<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JOSTENS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO
March 23, 1998
Dear Shareholder:
You are cordially invited to join us at the 1997 Annual Meeting of your
company, which will be held at 10 a.m. Thursday, April 23, 1998, in the
Auditorium of the company's headquarters at 5501 Norman Center Drive,
Minneapolis, Minnesota. The formal notice of the meeting and proxy statement
appear on the following pages.
At the meeting, shareholders will elect two individuals to serve as
directors for terms of three years, consider the Board's proposal that
shareholders ratify the appointment of Ernst & Young as the company's
independent accountants for the 1998 fiscal year, and consider two shareholder
proposals.
Directors and officers will be present before and after the meeting to talk
with shareholders. During the meeting there will be an opportunity for
shareholder questions regarding the affairs of the company and for discussion
of the business to be considered at the meeting.
We hope you will be able to attend and participate in the meeting. However,
whether or not you intend to attend the meeting in person, you can be assured
that your shares will be represented at the meeting by completing and
returning the enclosed proxy card in the envelope provided as soon as
possible. Remember, your vote is important!
Cordially,
/s/ Robert C. Buhrmaster
Robert C. Buhrmaster
Chairman of the Board
Robert C. Buhrmaster 5501 Norman Center Drive Telephone (612) 830-3300
www.jostens.com
Chairman of the Board
Minneapolis, MN 55437
<PAGE>
LOGO
5501 NORMAN CENTER DRIVE
MINNEAPOLIS, MINNESOTA 55437
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1998
---------------------
To Our Shareholders:
The Annual Meeting of the Shareholders of Jostens, Inc., will be held at the
executive offices of the company, 5501 Norman Center Drive, Minneapolis,
Minnesota, Thursday, April 23, 1998, at 10 a.m. local time, for the following
purposes, as described in more detail in the accompanying Proxy Statement.
1. To elect two directors, each to serve three-year terms.
2. To ratify the appointment of Ernst & Young to act as independent
auditors of the company for fiscal year 1998.
3. To consider and act upon two shareholder proposals set forth in the
Proxy Statement, which are opposed by the company's Board of Directors.
4. To transact such other business that may be properly considered at the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 3, 1998, are
entitled to notice of and to vote at the Annual Meeting or any adjournments of
the meeting.
ON BEHALF OF THE BOARD OF DIRECTORS
/s/ Brian K. Beutner
Brian K. Beutner
Secretary
March 23, 1998
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD
AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
<PAGE>
LOGO
5501 NORMAN CENTER DRIVE
MINNEAPOLIS, MINNESOTA 55437
---------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 1998
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Jostens, Inc. in
connection with the solicitation by the Board of Directors of the company of
proxies for use at the Annual Meeting of Shareholders to be held Thursday,
April 23, 1998, at 10 a.m. local time, and at all adjournments thereof, for
the purposes set forth in the Notice of Annual Meeting of Shareholders.
Shareholders of the company may vote their shares either in person or by
proxy. The affirmative vote, either in person or by proxy, of a majority of
the shares of common stock present and entitled to vote at the Annual Meeting
is required for election of each nominee director and for approval of the
other items to be acted on by the shareholders.
Any proxy received pursuant to this solicitation will be voted at the Annual
Meeting as specified by the shareholder. A proxy signed by the shareholder
that lacks any such specification will be voted FOR the election of the
nominees for director, FOR the ratification of the appointment of Ernst &
Young to act as independent auditors of the company for fiscal year 1998, and
AGAINST the stockholder proposals. A proxy voted as abstaining on any of the
proposals will be treated as shares present and entitled to vote that were not
cast in favor of a particular matter, and will be counted as votes against
that matter. Shares represented by a proxy card, in which authority is
withheld, including any broker non-votes on a matter, will be treated as
shares not entitled to vote on that matter and will not be counted in
determining whether that matter has been approved.
A proxy may be revoked by the person giving it at any time before it is used
at the Annual Meeting. A proxy may be revoked by filing a revoking instrument
with the secretary of the company, by submitting a duly executed proxy bearing
a later date or by attending the Annual Meeting and voting in person.
The cost of solicitation will be borne by the company. Proxies will be
solicited primarily by mail. Morrow & Co., Inc., New York, N.Y. has been
retained to assist in the distribution of proxies at an estimated fee of
$5,500 plus expenses. Directors, officers and employees of the company may
solicit proxies in person, by telephone, by telegram or by facsimile. The
company may reimburse brokerage firms and others for expenses incurred in
forwarding proxy materials to the beneficial owners of the company's common
stock.
This Proxy Statement and the enclosed form of proxy are first being mailed
to Jostens shareholders on March 23, 1998.
1
<PAGE>
OUTSTANDING SHARES
Only shareholders of record at the close of business March 3, 1998, are
entitled to vote at the Annual Meeting. On March 3, 1998, the company had
38,297,633 outstanding shares of common stock, each such share entitling the
holder thereof to one vote on each matter to be voted on at the Annual
Meeting. Holders of shares of common stock are not entitled to cumulative
voting rights. Representation in person or by proxy of a majority of the
shares outstanding is required to constitute a quorum.
The following table sets forth certain information concerning persons known
to the company to be the beneficial owner of more than five percent of the
company's common stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ----------------------------------- ----------------
<S> <C> <C>
The Capital Group Companies, Inc. 5,172,960(/1/) 13.51%
333 South Hope Street
Los Angeles, CA 90071
FMR Corporation 2,753,815(/2/) 7.19%
82 Devonshire Street
Boston, MA 02109
Principal Mutual Life Ins. Co. 2,572,708(/3/) 6.72%
711 High Street
Des Moines, IA 50392
</TABLE>
- ---------------------
(1) According to the Schedule 13G dated February 10, 1998, this entity had
sole dispositive power over all of the shares set forth above opposite its
name as of December 31, 1997. The Capital Group Companies, Inc., is the
parent holding company of a group of investment management companies that
hold investment power and, in some cases, voting power over the securities
reported. The investment management companies, which include a "bank" as
defined in Section 3(a)6 of the Securities Exchange Act of 1934 (the
"Act") and several investment advisers registered under Section 203 of the
Investment Advisers Act of 1940, provide investment advisory and
management services for their respective clients which include registered
investment companies and institutional accounts. The Capital Group
Companies, Inc., does not have investment power or voting power over any
of the securities reported herein; however, The Capital Group Companies,
Inc. may be deemed to "beneficially own" such securities by virtue of Rule
13d-3 under the Act.
(2) According to the Form 13G dated January 10, 1998, this entity had sole
dispositive power over all of the shares set forth above opposite its name
as of December 31, 1997. FMR Corp. is the parent holding company of
Fidelity Management & Research Company, an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940 that is the
beneficial owner of 2,676,057 shares as a result of acting as investment
adviser to various investment companies registered under Section 8 of the
Investment Act of 1940.
