Form 4: LEE CFO Reports Stock Transactions & Option Grants

Lee Enterprises' CFO, Timothy R. Millage, reported recent stock dispositions for tax withholding and new grants of stock options and performance shares.

Summary

• Timothy R. Millage, V.P., CFO and Treasurer of Lee Enterprises, Inc. (LEE), reported changes in his beneficial ownership.
• Disposed of 1,639 shares of Common Stock on December 9, 2022, at a price of $16.74 per share, reducing his direct beneficial ownership to 36,588 shares.
• Disposed of 2,048 shares of Common Stock on December 9, 2025, at a price of $4.15 per share, reducing his direct beneficial ownership to 34,540 shares.
• Disposed of 299 shares of Common Stock on December 16, 2025, at a price of $3.45 per share, reducing his direct beneficial ownership to 34,241 shares.
• These dispositions were due to the exercise of tax withholding rights in connection with the vesting of previously granted restricted stock.
• Acquired 5,203 Employee Stock Options (Right to Buy) on March 11, 2025, with an exercise price of $16.36, vesting in three equal annual installments beginning December 16, 2025, and expiring on December 15, 2034.
• Acquired 6,364 Employee Stock Options (Right to Buy), representing performance rights, on March 11, 2025, which vest on their expiration date of September 26, 2027, upon satisfaction of certain performance criteria of LEE's common stock.

Sentiment

Score: 5

Explanation: This Form 4 filing is a routine disclosure of insider transactions related to executive compensation, including both dispositions for tax purposes and new grants of long-term incentives. It does not contain information that would significantly alter the company's fundamental outlook or financial performance, thus warranting a neutral sentiment.

Positives

• The grant of new stock options and performance shares aligns management's interests with shareholder value creation.
• The long-term incentive plan encourages executive retention and performance over several years.

Negatives

• Dispositions of common stock for tax withholding purposes reduced the direct beneficial ownership of the CFO.

Risks

• The vesting of 6,364 performance rights is contingent upon the satisfaction of certain performance criteria of LEE's common stock, meaning the shares may not be received if conditions are not met.
• The value of the stock options is subject to the future market price of LEE common stock, which could fluctuate.

Future Outlook

The future outlook for the reported derivative securities is tied to the vesting schedules and the satisfaction of performance criteria for the performance rights. The stock options will vest in annual installments, while the performance rights are contingent on specific company performance metrics by their expiration date.

Management Comments

• The dispositions of common stock were a result of the exercise of tax withholding rights in connection with the vesting of previously granted restricted stock.
• The grant of restricted stock awards, stock options, and performance shares was approved by the executive compensation committee and subsequently by shareholders, with the Form S-8 filed to register the additional shares.

Industry Context

This filing reflects standard executive compensation practices within publicly traded companies, where long-term incentives like stock options and performance shares are used to align executive interests with shareholder value and encourage long-term performance. The use of a 10b5-1 plan indicates a pre-arranged trading plan for compliance.

Corporate Governance

Related Party Transactions

• The grants of stock options and performance shares to the CFO constitute related party transactions as part of executive compensation.

Stakeholder Impact

• Shareholders: The new grants of stock options and performance shares aim to align executive incentives with shareholder returns, potentially leading to improved long-term performance. However, these grants also represent potential future dilution.
• Employees (Executives): The CFO benefits from long-term incentive awards, which are a key component of executive compensation and retention.

Next Steps

• Vesting of 5,203 employee stock options in three equal annual installments beginning December 16, 2025.
• Satisfaction of performance criteria for 6,364 performance rights by September 26, 2027, for them to vest.

Key Dates

Keywords

Lee Enterprises, LEE, Form 4, Insider Transaction, Executive Compensation, Stock Options, Restricted Stock, Performance Shares, CFO, Beneficial Ownership