the negotiation of content distribution agreements, including retransmission consent agreements with local broadcaster groups
  Deep understanding of the changing media landscape
  Experience in capitalizing on market opportunities, new technologies and emerging platforms in the media space, including innovative consumer experiences
 

 

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LOGO    Proposal 1—Election of Directors: Committees of the Board of Directors

 

 

 

Committees of the Board of Directors

The Board of Directors conducts its business through meetings of the Board and its five committees: the Audit Committee, Executive Committee, Leadership Development and Compensation Committee, Public Policy and Regulation Committee and Nominating and Governance Committee. The chart below shows the current membership and chairperson of each of our Board committees and the number of committee meetings held during 2019. Each member of the Audit, Leadership Development and Compensation, Nominating and Governance, and Public Policy and Regulation Committee meets the applicable independence requirements of the SEC and NYSE for service on the Board and each Committee on which she or he serves.

 

 

LOGO

AuditExecutiveLeadership Development and Compensation Nominating and Governance Public Policy and Regulation# of Mettings HeldBianchiniElias Epstein Fonseca Lougee McCune McGee Ness Nolop Shapiro Witmer

 

(1)

Ms. Grimes has recently been elected to the Board and is not yet a member of a committee.

Audit Committee

The Audit Committee assists the Board of Directors in its oversight of financial reporting practices and the quality and integrity of the financial reports of the Company, including compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of the Company’s internal audit function. The Audit Committee appoints and is responsible for setting the compensation of the Company’s independent registered public accounting firm. The Audit Committee reviews the Company’s independent registered public accounting firm’s qualification, performance and independence on an annual basis.

The Audit Committee also provides oversight of the Company’s internal audit function and oversees the adequacy and effectiveness of the Company’s accounting and financial controls and the guidelines and policies that govern the process by which the Company undertakes financial, accounting and audit risk assessment and risk management. In connection with the Ethics Policy, the Audit Committee has established procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting controls or auditing matters and the confidential, anonymous submission by employees of the Company of any accounting or auditing concerns.

The Audit Committee members are not professional accountants or auditors, and their role is not intended to duplicate or certify the activities of management and the independent registered public accounting firm, nor can the Committee certify that the independent registered public accounting firm is “independent” under applicable rules.

The Board has determined that each of Bruce P. Nolop and Stuart J. Epstein is an audit committee financial expert, as that term is defined under SEC rules.

Executive Committee

The Executive Committee may exercise the authority of the Board between Board meetings, except as limited by Delaware law.

 

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Leadership Development and Compensation Committee

As further described in the “Compensation Discussion and Analysis” (CD&A) section of this Proxy Statement, the Leadership Development and Compensation Committee discharges the Board’s responsibilities relating to the compensation of the Company’s directors and executives and has overall responsibility for the Company’s compensation plans, principles and programs. The Committee also monitors the Company’s human resources practices, including its performance in diversity and equal employment opportunity.

Under its charter, the Committee may, in its sole discretion, engage, retain and compensate any compensation consultant, independent legal counsel or other adviser it deems necessary. In selecting a consultant, counsel or adviser, the Committee evaluates its independence by considering the independence factors set forth in applicable SEC and NYSE rules and any other factors the Committee deems relevant to the adviser’s independence from management.

The Committee retains Meridian Compensation Partners, LLC (Meridian) as its consultant to advise it on executive compensation matters. The Committee has determined that Meridian is an independent compensation consultant based on a review of the independence factors reviewed by the Committee.

Meridian participates in Committee meetings as requested by the chairman of the Committee and communicates directly with the chairman and other members of the Committee outside of meetings. Meridian specifically has provided the following services to the Committee:

 

 

Consulted on various compensation plans, policies and practices;

 

 

Participated in Committee executive sessions without management present;

 

 

Assisted in analyzing executive compensation practices and trends and other compensation-related matters;

 

 

Consulted with management and the Committee regarding market data used as a reference for pay decisions;

 

 

Assisted in administering the equity award program; and

 

 

Reviewed the CD&A and other compensation related disclosures contained in this Proxy Statement.

Nominating and Governance Committee

The Nominating and Governance Committee is charged with identifying individuals qualified to become Board members, recommending to the Board candidates for election or re-election to the Board, and considering from time to time the Board committee structure and makeup. The Committee also monitors and takes a leadership role with respect to the Company’s corporate governance practices.

The Nominating and Governance Committee charter sets forth certain criteria for the Committee to consider in evaluating potential director nominees. In addition to evaluating a potential director’s independence, the Committee considers whether director candidates have relevant experience and skills to assure that the Board has the necessary breadth and depth to perform its oversight function effectively. The charter also encourages the Committee to work to maintain a board that reflects the diversity, in terms of gender, age, race and other self-identified diversity attributes of the communities we serve. The Committee evaluates potential candidates against these requirements and objectives. For those director candidates who appear upon first consideration to meet the Committee’s criteria, the Committee will engage in further research to evaluate their candidacy.

The Nominating and Governance Committee periodically retains search firms to assist in the identification of potential director nominee candidates based on criteria specified by the Committee and in evaluating and pursuing individual candidates at the direction of the Committee. The Committee will also consider timely written suggestions from shareholders, as it has done with Standard General’s nominees. Shareholders wishing to suggest a candidate for director nomination for the 2021 Annual Meeting should mail their suggestions to TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary. Suggestions must be received by the Secretary of the Company no earlier than [                    ], 2020 and no later than [                    ], 2021. The manner in which the Committee evaluates director nominee candidates suggested by shareholders will be consistent with the manner in which the Committee evaluates candidates recommended by other sources.

 

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LOGO    Proposal 1—Election of Directors: Committee Charters

 

 

 

The By-laws of the Company establish a mandatory retirement age of 73 for directors who have not been executives of the Company and 65 for directors who have served as executives, except that the Board of Directors may extend the retirement age beyond 65 for directors who are or have been the CEO of the Company. The Company’s Principles of Corporate Governance also provide that a director who retires from, or has a material change in responsibility or position with, the primary entity by which that director was employed at the time of his or her election to the Board of Directors shall offer to submit a letter of resignation to the Nominating and Governance Committee for its consideration. The Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken.

Public Policy and Regulation Committee

The Public Policy and Regulation Committee assists the Board in its oversight of risks relating to legal, regulatory, compliance, public policy and corporate social responsibility matters that may impact the Company’s operations, performance or reputation. The Committee’s duties and responsibilities include reviewing and providing guidance to the Board about legal, regulatory and compliance matters concerning media, antitrust and data privacy laws, rules and regulations and monitoring legislative and regulatory trends and public policy developments that may affect the Company’s operations, strategy, performance or reputation. The Public Policy and Regulation Committee also is responsible for reviewing compliance with the Company’s Ethics Policy and assuring appropriate disclosure of any waiver of or change in the Ethics Policy for executive officers, and for reviewing the Ethics Policy on a regular basis and proposing or adopting additions or amendments to the Ethics Policy as appropriate.

Committee Charters

The written charters governing the Audit Committee, the Leadership Development and Compensation Committee, the Nominating and Governance Committee and the Public Policy and Regulation Committee, as well as the Company’s Principles of Corporate Governance, are posted on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. You may also obtain a copy of any of these documents without charge by writing to: TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary.

Corporate Governance

The Board and the Company have instituted strong corporate governance practices to ensure that the Company operates in ways that support the long-term interests of our shareholders. Other important corporate governance practices of the Company include the following:

 

 

  All of our directors are elected annually.

 

  Eleven of the twelve TEGNA nominees are independent.

 

  We have a robust shareholder engagement program pursuant to which senior management and our independent Chairman regularly engage with investors.

 

  We separate the positions of Chairman and CEO and have an independent Chairman.

 

  We maintain an ongoing board refreshment process, which has resulted in our adding six (6) independent directors during the past five years and the transition of the chairman role during 2018.

   

 

  Approximately 94.5% of the votes cast at last year’s annual meeting were in favor of the Company’s Say on Pay proposal.

 

  Our directors and senior executives are subject to stock ownership guidelines.

 

  We do not have a shareholder rights plan (poison pill) in place.

 

  We have a majority vote standard for uncontested director elections and a director resignation policy.

 

  Our Board has adopted a proxy access by-law provision.

 

  Mergers and other business combinations involving the
Company generally may be approved by a simple majority vote.

 

 

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Additional information regarding the Company’s corporate governance practices is included in the Company’s Principles of Corporate Governance posted on the Corporate Governance page under the “Investors” menu of the Company’s website at www.tegna.com. See the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of the Company’s compensation-related governance practices.

Shareholder Engagement

The Company is committed to acting in the best interests of its shareholders, and views ongoing dialogue with shareholders as a critical component of the Company’s corporate governance program. Members of management and the Board actively engage with the Company’s shareholders through in person and telephonic meetings throughout the year in order to fully understand their viewpoints concerning the Company, to garner feedback on areas for improvement, and to help our shareholders better understand our performance and long-term strategic plan. Company management provides the Board with regular updates regarding its shareholder outreach efforts as well as feedback received from shareholders, which helps to influence our policies and practices. We believe our regular engagement with shareholders fosters an open exchange of ideas and perspectives for both the Company and its shareholders.

During 2019, the Company actively engaged with shareholders, reaching out to shareholders representing, in the aggregate, more than 56% of our outstanding shares (including Standard General) in order to understand their viewpoints concerning a variety of topics, including the following:

 

 

The Company’s strategic direction, including our growth, diversification and capital allocation strategies;

 

 

The media environment and the Company’s M&A strategy;

 

 

The Company’s position and opportunities to capitalize on the changing media landscape;

 

 

Sustainability and corporate social responsibility matters;

 

 

The Company’s executive compensation programs and policies, including the changes to our long-term incentive program described in our 2019 proxy statement; and

 

 

the Company’s corporate governance profile.

For those who are unable to attend any of our investor meetings, transcripts of all management presentations are available on our website at www.tegna.com. Any shareholder who has an inquiry or meeting request is invited to contact John Janedis, Senior Vice President/Capital markets and Investor Relations, at 703-873-6222.

The Board’s Role in Risk Oversight

The Board is primarily responsible for oversight of the Company’s risk management function in the context of the Company’s strategic plan and operations. In addition, the Company has an enterprise risk management (ERM) program to enhance the Board’s and management’s ability to identify, assess, manage and respond to strategic, market, operational and compliance risks facing the Company.

As part of our ERM program, our Board communicates to management its expectations for evaluating Company strategy and the risks inherent in that strategy, while management provides the Board with the information necessary to evaluate risk. Our ERM program is updated on a regular basis in order to identify potential risk exposures.

 

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LOGO    Proposal 1—Election of Directors: The Board’s Role in Corporate Strategy

 

 

 

Further, each committee of the Board also considers risk within its area of responsibility, with committee chairs reporting regularly to the entire Board on their committees’ efforts and findings, as noted in the following:

 

      Responsibilities

 

Board

  

 

•  Primary responsibility for overseeing the Company’s risk management function and reviewing the steps management has taken to monitor and control the Company’s significant business risks, including potential financial, operational, privacy, cybersecurity, business continuity, legal and regulatory, and reputational exposures.

 

Audit Committee

  

 

•  Reviews risks relating to accounting and financial controls and oversees the Company’s ERM program generally.

 

Leadership Development and Compensation Committee

  

 

•  Oversees and evaluates risks associated with the compensation and development of the Company’s executives and succession planning.

 

Nominating and Governance Committee

  

 

•  Oversees the Company’s risks associated with its corporate governance practices.

 

Public Policy and Regulation Committee

  

 

•  Oversees the Company’s risk exposure associated with media, antitrust and data privacy laws, rules and regulations, compliance with the Company’s ethics policy and public policy and corporate social responsibility matters.

With respect to risks relating to compensation matters, the Leadership Development and Compensation Committee, with the assistance of its independent compensation consultant, has reviewed the Company’s executive compensation program and has concluded that the program does not create risks that are reasonably likely to have a material adverse effect on the Company.

The Board’s Role in Corporate Strategy

The Board of Directors is actively involved in overseeing, reviewing and guiding the Company’s corporate strategy. Strategic business issues, including developments in our industry and industry positioning, opportunities for growth, multiyear strategic plans, investments and capital allocation, including M&A-related decisions, are discussed as a matter of regular course at our Board meetings. The Board also discusses corporate strategy throughout the year with management, both formally and informally, and during executive sessions of the Board, as appropriate.

The Board regularly discusses the Company’s performance and results relative to our operating plan and expectations periodically throughout the year. At each Board meeting, senior Company management makes presentations to the Board to facilitate a further in-depth and comprehensive discussion and review of the Company’s strategic and operational plans, initiatives and goals over the long, medium and short-term, as well as paths, options and alternatives to achieving such goals.

Board and committee-level discussions are also regularly infused with strategic and business themes. For example, the Nominating and Governance Committee seeks to ensure that the composition of the Board itself and the Board’s processes are designed to maximize the contributions and input of the directors to important issues facing the Company and effective oversight.

Corporate Social Responsibility

TEGNA is committed to embedding sustainability throughout our business. We are driven by our strongly held purpose to make a difference in our work, our company and our communities. Our culture is defined by our values of inclusion, integrity, innovation, impact and results. As we carry out our work, we are focused on social, human, environmental and corporate governance practices that strengthen communities, and protect and enhance TEGNA’s long-term value.

 

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LOGO    Proposal 1—Election of Directors: Corporate Social Responsibility

 

 

 

TEGNA’s Corporate Social Responsibility website (https://www.tegna.com/corporate-social-responsibility/) contains information on our environmental and social policies and programs, including the following:

 

 

Environmental Policy: Our Environmental Policy promotes the operation of our business in a manner that is environmentally responsible by reducing our carbon footprint and conserving energy. More importantly, TEGNA stations also regularly report on environmental and sustainability issues impacting our communities, that have, in many instances, made a difference in the lives of the people in those communities.

 

Codes of Conduct: Our Codes of Conduct, applicable to all our directors, officers, employees and vendors, reflect our values and expectations on a number of topics, including a discrimination-free work environment, the efficient use of our assets, professional business conduct, supplier diversity and fair compensation. The TEGNA Code of Vendor Conduct details our expectations with regard to fair labor practices, the protection of human rights, privacy and data security, anti-bribery and anti-corruption protections, and compliance and misconduct reporting.

 

Ethics Policies: Our Ethics Policies ensure that all of our directors, officers and employees conduct themselves with the highest professional standards. As a company that produces and distributes the highest-quality news and information content, journalistic integrity is critical to ensure TEGNA’s stations are one of the most trusted news sources in their communities. TEGNA’s Principles of Ethical Journalism define the behavior to which all employees who gather, report, produce and distribute news and information on any platform must adhere. Our core principles of Truth, Independence, Public Interest, Fair Play, and Integrity form the foundation for all news content produced by TEGNA stations.