(3) According to the Schedule 13G dated February 13, 1998, this entity had
shared power to vote or direct the vote over all of the shares set forth
above opposite its name. The number of shares includes 2,541,008 shares,
representing 6.63% of the company's stock, held by Invista Capital
Management, Inc., an investment advisor registered under Section 203 of
the Investment Advisers Act of 1940. Principal Mutual Life Ins. Co. is a
parent holding company with reporting obligation over the shares held by
Invista.
2
<PAGE>
ELECTION OF DIRECTORS
NOMINATION
The company's Articles of Incorporation currently provide that the Board of
Directors shall consist of not less than five nor more than 15 members, which
number shall be fixed from time to time by resolution of the Board and shall
be divided into three classes of as nearly equal size as possible. The
standard term of each class is three years and the term of one class expires
each year in rotation. The company has established a retirement age for
directors of 70 years old. The Board presently consists of seven members. At
the Annual Meeting, the terms of two current directors will expire.
Mr. Jensen elected to retire from the Board effective February 6, 1998,
prior to the end of his current one year term. Mr. Jensen had been a director
of Jostens since the 1980 and acted as Chairman of the Board since 1993. The
company recognizes and expresses its sincere appreciation for his many
contributions during his lengthy service on behalf of the company as the
Chairman and member of the Board of Directors. His vision, leadership and
spirit have helped Jostens reach national prominence and establish a strong
foundation for its continuing growth and success.
The Board has determined that there will be seven directors of the company
for the ensuing year or until such time as the number of directors may be
changed by the Board. The Board of Directors has designated Mannie L. Jackson
and Walker Lewis as nominees for election to three-year terms ending at the
next subsequent annual meeting after the end of fiscal year 2000 or until
their successors are duly elected and qualified. Both nominees are currently
directors of the company. Mr. Lewis was elected as a director of the company
by the Board in December 1997. The Board has no reason to believe that either
nominee will be unable to serve if elected. If, prior to the Annual Meeting,
the Board should learn that any nominee will be unable to serve by reason of
death, incapacity or other unexpected occurrence, the proxies that would have
been voted for such nominee will be voted for a substitute nominee as selected
by the Board.
The following information has been furnished to the company by the
respective directors and nominees. Except as otherwise stated, each of the
directors and nominees has held his or her present occupation for the past
five years. The term of each director expires at the next subsequent annual
meeting after the end of the year shown below each individual's name.
<TABLE>
<CAPTION>
DIRECTOR
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE
-------------------------------------------- --- --------
<S> <C> <C>
Lilyan H. Affinito, until 1991 served as Vice Chair- 66 1987
man of the Board of Maxxam Group, Inc., a forest
products, real estate management and development and
integrated aluminum production company. She previ-
ously served as President and Chief Operations Offi-
cer of Maxxam Group. She is also a director of Kmart
Corporation; Caterpillar, Inc.; and Chrysler Corpo-
ration.
</TABLE>
PHOTO
Lilyan H. Affinito
(1999)
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE
-------------------------------------------- --- --------
<S> <C> <C>
Robert C. Buhrmaster is the Chairman, President and 50 1993
Chief Executive Officer of the company. Mr.
Buhrmaster joined Jostens in December 1992 as Execu-
tive Vice President and Chief Staff Officer. He was
named President and Chief Operating Officer in June
1993; was named Chief Executive Officer in March
1994; and was named Chairman in February 1998. Prior
to joining the company, Mr. Buhrmaster was with Cor-
ning, Inc. for 18 years, most recently as Senior
Vice President of Strategy and Business Development.
He is also a director of The Toro Company.
PHOTO
Robert C. Buhrmaster
(1998)
Jack W. Eugster is Chairman, President and Chief Ex- 52 1995
ecutive Officer of Musicland Stores Corp, a spe-
cialty retailer of home entertainment products. He
has been with Musicland Stores Corp. since June
1980. He is also a director of Damark, Inc.; Donald-
son Company, Inc.; MidAmerican Energy Company; and
ShopKo Stores.
PHOTO
Jack W. Eugster
(1998)
Mannie L. Jackson is majority owner and Chairman of 58 1994
Harlem Globetrotters International, Inc., a sports
and entertainment company. Until December 1, 1994,
he was Senior Vice President Corporate Marketing and
Administration of Honeywell Inc., a manufacturer of
control systems. He was with Honeywell since 1968,
serving in a variety of executive capacities. He is
also a director of Ashland Inc.; The Stanley Works;
Martech Controls, a South African subsidiary of Hon-
eywell Inc.; and Reebok International Ltd.
PHOTO
Mannie L. Jackson
(nominee)
Walker Lewis is Chairman of Devon Value Advisers, a 53 1997
consulting and financial advisory service company.
In 1994, Mr. Lewis served as Managing Director, Kid-
der, Peabody & Co., Inc. Prior to April 1994, he was
President, Avon U.S. and Executive Vice President,
Avon Products, Inc. He is also a director of Ameri-
can Management Systems, Inc.; and Owens Corning
Corp.
</TABLE>
PHOTO
Walker Lewis
(nominee)
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE
-------------------------------------------- --- --------
<S> <C> <C>
Kendrick B. Melrose is Chairman and Chief Executive 57 1996
Officer of The Toro Company, a manufacturer of out-
door beautification equipment. He has been with The
Toro Company since 1970. He is also a director of
The Valspar Corporation; Donaldson Company, Inc.;
and SurModics, Inc.
PHOTO
Kendrick B. Melrose
(1999)
Richard A. Zona is Vice Chairman-Finance of U.S. 53 1996
Bancorp, a
regional bank holding company. He has been with U.S.
Bancorp since September 1989.
</TABLE>
PHOTO
Richard A. Zona
(1999)
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Committees. The business and affairs of the company are managed under the
direction of the Board of Directors, which met five times in 1997. The Board
maintains an Audit Committee, an Executive Committee and a Compensation
Committee. The Board does not maintain a nominating committee, but instead the
Board as a whole determines the nominees for director based on a slate
recommended by the Executive Committee. The Board will consider nominees
recommended by shareholders. During 1997, no director attended fewer than 75
percent of the aggregate number of meetings of the Board or the committees of
which such director is a member.
The Audit Committee presently consists of directors Affinito, Eugster,
Melrose and Zona. The committee, along with other duties, reviews the
company's financial and accounting practices and procedures, the scope and
results of the annual audit performed by the company's independent auditors
and the professional services provided by such auditors. The Audit Committee
met four times during 1997.
The Compensation Committee presently consists of directors Affinito,
Eugster, Jackson and Zona. The committee, along with other duties, reviews,
evaluates and approves the various levels and forms of compensation for key
management and officers of the company. In addition, the committee administers
the company's stock incentive plans. The Compensation Committee met four times
during 1997.
