Memo from Ron Redfern

February 10, 2009
TO: All PEC Employees
FROM: Ron Redfern

Dear Colleagues:

By now, I hope all of you have read Robert Decherd’s letter of January 30^th to all A. H. Belo employees. If you have not, you can access it on the A. H. Belo intranet site or obtain a copy from Human Resources.

In the letter, Robert describes how the present economic climate, coupled with the significant challenges that the newspaper industry was facing even before the recent economic downturns, have made this an especially difficult time for our newspaper company, as well as newspaper companies across the country.

We continue to be very uncertain about what will happen with our economy in this coming year. Consequently, we are anticipating further advertising revenue declines for 2009 from 2008, and in fact, our January results bear this out. Because advertising revenues account for approximately 80% of our company’s revenue, we need to implement the expense-reduction measures outlined in Robert’s letter.

Two things were not ready for communication at the time of Robert’s letter: the timing of the layoffs and the severance package.

As to timing, we anticipate completing the layoffs by the end of April. We are currently in the process of determining the extent of the layoffs and will notify impacted employees as soon as possible. If for some reason the layoffs will extend beyond April, you will be advised.

A. H. Belo has adopted a severance plan that governs the amount of severance to be paid to employees who terminate employment with an A. H. Belo company due to a reduction in force.

• Generally, employees who are terminated due to the reduction in force and who sign the separation-and-release agreement, will receive a lump-sum severance payment of one and one-quarter (1.25) weeks of current base pay for each year of employment. The maximum severance allowed is 10 weeks. The minimum severance payment for eligible employees will be two weeks. Partial years of service will be used for purposes of calculating the severance payment.


• The severance payment will be made once the separation-and-release agreement has been signed and, when applicable, the revocation period has expired.


• Outplacement services to assist employees in looking for their next employment opportunity are being provided as part of the offer.

Thanks to each of you for your continued support and efforts on behalf of The Press-Enterprise. Our mission as an organization is an important one for all of the communities we serve in the region. It is unfortunate that we must take these measures to sustain that mission, but they are truly necessary. I appreciate your cooperation during these difficult and challenging times.

Memo from the Modesto Bee (dated 1/28/09)

In order to help offset decreases in advertising revenue, we will be reducing a significant number of pages in the paper each week.

These are not things we want to do, but things we need to do.

In the next several weeks, we'll be:

§ Consolidating and/or combining some sections.

§ Reducing the number of section fronts.

§ Eliminating some pages and sections altogether.

§ Refocusing some sections with content that we think will be a plus for readers.

At one point we considered going to a two-section paper on Mondays, which would move the local news into the A section. But given all the changes in the paper, with the web reduction and the shift to Sacramento, we decided against that at this time.

The changes we're making could reduce the weekly page count by 16 pages, plus or minus depending on ad volumes and sizes. One daily page is about $280, so, for example, taking 10 pages out of the paper over the course of the week would save about $2,800 or more than $145,000 a year.

Memo from Fred Hamilton on Inland Division management moves

Dear Fellow Employees:

As part of a further restructure and management consolidation I am pleased to announce the appointment of Steve Lambert to the position of Editor and General Manager for the San Gabriel Valley Newspaper Group.

Steve has been Editor of the San Bernardino Sun and Inland Valley Daily Bulletin for seven years and also serves as Vice President of News for the Los Angeles Newspaper Group. In his new role, he will also serve as general manager for our Inland Division.

Steve has done an outstanding job as editor and has been instrumental in the strategic planning for new product launches and content and revenue initiatives that have been rolled out across the division.

Steve Replaces Fred Board, who is no longer with our company.

Frank Pine, currently senior editor for the San Gabriel Valley Newspaper Group, becomes executive editor of The Sun and Daily Bulletin, handling day-to-day oversight of those news operations.

Fred Hamilton
Publisher and CEO
Inland Newspaper Division