 

Social Media Policy: We maintain a Social Media Policy that applies to all TEGNA employees. Additional policies are outlined for TEGNA’s community-facing employees and news and editorial employees.

Our Board’s Public Policy and Regulation Committee guides the Company’s corporate social responsibility and sustainability efforts, and reviews and reports on these efforts on a periodic basis to our Board.

 

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Social Capital

 

Creating societal impact is at the core of our purpose to serve the greater good of our communities, to make a difference in our work, our company and our communities.

 

Human Capital

 

TEGNA is committed to building a fully inclusive culture and equity in talent hiring and management decisions. Women comprise 42% of the Board and 47% of our workforce.

 

Corporate Governance

 

The TEGNA Board has implemented fit-for-purpose corporate governance policies that align with best practices for publicly held companies and the evolving expectations of shareholders and institutional investors.

 

Environment

 

TEGNA is committed to managing our environmental impact responsibly and protecting the environment through our investigative journalism and business practices.

Our purpose to serve the greater good of our communities is the fundamental basis of our

company culture and role as journalists. Our people strive to make a difference in our work, our

company and our communities. Our purpose and culture are vital to the creation and protection of TEGNA’s long-term value.

Howard Elias, Chairman

 

14   |    2020 PROXY STATEMENT


Table of Contents
LOGO    Proposal 1—Election of Directors: Corporate Social Responsibility

 

 

 

Our commitment to strong corporate social responsibility is the foundation on which our Company is built. In 2019, we focused on the following to achieve our goals:

 

 

Transparent ESG Reporting: We updated the Social Responsibility portion of our corporate website to better reflect and report on our corporate social responsibility practices, including the publication of a new section devoted to Social Responsibility Highlights.

 

Equality and Diversity: TEGNA provided equal and equitable opportunities to all employees through training, education and an inclusive culture. We engaged our employees through a structured, confidential survey to identify current organizational culture in areas of equality and diversity.

 

Employee Well-Being: Based on employee feedback, we continued to invest in our employees by upgrading benefits to improve quality of life while reducing healthcare expenses for our employees.

 

Giving and Volunteerism: We reinforced our longstanding commitment to Giving and Service, including corporate giving and station fundraising efforts that have a positive impact on the markets we serve.

2019 Journalism Awards

 

LOGO       LOGO       LOGO  

 

  LOGO
           
               LOGO     LOGO     LOGO               
           

2019 Diversity & Inclusion Recognition

 

LOGO     LOGO     LOGO     LOGO

 

2020 PROXY STATEMENT    |   15


Table of Contents
LOGO    Proposal 1—Election of Directors: Social Capital

 

 

 

Additional key highlights from 2019 include the following:

 

 

LOGO   

Social

Capital

Journalistic Integrity & Impactful Investigations

 

  TEGNA stations and our journalists take seriously our responsibility to be defenders of the First Amendment and strive to make an impact by being agents of change in the markets we serve.

 

  Our local journalists are empowered to seek out the stories that matter most to their audience and pursue investigations that expose wrongdoing while continuing to maintain the highest ethical standards.

 

  TEGNA won more national journalism awards in 2019 than any local broadcaster as a result of our innovative approach to content, impactful investigations and commitment to the communities we serve.

Corporate Giving

 

  The TEGNA Foundation Community Grants program made 225 grants totaling $1.5 million.

 

  Grants are distributed within the United Nations Sustainable Development Goal framework, with the majority of 2019 grants supporting four major categories: Good Health and Well-Being, Quality Education, Zero Hunger, and No Poverty.

 

  TEGNA Foundation made 13 strategic Media Grants in 2019 to support press freedom, journalism ethics, and training for the next generation of diverse journalists.

 

  2019 TEGNA Foundation Media Grantees:

 

    American Bar Association Fund for Justice and Education

 

    Asian American Journalist Association

 

    The Carole Kneeland Project for Responsible Television Journalism

 

    Investigative Reporters and Editors Inc.

 

    National Association of Black Journalists

 

    National Association of Broadcasters Education Foundation

 

    National Association of Hispanic Journalists

 

    Native American Journalists Association

 

    Online News Association

 

    The Poynter Institute for Media Studies

 

    Radio Television Digital News Foundation

 

    NLGJA: The Association of LGBTQ Journalists

Local Impact

 

  TEGNA stations helped raise more than $100 million in 2019 in support of diverse local causes that address specific needs in the communities we serve.
LOGO   

Human

Capital

Diversity

 

  In 2019, for the third consecutive year, TEGNA was named as a Best Place to Work for LGBTQ Equality by the Human Rights Campaign. TEGNA received a perfect score of 100 in HRC’s Corporate Equality Index.

 

  TEGNA was awarded the 2019 Microsoft Advertising Agency Award for Inclusive Culture & Marketing, in recognition of our strong commitment to inclusive practices both internally and in marketing campaigns.

 

  In 2019, minority and women-owned businesses were awarded 13% of TEGNA’s spending on outside products and services (excluding programming spend and based on an analysis of our top 100 vendors).

Workforce Demographics

 

    

People of Color

Women

  

African American

  

Hispanic/Latino

  

    Asian    

Total Management

41.4%

  

5.6%

  

6.2%

  

2.4%

Total Non-Management

48.0%

  

11.6%

  

9.7%

  

2.8%

Total Tegna

47.0%

  

10.7%

  

9.2%

  

2.7%

Professional Development & Employee Awards

 

  TEGNA has developed several initiatives to recognize, develop and reward talent, including Leadership Development, Executive Leadership and Mentoring programs.

 

  In 2019, four Innovation Summits were held with a cross-section of employees to develop new initiatives designed to meet the needs of today’s news consumer.

 

  High-performing stations and employees were also celebrated and recognized at the TEGNA “Pinnacle Awards” ceremony.

Employee Match Program

 

  The TEGNA Foundation matched more than 1,000 employee charitable donations dollar for dollar, totaling more than $500,000.
 

 

16   |    2020 PROXY STATEMENT


Table of Contents
LOGO    Proposal 1—Election of Directors: Corporate Governance

 

 

 

LOGO   

Corporate

Governance

Independent Board Oversight

 

  Independent Chairman and 11 out of 12 independent Directors.

 

  Leadership structure allows for effective, independent Board oversight and communication, while enabling the CEO to focus on executing the strategic plan and managing operations.

Fit-for-Purpose Board Composition and Practices

 

  Ongoing Board Refreshment with 6 new independent Directors appointed in the last 5 years.

 

  Recently added Directors’ skills align with TEGNA’s strategy and provide deep expertise in media, technology, social/digital media, and capital markets and transactional experience.

 

  The Board is comprised of 42% women and 17% of our Directors are racially and ethnically diverse.

 

  Average board tenure of less than 6 years.

 

  Annual Board performance evaluations.

Board Accountability & Shareholder Rights

 

  Annual election of directors.

 

  Majority voting standard for director elections.

 

  Director and Executive Stock Ownership Guidelines ensure alignment of interests with those of long-term shareholders.

 

  Proxy access by-law provision adopted in 2018 in response to shareholder feedback.

 

  No shareholder rights plan (poison pill).
LOGO    Environment

Environmental Commitment

 

  We seek to take space in LEED-certified buildings that are designed for energy efficiency and employ active water management using sensor-based, high-efficiency fixtures.

 

  TEGNA’s new Virginia-based headquarters, completed in 2019, features easy access to public transportation, bike racks and electric vehicle charging ports. The interior design seeks to reduce energy consumption through features like automated shade and lighting controls for daylight harvesting, occupancy sensors and zoned HVAC, among others.

 

  We implemented several energy efficiency strategies during the year, including upgrading stations’ studio lighting to LED, and HVAC upgrades in KVUE in Austin, WFMY in Greensboro, KTHV in Little Rock, and KFMB in San Diego.

 

  KGW in Portland became the first local broadcaster to introduce an all-electric car in its news fleet and launched an awareness campaign to educate drivers about the benefits and practicality of electric vehicles.

 

  We have committed to reducing unnecessary business travel by utilizing video conferencing technology across the business.

 

  On-demand printers have been installed in 15 office locations to reduce paper use and minimize waste.

 

  TEGNA is also reviewing actively other ways it can move to renewable energy sources to further reduce our environmental impact.

Reporting on Environmental & Sustainability Issues

 

  In 2019, several climate and environment-focused investigations explored issues of sustainability such as the California wildfires, flooding due to climate change, environmental health issues in military housing and recycling.

TEGNA Foundation Sustainability Grants

 

  KFMB in San Diego continued their partnership with Kids’ Ocean Day, an environmental education program serving students from Title 1 schools.

 

  WKYC in Cleveland supported the Alliance for the Great Lakes, contributing to a clean Lake Erie through a volunteer cleanup event.

 

  WFAA in Dallas partnered with Cool Effect to offset the carbon output of their reporters who traveled to Alaska to report on climate change.
 

 

2020 PROXY STATEMENT    |   17


Table of Contents
LOGO    Proposal 1—Election of Directors: Annual Board Performance Evaluation

 

 

 

Annual Board Performance Evaluation

The Company conducts an annual Board performance evaluation process in which the Board either retains an independent consultant experienced in corporate governance matters to conduct an in-depth study of the Board’s effectiveness and to assist it with the annual performance process or conducts Board and committee self-evaluations using written questionnaires. In addition, our independent Chairman regularly speaks with other Board members and receives input regarding Board and committee practices and management oversight.

With respect to 2019, the Board and each committee performed a confidential assessment of their effectiveness using written questionnaires developed by an independent consultant experienced in corporate governance matters retained by the Nominating and Governance Committee. The results of the evaluation process were reported to the Board and are being applied to enhance the overall operation and effectiveness of the Board and its committees.

Ethics Policy

The Company has long maintained a code of conduct and ethics (the “Ethics Policy”) that sets forth the Company’s policies and expectations. The Ethics Policy, which applies to every Company director, officer and employee, addresses a number of topics, including conflicts of interest, relationships with others, corporate payments, the appearance of impropriety, disclosure policy, compliance with laws, corporate opportunities and the protection and proper use of the Company’s assets. The Ethics Policy meets the NYSE’s requirements for a code of business conduct and ethics as well as the SEC’s definition of a code of ethics applicable to the Company’s senior officers. Neither the Board of Directors nor any Board committee has ever granted a waiver of the Ethics Policy.

The Ethics Policy is available on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. You may also obtain a copy of the Ethics Policy without charge by writing to: TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary. Any additions or amendments to the Ethics Policy, and any waivers of the Ethics Policy for executive officers or directors, will be posted on the Corporate Governance page under the “Investors” menu of the Company’s website and similarly provided to you without charge upon written request to this address.

The Company has a telephone hotline staffed by an independent third party for employees and others to submit their concerns regarding violations or suspected violations of the Company’s Ethics Policy or violations of law and for reporting any concerns regarding accounting or auditing matters on a confidential anonymous basis. Employees and others can report concerns by calling 1-800-695-1704 or by emailing or writing to the addresses provided in the Company’s Ethics Violation Reporting Policy found on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. Any concerns regarding accounting or auditing matters so reported will be communicated to the Company’s Audit Committee.

Related Transactions

Our Company has not had compensation committee interlocks with any other company, nor has our Company engaged in any material related transactions since January 1, 2019, the first day of our last fiscal year. Although no such related transactions have occurred or are anticipated, the Board has adopted a related person transaction policy that outlines the procedures that the Board will follow in connection with reviewing any future transactions involving the Company and related persons. The policy takes into account the categories of transactions that the Board has determined are not material in making determinations regarding independence and requires directors and executive officers to notify the Company’s general counsel of any potential related person transactions.

 

18   |    2020 PROXY STATEMENT


Table of Contents
LOGO    Proposal 1—Election of Directors: Report of the Audit Committee

 

 

 

Report of the Audit Committee

During fiscal years 2018 and 2019, the Company’s independent registered public accounting firm for each of those years, Ernst & Young LLP (“EY”) and PricewaterhouseCoopers, LLP (“PwC”), respectively, billed the Company the following fees and expenses:

 

    

2018

   

2019

 

Audit Fees

               

Audit Fees—TEGNA(1)

 

$

3,296,950

 

 

$

2,377,000

 

Audit Fees—Acquisitions(2)

 

$

0

 

 

$

515,000

 

Audit Fees—Total

 

$

3,296,950

 

 

$

2,892,000

 

Audit-Related Fees(3)

 

$

210,403

 

 

$

201,053

 

Tax Fees(4)

 

$

115,000

 

 

$

32,500

 

All Other Fees(5)

 

$

0

 

 

$

0

 

 

 

 

   

 

 

 

Total

 

$

3,622,353

 

  $ 3,125,553  

 

(1)

Audit Fees—TEGNA include professional services rendered in connection with the annual integrated audit of the Company’s consolidated financial statements, internal control over financial reporting, and the review of quarterly reports on Form 10-Q. In 2019, Audit Fees include payments to EY of $117,000 and PwC of $100,000 related to Debt Comfort Letters issued in relation to the Company’s 2029 bond issuance. All of these fees were pre-approved by the Audit Committee as described below.

(2)

Audit Fees—Acquisitions for 2019 include professional services rendered in connection with the Midwest, Dispatch and Nexstar acquisitions. These services were pre-approved by the Audit Committee as described below.

(3)

Audit-Related Fees include professional services rendered in connection with the audit of employee benefit plans. In 2019, the Company paid employee benefit plan audit fees to EY ($15,000) and PwC ($185,153). These services were pre-approved by the Audit Committee as described below.

(4)

Tax Fees principally relate to tax planning services and advice in the U.S. All of these services were pre-approved by the Audit Committee as described below.

(5)

No services were rendered during either 2018 or 2019 that would cause EY or PwC, respectively, to bill the Company amounts constituting “All Other Fees.”

The Audit Committee has adopted a policy for the pre-approval of services provided by the Company’s independent registered public accounting firm. Under the policy, particular services or categories of services have been pre-approved, subject to a specific budget. Periodically, but at least annually, the Audit Committee reviews and approves the list of pre-approved services and the maximum threshold cost of performance of each. The Audit Committee is provided with a status update on all services performed by the Company’s independent registered accounting firm periodically throughout the year and discusses such services with management and the independent registered accounting firm. Pursuant to its pre-approval policy, the Audit Committee has delegated pre-approval authority for services provided by the Company’s independent registered accounting firm to its Chair, Bruce P. Nolop. Mr. Nolop may pre-approve up to $100,000 in services provided by the independent registered accounting firm, in the aggregate at any one time, without consultation with the full Audit Committee, provided that he reports such approved items to the Audit Committee at its next scheduled meeting. In determining whether a service may be provided pursuant to the pre-approval policy, the primary consideration is whether the proposed service would impair the independence of the independent registered public accounting firm.