The Executive Committee presently consists of directors Buhrmaster, Eugster
and Zona. The committee charter permits it to exercise most of the powers of
the Board of Directors during intervals between regular meetings of the full
Board. The Executive Committee met three times during 1997.
5
<PAGE>
The Board established a special committee consisting of directors
Buhrmaster, Melrose and Zona to review the capital structure of the company.
This committee met three times during 1997. The Board also established a
special committee consisting of directors Buhrmaster, Eugster, Jensen and
Melrose to evaluate candidates for the position of Chief Operating Officer.
This committee met once in 1997.
Directors' Fees. An annual retainer of $22,000 is paid to those members of
the Board of Directors who are not present or past employees of the company.
In addition, non-employee directors receive $1,000 for each Board or Committee
meeting attended and $500 for each telephone meeting. The Chair of each Board
committee is entitled to an additional $2,000 per year. Pursuant to the
company's 1992 Stock Incentive Plan, each non-employee director automatically
is granted, as of the date of each annual meeting of shareholders, a non-
qualified option to purchase 2,200 shares of the company's common stock at the
then-current market value and an annual grant of restricted stock units equal
to 50 percent of the value of the then-annual retainer. Such share units
receive dividend credits and are restricted until the director terminates
service as a director, at which time the share units are paid to the director
in company common stock. Due to the change in the company's fiscal year,
directors have not received an option or restricted stock unit grant since
October 24, 1996.
Under the Jostens, Inc. Deferred Compensation Plan, a non-employee director
may elect to receive his or her fees currently in the form of either cash or
company stock or to defer such fees in an interest-bearing account and/or a
company share equivalent account. The interest-bearing account accrues
interest at a rate equivalent to the seven-year U.S. Treasury Note rate plus
one percentage point. Deferred compensation in the share equivalent account is
treated as though it were invested in company stock with such account credited
for dividend equivalents and adjusted to reflect share ownership changes
resulting from events such as a stock split or recapitalization. Participants
will have no voting rights with respect to the share equivalent account until
shares are distributed. Upon termination of service as a director, a
participant may elect to receive the balance in his or her account (in the
form of cash or shares, as the case may be) either in a lump sum or in
installments. Upon a change in control of the company, participants will
receive the balance in their accounts in a lump sum.
Until his retirement, director Jensen served as Chairman of the Board of
Directors and of the Executive Committee of the Board. Since these positions
required Mr. Jensen to be the key interface between the Board of Directors and
the company's management, the Board of Directors entered into a consulting
arrangement with Mr. Jensen to pay him an additional fee of $25,000 per month.
This arrangement terminated upon Mr. Jensen's retirement as a director. For
1997, for the six month transition period ended December 28, 1996, and each of
the fiscal years ended June 30, 1996 and 1995, respectively, Mr. Jensen
received aggregate cash compensation as follows: $335,500, $167,500, $335,000
and $326,000. Compensation paid is attributable to Mr. Jensen's service as
Chairman, along with the standard compensation for services as a Board member.
In addition, pursuant to the company's stock option plan (as part of the
standard compensation for all non-employee directors), Mr. Jensen received a
grant on the date of the annual meeting of shareholders of an option to
purchase shares of the company's common stock, vesting at the rate of 25
percent per year and expiring 10 years after the date of grant, in the
following amounts and at the following exercise prices during the transition
period ended December 28, 1996, and fiscal years ended June 30, 1996 and 1995,
respectively: 2,200 shares at $21.9375; 1,000 shares at $22.94; 1,000 shares
at $17.188; and 1,000 shares at $19.00. During the transition period ended
December 28, 1996, Mr. Jensen also received a grant of restricted stock units
equal to $11,000 (50 percent of the value of his annual retainer).
6
<PAGE>
SHARES HELD BY DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
COMMON SHARES OWNED BENEFICIALLY
NAME AS OF MARCH 3, 1998(/1/)(/2/)
- ---- --------------------------------
<S> <C>
Lilyan H. Affinito(/3/)........................ 20,309
Robert C. Buhrmaster........................... 259,970
Jack W. Eugster(/3/)........................... 5,818
Orville E. Fisher Jr........................... 109,325
Mannie L. Jackson(/3/)......................... 8,677
Walker Lewis................................... 0
John J. Mann................................... 13,166
Kendrick B. Melrose(/3/)....................... 4,792
Charles W. Schmid.............................. 14,171
Jack Thornton.................................. 38,571
Richard A. Zona(/3/)........................... 6,263
All directors and executive
officers as a group (15 members).............. 373,903
</TABLE>
- ---------------------
(1) Unless otherwise noted, each person and group identified possesses sole
voting and investment power with respect to the shares shown opposite such
person's or group's name. Shares not outstanding but deemed beneficially
owned by virtue of the right of an individual to acquire them within 60
days are treated as outstanding only when determining the amount and
percent owned by such individual or group. All amounts shown for
individuals reflect less than 1 percent of the outstanding shares. The
group total reflects 1.0% of the shares outstanding.
(2) Includes the following number of shares which may be acquired by the named
persons or group within 60 days upon the exercise of options: Ms.
Affinito, 7,800 shares; Mr. Buhrmaster, 221,720 shares; Mr. Eugster, 1,050
shares; Mr. Fisher, 91,740 shares; Mr. Jackson, 1,800 shares; Mr. Lewis, 0
shares; Mr. Mann, 10,050 shares; Mr. Melrose, 550 shares; Mr. Schmid,
6,360 shares; Mr. Thornton, 34,254 shares; Mr. Zona, 550 shares; and all
directors and executive officers as a group, 279,350 shares. Also includes
the following number of restricted shares held subject to forfeiture: Mr.
Mann, 3,000 shares; and all directors and executive officers as a group,
5,200 shares.
(3) Includes the following number of shares held for the account of the named
person participating in the Jostens, Inc. Deferred Compensation Plan: Ms.
Affinito, 11,709 shares; Mr. Eugster, 3,768 shares; Mr. Jackson, 6,877
shares; Mr. Melrose, 2,242 shares; and Mr. Zona, 533 shares.
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
REGARDING EXECUTIVE COMPENSATION
TO JOSTENS, INC. STOCKHOLDERS:
The Compensation Committee of the Jostens Board of Directors has the
responsibility to establish and carry out the executive compensation
philosophy and programs of your company and to report to you the compensation
decisions and actions taken during the past fiscal year. Our Committee
consists exclusively of outside independent Board members. We have independent
access to and use of outside executive compensation consultants on matters of
plan design, administration and competitiveness. This report discusses the
Committee's work in establishing executive compensation for the chief
executive officer and executive officers of your company.
