<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:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
March 25, 1999
Dear Shareholder:
You are cordially invited to join us at the 1998 Annual Meeting of your
company, which will be held at 10 a.m. Thursday, April 22, 1999, 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, one individual to serve as a director for
a term of two years and consider the board's proposal that shareholders ratify
the appointment of Ernst & Young as the company's independent accountants for
1999.
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
or by taking advantage of the phone or internet voting. Remember, your vote is
important!
Cordially,
Robert C. Buhrmaster
Chairman of the Board
Robert C. Buhrmaster 5501 Norman Center Drive Telephone (612) 830-3300
Chairman of the Board Minneapolis, MN 55437 www.jostens.com
<PAGE>
5501 Norman Center Drive
Minneapolis, Minnesota 55437
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 22, 1999
---------------------
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 22, 1999, at 10 a.m. local time, for the following
purposes, as described in more detail in the accompanying Proxy Statement.
1. To elect three directors, two to serve three-year terms and one to serve
a two-year term.
2. To ratify the appointment of Ernst & Young to act as independent
auditors of the company for fiscal year 1999.
3. 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, 1999, 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
William J. George
Secretary
March 25, 1999
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE OR
TAKE ADVANTAGE OF THE OPTION TO VOTE BY TELEPHONE OR VIA THE INTERNET
<PAGE>
5501 Norman Center Drive
Minneapolis, Minnesota 55437
---------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
April 22, 1999
---------------------
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 22, 1999, at 10 a.m. local time, and at all adjournments thereof.
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 and FOR the ratification of the appointment of Ernst &
Young to act as independent auditors of the company for 1999. 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. Proxy solicitation
will be conducted 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 facsimile or by electronic mail.
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 25, 1999.
1
<PAGE>
VOTING SECURITIES OF THE COMPANY
Only shareholders of record at the close of business on March 3, 1999, are
entitled to vote at the Annual Meeting. On March 3, 1999, the company had
35,134,930 outstanding shares of common stock, each such share entitling the
holder 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 requir ed to constitute a quorum.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth certain information concerning persons known
to the company to be the beneficial owner of more than 5 percent of the
company's common stock.
<TABLE>
<CAPTION>
Name and Address Number of Shares Beneficially Owned Percent of Class
---------------- ----------------------------------- ----------------
<S> <C> <C>
Capital Guardian Trust Company 2,395,420(/1/) 6.8%
11100 Santa Monica Boulevard
Los Angeles, CA 90025
</TABLE>
- ---------------------
(1) According to the Schedule 13G dated February 8, 1999, this entity had
sole dispositive power over all of the shares set forth above opposite
its name as of December 31, 1998. Capital Guardian Trust Company, a bank
as defined in Section 3(a)6 of the Securities Exchange Act of 1934 (the
Act), is deemed to be the beneficial owner of the securities reported as
a result of its serving as the investment manager of various
institutional accounts. The securities reported include 1,022,140 shares
for which Capital International Limited is deemed to be beneficial owner
as a result of its serving as the investment manager of various
institutional accounts and 627,250 shares for which Capital International
S.A. is deemed to be beneficial owner as a result of its serving as the
investment manager of various institutional accounts. Capital Guardian
Trust Company, Capital International Limited and Capital International
S.A. are affiliated entities.
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 and Mr.
Walker Lewis will resign from the board, prior to the end of his current term.
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 Robert C.
Buhrmaster and Jack W. Eugster as nominees for election to three-year terms
ending at the next subsequent annual meeting after the end of fiscal year 2001
or until their successors are duly elected and qualified. The Board of
Directors has designated Brenda J. Lauderback as nominee for election to a
two-year term ending at the next subsequent annual meeting after the end of
fiscal year 2000 or until her successor is duly elected and qualified. Both
Mr. Buhrmaster and Mr. Eugster are currently directors of the company. The
board has no reason to believe that any 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
-------------------------------------------- --- --------
<C> <S> <C> <C>
Lilyan H. Affinito Lilyan H. Affinito until 1991 served as Vice Chair- 67 1987
(1999) 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.; KeySpan Energy Cor-
poration; and Chrysler Corporation.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Director
Principal Occupation and Other Directorships Age Since
-------------------------------------------- --- --------
<C> <S> <C> <C>
Robert C. Robert C. Buhrmaster is the Chairman, President and 51 1993
Buhrmaster Chief Executive Officer of the company. Mr.