In connection with its review of the Company’s 2019 audited financial statements, the Audit Committee received from PwC written disclosures and a letter regarding PwC’s independence in accordance with applicable requirements of the Public Company Accounting Oversight Board (PCAOB), including a detailed statement of any relationships between PwC and the Company that might bear on PwC’s independence, and has discussed with PwC its independence. The Audit Committee considered whether the provision of non-audit services by PwC is compatible with maintaining PwC’s independence. PwC stated that it believes it is in full compliance with all of the independence standards established by the various regulatory bodies. The Audit Committee also discussed with PwC various matters required to be discussed by the applicable requirements of the PCAOB and the SEC.

The Audit Committee met with management, the Company’s internal auditors and representatives of PwC to review and discuss the Company’s audited financial statements for the fiscal year ended December 31, 2019. Based on such review and discussion as well as the Committee’s reviews and discussions with PwC regarding the various matters mentioned in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Form 10-K for the 2019 fiscal year. The Board has approved that recommendation.

Audit Committee

Bruce P. Nolop, Chair

Stuart J. Epstein

Lidia Fonseca

Scott K. McCune

 

2020 PROXY STATEMENT    |   19


Table of Contents
LOGO   

 

 

 

Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm

(Proposal 2 on the proxy card)

The Audit Committee of the Board of Directors is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.

Following a comprehensive, competitive process, on October 8, 2018, the Audit Committee approved the engagement of PwC as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2019 and dismissed Ernst & Young LLP (EY) effective upon the conclusion of its audit of the Company’s consolidated financial statements for the year ended December 31, 2018. The reports of EY on the Company’s consolidated financial statements for the years ended December 31, 2018 and 2017 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles. During the years ended December 31, 2018 and 2017, there were no disagreements with EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of EY, would have caused them to make reference thereto in their reports. During the years ended December 31, 2018 and 2017, there were no “reportable events” requiring disclosure pursuant to paragraph (a)(1)(v) of Item 304 of Regulation S-K.

During the Company’s fiscal years ended December 31, 2017 and December 31, 2018, neither the Company nor anyone on its behalf consulted EY regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or on the type of audit opinion that might be rendered on the consolidated financial statements of the Company, and neither a written report nor oral advice was provided to the Company that EY or PwC concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

The Audit Committee has appointed PwC as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2020. We believe that the appointment of PwC is in the best interests of the Company and its shareholders. Upon the recommendation of the Audit Committee, the Board of Directors is submitting the appointment of PwC as the Company’s independent registered public accounting firm for shareholder ratification at the 2020 Annual Meeting.

 

The Company’s Board of Directors unanimously recommends that you vote “FOR” the ratification

of the appointment of PwC as the Company’s independent registered public accounting firm for

the current year.

 

Our By-laws do not require that the shareholders ratify the appointment of PwC as our independent registered public accounting firm. We are seeking ratification because we value our shareholders’ views on the Company’s independent registered accounting firm and believe it is a good corporate governance practice. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain PwC, but in its discretion may choose to retain PwC as the Company’s independent registered public accounting firm. 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 shareholders.

A representative of PwC is expected to be present at the 2020 Annual Meeting. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from shareholders.

 

20   |    2020 PROXY STATEMENT


Table of Contents
LOGO        

 

 

 

Executive Compensation

Compensation Discussion and Analysis

In this Compensation Discussion and Analysis section, references to “the Committee” are to the Leadership Development and Compensation Committee of the Board of Directors. References to “NEOs” are to our Named Executive Officers, who for the 2019 fiscal year were:

 

 

    David T. Lougee, President and Chief Executive Officer,

 

    Victoria D. Harker, Executive Vice President and Chief Financial Officer,
    Lynn Beall (Trelstad)*, Executive Vice President and Chief Operating Officer—Media Operations, and

 

    Akin S. Harrison, Senior Vice President, General Counsel and Secretary.
 

 

 

Executive Summary

PERFORMANCE HIGHLIGHTS

 

 

TEGNA ACHIEVED STRONG FINANCIAL RESULTS IN 2019 AND

RETURNED SUBSTANTIAL VALUE TO SHAREHOLDERS.

 

 

 

Operating

Revenues

$2.3

BILLION

 

   

 

Adjusted

EBITDA

$708

MILLION

 

   

 

Adjusted EBITDA Margin

31%

 

   

 

1 Year TSR1

    

56.4%

 

Highlights of the Company’s 2019 performance included:

Revenues. Our total revenues were $2.3 billion, up 4% year-over-year.

Total Shareholder Return. We achieved a total shareholder return of 56.4% in 2019.

Acquisitions. In 2019, we completed $1.5 billion in transactions expected to provide annualized revenues of approximately $500 million, Adjusted EBITDA of approximately $200 million and approximately $100 million of additional free cash flow over 2020 and 2021:

 

   

January 2019: WTOL, the CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in Midland-Odessa, TX.

 

   

June 2019: Leading 24/7 multicast networks Justice Network and Quest.

 

   

August 2019: #1 rated stations WTHR (NBC) in Indianapolis, IN, and WBNS (CBS) in Columbus, OH.

 

   

September 2019: 11 local television stations, including eight Big Four affiliates, from Nexstar.

Adjusted EBITDA. Our Adjusted EBITDA totaled $708 million (representing net income from continuing operations before income taxes, interest expense, equity income, other non-operating items, special items, depreciation and amortization).

 

 

*

“Beall” is Ms. Trelstad’s maiden name and the name she uses for business purposes. “Trelstad” is her married and legal name. Ms. Trelstad is referred to throughout this Proxy Statement as Ms. Beall.

 

1 

Total shareholder return includes impact of stock price performance and reinvested dividends.

 

2020 PROXY STATEMENT    |   21


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LOGO    Executive Compensation: Executive Summary

 

 

 

Strong subscription revenue growth. Our subscription revenue grew 20% for the year. In addition, we reached multi-year distribution agreements with major cable providers representing 50% of our paid subscribers.

Affiliation Agreement renewals. We executed multi-year affiliation agreement renewals with ABC, CBS and Fox.

Non-GAAP EPS. Our non-GAAP earnings per diluted share from continuing operations were $1.38.

Reconciliations of the following non-GAAP financial measures to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed March 2, 2020: adjusted EBITDA—page 27; non-GAAP earnings per share—page 25; and free cash flow—page 27.

PAY FOR PERFORMANCE

The Committee supports compensation policies that place a heavy emphasis on pay for performance. Having our NEOs receive a higher proportion of their long-term awards as performance shares that may be earned, if at all, based on the Company’s achievement of performance goals established by the Committee rather than restricted stock units (which are service-based) strengthens the pay for performance aspect of the Company’s long-term incentive program. The percentage of NEO annual equity awards granted on March 1, 2019 (based on grant date value) that were performance-based were 65% for our CEO and 55% for each of the other NEOs.

 

 

A MAJORITY OF OUR CEO’S 2019 TARGET PAY WAS PERFORMANCE-BASED

 

 

 

LOGO

LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE RESPONSIBILITIES

The Committee oversees the Company’s executive compensation program and is responsible for:

 

  Evaluating and approving the Company’s executive compensation plans, principles and programs;

 

  Administering the Company’s equity incentive plans and granting bonuses and equity awards to our senior executives;
  Reviewing and approving on an annual basis corporate goals and objectives relevant to the compensation of the Company’s President and CEO and its other senior executives; and

 

  Reviewing risks relating to the Company’s executive compensation plans, principles and programs.
 

 

The Committee also regularly reviews other components of executive compensation, including benefits, perquisites and post-termination pay. The Board has historically delegated to the Company’s President and CEO the authority for approving equity grants to employees other than our senior executives within the parameters of a pool of shares approved by the Board.

 

22   |    2020 PROXY STATEMENT


Table of Contents
LOGO    Executive Compensation: Executive Summary

 

 

 

GUIDING PRINCIPLES

In making its NEO compensation decisions, the Committee is guided by the following principles:

 

  Pay for performance—Compensation should place a heavy emphasis on pay for performance and substantial portions of total compensation should be “at risk.”

 

  Attract, retain and motivate—We are committed to attracting and retaining superior executive talent by offering a competitive compensation structure that motivates key employees to ensure our overall success and long-term strength.

 

  Fairness—Compensation should be fair to both executives and shareholders, and should align the interests of our executives with those of our shareholders.

 

  Pay competitively—We provide compensation opportunities generally in line with those afforded to executives holding similar positions at comparable companies.

 

  Promote stock ownership—As a key part of our shareholder alignment efforts, we expect each of our senior executives to acquire and maintain a meaningful level of investment in Company common stock. Minimum levels of senior executive stock ownership are regularly reviewed by the Committee and approved by the full Board.

The following table reflects the minimum stock ownership guideline for each NEO. All of the NEOs have met their minimum ownership guideline.

 

Name

 

Minimum

Guideline

Multiple

of Base

Salary

MR. LOUGEE

 

5X

MS. HARKER

 

3X

MS. BEALL

 

2X

MR. HARRISON

 

1X

The Company’s stock ownership guidelines require that executives hold all after-tax shares they receive from the Company as compensation until they have met the stock ownership guidelines detailed above and if they subsequently fall below such guideline.

 

 

 

COMPENSATION-RELATED GOVERNANCE PRACTICES

The Board’s commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by the Committee. The Company’s compensation-related governance practices and policies of note include the following:

 

Performance-based pay. The majority of the compensation we provide to our NEOs is performance-based.

 

Outcome alignment. Each year we review the Company’s compensation and financial performance against internal budgets, financial results from prior years and Peer Group market data to make sure that executive compensation outcomes are aligned with the absolute and relative performance of the Company.

 

Clawback. We have a recoupment policy which provides:

 

    That fraud or intentional misconduct by any employee that results in an accounting restatement due to material non-compliance with the securities laws would trigger a recoupment of certain incentive compensation from the responsible employee, as determined by the Committee; and
    That the Committee may recoup up to 3 years of an employee’s incentive compensation if that employee’s gross negligence or intentional misconduct caused the Company material harm (financial, competitive, reputational or otherwise).

 

All new change-in-control arrangements are double trigger without excise tax gross-ups. Severance for executives who became eligible to participate in a change in control severance plan after April 15, 2010 is double trigger and those executives are not eligible for an excise tax gross-up.

 

Double-trigger equity vesting upon a change in control. A change in control of the Company will not accelerate the vesting of equity awards unless the recipient has a qualifying termination of employment within two years following the date of the change in control (or the awards are not continued or assumed in connection with the change in control).

 

 

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LOGO    Executive Compensation: Executive Summary

 

 

 

No income tax gross-ups. We do not offer income tax gross-ups except in our relocation program.

 

Anti-hedging. We maintain a policy that prohibits the Company’s employees and directors from hedging or short-selling the Company’s shares.

 

Anti-pledging. We maintain a policy that prohibits the Company’s executive officers and directors from pledging the Company’s shares.

 

Risk evaluation. We regularly evaluate the risks associated with the Company’s compensation plans and programs and consider the potential relationship between compensation and risk taking.

 

No unearned dividends. We do not pay dividends or dividend equivalents on unearned performance shares or unpaid restricted stock unit awards granted to employees.

 

Independent compensation consultant. The Committee engages an independent compensation consultant to advise it on executive compensation matters.

 

No guaranteed bonuses. The Company’s executive officers are not entitled to receive guaranteed bonuses.

 

No excessive perquisites. We do not provide significant perquisites to our named executive officers under our executive compensation program.

 

Cap on incentive payouts. During 2019, the Committee established a maximum for payouts under the annual bonus plan for executives of 200% of target. Performance share payouts are also capped at 200% of target.

 

 

SAY ON PAY

 

 

94.5% OF OUR SHAREHOLDERS SUPPORTED OUR EXECUTIVE

COMPENSATION PROGRAM AT THE 2019 ANNUAL MEETING

 

Although such advisory votes are nonbinding, the Committee reviews and thoughtfully considers the results of Say on Pay votes when evaluating our executive compensation program. Additionally, as mentioned under “Shareholder Engagement” beginning on page [] of this Proxy Statement, it is our practice to actively engage our shareholders throughout the year to garner feedback, including with respect to our executive compensation programs and policies. The decisions made by the Committee with respect to compensation in 2019 reflect the Committee’s belief, based on the results of the advisory vote on 2018 named executive officer compensation and our ongoing dialogue with shareholders, that our shareholders generally support our overall executive compensation program.

 

24   |    2020 PROXY STATEMENT


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LOGO    Executive Compensation: Overview of Executive Compensation Program

 

 

 

Overview of Executive Compensation Program

Key Components of Annual Compensation Decisions

The Company has designed an executive compensation program that is currently comprised of several components, as more fully discussed in the pages that follow. The key components of the Company’s annual compensation decisions are described in the following table. Based on the strong support evidenced at the 2019 Annual Meeting, no significant changes to the Company’s executive compensation program were implemented for 2019 or 2020.

 

     Component   Description  

Performance

Considerations

  Pay Objective
  LOGO  

 

BASE SALARY

 

 

Pay for service in executive role.

 

 

Based on the nature and responsibility of the position, achievement of key performance indicators, internal pay equity among positions and competitive market data.

 

 

Attraction and retention. Base salary adjustments also allow the Committee to reflect an individual’s performance or changed responsibilities.

 

 

ANNUAL BONUS

 

 

Short-term program providing NEOs with an annual cash bonus payment.

 

 

Based on the Committee’s assessment of each NEO’s contributions to Company-wide performance and achievement of key performance indicators.

 

 

Reward performance in attaining Company and individual performance goals tied to our financial and strategic goals on an annual basis.

 

  LOGO

 

 

PERFORMANCE
SHARES

 

 

Long-term program through which participants are given an opportunity to earn shares of Company common stock based on how the Company’s Adjusted EBITDA and Free Cash Flow as a % of Revenue over a two-year performance period compare to targets set by the Committee.

 

 

Based on the measurement of the Company’s performance against two important financial metrics on which the Company focuses from a strategic growth perspective.

 

 

Align the interests of executives with those of shareholders, foster stock ownership and promote retention; reward longer-term performance in attaining Company performance goals.

  RESTRICTED
STOCK UNITS
(RSUs)
  Long-term program providing for delivery of shares of common stock subject to continued employment.   Alignment with shareholders through Company share price performance and the creation of shareholder value.   Retain executives, foster stock ownership and align their interests with those of shareholders.

How the Committee Determines NEO Compensation

The Committee determines NEO compensation in its sole discretion based on its business judgment, informed by the experience of the Committee members, input from Meridian (the Committee’s independent compensation consultant), market data, the Committee’s and the CEO’s assessment of the NEO, achievement of key performance indicators, the Company’s performance and progress towards achievement of its strategic plan and the challenges confronting our business. However, no NEO participates in the determination of his or her own compensation.

The Committee does not focus on any one particular objective, formula or financial metric, but rather on performance relative to what it considers to be value-added quantitative and qualitative goals in furtherance of our compensation guiding principles described in the Executive Summary of this Compensation Discussion and Analysis.