PHILOSOPHY
The Board of Directors has established a compensation philosophy and
programs that support and reinforce growth in shareholder value. Jostens
recognizes and rewards its employees for individual, team and overall company
performance. Jostens provides a competitive total compensation opportunity
that delivers premium rewards for superior performance and below-competitive
rewards for performance that fails to meet our standards. Beyond structuring
base salary and benefits to be competitive to attract and retain well-
qualified executives, our philosophy is to strongly tie compensation to
company performance by placing a significant part of the executive officers'
compensation at risk.
The Committee believes that:
1. The interests of executives should be linked with shareholders through
the risks and rewards of Jostens stock ownership;
2. Executives should purchase and hold Jostens stock;
3. A substantial portion of executive compensation should be at risk of not
being paid if the company's performance does not meet objectives;
4. All executives should have a portion of compensation tied to overall
corporate performance;
5. Executives responsible for specific business units also should have a
substantial portion of compensation tied to that business unit's
performance;
6. In addition to rewards for annual results, a significant portion of
executive compensation should be long term, to focus management on
achieving sustained long-term results; and
7. Special benefits and perquisites for executives should be minimized.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
We directly link key executive officer compensation to the company's stock
performance and achievement of other long- and short-term performance goals
and objectives. Approximately 60 percent of an executive officer's targeted
total compensation is "at risk." If company performance targets are not
achieved, bonus and incentive awards are significantly reduced or not paid at
all. If performance targets are met or surpassed, shareholder value should
increase and executive officer performance-based compensation increases
commensurate with the company's performance.
8
<PAGE>
The key elements of Jostens' executive compensation are: base salary, an
annual bonus, and long-term incentives in the form of stock options and
performance shares. While we establish the elements and targets for
compensation, individual and corporate performance drive the actual
compensation paid.
In 1994, the company initiated a deposit share program that requires
executives to invest in the company through their ownership of company common
stock. In 1995, this program was expanded to apply to key Jostens managers.
Executive officers and key managers who are granted stock options must own
shares of common stock equal to 10 percent of the number of shares underlying
each grant of stock options they receive. These deposit shares must be held
for at least one year longer than the stock option vesting period. This
requirement will continue to apply to all stock option grants through 1997.
All executive officers, as a result of their current ownership of Jostens
stock, have met all of the deposit share requirements that were outstanding as
of the end of 1997.
Beginning in 1998, the company has chosen to implement stock ownership
guidelines for all executive officers. The guidelines require that executive
officers must own shares of Jostens stock with a total market value that is a
multiple of their salary grade midpoint. The multiple ranges from 1.0 for a
Vice President to 3.0 for the Chief Executive Officer. Executives have five
years to reach this ownership guideline.
In determining each component of compensation, we consider an executive's
TOTAL COMPENSATION package. We target total compensation for executive
officers at levels that reflect total compensation offered by companies of
similar size in general industry. The comparison companies we use to determine
appropriate executive compensation levels are not the same companies included
in the peer group performance graph in this Proxy Statement, because the peer
group index includes companies with revenues greater than Jostens and
companies in a different grouping of industries.
We establish BASE SALARIES of executive officers that are competitive with
the market median for similar positions in other companies of similar size in
general industry. Each executive's base salary is initially determined
according to competitive pay practices, consideration of internal equity,
level of responsibility, prior experience and breadth of knowledge. Generally,
salaries are reviewed annually. Increases to executive officer base salary
depend primarily on individual performance and the executive officer's
contribution and future growth potential as well as company performance and
competitive market rates. In 1996, we reduced base salaries for senior
executive officers including the Chief Executive Officer as part of a company
wide shift toward pay for performance. In exchange for the reduction in base
salary, which was 10% for the Chief Executive Officer and 5% for the senior
executive officers, the annual bonus target as a percentage of salary was
increased from 50% to 60% for the Chief Executive Officer and from 45% to 50%
for senior executive officers. Individuals who were executive officers at the
start of 1997 did not receive an increase in base salary in 1997.
We establish ANNUAL BONUS targets as a percentage of base salary. Bonus
awards are designed to reward executives and other key managers for achieving
financial performance goals of the company and/or business unit as well as
completing key business initiatives. If performance goals are exceeded, award
amounts increase, but if goals are not met, awards are reduced or not paid at
all. Annual bonus awards are paid to operating officers for achieving total
corporate and individual operating unit financial performance and key business
initiatives. Annual bonus awards for staff officers are tied to achieving
total corporate financial performance and key strategic initiatives.
LONG-TERM INCENTIVE COMPENSATION for executive officers consists of stock
option grants and performance share grants. We approve all grants of stock
options and performance shares. To further align management's interests with
those of stockholders, stock option awards for fiscal years 1995, 1996 and
1997 were made in
9
<PAGE>
fiscal year 1995 through a long-term incentive program, the Special Equity
Performance Program (SEPP). SEPP directly linked long-term executive incentive
compensation to the company's long-range financial goals for fiscal years
1995, 1996 and 1997. The plan was designed to focus executive attention on
achieving and exceeding the company's historical earnings level.
The stock options granted under SEPP were in place of grants that would have
been made over the three-year period that included fiscal years 1995, 1996 and
1997. The performance shares granted under SEPP also represented a long-term
incentive opportunity and were earned based on the company's earnings
performance over the same 1995-1997 period. Annual earnings goals were
established as the basis for earning the performance shares. Once earned, the
performance shares were converted to restricted stock subject to an additional
two-year vesting requirement. These shares of restricted stock, once earned,
may be included in stock ownership for the deposit share program. With the
change to a calendar fiscal year, we revised the performance period for the
performance shares tied to fiscal year 1997 to align with calendar year 1997.
For 1997 under the revised calendar year performance period, Jostens' earnings
performance goals were not attained and, as a result, the performance shares
were not earned.
In July 1997, the Committee approved an annual grant of stock options and
performance shares, as the next set of long-term incentive grants to follow
SEPP. The stock options were granted at fair market value on date of grant
with vesting over three years. The performance shares will be earned based on
the achievement of an EPS goal established for 1998, provided that the company
has maintained a minimum level of return on assets for 1998. Payout will occur
at the end of 1998 under these terms. The performance shares earned will be
valued at the share price on the last trading day of 1998, and will be paid
out in half cash and half stock.
FISCAL YEAR 1997 COMPENSATION DECISIONS RELATING TO THE CEO
Chief Executive Officer Robert C. Buhrmaster's fiscal year 1997 performance
was reviewed by the independent Directors as established in the CEO Evaluation
Process adopted by the Board of Directors in 1995. Jostens' financial results
met some of the goals established by the Board for 1997. The company's core
businesses finished a strong year with good year-over-year improvements in
sales and profitability. Significant progress was also made in 1997 in
positioning the company for future growth.
Mr. Buhrmaster's compensation reflects the Board's assessment of both
Jostens fiscal year 1997 results and his overall performance. The Board did
not grant Mr. Buhrmaster a salary increase during 1997. Based on Mr.