Buhrmaster joined the company in December 1992 as
(nominee) Executive 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 Corning, Inc. for 18 years, most recently as
Senior Vice President of Strategy and Business De-
velopment. He is also a director of The Toro Compa-
ny.
Jack W. Eugster Jack W. Eugster is Chairman, President and Chief Ex- 53 1995
ecutive Officer of Musicland Stores Corp, a spe-
(nominee) cialty retailer of home entertainment products. He
has been with Musicland Stores Corp. since June
1980. He is also a director of Damark International,
Inc.; Donaldson Company, Inc.; MidAmerican Energy
Holdings Company; and ShopKo Stores, Inc.
Mannie L. Jackson Mannie L. Jackson is majority owner and Chairman of 59 1994
Harlem Globetrotters International, Inc., a sports
(2000) and entertainment company. Until December 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;
and Reebok International Ltd.
Brenda J. Brenda J. Lauderback was the Group President--Whole- 48 --
Lauderback sale and Retail of Nine West Group, Inc., a company
that designs, develops and markets quality, fashion-
(2000) able footwear and accessories, from 1995 until March
1998. From 1993 through 1995, Ms. Lauderback was
President, Wholesale Division of U.S. Shoe Corpora-
tion. She is also a director of Irwin Financial Cor-
poration.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Director
Principal Occupation and Other Directorships Age Since
-------------------------------------------- --- --------
<C> <S> <C> <C>
Kendrick B. Kendrick B. Melrose is Chairman and Chief Executive 58 1996
Melrose Officer of The Toro Company, a manufacturer of out-
door beautification equipment. He has been with The
(1999) Toro Company since 1970. He is also a director of
The Valspar Corporation; Donaldson Company, Inc.;
and SurModics, Inc.
Richard A. Zona Richard A. Zona is Vice Chairman of U.S. Bancorp, a 54 1996
regional bank holding company. He has been with U.S.
(1999) Bancorp since September 1989.
</TABLE>
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 six times in 1998. 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 1998, no director attended fewer than 75
percent of the aggregate number of meetings of the board or the committees on
which each director serves.
The Audit Committee presently consists of directors Affinito, 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
1998.
The Compensation Committee presently consists of directors Eugster, Jackson
and Lewis. 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 three times during 1998.
The Executive Committee presently consists of directors Buhrmaster, Eugster,
Melrose 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 four times during 1998.
5
<PAGE>
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 a restricted stock units equal to 50 percent of
the value of the then-annual base 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.
Under the Jostens, Inc. Deferred Compensation Plan, a non-employee director
may elect to receive his or her fees 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 each account credited for
dividend equivalents and adjusted to reflect share ownership changes resulting
from events such as a stock split or recapitalization. Participants 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.
6
<PAGE>
SHARES HELD BY DIRECTORS AND OFFICERS
The following table shows the amount of common stock of the company
beneficially owned by the company's directors, the executive officers of the
company named in the Summary Compensation Table below and the directors and
executive officers as a group.
<TABLE>
<CAPTION>
Common Shares Owned Beneficially Percent of Shares
Name as of March 3, 1999(/1/)(/2/)(/3/) Outstanding
---- ---------------------------------- -----------------
<S> <C> <C>
Lilyan H. Affinito........ 22,994 *
Carl H. Blowers........... 84,191 *
Robert C. Buhrmaster...... 459,704 1.3%
Jack W. Eugster........... 9,540 *
Mannie L. Jackson......... 12,438 *
David J. Larkin........... 88,500 *
Walker Lewis.............. 2,376 *
John J. Mann.............. 46,077 *
Kendrick B. Melrose....... 8,020 *
William N. Priesmeyer..... 82,158 *
Richard A. Zona........... 8,766 *
All directors and
executive
officers as a group (18
members)................. 1,156,067 3.29%
</TABLE>
- ---------------------
* Represents less than 1% of the company's outstanding common stock.