 

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Key Performance Indicators

The Committee assesses the degree and extent of achievement of key performance indicators (KPIs) as a principal tool for making NEO compensation decisions. KPIs, set annually for each of our executive officers, consist of individually designed qualitative and quantitative goals organized in three areas:

 

 

Profit and Revenue Goals, which include, as appropriate, revenue, adjusted EBITDA, operating income, free cash flow, digital revenue and other financial goals for the Company and the respective businesses and/or functions over which each NEO has operational or overall responsibility;

 

 

People Goals, intended to help the Committee measure the NEO’s contributions through, as appropriate, measures of leadership, achievement of diversity initiatives, First Amendment activities, and other significant qualitative objectives such as promoting an ethical Company work environment and diverse workforce and maintaining our reputation as a good corporate citizen of the communities in which we do business; and

 

 

Strategic and Business Goals, which include specific areas in which the NEO is asked to innovate and collaborate to adopt and implement new products and programs in support of the strategic plan.

Each NEO’s KPIs include multiple items in each of the three areas. The KPIs are intended to be challenging but realistic, with a high degree of difficulty in achieving all of the goals set for each NEO. Accordingly, the Committee’s assessment of NEO performance versus KPIs is holistic, with no particular weighting ascribed to achievement of any particular item in any area.

While the Committee takes into consideration the degree of achievement of each NEO’s KPIs and the Company performance goals and financial measures set forth above in making compensation decisions, the Committee exercises its business judgment, in its sole discretion, to set NEO compensation.

Comparative Market Data

To assist the Committee in making decisions affecting NEO compensation opportunities, the Committee reviewed a report from Company management providing, among other things, executive compensation market data. The report included data from the Willis Towers Watson Media Compensation Survey, the Willis Towers Watson General Industry Executive Compensation Survey, the Croner Digital Content and Technology Survey and data from Equilar, a source of detailed executive compensation information (collectively, “Comparative Market Data”).

Through use of this data, the Committee compares NEO salaries, bonus opportunities and equity compensation opportunities to those of companies in the media sector and other companies with comparable revenues to confirm that the elements of our compensation program and the compensation opportunities we afford our executives are appropriately competitive. The Committee does not, however, target elements of compensation to a certain range, percentage or percentile within the Comparative Market Data.

BASE SALARY

We pay our NEOs base salaries to compensate them for service in their executive role. Salaries for NEOs take into account:

 

 

the nature and responsibility of the position;

 

 

the achievement of KPIs, both historically and in the immediately prior year;

 

 

internal pay equity among positions; and

 

 

Comparative Market Data as described above.

Based on these factors, the Committee set 2019 NEO base salaries as follows2:

 

EXECUTIVE

2019 Base Salary

Mr. Lougee

  $950,000

Ms. Harker

  $700,000

Ms. Beall

  $590,000

Mr. Harrison

  $425,000

 

2 

The base salaries for Mr. Lougee and Ms. Harker remain at the same levels as were implemented following the completion of the Cars.com Spin-off.

 

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ANNUAL BONUSES

ANNUAL BONUS OPPORTUNITY

Our NEOs participate in an annual bonus program designed to reward the individual NEO’s contribution to overall Company results and attainment of strategic business objectives during the year. Annual bonuses therefore can vary in amount from year to year.

Beginning in late 2018 and continuing into early 2019, the Committee, in consultation with Meridian, its independent compensation consultant, determined the target bonus opportunities for each NEO. The Committee established these amounts, which are based on a target percentage of each NEO’s base salary, after thorough consideration of:

 

 

the nature and responsibility of the position;

 

 

internal pay equity among positions; and

 

 

Comparative Market Data.

Based on these factors, the Committee approved the following 2019 bonus guideline opportunities for our NEOs:

 

 

Executive

Base
Salary

Target
Percentage

of Base
Salary

Bonus

Guideline
Amount

 

Mr. Lougee

$ 950,000   120 % $ 1,140,000
 

Ms. Harker

$ 700,000   100 % $ 700,000
 

Ms. Beall

$ 590,000   100 % $ 590,000
 

Mr. Harrison

$ 425,000   65 % $ 276,250

ANNUAL BONUS PAYOUT FOR 2019

The extent to which a bonus is earned by an NEO is determined by the Committee, informed by attainment of the Company’s annual financial and qualitative performance goals, individual contributions made by the NEO during the year and each NEO’s KPIs set at the beginning of the year.

In addition to assessing individual KPI achievement, the Committee also considers the financial performance of the Company across a variety of financial measures which, for 2019, included total revenues, operating income, net income, earnings per share, Adjusted EBITDA, EBITDA margins, subscription revenue and free cash flow as a percentage of revenue. The Committee selected these financial measures for 2019 because it considers them to be broad enough to capture the most significant financial aspects of an organization as large as ours yet also focused enough to represent the financial measures that we believe drive our financial success as a pure-play media company.

In assessing Company achievement of these financial performance measures, the Committee compares them to management budgets approved by the Board at the beginning of the year and financial results from prior years and takes into account the Company’s financial performance relative to its peer companies, as well as industry and market conditions. Finally, the Committee evaluates the performance of our executives and the roles played by each of them in achieving critically important strategic transactions and the operational and financial results described in the “Executive Summary” above. Other factors considered by the Committee for the 2019 bonus awarded to each NEO are described below.

 

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David T. Lougee, President and Chief Executive Officer

 

2019 Performance Highlights and Key Accomplishments:

 

During 2019, Mr. Lougee led the Company to strong financial results, executed on significant strategic acquisitions, drove the successful negotiation of network affiliate and retransmission agreements, restructured the Company’s debt, and continued to refine and communicate the Company’s investment thesis. Mr. Lougee’s annual bonus for 2019 reflected these accomplishments as well as the Committee’s assessment of the performance of his duties and his achievement of the following KPIs:

 

 

Profit and Revenue Goals

  

 

•  Increased total revenues 4% to $2.3 billion, in line with his revenue KPI.

 

•  Total shareholder return of 56.4% in 2019.

 

•  Achieved adjusted EBITDA* of $708 million for the year, which exceeded our target by 5%.

 

•  Continued to manage ongoing operational efficiencies and expense savings, including lowering corporate expenses by 7% year over year, excluding acquisition-related costs and advisory fees related to activism defense.

 

 

People Goals

  

 

•  Continued to make progress on key leadership succession and development plans, including successfully transitioning a new Media Operations group head.

 

•  Continued to drive the cultural changes necessary to become the leading local broadcast company for employees, consumers and customers, including the establishment of a Leadership Development Program targeting the next generation of company leadership.

 

•  Continued to champion the need for a more diverse employee base reflecting the markets in which our television stations operate and oversaw an increase in the gender and racial diversity of the Company’s employee base year over year.

 

 

Strategic and
Business Goals

  

 

•  Completed $1.5 billion in acquisitions expected to provide annualized revenues of approximately $500 million, Adjusted EBITDA of approximately $200 million and free cash flow of approximately $100 million, on a two-year average basis.

 

•  Successfully led the Company’s efforts to extend the Company’s CBS and Fox affiliation agreements and retransmission agreements with major cable providers representing 50% of our paid subscribers.

 

•  Under Mr. Lougee’s leadership, the Company continued to pursue its organic growth strategy by:

 

•  Overseeing the development of the Company’s true crime initiative, resulting in the launch of VAULT Studios, an in-house digital production and distribution studio, that has quickly gained a reputation as a premier podcast studio for fans of true crime (several VAULT Studios productions have been among the top 10 true crime podcasts on the Apple Podcasts app);

 

•  Continuing to drive strong revenue growth at Premion, the Company’s OTT advertising network, which had recognized revenues of more than $100 million in 2019; and

 

•  Establishing an in-house national sales organization as part of the Company’s integrated sales transformation strategy.

 

•  Drove industry-wide strategic and regulatory initiatives through meetings with FCC commissioners, close coordination with the National Association of Broadcasters and testifying before the Department of Justice on behalf of all broadcasters with respect to DOJ’s definition of the modern video marketplace.

 

•  Along with Ms. Harker, continued to refine the Company’s investor relations approach and tailored our messaging through a clearly articulated investment thesis that incorporated the regulatory context and the Company’s points of differentiation.

 

*

Reconciliations of the following non-GAAP financial measures to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed March 2, 2020: adjusted EBITDA – page 27.

 

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Victoria D. Harker, Executive Vice President and Chief Financial Officer

 

2019 Performance Highlights and Key Accomplishments:

 

Ms. Harker delivered a strong performance in 2019 during which she and her finance team led the refinancing of $2.1 billion of the Company’s debt, assisted in the negotiation of retransmission and OTT agreements and identified new areas of investment opportunity. Her annual bonus for 2019 reflected the Committee’s assessment of her performance, including her achievement of the following KPIs:

 

   
Profit and
Revenue Goals
  

•  Supported the achievement of the Company’s 2019 financial results through enhancement of our capital structure.

 

•  Led a variety of cost control programs and initiatives, resulting in the reduction of our effective tax rate and significant expense savings that benefited 2019 results.

 

•  Met or exceeded budget with respect to Adjusted EBITDA and earnings per share.

   
People Goals   

•  Achieved employee development and diversity hiring goals and oversaw an increase in the gender and racial diversity of the Company’s finance department year over year.

 

•  Developed a succession planning and development plan, including the creation of development opportunities for senior finance employees.

 

•  Restructured the corporate finance leadership team by rationalizing the tax function and through consolidation and centralization efforts.

   
Strategic and
Business Goals
  

•  Helped drive the completion of $1.5 billion in acquisitions expected to provide annualized revenues of approximately $500 million, Adjusted EBITDA of approximately $200 million and free cash flow of approximately $100 million, on a two-year average basis.

 

•  Including the $1.0 billion offering completed in January 2020, led the Company’s effort to issue $2.1 billion of lower coupon notes, successfully refinancing near-term debt maturities.

 

•  Successfully extended our revolving credit facility for five years (through 2024), providing the Company with significant financing flexibility to manage funding and liquidity efficiently.

 

•  Oversaw various company-wide initiatives, including executing an enterprise resource planning (ERP) implementation.

 

•  Achieved KPIs relating to investor outreach as she continued to refine the Company’s investor relations approach and tailored our messaging in response to feedback received from investors.

 

 

Lynn Beall, Executive Vice President and Chief Operating Officer – Media Operations

 

 

2019 Performance Highlights and Key Accomplishments:

 

In 2019, Ms. Beall continued to demonstrate leadership in overseeing one of the most geographically diverse broadcast groups in the United States as Chief Operating Officer for the Company’s Media Operations. Ms. Beall’s annual bonus for 2019 reflected the Committee’s assessment of her performance including her achievement of the following KPIs:

 

Profit and Revenue Goals   

•  Drove the Company’s Media revenue and net income for TEGNA’s media properties, meeting or exceeding her budget goals with respect to Media Operations revenues, net income and television core revenue.

   
People Goals   

•  Restructured the stations operations leadership team and oversaw the Company’s inaugural class of its Leadership Development Program.

 

•  Fostered greater gender, racial and ethnic diversity, increasing the gender, racial and ethnic diversity of the Company’s Media Operations team year over year and improving the diversity of our on-air talent, management teams and editorial personnel.

 

•  Strengthened the Company’s retransmission consent negotiation team with the hiring of a new distribution executive.

 

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Strategic and Business Goals   

•  Successfully led the Company’s retransmission consent negotiations covering 50% of our subscribers, resulting in new, top-of-the market Big-4 affiliate rates.

 

•  Managed a team that successfully integrated the operations of the 15 television stations and 2 radio stations the Company acquired from Gray Television, Dispatch Media Group and Nexstar Media Group.

 

•  Oversaw the successful negotiation and extension of the Company’s CBS and Fox affiliation agreements.

 

 

Akin S. Harrison, Senior Vice President, General Counsel and Secretary

 

 

2019 Performance Highlights and Key Accomplishments:

 

In 2019, Mr. Harrison effectively managed the law department and provided legal counsel and support in connection with a number of projects, including acquisitions, debt financings, and regulatory and corporate governance matters. Mr. Harrison’s annual bonus for 2019 reflected the Committee’s assessment of his performance, including his achievement of the following KPIs:

 

   
Profit and
Revenue Goals
  

•  Successfully managed the legal department’s budget, enabling it to achieve its internal department and Company-wide outside counsel fee budget for the year.

   
People Goals   

•  Leveraged the experience of his team to allow them to take on additional responsibilities and took steps to improve the efficiency and communication of the Law Department.

   
Strategic and
Business Goals
  

•  Successfully supported the Company’s closing of $1.5 billion in acquisitions, its retransmission consent and network affiliation negotiations and debt refinancing efforts.

 

•  Oversaw the Company’s legal compliance program, including the facilitation of training and compliance programming.

 

•  Continued to partner with internal clients to help them achieve their business goals.

In determining the annual bonus payouts for each NEO, the Committee considered the above individual and Company performance results, including profitability results that exceeded our performance targets and the closing of $1.5 billion in acquisitions. The Committee exercised its business judgment, in its sole discretion, to award 2019 annual bonuses to our NEOs as follows:

 

  Executive   Bonus   

Mr. Lougee

    $ 1,225,000   

Ms. Harker

    $ 780,000   

Ms. Beall

    $ 610,000   

Mr. Harrison

    $ 300,000   

LONG-TERM INCENTIVES

In 2017, upon becoming a pure-play broadcasting company following the Cars.com Spin-off and the sale of our controlling interest in CareerBuilder, the Committee, with the assistance of Meridian and Company management, engaged in a review of the Company’s long-term incentive program (the “LTI Program”). Following this review, during which the Company received positive shareholder feedback regarding its proposed changes to the LTI Program, the Committee decided to continue the use of RSUs in the LTI Program, but determined that it was in the best interests of the Company’s shareholders to modify the Company’s Performance Share awards, beginning in 2018, to (1) discontinue the use of relative total shareholder return of the Company versus a TSR peer group as the performance metric against which payouts were determined and (2) adopt and implement Performance Share awards based on new performance metrics. The Committee chose to discontinue the use of relative TSR for Performance Shares based on the declining number of comparable peer group companies, and developed a new program based on adjusted EBITDA and Free Cash Flow metrics which the Committee views as critical to measuring our success in creating value for shareholders.

 

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The Committee chose a 2-year performance cycle for the Performance Shares in order to address the significant cyclical revenue increase the Company experiences in even-numbered years due to (1) political spending during mid-term and presidential election years as a result of the Company’s strong political footprint, and (2) the summer and winter Olympic games, resulting from the Company being the largest group owner of stations affiliated with NBC, which broadcasts the Olympic games.

 

LOGO

Under the Performance Share program, grants are made, and a new two-year performance cycle begins each year. At the end of each two-year performance cycle, the number of shares of Company common stock earned will be determined based upon the Company’s level of achievement versus the aggregate financial performance target or targets set by the Committee for that cycle. Any earned shares of Company common stock will not be distributed to executives until after the completion of the three-year service period. If the Company fails to meet threshold performance against a financial performance metric at the end of any performance cycle, no Performance Shares will be earned and no payout of shares of Company common stock will be made with respect to that financial performance metric. The revised LTI Program was implemented and has been used for awards made since 2018.