Buhrmaster's partial achievement of fiscal year 1997 performance goals, the
Board approved a 1997 bonus for him of $162,000. This bonus is 36 percent of
Mr. Buhrmaster's 1997 base salary of $450,000. Mr. Buhrmaster's bonus target
for 1997 was 60 percent of base salary.
Under SEPP, Mr. Buhrmaster was eligible for but did not earn 15,930
performance shares because the company did not achieve the designated
financial threshold for 1997.
In July, 1997, Mr. Buhrmaster received an annual grant of 60,000 stock
options and 10,000 performance shares under the long-term incentive program
that followed SEPP. The terms for this grant are described above.
IRS LIMITATIONS
Under Section 162(m) of the Internal Revenue Code of 1986, as amended, no
tax deduction by a publicly held corporation is allowed for compensation to a
named executive officer that exceeds $1 million in a taxable year. Annual
compensation for purposes of this deduction limitation does not include any
compensation that is
10
<PAGE>
considered performance-based under Section 162(m). Jostens' policy is to
ensure that compensation earned under its executive compensation program will
either qualify for the exclusion from deduction limitation under Section
162(m) or be deferred until such time as they become tax deductible by the
company.
SUMMARY
The Committee believes Jostens' executive compensation policies and programs
effectively serve the interests of the shareholders as well as the company.
The quality and motivation of the Jostens' executive leadership team are two
of the most crucial factors impacting the company's long-term success. We
believe that recognizing and rewarding individual and group achievement
related to the company's performance is very important in reinforcing our
beliefs and in advancing the long-term interests of you, the shareholder. We
also believe that the executive compensation actions we have taken are
consistent with our philosophy for the executive compensation program. As we
move forward, we will continue to link company performance to executive
rewards and to emphasize stock ownership as key components of the Jostens'
executive compensation program.
RESPECTFULLY SUBMITTED,
Members of the Compensation
Committee:
Jack W. Eugster, Chair
Lilyan H. Affinito
Mannie L. Jackson
Richard A. Zona
11
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and non cash compensation for 1997,
the six-month transition period ended December 28, 1996, and fiscal years
ended June 30, 1996 and 1995, awarded to or earned by the Chief Executive
Officer and the four most highly compensated executive officers of the
company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------ ----------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS(/1/) COMPENSATION(/2/) AWARDS(/3/) OPTIONS COMPENSATION(/4/)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
------------------ ----- ------- ---------- ----------------- ----------- ---------- ----------------- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert C. Buhrmaster, 1997 467,307 167,227 48,952 0 60,000 0
President and Chief 6 mos 217,692 0 10,988 0 0 0
Executive Officer 1996 495,833 126,800 22,967 0 0 0
1995 470,833 237,500 80,104 341,488 216,000 0
Orville E. Fisher
Jr.,(/5/) 1997 229,345 68,820 57,374 0 21,000 11,196
Senior Vice President- 6 mos 101,931 0 7,403 0 0 11,196
Administration and 1996 230,806 53,060 20,128 0 0 11,196
Secretary 1995 220,696 100,107 20,261 113,815 72,000 11,196
John J. Mann,(/6/) 1997 207,692 66,485 7,950 35,719 30,000 0
Vice President- 6 mos 92,308 0 0 0 15,000 0
Scholastic Division 1996 43,205 39,583 0 33,000 0 0
1995 N/A N/A N/A N/A N/A N/A
Charles W. Schmid,(/7/) 1997 233,602 20,637 19,898 0 0 0
Executive Vice President 6 mos 130,223 0 8,508 0 0 0
1996 290,035 70,407 21,690 0 8,000 0
1995 254,340 114,844 16,653 113,815 72,000 0
Jack Thornton,(/8/) 1997 217,038 7,154 5,994 0 0 0
Senior Vice President- 6 mos 96,461 0 7,428 0 0 0
Imaging Division 1996 211,067 10,078 8,205 0 22,080 0
1995 165,333 89,032 6,221 61,455 38,880 0
</TABLE>
- ---------------------
(1) Bonuses for fiscal years 1996 and 1995 were paid in August of the
following year for the prior fiscal year. 1997 bonuses include amounts
earned in 1997 and paid in 1998. Also includes amounts paid under Jostens
Performance Pays bonus program as follows: Mr. Buhrmaster: $5,227; Mr.
Fisher: $2,565; Mr. Mann: $2,323; Mr. Schmid: $589; and Mr. Thornton:
$884. The Performance Pays bonus program was introduced in 1997 for all of
the company's non-union employees and is based on the company's net income
performance.
(2) Includes the amounts indicated after each officer's name for the following
items (a) automobile, (b) financial planning, (c) club dues and (d)
medical reimbursement for fiscal year 1997: Mr. Buhrmaster: $14,960,
$23,475, $7,982 and $2,535; Mr. Fisher: $8,600, $1,510, $44,987 and
$2,277; Mr. Mann: $6,850, $1,100,
12
<PAGE>
$0 and $0; Mr. Schmid: $8,237, $3,627, $5,784 and $2,250; and Mr. Thornton:
$5,439, $0, $0 and $555. Includes the amounts indicated after each officer's
name for the following items (a) automobile, (b) financial planning, (c)
club dues and (d) medical reimbursement for the six-month period ending
December 28, 1996: Mr. Buhrmaster: $7,136, $0, $3,852 and $0; Mr. Fisher:
$5,337, $0, $2,039 and $28; Mr. Mann: $0 $0, $0 and $0; Mr. Schmid: $4,565,
$0, $2,646 and $1,297; and Mr. Thornton: $7,264, $0, $0 and $164. Includes
the amounts indicated after each officer's name for the following items (a)
automobile, (b) financial planning, (c) club dues and (d) medical
reimbursement for fiscal year 1996: Mr. Buhrmaster: $12,798, $0, $7,704 and
$2,465; Mr. Fisher: $9,729, $2,500, $4,639 and $3,260; Mr. Mann: $0, $0, $0
and $0; Mr. Schmid: $8,585, $5,800, $5,613 and $1,691; and Mr. Thornton:
$7,388, $550, $0 and $267. Includes the amounts indicated after each
officer's name for the following items (a) automobile, (b) financial
planning, and (c) club dues for fiscal year 1995: Mr. Buhrmaster: $10,777,
$10,000 and $56,401; Mr. Fisher: $11,348, $1,365 and $4,243; Mr. Mann $0, $0
and $0; Mr. Schmid: $10,881, $0 and $5,606; and Mr. Thornton: $5,425, $550
and $246.
(3) Fiscal year 1995 award amounts reflect conversion of performance shares
into restricted stock pursuant to the Special Equity Performance Plan. No
restricted stock was earned during the six-month transition period or
fiscal years 1996 and 1997 under this Plan, and all related performance
shares for the periods after fiscal years 1995 have been forfeited. Mr.
Mann's award amounts reflect the grant of restricted stock upon his date of
hire in April 1996 and upon his appointment as Vice President in May 1997.
(4) All Other Compensation includes life insurance premiums on the life of Mr.
Fisher paid by the company in the fiscal year indicated for the Executive
Supplemental Retirement Plan. The Executive Supplemental Retirement Plan
was established in 1986 and funded through a life insurance policy
purchased on each individual. The insurance proceeds are assigned to the
company to reimburse it for the cost of the premiums paid. There is no
substantial net cost to the company for this plan.
(5) Mr. Fisher resigned as an executive officer of the company effective
January 31, 1998.
(6) Mr. Mann joined the company in April 1996 as General Manager, Scholastic
and was named Vice President--Scholastic Division in May 1997.
(7) Mr. Schmid resigned as an executive officer of the company effective April
15, 1997.
(8) Mr. Thornton resigned as an executive officer of the company effective June
30, 1997.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR OPTION TERM(/1/)
UNDERLYING GRANTED TO EXERCISE OR ---------------------------------------
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION 5% ($40.672 PER 10% ($64.762 PER
NAME GRANTED(/2/) FISCAL YEAR ($/SHARE) DATE SHARE) SHARE)
---- ------------ ------------- ----------- ---------- --------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Buhrmaster.... 60,000 12.1 24.9688 7/24/07(/3/) $ 942,192 $ 2,387,592
Orville E. Fisher Jr.... 21,000 4.2 24.9688 7/24/07(/3/) 329,767 835,657
John J. Mann............ 15,000 3.0 24.9688 7/24/07(/3/) 235,548 596,898
15,000 3.0 23.8125 5/2/07(/4/) 224,635(/4/) 569,243(/4/)
Charles W. Schmid....... 0 0 N/A N/A N/A N/A
Jack Thornton........... 0 0 N/A N/A N/A N/A
All Shareholders(/5/)... N/A N/A N/A N/A 615,118,998 1,558,762,119
</TABLE>
- --------------------
(1) The "potential realizable value" shown is the potential gain on the last
day the option remains exercisable. This value will be achieved only if the
options have been held for the full 10 years and the stock price has
appreciated at the assumed rate. For the named executive officers, the
value is calculated from the option
13
<PAGE>
price per share of fiscal year 1997 granted options. For all shareholders,
the gain is calculated from the option price per share on July 24, 1997,
based on the number of outstanding shares of common stock on that date.
Potential realizable value is listed for illustration only. The values
disclosed are not intended to be and should not be interpreted as
representations or projections of future value of company stock or of the
stock price.
(2) Options not yet exercisable generally become exercisable upon a change in
control of the company. A change of control as defined in the 1992 Stock
Incentive Plan occurs upon the sale of substantially all of the assets of
the company or other change of control event that would require disclosure
under federal securities laws. The exercise price may be paid in cash, in
shares of stock or pursuant to a cashless exercise procedure under which
the optionee instructs a brokerage firm to sell the purchased shares and
remit to the company out of the proceeds an amount equal to the exercise
price plus all applicable withholding taxes.
(3) So long as employment with the company or any of its subsidiaries
continues, the options become exercisable in equal installments on each of
the following dates: July 24, 1998; July 24, 1999; and July 24, 2000.
(4) So long as employment with the company or any of its subsidiaries
continues, the options become exercisable in equal installments on
February 1, 1998 and February 1, 1999. Terminal value of one share at an
assumed appreciation rate of 5 percent and 10 percent annually is $38.788
and $61.762, respectively.
(5) Shown for comparative purposes only. The amounts indicate the increase in
the value of the company stock if the stock price appreciates at the rates
assumed in the table.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR END 1997 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS AT FISCAL YEAR THE-MONEY OPTIONS AT
END FISCAL YEAR END(/1/)
SHARES ACQUIRED ------------------------- -------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Buhrmaster.... 0 0 196,720 264,280 $861,269 $1,033,748
Orville E. Fisher Jr.... 19,000 $65,068 91,740 80,760 217,503 298,770
John J. Mann............ 0 0 10,050 34,950 3,028 14,785
Charles W. Schmid....... 0 0 28,600 71,400 161,031 333,983
Jack Thornton........... 7,000 $40,720 40,864 50,596 44,835 167,061
</TABLE>
- --------------------
(1) Based on a closing price of $23.1875 on January 2, 1998.
JOSTENS RETIREMENT PLANS
The company maintains a non-contributory pension plan, Pension Plan D (Plan
D), that provides benefits for substantially all salaried employees.
Retirement income benefits are based upon a participant's highest average
annual cash compensation (base salary plus annual bonus, if any) during any
five consecutive calendar years, years of credited service (to a maximum of 35
years) and the Social Security covered compensation table in effect at
termination.
The company also maintains an unfunded supplemental retirement plan that
gives additional credit under Plan D for years of service as a company sales
representative to those salespersons who were hired as employees of the
company prior to October 1, 1991. In addition, benefits specified in Plan D
may exceed the level of benefits that may be paid from a tax-qualified plan
under the Internal Revenue Code of 1986, as amended. The benefits up to IRS
limits are paid from Plan D and benefits in excess, to the extent they could
have been earned in Plan D, are paid from the unfunded supplemental plan.
14
<PAGE>
The following table illustrates a reasonable estimate of the annual benefits
under Pension Plan D and the supplemental plan payable to employees, including
officers, under these plans. The table does not take into account transition
rule provisions of the plan for employees who were participants on June 30,
1988.
<TABLE>
<CAPTION>
PROJECTED ANNUAL BENEFIT AT NORMAL RETIREMENT AT AGE
65(/1/)
------------------------------------------------------------------------
YEARS OF SERVICE AT RETIREMENT(/2/)
------------------------------------------------------------------------
AVERAGE
FINAL
COMPENSATION 15 20 25 30 35
------------ -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$150,000 $ 27,900 37,200 46,500 55,800 65,200
200,000 39,200 52,200 65,300 78,300 91,400
300,000 61,700 82,200 102,800 123,300 143,900
400,000 84,200 112,200 140,300 168,300 196,400
500,000 106,700 142,200 177,800 213,300 248,900
600,000 129,200 172,200 215,300 258,300 301,400
700,000 151,700 202,200 252,800 303,300 353,900
800,000 174,200 232,200 290,300 348,300 406,400
900,000 196,700 262,200 327,800 393,300 458,900
950,000 207,900 277,200 346,500 415,800 485,200
</TABLE>
- ---------------------
(1) The projected benefits shown in the table are payable in a monthly benefit
for life upon retirement at age 65.