Long-Term Equity Awards under the 2019 LTI Program

For the March 1, 2019 grants, the Committee determined total long-term equity award target values for the NEOs taking into account market data and, for executives other than Mr. Lougee, the recommendations of our President and CEO and Senior Vice President and Chief Human Resources Officer. These target values were calculated by multiplying the NEO’s base salary by a target percentage, which target percentage took into account:

 

 

the nature and responsibility of the position;

 

 

internal pay equity among positions; and

 

 

Comparative Market Data.

Following an assessment of the market data and recommendations made with the assistance of Meridian, the Committee approved 2019 total long-term award target values for each of our NEOs in February 2019. The Committee determined that these long-term equity award values were appropriate given the individual performance of each NEO against his or her KPIs, the financial performance of the Company and the operations for which they are responsible, and the Company’s progress towards the goals of its strategic plan.

 

 

Executive

 

2019

Base Salary

   

Long Term-

Award Target

Percentage

   

Total Long-

Term Award

Target Value

 
 

Mr. Lougee

    $950,000          350%              $3,325,000     
 

Ms. Harker

    $700,000          200%              $1,400,000     
 

Ms. Beall

    $590,000          150%              $   885,000     
 

Mr. Harrison

    $425,000          125%              $   531,250     

 

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On March 1, 2019, the long-term equity award value for each NEO was translated into a target award of Performance Shares and an award of RSUs based upon the Company’s closing stock price on February 28, 2019 (taking into account that dividends would not be paid on the Performance Shares or RSUs during the respective vesting periods), as follows:

 

 

Executive

 

Performance

Shares

(Target #)

    RSUs  
 

Mr. Lougee

    174,858            93,100  
 

Ms. Harker

    62,298            50,400  
 

Ms. Beall

    39,381            31,860  
 

Mr. Harrison

    23,640            19,125  

2018 and 2019 Performance Share Awards

For the 2018 and 2019 Performance Share grants, the Committee determined to maintain the same performance metrics that will be measured over the applicable performance cycle, as follows:

 

Performance Metric    Weighting    Description
Adjusted EBITDA    2/3    Compares, in percentage form, (1) the sum of the actual Adjusted EBITDA generated by the Company in each of the two applicable fiscal years, to (2) the sum of the target budgeted amounts of Adjusted EBITDA set by the Committee in connection with its annual budget review process for such fiscal years.
Free Cash Flow as a Percentage
of Revenue
   1/3    Compares, in percentage form, (1) the aggregate amount of Free Cash Flow generated by the Company in the two applicable fiscal years measured as a percentage of the aggregate total Company revenues generated by the Company in such fiscal years, to (2) the weighted average of the targeted level of Free Cash Flow as a percentage of total Company revenues set by the Committee in connection with its annual budget review process for such fiscal years.

For purposes of the 2018 and 2019 Performance Share grants:

 

 

“Adjusted EBITDA” means net income from continuing operations before (1) interest expense, (2) income taxes, (3) equity income (losses) in unconsolidated investments, net, (4) other non-operating items, (5) severance expense, (6) facility consolidation charges, (7) impairment charges, (8) depreciation, (9) amortization, and (10) expense related to performance share long-term incentive awards. Net income from continuing operations may be further adjusted to exclude unusual or non-recurring charges or credits to the extent and in the amount such items are separately reported or discussed in the financial statements and notes thereto or in management’s discussion and analysis of the financial statements in a periodic report filed by the Company under the Securities Exchange Act of 1934, as amended.

 

 

“Free Cash Flow” means “net cash flow from operating activities” less “purchase of property and equipment”, each as reported in the Company’s consolidated statements of cash flows, and adjusted to exclude (1) voluntary pension contributions, (2) capital expenditures required either by government regulators or due to natural disasters offset by any reimbursements of such expenditures (e.g., from the U.S. Government or an insurance company), and (3) the same adjustments made to Adjusted EBITDA, other than income taxes and interest to the extent of their impact on Free Cash Flow. When calculating Free Cash Flow in respect of the 2019 Performance Shares, actual changes in working capital for the year will be disregarded to the extent they are greater than or less than the $20 million collars specified by the Committee from the target change in working capital. The “collar” limits the impact of volatility in working capital that can impact the Company’s Free Cash Flow. The Committee reserves the right to modify the calculations to adjust for impacts it deems appropriate.

 

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The following table illustrates the ranges of potential payouts based on threshold, target and maximum performance levels for each financial performance metric adopted by the Committee for the applicable performance cycle:

 

 
 

 

Actual versus Target Applicable Payout Percentage*
 

Below Threshold (80%)

<80% 0
 

Threshold

80% 65%
 

Target

100% 100%
 

Maximum

110% 200%
 

Above Maximum

>110% 200%

 

*

The Applicable Payout Percentage is calculated using straight line interpolation for points between Threshold and Target and for points between Target and Maximum.

The Company does not publicly disclose its expectations of how it will perform on a prospective basis in future periods or specific long-term incentive plan targets applicable under its compensation programs due to potential competitive harm. The target performance goals for Adjusted EBITDA and Free Cash Flow for each two-year performance cycle are designed to be appropriately challenging based on internal forecasts and the Company’s historical results, and there is a risk that payments will not be made at all or will be made at less than 100% of the target amount.

With certain exceptions for terminations due to death, disability, retirement (defined as 65 years of age or at least 55 years of age with at least 5 years of service) or a change in control of the Company, Performance Shares generally vest on the expiration of the three-year vesting service period (the Incentive Period) only if the executive continues to be employed by the Company through the last day of the vesting service period.

Following the end of the vesting service period, each executive who has earned Performance Shares will receive the number of shares of Company common stock earned for the performance cycle, less withholding taxes. Dividends are not paid or accrued on Performance Shares.

The vesting of the 2018 and 2019 Performance Share grants will not accelerate in connection with a change in control, unless the executive has a qualifying termination of employment within two years following the date of the change in control or the grants are not continued or assumed (e.g., the grants are not equitably converted or substituted for awards of the successor company) following the change in control. In the event of a change in control occurring prior to the expiration of the applicable performance period, the executive will receive (if the vesting requirements are satisfied) the target number of Performance Shares set forth in the executive award agreement for that Performance Share grant. In the event of a change in control occurring after the expiration of the applicable performance period but prior to the expiration of the applicable vesting service period, the executive will receive (if the vesting requirements are satisfied) the number of Performance Shares earned during the applicable performance cycle.

2019 RSU Awards

An RSU generally represents the right to receive a share of Company stock at a specified date, provided that certain service requirements are satisfied. The RSUs granted to our NEOs in 2019 generally vest and are paid in four annual installments, a longer cycle than the three-year vesting period often used by companies for RSU grants. Executives are also entitled to receive a prorated portion of their RSUs upon retirement, disability or death. The vesting of the RSUs will not accelerate in connection with a change-in-control, unless the executive has a qualifying termination of employment within two years following the date of the change-in-control or the grants are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) following the change-in-control.

 

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Results for 2018 Performance Share Awards

In 2018, the NEOs received Performance Share awards with a two-year performance cycle of January 1, 2018 through December 31, 2019, contingent on the Company achieving its two-year Adjusted EBITDA and Free Cash Flow as a Percentage of Revenue performance targets. The performance metric targets established by the Committee were designed to be challenging.

 

Performance Metric Targets for the 2018 Performance Shares

 
 

 

  Adjusted
EBITDA
   

Cash Flow   

as a   
Percentage   
   of Revenue       

 

2018-2019 Total:

  $ 1,391,735,000     15.2%1

 

1 

Based on a Free Cash Flow target of $661,016,000 and a Revenue target of $4,351,505,000.

In February 2020, the Committee determined that the 2018-2019 Adjusted EBITDA and Cash Flow as a Percentage of Revenue performance metrics were achieved at $1,414,317,000 and 17.0%, respectively, which would have resulted in a payout percentage of 143.7% of the target number of 2018 Performance Shares. However, as discussed previously, the Committee established a working capital “collar” as part of the calculation of Free Cash Flow for purposes of the 2019 Performance Share grants. The Committee exercised discretion to retroactively apply a similar “collar” to the 2018 Performance Share grants to more appropriately align the potential payouts to the Committee’s view of the Company’s performance over the 2018-2019 performance cycle. As a consequence, the number of Performance Shares earned for that cycle was reduced from 143.7% of target to 132.5% of target, resulting in each NEO earning the following number of Performance Shares:

 

Executive

2018
Performance
Shares

Mr. Lougee

196,551

Ms. Harker

  84,668

Ms. Beall

  52,161

Mr. Harrison

    8,797

The earned 2018 Performance Shares remain subject to service vesting requirements; they generally will be paid out shortly after February 28, 2021 to the extent the executive has satisfied the vesting requirements for such awards as of such date.

Results for 2017 Performance Share Awards

In 2017, the Company granted Performance Shares with payouts determined based on the Company’s total shareholder return measured relative to a peer group of media companies (TSR Peer Group) over a three-year period from January 1, 2017 through December 31, 2019 (the Incentive Period).

The TSR Peer Group selected by the Committee for the 2017-2019 Incentive Period, with assistance from its independent compensation consultant, comprised only media companies, reflecting the Committee’s anticipation of the Cars.com Spin-off and the sale of CareerBuilder:

 

     
CBS Corp.   Gray Television, Inc.   Sinclair Broadcast Group, Inc.
Discovery Communications Inc.   Meredith Corp.   Tribune Media Co.**
E.W. Scripps   Nexstar Media Group (formerly,
Nexstar Broadcasting Group, Inc.)
  Twenty-First Century Fox, Inc.**
Graham Holdings Co.   Scripps Networks Interactive**    

 

 

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**

Based on special rules applicable to the 2017-2019 Performance Share awards, this TSR Peer Group member was excluded from the relative TSR comparisons because it entered into a definitive agreement to be acquired on or before the last day of the second year of the 2017-2019 Incentive Period.

For purposes of the 2017 Performance Share awards, a company’s TSR generally equaled a fraction, the numerator of which was the company’s stock price change plus the dividends paid on such stock (which are assumed to be reinvested in the stock) from the first day of the Incentive Period to the applicable measurement date, and the denominator of which was the company’s closing stock price on the business day preceding the first day of the Incentive Period.

For the 2017-2019 Incentive Period, the Committee calculated the number of Performance Shares earned by multiplying the target number of Performance Shares (as specified in the executive’s award agreement) by a percentage based upon the Company’s 3-year TSR performance ranked against the TSR performance of the TSR Peer Group, with percentiles between the thresholds determined by straight line interpolation:

 

3 Year TSR vs. Peer Group Companies

Resulting Shares
Earned (% of
Target)

90th percentile or above

200%

70th percentile

150%

50th percentile

100%

30th percentile

50%

Less than 30th percentile

  0%

Relative TSR performance was measured at the end of each of the last four quarters in the Incentive Period and a hypothetical payout is calculated. The average of these payouts was used to calculate the actual number of Performance Shares that an executive earned, so that the payouts did not solely rely upon the Company’s stock price on the first day and the last day of the Incentive Period.

Comparing the Company TSR to the TSR of the 2017-2019 TSR Peer Group companies at the end of each of the last four quarters in the 2017-2019 Incentive Period resulted in the executives earning a number of Performance Shares equal to 108% of the target number of Performance Shares granted to them in connection with their 2017-2019 awards, resulting in the vesting of the following number of shares:

 

Executive

2017
Performance
Shares

Mr. Lougee

122,735

Ms. Harker

  65,315

Ms. Beall

  21,533

Mr. Harrison

    6,908

The shares earned were paid to the executives on January 29, 2020. Dividends were not paid or accrued on the 2017 Performance Shares.

Impact of Cars.com Spin-off on Pre-2018 Equity Awards

Company equity awards that were outstanding as of the date of the Cars.com Spin-off were adjusted to reflect the impact of the Cars.com Spin-off.

As of May 31, 2017 (the date of the Cars.com Spin-off), each outstanding Performance Share granted in 2017 and each outstanding RSU award granted in 2017 or 2016 that was held by an employee who remained employed by the Company following the Cars.com Spin-off remained denominated in shares of Company common stock, provided that the number of shares subject to the award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original award by multiplying the number of shares by a conversion ratio based upon the volume weighted average per share price of

 

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Company common stock during the five (5) trading days immediately preceding and immediately following the date of the Cars.com Spin-off. TSR performance goals were adjusted to reflect the Cars.com Spin-off, with performance based on the performance of the Company prior to and after the Cars.com Spin-off.

Benefits and Perquisites

The Company’s NEOs are provided a limited number of personal benefits and perquisites (described in footnote 5 to the Summary Compensation Table). The Committee’s objectives in providing these benefits are to provide insurance protection for our NEOs and their families, to enable the Company to attract and retain superior management talent in a competitive marketplace, to complement other compensation components, and to help minimize distractions from our executives’ attention to important Company initiatives.

The personal benefits and perquisites the Company provides to our NEOs, including medical, life insurance and disability plans, are generally the same as those offered to other similarly situated senior executives. For additional information about these and other post-employment benefits, see the “Other Potential Post-Employment Payments” section of this Proxy Statement.

Post-Termination Pay

The Company sponsors post-termination pay plans which assist the Company in recruiting and retaining employees and in providing leadership stability and long-term commitment.

TEGNA Retirement Plan (TRP)

Prior to the spin-off of Gannett in June 2015 (the “Gannett Spin-off”), eligible Company employees generally had earned benefits under the Gannett Retirement Plan (GRP). In connection with the Gannett Spin-off, the Company adopted the TEGNA Retirement Plan (TRP), a tax-qualified defined benefit retirement plan which assumed the GRP pension liabilities relating to Company employees. Accordingly, the TRP generally provides retirement income to certain of the Company’s U.S.-based employees who were employed before their benefits were frozen on August 1, 2008, at which time participants, including each of the NEOs (other than Ms. Harker, who did not participate in the GRP and does not participate in the TRP), ceased to earn additional benefits for compensation or service earned on or after that date. The TRP provides benefits for employees based upon years of credited service, and the highest consecutive five-year average of an employee’s compensation out of the final ten years of credited service, referred to as final average earnings, or FAE. Subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans other than the TEGNA Deferred Compensation Plan (DCP). Until benefits commence, participants’ frozen benefits are periodically adjusted to reflect increases in a specified cost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy).

Effective January 1, 1998, the Company made a significant change to the GRP for service after that date. Certain employees who were either retirement-eligible or had a significant number of years of service with the Company were “grandfathered” in the plan provisions applicable to them prior to the change (pre-1998 plan provisions). Other employees were transitioned to the post-1997 plan provisions under the GRP.