(2) The following individuals named in the Summary Compensation Table have the
respective number of years of service under Plan D: Mr. Buhrmaster, 5.1
years; Mr. Fisher, 22.2 years; Mr. Mann, 1.7 years; Mr. Schmid, 3.7 years;
and Mr. Thornton, 19.1 years.
The company also maintains a non-contributory supplemental pension plan for
corporate vice presidents. Under the plan, vice presidents who retire after
age 55 with at least seven years of service as a corporate vice president are
eligible for a benefit equal to 1 percent of final salary for each year of
service, up to a maximum of 30 percent. Only service after age 30 is
recognized in the plan. The calculation of benefits is frozen at the levels
reached at age 60. Mr. Fisher is eligible for benefits under the old vesting
rules in effect prior to 1995, which required attainment of age 50, 15 years
of service and eight years of service as a corporate vice president. If they
continue in their current positions at their current levels of compensation
and retire at age 60, the estimated total annual pension amounts from this
plan for Messrs. Buhrmaster and Mann would be $63,000 and $16,000,
respectively. The actual total annual pension amounts from this plan for
Messrs. Fisher and Schmid are $55,393 and $14,850, respectively. As of his
termination date, Mr. Thornton was not eligible to receive payment under this
plan.
15
<PAGE>
PERFORMANCE GRAPH
Set forth below is a performance graph showing the company's total return to
shareholders the last five years as compared to the S&P 500 Index and a peer
group index comprised of the eleven companies in three S&P consumer product
indexes. The company is part of both the S&P 500 Index and the peer group
index. (The company has previously used the S&P Miscellaneous Index, of which
the company was a part, as its published peer index. As a result of S&P
realigning its industry groups, the S&P Miscellaneous Index is no longer
maintained.) The returns are based on an assumed investment of $100 on
December 31, 1992, in the company's common stock and both of the indexes, with
all dividends reinvested.
[GRAPH]
Cumulative Total Return
----------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
Jostens Inc JOS 100 77 76 103 94 106
PEER GROUP 100 107 94 91 95 116
S & P 500 100 110 112 153 189 252
(1) The peer group index is comprised of all of the eleven companies that are
included in three S&P consumer product indices: Jostens, Inc.; American
Greetings Corporation; A.T. Cross Co.; Cyrk, Inc.; Franklin Covey Co.; Jan
Bell Marketing, Inc.; Russ Berrie and Company, Inc.; Swiss Army Brands,
Inc.; Gibson Greetings, Inc.; Lancaster Colony Corporation; and Stanhome
Inc.
16
<PAGE>
SHAREHOLDER PROPOSALS
PROPOSAL NUMBER 1
RESOLUTION REQUESTING ELIMINATION OF ELECTION OF DIRECTORS BY CLASSES
PROPOSED BY SHAREHOLDER
The company has been informed that William Steiner, whose address is 4
Radcliff Drive, Great Neck, New York 11024, a record holder of 750 shares of
common stock, intends to introduce at the Annual Meeting the following
resolution:
"RESOLVED, that the stockholders of the company request that the Board of
Directors take the necessary steps, in accordance with state law, to
declassify the Board of Directors so that all directors are elected annually,
such declassification to be effected in a manner that does not affect the
unexpired terms of directors previously elected."
THE PROPONENT HAS FURNISHED THE FOLLOWING STATEMENT:
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the board being elected
annually, is not in the best interests of the company and its stockholders.
The Board of Directors of the company is divided into three classes serving
staggered three-year terms. I believe that the company's classified Board of
Directors maintains the incumbency of the current board and therefore of
current management, which in turn limits management's accountability to
stockholders.
The elimination of the company's classified board would require each new
director to stand for election annually and allow stockholders an opportunity
to register their views on the performance of the board collectively and each
director individually. I believe this is one of the best methods available to
stockholders to insure that the company will be managed in a manner that is in
the best interests of the stockholders.
A classified board might also be seen as an impediment to a potential
takeover of the company's stock at a premium price. With the inability to
replace a majority of the board at one annual meeting, an outside suitor might
be reluctant to make an offer in the first place.
I am a founding member of the Investors Rights Association of America and I
believe that concerns expressed by companies with classified boards that the
annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders, are
unfounded. In my view, in the unlikely event that stockholders vote to replace
all directors this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION.
17
<PAGE>
STATEMENT OF THE COMPANY IN OPPOSITION TO PROPOSAL NUMBER 1
BOARD OF DIRECTORS STATEMENT ON PROPOSAL:
Under the law of Minnesota, where the company is incorporated, the change
contemplated by the proposal would require an amendment to the company's
Articles of Incorporation. That action must first be approved by the Board of
Directors and then submitted to a vote of the shareholders. A vote in favor of
this proposal, therefore, would constitute a request that the board initiate
this amendment. The board does not believe such an amendment would be in the
best interests of the company or its shareholders.
The board believes a classified Board of Directors facilitates continuity
and stability of leadership and policy by ensuring that people with experience
and knowledge of the company's unique markets will be on the Board of
Directors at all times.
The board believes classifying director terms is in the best interests of
the corporation and its stockholders. The affirmative vote of holders of at
least a majority of shares of the common stock in the corporation present and
entitled to vote at the annual meeting is required for approval of this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
PROPOSAL NUMBER 2
RESOLUTION REQUESTING REDEMPTION OR BINDING SHAREHOLDER VOTE ON THE COMPANY'S
RIGHTS PLAN.
The company has been informed that Kenneth Steiner, whose address is 14
Stoner Avenue, Suite 2-M, Great Neck, New York 11021, a record holder of 300
shares of common stock, intends to introduce at the Annual Meeting the
following resolution:
"RESOLVED, that the shareholders recommend that our Board of Directors, at
the earliest practical date, redeem or submit to a binding shareholder vote
the corporation's "poison pill' share purchase rights plan."
THE PROPONENT HAS FURNISHED THE FOLLOWING STATEMENT:
The Board of Directors, unilaterally and without shareholder participation
or approval, adopted a share purchase rights plan, more commonly known as a
"poison pill." After carefully studying this issue, I have come to the
conclusion that this plan is detrimental to shareholders and should either be
dismantled or put to a binding shareholder vote on its continued use.
From my homework on this issue, I've learned that poison pills may serve to
harm shareholder value and entrench current management by deterring stock
acquisition offers that are not favored by the Board of Directors. In my view
management's failure to seek the input and approval of the company's owners on
an action of such critical importance indicates that management is placing its
interests above those of the shareholders.
The Securities and Exchange Commission has stated: "Tender offers can
benefit shareholders by offering them an opportunity to sell their shares at a
premium and by guarding against management entrenchment. However, because
poison pills are intended to deter non-negotiated tender offers, and because
they have this
18
<PAGE>
potential effect without shareholder consent, poison pill plans can
effectively prevent shareholders from even considering the merits of a
takeover that is opposed by the board." (SEC Release No. 34-23486 [July 31,
1986].)