The pre-1998 plan provisions provide for a benefit that is expressed as a monthly annuity at normal retirement equal to a gross benefit reduced by a portion of the participant’s Social Security benefit. Generally, a participant’s annual gross benefit is calculated by multiplying the participant’s years of credited service by specified percentages (generally 2% for each of a participant’s first 25 years of credited service and 0.7% for years of credited service in excess of 25) and multiplying such amount by the participant’s FAE. Benefits under the pre-1998 plan provisions are paid in the form of monthly annuity payments for the life of the participant and, if applicable, the participant’s designated beneficiary. The pre-1998 plan provisions provide for early retirement subsidies for participants who terminate employment after attaining age 55 and completing five years of service and elect to commence benefits before age 65. Under these provisions, a participant’s gross benefit that would otherwise be paid at age 65 is reduced by 4% for each year the participant retires before age 65. If a participant terminates employment after attaining age 60 with 25 years of service, the participant’s gross benefit that would otherwise be paid at age 65 is reduced by 2.5% for each year the participant retires before age 65.

 

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The post-1997 plan provisions provide for a benefit under a pension equity formula, which generally expresses a participant’s benefit as a current lump sum value based on the sum of annual percentages credited to each participating employee. The percentages increase with years of service, and, in some circumstances, with age. Upon termination or retirement, the total percentages are applied to a participant’s FAE resulting in a lump sum benefit value. The pension equity benefit can be paid as either a lifetime annuity or a lump sum.

As noted above, in connection with the Gannett Spin-off, the TRP assumed the GRP pension liabilities of the NEOs who had accrued a benefit under the GRP. The TRP benefit for each of our participating NEOs is calculated under the post-1997 plan provisions. However, as noted below, the SERP benefit for Ms. Beall is calculated under the pre-1998 plan provisions. Each of the NEOs who participates in the TRP is fully vested in his or her TRP benefit.

In connection with its acquisition of Belo Corp. (Belo), the Company assumed the legacy Belo pension plan (the “Belo Plan”), which was merged into the TRP. Since Mr. Lougee earned a pension benefit while employed by Belo, the total TRP benefit for Mr. Lougee is calculated based on his accruals under both the post-1997 TRP plan provisions and the Belo Plan provisions, in which benefits he is also fully vested. Under the Belo Plan, which was frozen to new benefits as of March 31, 2007, Mr. Lougee will be entitled to monthly annuity payments for his life commencing at age 65 calculated by multiplying his Belo credited service (including any additional service credits provided when the plan was frozen) by his monthly FAE, in each case earned at Belo as of March 31, 2007, and further multiplied by specified percentages (generally 1.1% plus 0.35% for average earnings in excess of covered compensation). If Mr. Lougee were to terminate employment and elect to commence receiving benefits prior to age 65, his benefit that would otherwise be paid at age 65 would be reduced as follows: 3.33% per year for each year of such early retirement prior to age 61 and 6.67% per year for each year of such early retirement between ages 61 and 65.

TEGNA Supplemental Retirement Plan (SERP)

The SERP is a nonqualified retirement plan that provides eligible employees with retirement benefits that cannot be provided under the TRP due to the Internal Revenue Code, which limits the compensation that can be recognized under qualified retirement plans and imposes limits on the amount of benefits which can be paid. For some participants, including Ms. Beall, the SERP also provides a benefit equal to the difference between the benefits calculated under the pre-1998 formula, without regard to the IRS-imposed limits on pay and benefits, and the amount they will receive from the TRP under the post-1997 formula. The SERP benefits for Mr. Lougee and Mr. Harrison are calculated under the post-1997 formula without regard to the IRS-imposed limits on pay and benefits. For all SERP participants, the benefit calculated under the applicable SERP formula is reduced by benefits payable from the TRP. Ms. Harker does not participate in the SERP.

In conjunction with the Company’s decision to freeze benefits under the GRP, the Company also decided to make changes to benefits under the SERP. Generally, until December 31, 2017, SERP participants whose SERP benefits were calculated under the pre-1998 formula continued to accrue benefits under the SERP. However, their benefits for credited service after August 1, 2008 were calculated at a rate that is one-third less than the pre-August 1, 2008 rate. Ms. Beall is the only NEO who was affected by this change. Ms. Beall is currently eligible for early retirement under the pre-1998 formula that applies to her under the SERP.

Effective December 31, 2017, SERP participants whose SERP benefits were calculated under the pre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for earnings, credited service, cost of living adjustments or any other factor or reason after that date. Ms. Beall is the only NEO who was affected by this change.

Effective August 1, 2008, SERP participants whose SERP benefits were not calculated under the pre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for compensation or service earned on or after that date. Until benefits commence, such participants’ frozen benefits are periodically adjusted to reflect increases in a specified cost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy). Mr. Lougee and Mr. Harrison are the only NEOs who were affected by this change.

SERP benefits generally vest if the participant terminates employment after attaining age 55 and completing at least five years of service with the Company, although benefits become fully vested upon a change in control.

SERP benefits are generally paid in the form of a lump sum amount when a participant separates from service or, if later, the date the participant attains age 55, except that payment is accelerated in the event that the Company undergoes a change in control. In order to comply with federal tax laws, an NEO’s SERP benefit cannot be paid within the first six months after the

 

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participant’s separation from service with the Company. Mr. Lougee and Ms. Beall each are fully vested in his or her SERP benefits. Mr. Harrison is not vested in his SERP benefit but will become vested if he continues employment until age 55.

TEGNA 401(k) Savings Plan (401(k) Plan)

Most of the Company’s employees based in the United States are eligible to participate in the TEGNA 401(k) Savings Plan (“401(k) Plan”), which permits eligible participants to make pre-tax contributions and provides for matching and other employer contributions. Effective August 1, 2008, new participants as well as participants whose benefits have been frozen under the TRP and, if applicable, the SERP, commenced receiving higher matching contributions under the 401(k) Plan. At that time, the matching contribution rate generally increased from 50% of the first 6% of compensation that an employee elects to contribute to the plan to 100% of the first 5% of compensation. Mr. Lougee, Ms. Harker and Mr. Harrison receive matching contributions under the higher match formula, and Ms. Beall receives matching contributions under the old formula. Beginning in 2018, the matching contribution rate for the 401(k) plan was changed to 100% of the employee’s elective deferrals up to the first 4% of the employee’s compensation, and Ms. Beall became eligible to receive matching contributions under this matching formula due to her SERP benefit being frozen effective as of December 31, 2017. For purposes of the 401(k) Plan and subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans. Company contributions under the 401(k) Plan are immediately vested when they are made; therefore, as of the date of this Proxy Statement, Company contributions are 100% vested for each of the NEOs.

TEGNA Deferred Compensation Plan (DCP)

Each NEO who participates in the DCP, the Company’s nonqualified deferred compensation plan, may elect to defer all or a portion of his or her compensation under the DCP, provided that the minimum deferral must be $5,000 for each form of compensation (base salary and bonus) for the year of deferral. The amounts deferred by each NEO are vested and will be deemed invested in the fund or funds designated by such NEO from among a number of funds offered under the DCP.

The DCP provides for Company contributions on behalf of certain employees whose benefits under the 401(k) Plan are capped by Internal Revenue Code rules that limit the amount of compensation that can be taken into account when calculating benefits under a qualified plan. Generally, Company contributions to the DCP are calculated by applying the same formula that applies to an employee’s matching contributions under the 401(k) Plan to the employee’s compensation in excess of the Internal Revenue Code compensation limit. Participants are not required to make elective contributions to the DCP to receive an employer contribution under the DCP. The same vesting rules that apply under the 401(k) Plan apply to contributions under the DCP, except that amounts under the DCP become vested upon a change in control. Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison each has been credited with Company contributions to the DCP. Each of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison was immediately vested in his or her Company contribution when it was made.

Amounts that a participant elects to defer into the DCP are generally paid at the time and in the form elected by the participant, provided that if the participant terminates employment before attaining age 55 and completing five years of service, benefits are paid in a lump sum amount upon such termination (although for pre-2005 deferrals the Committee may pay such deferrals in five annual installments). The DCP permits participants to receive in-service withdrawals of participant contributions for unforeseeable emergencies and certain other circumstances. Prior to when the deferrals are made, a participant may make a special election as to the time and form of payment for benefits that become payable due to the participant’s death or disability if payments have not already commenced, and deferrals will be paid in accordance with such elections under those circumstances. Company contributions to the DCP are generally paid in the form of a lump sum amount when a participant separates from service. The payment of post-2004 Company and participant DCP contributions is accelerated in the event that the Company undergoes a change in control.

TEGNA 2015 Change in Control Severance Plan

The TEGNA 2015 Change in Control Severance Plan (CIC Severance Plan) provides severance pay for certain key executives upon a change in control of the Company in order to assure the Company that it will have the continued dedication of, and the

 

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availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. Mr. Lougee is the only NEO eligible to participate in the CIC Severance Plan. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.

With those goals in mind, the CIC Severance Plan provides that a participant would be entitled to compensation if the participant is terminated prior to and in connection with a change in control or if within two years from the date of the change in control the participant’s employment is terminated by the Company other than for “cause,” or by the participant for “good reason”.

Following is a summary of several key terms of the CIC Severance Plan:

 

 

“change in control” means the first to occur of: (1) the acquisition of 20% or more of the Company’s outstanding shares of common stock or the combined voting power of the Company’s outstanding voting securities; (2) the Company’s incumbent directors ceasing to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of a sale of the Company in a merger or similar transaction, or sale or other disposition of all or substantially all of the Company’s assets; or (4) approval by the Company’s shareholders of the Company’s complete liquidation or dissolution.

 

 

“cause” means (1) the participant’s material misappropriation of Company funds or property; (2) the participant’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied within 30 days following notice from the Company; or (3) the participant’s conviction, including a plea of guilty or of nolo contendere, of a securities law violation or a felony.

 

 

“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of the participant’s duties, authorities or responsibilities; (2) a reduction in the participant’s base salary or target bonus opportunity; (3) a failure to provide the participant with an annual long-term incentive opportunity whose grant date value is equivalent to or greater in value than participant’s regular annual long-term incentive opportunity in effect on the date of the change in control; (4) the relocation of the participant’s office from the location at which the participant is principally employed immediately prior to the date of the change in control to a location 35 or more miles farther from the participant’s residence immediately prior to the change in control, or the Company’s requiring the participant to be based anywhere other than the Company’s offices, except for required travel on the Company’s business to an extent substantially consistent with the participant’s business travel obligations prior to the change in control; (5) the failure by the Company to pay any compensation or benefits due to the participant; (6) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the CIC Severance Plan; or (7) any purported termination of the participant’s employment that is not effected pursuant to the CIC Severance Plan.

 

 

“multiplier” means 3.0 for the Company’s CEO as of the date of the change in control; 2.0 for a participant who on the date of the change in control is a member of the Company’s executive leadership team and reports directly to the Company’s CEO; and 1.0 for other participants. Mr. Lougee’s multiplier is 3.0.

A NEO entitled to compensation under the CIC Severance Plan would receive:

 

 

Payments. Upon a participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination date in an amount equal to the average annual bonus the participant earned with respect to three fiscal years immediately prior to the fiscal year in which the termination date occurs prorated for the portion of the fiscal year elapsed prior to the termination date. Additionally, participants are paid a lump sum cash severance payment equal to a “multiplier” that is designated for the participant times the sum of (1) the participant’s annual base salary at the highest rate of salary during the 12-month period immediately prior to the termination date or, if higher, during the 12-month period immediately prior to the change in control (in each case, as determined without regard for any reduction for deferred compensation, 401(k) plan contributions and similar items), and (2) the greater of

 

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(A) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the change in control occurs; and (B) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the termination occurs.

 

 

COBRA Benefit. A participant will receive an amount equal to the monthly COBRA cost of the participant’s medical and dental coverage in effect as of the date of termination multiplied by the lesser of (1) 18; or (2) 24 minus the number of full months between the date of the change in control and the date of termination.

 

 

Excise Taxes. In the event benefits otherwise would be subject to Section 4999 of the Code, they will be reduced to $1 less than the amount that would trigger such taxes if such a reduction would put the applicable participant in a better after-tax position.

Benefits are subject to the participant executing a release and agreeing to certain restrictive covenants.

TEGNA Transitional Compensation Plan (TCP)

The TCP is a legacy plan that provides severance pay for some of our NEOs and other key executives upon a change in control of the Company. Ms. Harker, Ms. Beall and Mr. Harrison participate in the TCP. Ms. Harker first participated in the TCP after April 15, 2010. Mr. Lougee participates in the CIC Severance Plan rather than the TCP.

On December 8, 2015, the Company, consistent with its practice of updating its plans and programs from time to time in light of evolving market trends, froze participation in the TCP and, effective December 15, 2016, additional service credit accruals for existing participants.

The TCP assures the Company that it would have the continued dedication of, and the availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. As a result, we believe the TCP helps promote the retention and continuity of certain key executives for at least one year after a change in control. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.

With those goals in mind, the TCP provides that participants would be entitled to compensation following a change in control if (1) within two years from the date of the change in control the participant’s employment is terminated by the Company other than for “cause,” or by the employee for “good reason”, or (2) in the case of executives participating in the TCP before April 15, 2010 (but not those who first participate in the TCP on or after that date), within a 30-day window period beginning on the first anniversary of the change in control, the executive terminates his or her employment voluntarily.

Following is a summary of several key terms of the TCP:

 

 

“change in control” means the first to occur of: (1) the acquisition of 20% or more of our then-outstanding shares of common stock or the combined voting power of our then-outstanding voting securities; (2) our incumbent directors cease to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of our sale in a merger or similar transaction or sale or other disposition of all or substantially all of our assets; or (4) approval by our shareholders of the Company’s complete liquidation or dissolution.

 

 

“cause” means (1) any material misappropriation of Company funds or property; (2) the executive’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied in a reasonable period of time following notice from the Company; or (3) conviction of a felony involving moral turpitude.

 

 

“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of an executive’s duties or responsibilities; (2) a reduction in, or failure to pay timely, the executive’s compensation and/or other benefits or perquisites; (3) the relocation of the executive’s office outside the Washington, D.C. metropolitan area or away from the Company’s headquarters; (4) the failure of the Company or any successor to assume and agree to perform the TCP; or (5) any

 

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purported termination of the executive’s employment other than in accordance with the TCP. Any good faith determination of “good reason” made by the executive shall be conclusive.

 

 

“severance period” means a number of whole months equal to the participant’s months of continuous service with the Company or its affiliates divided by 3.33; provided, however, that in no event shall the participant’s severance period be less than 24 months or more than 36 months, regardless of the participant’s actual length of service. As of December 31, 2019, the severance periods for Ms. Harker, Ms. Beall and Mr. Harrison are 24, 36 and 36 months, respectively.