Beyond the effect of poison pills on specific acquisition offers, however, I
am convinced that the company's adoption of the Plan significantly reduces
management's accountability to shareholders. Acquisition offers aside, the
poison pill may simply relieve management from the task of striving for
maximum shareholder value.
Again, I strongly feel that adoption of the Plan without shareholder consent
was contrary to the long-term interests of all shareholders and offensive to
the concepts of management accountability and corporate democracy. I urge you
to vote for this proposal which recommends that the Board redeem the Plan or
submit it for shareholder approval.
STATEMENT OF THE COMPANY IN OPPOSITION TO PROPOSAL NUMBER 2
BOARD OF DIRECTORS STATEMENT ON PROPOSAL:
The directors adopted the shareholders rights plan to ensure that the Board
is positioned to execute its fiduciary responsibility to maximize shareholder
value and to protect the interests of all company shareholders in the event of
an unsolicited takeover attempt. Studies by the proxy solicitation firm of
Georgeson & Co. and by Professor Donald Margotta of Northeastern University
concluded that a rights plan does not deter takeovers, does not depress the
price of a corporate-issued stock and in fact has led to higher prices paid to
acquire companies. As a matter of fact, most companies that have been targets
of hostile takeovers in the last few years had rights plans in effect prior to
their acquisition.
A rights plan enables the Board of Directors to respond in an orderly and
considered manner to an unsolicited bid. It puts the board in a better
position to deflect unfair offers, such as coercive, partial or two-tier bids
and stock accumulation programs in which all shareholders do not share in the
premium associated with a change in control. It puts the Board in a better
position to negotiate, whether with the original bidder or a third party, a
higher price if the offer is considered to be in the best interests of the
company and its shareholders. The Georgeson and Margotta studies concluded
that shareholders of takeovers targets with rights plans have received higher
premiums than shareholders of takeover targets without rights plans.
Six of the seven directors on the company's board are outside directors. All
are prominent representatives of the business community. The preponderance of
outside directors, their credentials and the fiduciary obligations imposed by
law on all directors assure that this Board of Directors will act in the best
interests of the company and its shareholders in deciding options under the
rights plans in the face of an unsolicited offer.
The board believes the Jostens shareholder rights plan is in the best
interests of the corporation and its stockholders. The affirmative vote of
holders of at least a majority of shares of the common stock in the
corporation present and entitled to vote at the annual meeting is required for
approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
19
<PAGE>
APPOINTMENT OF AUDITORS
The Board of Directors has appointed Ernst & Young as independent auditors
to examine the accounts of the company for 1998, and to perform other
appropriate accounting services. Although it is not required to do so, the
Board of Directors submits the appointment of Ernst & Young to the
shareholders for ratification.
The Board recommends a vote for ratification of Ernst & Young as independent
auditors for fiscal year 1998. Unless a contrary choice is specified, proxies
solicited by the Board will be voted for ratification of Ernst & Young. If the
appointment of Ernst & Young is not ratified, the Board of Directors will
reconsider its appointment.
The company has requested and expects representatives of Ernst & Young to be
present at the Annual Meeting to make a statement if they so desire and to
respond to appropriate questions.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting, other than that described in this Proxy
Statement. If, however, any other matters properly come before the meeting, it
is intended that proxies solicited by the Board will be voted in accordance
with the judgment of the individual or individuals voting the proxies.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended to be presented in the proxy materials
relating to the 1998 Annual Meeting of Shareholders must be received by the
secretary of the company at its principal executive offices on or before
November 16, 1998.
MISCELLANEOUS
THE COMPANY WILL FURNISH UPON WRITTEN CONSENT AND WITHOUT CHARGE A COPY OF
ITS ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS) FOR FISCAL YEAR 1997 TO
EACH PERSON WHO IS A SHAREHOLDER OF THE COMPANY AS OF MARCH 3, 1998. SUCH
REQUESTS SHOULD BE SENT TO NORWEST BANK, SHAREOWNER SERVICES, P.O. BOX 738,
SOUTH ST. PAUL, MN 55075-9902, (800) 468-9716.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Brian K. Beutner
Brian K. Beutner
Secretary
March 23, 1998
YOUR VOTE IS IMPORTANT!
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY CARD
AND RETURN IT PRIOR TO THE MEETING DATE IN THE ENCLOSED STAMPED ENVELOPE.
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This Proxy Statement is printed on recycled paper.
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JOSTENS, INC.
5501 NORMAN CENTER DRIVE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
MINNEAPOLIS, MINNESOTA 55437
The undersigned, revoking all prior proxies, hereby
appoints Robert C. Buhrmaster and Brian K. Beutner, and
each of them, as Proxies, each with the power to
appoint his substitute and to act without the other,
and hereby authorizes each of them to represent and to
vote, as designated below, all shares of common stock
of Jostens, Inc. held of record by the undersigned on
March 3, 1998, at the Annual Meeting of Shareholders of
the company to be held on April 23, 1998 or any
adjournment thereof.
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SEE REVERSE
SIDE
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JOSTENS, INC.
ANNUAL MEETING
Auditorium of Jostens, Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
APRIL 23, 1998
10 A.M. LOCAL TIME
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1. Election of directors.
[_] FOR all nominees listed below
[_] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below)
for all nominees listed below
Mannie L. Jackson and Walker Lewis (three year terms)
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name below)
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2. Ratification of Ernst & Young as independent
auditors for fiscal year 1998.
[_] FOR[_] AGAINST[_] ABSTAIN
3. Shareholder Proposal #1 requesting elimination of
election of directors by classes.
[_] FOR[_] AGAINST[_] ABSTAIN
4. Shareholder Proposal #2 requesting redemption or
binding shareholder vote on the company's rights
plan.
[_] FOR[_] AGAINST[_] ABSTAIN
5. In their discretion, the Proxies are authorized to
vote upon such other business as may properly come
before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED FOR ITEM 2 ABOVE, AGAINST ITEMS 3 AND 4
ABOVE AND TO GRANT AUTHORITY TO VOTE FOR ALL NOMINEES
NAMED IN ITEM 1 ABOVE.
Dated: _______, 1998
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(Signature)
Please sign exactly
as your name
appears opposite.
When shares are
held by joint
tenants, both
should sign. When
signing as
attorney, executor,
administrator,
trustee or
guardian, please
give full title as
such. If a
corporation, please
sign in full
corporate name by
the President or
other authorized
officer. If a
partnership, please
sign in partnership
name by authorized
person.
PLEASE MARK, SIGN,
DATE AND PROMPTLY
RETURN THE PROXY
CARD PROMPTLY USING
THE ENCLOSED
ENVELOPE, WHICH
REQUIRES NO POSTAGE
IF MAILED IN THE
UNITED STATES.