An NEO entitled to compensation under the TCP would receive:

 

 

Pension. In addition to their vested TRP and SERP benefits, upon their termination of employment, TCP participants are entitled to a lump sum payment equal to the difference between (1) the amount that would have been paid under the TRP and SERP had the executive remained in the employ of the Company for the severance period and received the same level of base salary and bonus which the executive received with respect to the fiscal year immediately preceding the date of the change in control or the termination date, whichever is higher, and (2) the amount payable under the TRP and SERP as of the later of the date of the change in control or the termination date, whichever is higher. Ms. Beall’s SERP benefit was subject to a service and pay freeze as of December 15, 2017. Mr. Harrison’s SERP benefit was subject to a service and pay freeze as of August 1, 2008. Ms. Beall is 100% vested in her SERP benefit and Mr. Harrison would become 100% vested in his SERP benefit in the event of a change in control. The TCP would provide each of Ms. Beall and Mr. Harrison with increases on her or his pension benefit through the end of her or his severance period. Ms. Harker does not participate in the TRP or the SERP.

 

 

Payments. Upon a TCP participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (i) any unpaid base salary through the date of termination at the higher of the base salary in effect immediately prior to change in control or on the termination date; and (ii) an amount equal to the highest annual bonus paid in the three preceding years which is prorated to reflect the portion of the fiscal year in which the participant was employed prior to termination. Additionally, TCP participants are paid a lump sum cash severance payment equal to the participant’s severance period divided by twelve multiplied by the sum of (1) the executive’s highest base salary during the 12-month period prior to the termination date or, if higher, during the 12-month period prior to the change in control (plus certain other compensation items paid to the participant during the 12-month period prior to the date of termination), and (2) the greater of (a) the highest annual bonus earned by the executive in the three fiscal years immediately prior to the year of the change in control or (b) the highest annual bonus earned by the executive with respect to any fiscal year during the period between the change in control and the date of termination.

 

 

Excise Taxes. Executives participating in the TCP before April 15, 2010 (but not those who first participated in the TCP on or after that date) would be entitled to receive payment of an amount sufficient to make them whole for any excise tax imposed on the payment under Section 4999 of the Internal Revenue Code. The effects of Section 4999 generally are unpredictable and can have widely divergent and unexpected effects based on an executive’s personal compensation history. Therefore, to provide an equal level of benefit across individuals without regard to the effect of the excise tax, the Company determined that excise tax reimbursement payments were appropriate for certain TCP participants. Executives, such as Ms. Harker, who first participated in the TCP on or after April 15, 2010, will not receive a Section 4999 excise tax reimbursement. The change of control benefits for executives who are not entitled to receive a Section 4999 excise tax reimbursement payment will be reduced to $1 less than the amount that would trigger such taxes if such a reduction would put them in a better after-tax position.

 

 

Medical and Life Insurance. For purposes of determining a TCP participant’s eligibility for retiree life insurance and medical benefits, the participant is considered to have attained the age and service credit that the participant would have attained had the participant remained employed until the end of the severance period. Additionally, each TCP participant receives life and medical insurance benefits for the severance period in amounts no less than those that would have been provided had the participant not been terminated.

TEGNA Executive Severance Plan (TESP)

Each of the NEOs participates in the TEGNA Inc. Executive Severance Plan (TESP). The TESP provides severance payments to each of the NEOs and other executives of the Company approved by the Committee in the event of certain involuntary terminations of employment. Under the TESP, a participant who experiences an involuntary termination of employment without cause would receive a lump-sum cash severance payment equal to the product of (a) a severance multiple; and (b) the sum of

 

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the participant’s (1) annual base salary and (2) average annual bonus earned for the three fiscal years immediately preceding the termination. The severance multiple is 2.0 for a participant who is the Company’s Chief Executive Officer, 1.5 for a participant who is a member of the Company’s executive leadership team who reports directly to the Company’s Chief Executive Officer, and 1.0 for all other participating executives. In addition, participating executives would receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination. The severance payment is contingent upon the participant’s execution of a separation agreement containing a release of claims in favor of the Company and its affiliates and covenants restricting the participant’s competition, solicitation of employees, disparagement of the Company and its affiliates, and disclosure of confidential information. The separation agreement also contains a release of claims by the Company and its affiliates in favor of the participant and a covenant restricting the Company’s disparagement of the participant. The severance multiples for Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison are 2.0, 1.5, 1.5 and 1.5, respectively.

In May 2017, in order to secure the retention of Ms. Harker following the Cars.com Spin-off, the Company entered into a letter agreement with Ms. Harker pursuant to which she was entitled to participate in the TESP or a plan that provides substantially similar benefits through February 28, 2018. Following that date, Ms. Harker is permitted to terminate her employment with the Company voluntarily and receive the benefits contemplated by the TESP or such other severance plan, subject to her compliance with certain notice requirements and the terms of such plan (including the execution of a release of claims) and provided that circumstances have not arisen entitling the Company to terminate her employment for cause.

Additional information regarding severance benefits for the Company’s NEOs is set forth in the section of this Proxy Statement entitled “Other Potential Post-Employment Payments.”

Other Compensation Policies

Recoupment Policy

The Company has adopted a recoupment or “clawback” policy that applies to cash-based and equity-based incentive compensation awards granted to the Company’s employees, including the NEOs. Under the policy, to the extent permitted by applicable law and subject to the approval of the Committee, the Company may seek to recoup any incentive based compensation awarded to any employee subject to the policy, if (1) the Company is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws, (2) the fraud or intentional misconduct of an employee subject to the policy contributed to the noncompliance that resulted in the obligation to restate, and (3) a lower award of incentive-based compensation would have been made to the covered employee had it been based upon the restated financial results. In December 2018, the Company amended its recoupment policy to permit the Committee to recoup up to three years of an employee’s incentive compensation if that employee’s gross negligence or intentional misconduct caused the Company material harm (financial, competitive, reputational or otherwise). The policy is in addition to any other remedies the Company may have, including those available under Section 304 of the Sarbanes-Oxley Act of 2002, as amended.

Hedging, Short-Selling and Pledging Policy

The Company has adopted a policy that prohibits the Company’s employees and directors from purchasing financial instruments that are designed to hedge or offset any fluctuations in the market value of the Company’s equity securities they hold, purchasing the Company’s shares on margin and selling any securities of the Company “short.” The policy also prohibits the Company’s directors and executive officers from borrowing against any account in which the Company’s equity securities are held or pledging the Company’s equity securities as collateral for a loan. These prohibitions apply whether or not such equity securities were acquired through the Company’s equity compensation programs.

Tax Considerations

Effective January 1, 2018, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid to an individual who was the company’s CEO, CFO or one of the company’s next three other most highly compensated executive officers in any year after 2016 (“covered employee”). Prior to

 

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Table of Contents
LOGO    Executive Compensation: Leadership Development and Compensation Committee Report

 

 

 

January 1, 2018, Section 162(m) provided for an exception to the deduction limit for qualifying performance-based compensation if specified requirements were met, and the deduction limit did not apply to the CFO or an individual who was not the company’s CEO or one of the company’s next three most highly compensated employees as of the last day of the fiscal year. The Tax Cuts and Jobs Act of 2017 amended Section 162(m) by eliminating the performance-based exception and expanding the individuals who are treated as covered employees.

As a general matter, while the Committee considers tax deductibility as one of several relevant factors in determining compensation, it retains the flexibility to design and maintain executive compensation arrangements that it believes will attract and retain executive talent and result in strong returns to shareholders, even if such compensation is not deductible by the Company for federal income tax purposes.

Leadership Development and Compensation Committee Report

The Leadership Development and Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures included in this Proxy Statement. Based on such review and discussion, on February 18, 2020 the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Form 10-K for its 2019 fiscal year, and the Board has approved that recommendation.

Leadership Development and Compensation Committee

Scott K. McCune, Chair

Howard D. Elias

Lidia Fonseca

Melinda C. Witmer

 

2020 PROXY STATEMENT    |   43


Table of Contents
LOGO    Executive Compensation: Summary Compensation Table

 

 

 

Summary Compensation Table

 

Name and

Principal Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($)(2)

Non-Equity
Incentive Plan
Compensation

($)(3)

 

Change in

Pension Value

and Nonqualified

Deferred

Compensation

Earnings

($)(4)

All Other

Compensation

($)(5)

      Total      

($)

 

David T. Lougee

(President and CEO)

 

2019

 

950,000

 

1,225,000

 

3,324,995

 

0

 

100,646

 

186,105

   5,786,746   

 

2018

 

950,000

 

1,000,000

 

2,749,995

 

0

 

0

 

185,365

4,885,360

 

2017

 

908,333

 

1,000,000

 

2,650,003

 

0

 

48,645

 

191,401

4,798,382

 

Victoria D. Harker

(Executive Vice President

and Chief Financial Officer)

 

2019

 

700,000

 

780,000

 

1,400,003

 

0

 

0

 

72,414

2,952,417

 

2018

 

700,000

 

690,000

 

1,399,999

 

300,000

 

0

 

70,737

3,160,736

 

2017

 

700,000

 

675,000

 

1,399,982

 

700,000

 

0

 

84,314

3,559,296

 

Lynn Beall

(Executive Vice President and COO—
Media Operations)

 

2019

 

585,961

 

610,000

 

884,999

 

0

 

744,670

 

108,250

2,933,880

 

2018

 

575,000

 

550,000

 

862,502

 

0

 

0

 

109,741

2,097,243

 

2017

 

554,167

 

562,019

 

714,999

 

0

 

826,662

 

61,398

2,719,245

 

Akin S. Harrison

(Senior Vice President, General

Counsel and Secretary)(1)

 

 

2019

 

425,000

 

300,000

 

531,253

 

0

 

8,086

 

25,555

1,289,894

 

(1)

Mr. Harrison was promoted to his current role and became an executive officer of the Company effective January 1, 2019.

(2)

Amounts in this column represent the aggregate grant date fair value of Performance Share and RSU awards computed in accordance with Accounting Standards Codification 718, Compensation—Stock Compensation (“ASC 718”) based on the assumptions set forth in note 10 to the Company’s 2019 audited financial statements. The amounts reported in this column are not paid to or realized by the NEO. There can be no assurance that the ASC 718 amounts shown in this column will ever be realized by an executive officer. The value of grants of Performance Shares included above have been calculated assuming the target level of performance is met, which we consider to be the most probable outcome. If grants of Performance Shares were calculated assuming the maximum level of performance was met, the amounts shown in this column for Mr. Lougee would be: 2019: $5,486,240; 2018: $4,537,492; and 2017: $4,359,996; for Ms. Harker: 2019: $2,170,007; 2018: $2,169,994; and 2017: $2,309,971; for Ms. Beall: 2019: $1,371,748; 2018: $1,336,874; and 2017: $1,015,004; and for Mr. Harrison: 2019: $823,443.

(3)

The amount reported in this column for Ms. Harker in 2018 and 2017 represents the portion of the cash incentive award granted to Ms. Harker on May 4, 2017 in connection with the Cars.com Spin-off that vested on June 1, 2018 and December 31, 2017, respectively, due to her remaining in continuous, active employment with the Company through those dates.

(4)

Amounts in this column represent the aggregate increase, if any, of the accumulated benefit liability relating to the NEO under the TRP and the SERP in the applicable fiscal year. Amounts are calculated by comparing values as of the pension plan measurement date used for the Company’s financial statements for the applicable fiscal years. This includes the value of any additional service accrued, the impact of any compensation increases received, the impact of any plan amendments made during the period, and growth attributable to interest, if applicable. The Company uses the same assumptions it uses for financial reporting under generally accepted accounting principles with the exception of retirement age, pre-retirement mortality and probability of terminating employment prior to retirement. The assumed retirement age for the above values is the earliest age at which an executive could retire without any benefit reduction due to age. The above values are calculated assuming each NEO survives to the assumed retirement age. The amounts reported in this column shown for Mr. Lougee include the accumulated benefit liability related to his legacy Belo Corp. pension benefit. The amounts reported in this column shown for Ms. Harker reflect the fact that she does not participate in the TRP or the SERP.

(5)

Amounts for 2019 reported in this column include (i) life insurance premiums paid by the Company (or cash in lieu of premium payment) for Mr. Lougee in the amount of $44,400 and Ms. Beall in the amount of $15,289 (for an explanation of the Company’s life insurance programs, see footnote [    ] to the “Potential Payments to NEOs Upon Termination” table beginning on page [] of this Proxy Statement); (ii) matching contributions of $11,200 to each of the respective 401(k) accounts of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison; (iii) Company contributions into the DCP accounts of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison in the amounts of $66,800, $44,400, $34,238 and $14,355, respectively (for an explanation of these payments, see the discussion of the TEGNA Deferred Compensation Plan beginning on page [    ] of this Proxy Statement); (iv) premiums paid by the Company for supplemental medical coverage for Mr. Lougee and Ms. Beall; (v) other than for Ms. Harker and Mr. Harrison, a Company-provided automobile (beginning in 2012, the Company no longer provides this benefit to new senior executives), (vi) legal and financial services for Mr. Lougee and Ms. Beall; (vii) TEGNA Foundation grants to eligible charities recommended by Mr. Lougee and Ms. Harker of up to $15,000 annually (beginning in 2013, the Company no longer provides this benefit to new senior executives, including Ms. Beall and Mr. Harrison); and (viii) premiums paid by the Company for travel accident insurance for Mr. Lougee, Ms. Harker and Ms. Beall in the amounts of $1,814, $1,814 and $778, respectively. The NEOs also occasionally receive tickets to sporting events for personal use if the tickets are not needed for business use, for which the Company does not incur incremental costs.

 

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LOGO    Executive Compensation: Grants of Plan-Based Awards

 

 

 

Grants of Plan-Based Awards

The following table summarizes grants of plan-based awards in 2019. See the table entitled “Outstanding Equity Awards at Fiscal Year End” for the number of plan-based awards outstanding on December 31, 2019.

 

     

Estimated Future Payouts

Under Equity Incentive

Plan Awards(2)

 

 

All Other
Stock
Awards:
Number
of Shares
‘of Stock

or Units

(#)(3)

Grant
Date Fair
Value of
Stock
and Option

Awards

($)(4)

Name

Grant

Date(1)

Committee

Meeting

Date

Threshold

(#)

Target

(#)

Maximum

(#)

 

Mr. Lougee

 

3/1/19

 

2/18/19

 

113,658

 

174,858

 

349,716

 

2,161,245

 

3/1/19

 

2/18/19

 

93,100

 

1,163,750

 

Ms. Harker

 

3/1/19

 

2/18/19

 

40,494

 

62,298

 

124,596

 

770,003

 

3/1/19

 

2/18/19

 

50,400

 

630,000

 

Ms. Beall

 

3/1/19

 

2/18/19

 

25,598

 

39,381

 

78,762

 

486,749

 

3/1/19

 

2/18/19

 

31,860

 

398,250

 

Mr. Harrison

 

3/1/19

 

2/18/19

 

15,366

 

23,640

 

47,280

 

292,190

 

3/1/19

 

2/18/19

 

19,125

 

239,063

 

(1)

See the “Compensation Discussion and Analysis” section for a discussion of the timing of various pay decisions.

(2)

These share numbers represent the threshold, target and maximum payouts which may be earned under the 2019 Performance Share awards. The threshold payout is 65% of the target Performance Share award, and the maximum payout is 200% of the target Performance Share award.

(3)

The RSU grants reported in this column generally vest in four equal annual installments and, subject to certain exceptions, the corresponding vested shares of the Company’s common stock generally will be delivered to the NEO in four equal annual installments beginning on February 28, 2020.

(4)

The full grant date fair value of the awards was computed in accordance with ASC 718, based on the assumptions set forth in note 10 to the Company’s 2019 audited financial statements. There can be no assurance that the ASC 718 amounts shown in the table will ever be realized by an executive officer. Amounts shown for grants of Performance Shares have been calculated assuming the target level of performance is met.

 

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Table of Contents
LOGO    Executive Compensation: Outstanding Equity Awards at Fiscal Year-End

 

 

 

Outstanding Equity Awards at Fiscal Year-End

 

   

 

Stock Awards

Name

Number

of

Shares

or Units

of Stock

that

Have Not

Vested

(#)

Market

Value of

Shares

or Units

of Stock

that

Have Not

Vested

($)

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

Shares,

Units

or Other

Rights

That Have

  Not Vested  

($)

 

Mr. Lougee

 

17,958(1)

 

 

299,719

 

59,219(2)

 

 

988,365

 

93,100(3)

 

 

1,553,839

 

196,551(4)

 

 

3,280,436

 

174,858

(5)

2,918,380

 

Ms. Harker

 

9,696(1)

 

 

161,826

 

38,762(2)

 

 

646,938

 

50,400(3)

 

 

841,176

 

84,668(4)

 

 

1,413,109

 

62,298

(5)

1,039,754

 

Ms. Beall

 

7,867(1)

 

 

131,300

 

23,880(2)

 

 

398,557

 

31,860(3)

 

 

531,743

 

52,161(4)

 

 

870,567

 

39,381

(5)

657,269

 

Mr. Harrison

 

1,599(1)

 

 

26,687

 

7,383(2)

 

 

123,222

 

19,125(3)

 

 

319,196

 

8,797(4)

 

 

146,822

 

23,640

(5)

394,552

 

(1)

These RSUs will vest on December 31, 2020. The value of these RSUs is based on the product of the number of RSUs multiplied by $16.69, the closing price of a share of Company stock on December 31, 2019. There can be no assurance that the amounts shown in the table will ever be realized by an executive officer.

(2)

These RSUs will vest in three equal annual installments ending on February 28, 2022. The value of these RSUs is based on the product of the number of RSUs multiplied by $16.69, the closing price of a share of Company stock on December 31, 2019. There can be no assurance that the amounts shown in the table will ever be realized by an executive officer.

(3)

These RSUs will vest in four equal annual installments ending on February 28, 2023. The value of these RSUs is based on the product of the number of RSUs multiplied by $16.69, the closing price of a share of Company stock on December 31, 2019. There can be no assurance that the amounts shown in the table will ever be realized by an executive officer.

(4)

These numbers represent the Performance Shares earned for the 2018-2019 performance cycle, which were earned at 132.5% of target as described on page [] of this proxy statement. The payout of the earned Performance Shares remains subject to a service-based vesting period ending February 28, 2021. The value of these Performance Shares is based on the product of the earned number of Performance Shares multiplied by $16.69, the closing price of a share of Company stock on December 31, 2019. There can be no assurance that the amounts shown in the table will ever be realized by an executive officer.

(5)

These share numbers represent the target Performance Share awards under the Performance Share program for the 2019-2022 Incentive Period. If the performance conditions are met during the two-year performance cycle ending December 31, 2020, these Performance Shares are eligible to vest on February 28, 2022. The value of these Performance Shares is estimated by multiplying the target number of Performance Shares by $16.69, the closing price of a share of Company stock on December 31, 2019. There can be no assurance that the amounts shown in the table will ever be realized by an executive officer.

 

46   |    2020 PROXY STATEMENT


Table of Contents
LOGO    Executive Compensation: Option Exercises and Stock Vested

 

 

 

Option Exercises and Stock Vested

 

   

 

Stock Awards

 
  Name  

 

Number of

Shares

Acquired on

Vesting

(#)(1)

   

Value

Realized on

Vesting

($)(2)

 

  David T. Lougee

 

 

169,050    

 

 

 

2,859,970

 

  Victoria D. Harker

 

 

96,102    

 

 

 

1,615,941

 

  Lynn Beall

 

 

40,484    

 

 

 

666,608

 

  Akin S. Harrison

 

 

12,188    

 

 

 

200,834

 

 

(1)

These share amounts include (a) 25% of the Company’s RSU awards granted on March 1, 2018 which vested on February 28, 2019 (which RSUs were paid to the NEOs by the Company shortly after the vesting date); (b) with respect to Mr. Lougee and Ms. Beall only, 25% of the Company’s RSU awards granted on June 9, 2017 which vested on December 31, 2019 (which RSUs were paid to Mr. Lougee and Ms. Beall shortly after the vesting date); (c) 25% of the Company’s RSU awards granted on January 1, 2017 which vested on December 31, 2019 (which RSUs were paid to the NEOs by the Company shortly after the vesting date); (d) 25% of the Company’s RSU awards granted on January 1, 2016 which vested on December 31, 2019 (which RSUs were paid by the Company to the NEOs shortly after the vesting date); and (e) Performance Shares that vested based on the results of the 2017-2019 Incentive Period, which ended December 31, 2019, and which were paid to the NEOs on January 29, 2020.

(2)

For each of the NEOs, these amounts equal the sum of (a) the product of the aggregate number of vested Company RSU shares granted on March 1, 2018 multiplied by $13.17 (the closing price of a share of Company stock on February 28, 2019, the vesting date), (b) the product of the aggregate number of vested Company RSU shares granted on January 1, 2016, January 1, 2017 and June 9, 2017 multiplied by $16.69 (the closing price of a share of Company stock on December 31, 2019, the vesting date) and (c) the product of the number of Performance Shares earned for the 2017-2019 Incentive Period multiplied by $17.57 (the closing price of a share of Company stock on January 27, 2020, the date the Performance Shares earned for the 2017-2019 Incentive Period were priced in order to deliver the Performance Shares (net of shares withheld to pay taxes) to participants on January 29, 2020).

Pension Benefits

The table below shows the actuarial present value as of December 31, 2019 of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each, under each of the TEGNA Retirement Plan, or TRP, and the TEGNA Supplemental Retirement Plan, or SERP, in each case determined using assumptions consistent with those used in the Company’s financial statements, except with respect to pre-retirement mortality, probability of turnover prior to retirement and retirement age. The table below reflects an immediate retirement for all NEOs who participate with respect to the TRP and the SERP. The amounts reported in the table reflect payment at the earliest point in time at which benefits are available without any reduction for age. Information regarding the TRP and SERP can be found in the “Compensation Discussion and Analysis” section under the heading “Post-Termination Pay.” Ms. Harker does not participate in the TRP or the SERP.

 

Name

  Plan Name    

 

Number

of Years

Credited

Service

(#)

   

 

Present

Value of

Accumulated

Benefit

($)

   

 

Payments

During

Last Fiscal 

Year

($)

 

Mr. Lougee(1)

 

 

TRP

 

 

 

20.12

 

 

 

631,113

 

 

0

 

 

SERP

 

 

 

6.58

 

 

 

25,083

 

 

0

 

Ms. Beall(2)

 

 

    TRP

 

 

 

20.17

 

 

 

322,121

 

 

0

 

 

SERP

 

 

 

29.58

 

 

 

3,979,258

 

 

0

 

Mr. Harrison(3)

 

 

    TRP

 

 

 

5.33

 

 

 

35,648

 

 

0

 

 

SERP

 

 

 

5.33

 

 

 

1,569

 

 

0

 

(1)

The TRP amount shown for Mr. Lougee includes the accumulated benefit related to his legacy Belo Corp. pension benefit. The number of years of credited service shown for Mr. Lougee include 13.5 years of service under the Belo Corp. Pension Plan, which was acquired by

 

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Table of Contents
LOGO    Executive Compensation: Non-Qualified Deferred Compensation

 

 

 

  the Company. The Company has not granted Mr. Lougee any additional credited service under the pension plans. The present values of Mr. Lougee’s accumulated TRP and legacy Belo Corp. pension benefits are $137,604 and $493,509, respectively.
(2)

Ms. Beall has fewer years of credited service under the TRP than under the SERP. As discussed in the description of the SERP beginning on page [    ] of this Proxy Statement, participants in the SERP whose SERP benefits were not calculated under the pre-1998 formula ceased accruing credit for additional years of service after the GRP was frozen on August 1, 2008. Until December 31, 2017, at which time SERP participants whose SERP benefits were calculated under the pre-1998 formula ceased accruing credit for additional years of service or compensation, Ms. Beall continued to accrue benefits under the SERP at a reduced rate (as described in the discussion of the SERP found in the “Compensation Discussion and Analysis” section of this Proxy Statement) based on actual years of service. The Company does not generally provide additional pension service credit to any executive for years not actually worked.

(3)

Mr. Harrison is not vested in his SERP benefit but will become vested if he continues employment until age 55.

Non-Qualified Deferred Compensation

The TEGNA Deferred Compensation Plan, or DCP, is a non-qualified plan that allows Company executives to defer all or a portion of their compensation. Participant contributions that are not treated as if invested in the Company’s stock are generally distributed in cash and amounts that are treated as if invested in the Company’s stock are generally distributed in shares of stock or cash, at the Company’s election. Effective August 1, 2008, the DCP also provides for Company contributions for certain participants. Additional information regarding the DCP can be found in the “Compensation Discussion and Analysis” section under the heading “Post-Termination Pay.”

 

  Name

Executive

Contributions

in Last FY

($)

Registrant

Contributions

in Last FY

($)(1)

Aggregate

Earnings

in Last FY

($)

 

Aggregate

Withdrawals/

Distributions

in Last FY

($)

Aggregate

Balance at

Last FYE

($)

  Mr. Lougee

0

66,800

219,092

0

933,037

  Ms. Harker

0

44,400

112,924

0

413,039

  Ms. Beall

0

34,238

  16,780

0

  84,534

  Mr. Harrison

0

14,355

  29,123

0

131,146

 

(1)

For 2019, the Company credited contributions to the DCP on behalf of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison in an amount equal to 4% of their respective cash compensation that exceeds the Internal Revenue Code limits on the amount of compensation that can be taken into account when calculating benefits under a qualified plan. These Company contributions are initially treated as invested in Company stock (although participants can reallocate the contributions to other designated investment options) and are distributed in cash. The amounts shown in this column reflect the Company contributions made in February 2020 for services provided by Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison in 2019, all of which contributions were included in the amounts reported in the “All Other Compensation” column of the “Summary Compensation Table” found on page [] of this Proxy Statement.

 

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LOGO    Executive Compensation: Other Potential Post-Employment Payments

 

 

 

Other Potential Post-Employment Payments

The Company’s employee benefit programs provide the NEOs with post-termination benefits in a variety of circumstances. The amount of compensation payable may vary depending on the nature of the termination, whether as a result of retirement/voluntary termination, involuntary not-for-cause termination, termination following a change in control or termination in the event of the disability or death of the executive. The following table describes payments the NEOs generally may receive under the Company’s employee benefits programs following termination in connection with certain events. Benefits provided to an NEO pursuant to a particular agreement or other arrangement between the Company and the NEO are not described in the table below. Any such benefits are described in the footnotes to the “Potential Payments to NEOs Upon Termination” table beginning on page [    ] of this Proxy Statement.

 

Benefit   Retirement/
Voluntary
Termination
  Death   Disability   Change in Control   Involuntary
Termination
without Cause

 

Pension

 

 

Vested portion of:

 

(1) TRP benefit payable at the date of termination.

 

(2) SERP benefit payable at the later of the termination date or the date the NEO reaches age 55.

 

 

Vested portion of:

 

(1) TRP benefit payable to an eligible spouse at the date of NEO’s death.

 

(2) SERP benefit payable to an eligible spouse at the later to occur of (a) the date of death or (b) the date the NEO would have attained age 55.

 

 

Vested portion of:

 

(1) TRP benefit payable at the date of termination.

 

(2) SERP benefit payable at the later of the termination date or the date the NEO reaches age 55.

 

 

In addition to their vested TRP and SERP benefits, NEOs who actively participate in the SERP are entitled to receive a lump sum payment in an amount determined based upon the SERP payment the NEO would have received if the NEO had remained employed by the Company during the applicable severance period.

 

 

 

Vested portion of:

 

(1) TRP benefit payable at the date of termination.

 

(2) SERP benefit payable at the later of the termination date or the date the NEO reaches age 55.

Restricted Stock Units   Vested RSUs are payable at the date of termination and if termination occurs after age 65 (or after attaining 55 with 5 years or more of service), the NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant.   The NEO’s estate is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant.   The NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant.   RSUs only provide for accelerated vesting if the awards are not continued or assumed upon a change in control or there is a qualifying termination within 2 years of the change in control.  

Vested RSUs are payable at the date of termination, and if termination occurs after age 65 (or after attaining 55 with 5 or more years of service), the NEO is generally entitled to receive a prorated portion of RSUs based on the number of full months worked during the term of the applicable grant.

 

 

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Table of Contents
LOGO    Executive Compensation: Other Potential Post-Employment Payments

 

 

 

Benefit   Retirement/
Voluntary
Termination
  Death   Disability   Change in Control   Involuntary
Termination
without Cause
Performance Shares   Performance shares are forfeited unless termination occurs after age 65 (or after attaining 55 with 5 years or more of service), in which case the NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period.   The NEO’s estate is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period.   The NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period.  

Performance Shares only provide for accelerated vesting if the awards are not continued or assumed upon the change in control or there is a qualifying termination within 2 years of the change in control.

 

Performance Share award payouts made as a result of change in control occurring prior to the expiration of the two-year performance cycle will be made at target; if the change in control occurs after the performance cycle is completed, payouts will be determined based on the Company’s achievement of the applicable performance metrics during the performance cycle.

 

  Performance shares are forfeited unless termination occurs after age 65 (or after attaining 55 with 5 or more years of service), in which case the NEO is generally entitled to receive, after the end of the applicable Incentive Period, a prorated number of Performance Shares based on the number of full months worked during the applicable Incentive Period.

Life and Disability

Insurance Benefits

  None.  

NEOs are generally entitled to receive death benefits under individual policies maintained by the Company and owned by the NEO or pursuant to the Company’s group life insurance program applicable to all employees.

 

 

  NEOs are generally entitled to receive disability benefits under the Company’s disability plans applicable to all employees, but only if their condition qualifies them for such benefits.   None.   None.

 

50   |    2020 PROXY STATEMENT


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