(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.
(2) Includes the following number of shares which may be acquired upon the
exercise of options by the named persons or group within 60 days: Ms.
Affinito, 8,583 shares; Mr. Blowers, 42,333 shares; Mr. Buhrmaster,
338,000 shares; Mr. Eugster, 2,583 shares; Mr. Jackson, 3,583 shares; Mr.
Larkin, 33,333 shares; Mr. Lewis, 733 shares; Mr. Mann, 41,333 shares; Mr.
Melrose, 1,833 shares; Mr. Priesmeyer, 35,333 shares; Mr. Zona, 1,833
shares; and all directors and executive officers as a group, 719,484
shares. Also includes the following number of restricted shares held
subject to forfeiture: Mr. Blowers, 4,817 shares; Mr. Buhrmaster, 10,135
shares; Mr. Larkin, 6,411 shares; Mr. Mann, 3,000 shares; Mr. Priesmeyer,
5,673 shares; and all directors and executive officers as a group, 43,637
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, 12,611 shares; Mr. Eugster, 5,957 shares; Mr. Jackson, 8,855
shares; Mr. Lewis, 1,643 shares; Mr. Melrose, 4,187 shares; and Mr. Zona,
1,015 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 of three 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.
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.
8
<PAGE>
In 1998, the company chose 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 or base salary, whichever is higher. 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 (until February
2004).
To aid in achievement of the stock ownership guidelines, two new programs
were approved in 1998. First, the Executive Stock Matching Program allows
executives to receive up to half of their annual bonus in stock if their stock
ownership is not at guideline level. In addition, the company will match 25
percent of the shares they receive under this program with additional shares
of stock. This match is in the form of a restricted stock grant, which vests
after three years and would be forfeited if the executive left the company for
any reason during the vesting period. Second, the Executive Stock Purchase
Program was designed for executives subject to the stock ownership guidelines
and consists of a loan provision and a stock discount. The bank loan is an
unsecured, full-recourse loan taken out by the executive, with Jostens
coordinating the financing. Jostens guarantees principal and interest payments
and a balloon principal payment is required at the end of five years. Also
part of this program is a 15 percent discount in the form of a restricted
stock grant. See Executive Stock Purchase Program section below for additional
details.
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.
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 operating 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. Executive
officers (excluding the chief executive officer) also participate in a
companywide Performance Pays bonus program that was introduced in 1997 for all
of the company's non-union employees and is based on achieving net income
performance goals established by this committee.
Long-term incentive compensation for executive officers consists primarily
of annual stock option grants approved by the committee. In July 1997, the
committee approved an annual grant of stock options and performance shares.
The stock options were granted at fair market value on date of grant with
vesting over three years. The earning of the performance shares granted in
1997 was based on the achievement of an EPS goal established for fiscal year
1998, along with maintaining a minimum level of return on assets. The required
level of EPS and return on assets was achieved for fiscal year 1998. The
performance shares earned were valued at
9
<PAGE>
the share price on the last trading day of 1998. The value of the performance
shares earned was paid out half in cash and half in stock. Future executive
incentive compensation will be based on annual stock option grants.
Chief Executive Officer Robert C. Buhrmaster's fiscal year 1998 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 management expectations in 1998. The company accomplished improvements in
its infrastructure to support stronger growth and delivered meaningful ongoing
earnings per share improvement.
Mr. Buhrmaster's compensation reflects the board's assessment of both
Jostens' fiscal year 1998 results and his overall performance. The board
granted Mr. Buhrmaster a salary increase in 1998 of 11% to bring him to a base
salary of $500,000. Based on Mr. Buhrmaster's partial achievement of fiscal
year 1998 performance goals, the board approved a 1998 bonus for him of
$324,000. This bonus is 64.8% percent of Mr. Buhrmaster's 1998 base salary of
$500,000. Mr. Buhrmaster's bonus target for 1998 was 60 percent of base
salary.
In February 1998, Mr. Buhrmaster received an annual grant of 75,000 stock
options. The options were granted at fair market value on the date of grant
and vest over three years.
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 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 they become tax
deductible by the company.
Summary
The committee believes Jostens' executive compensation policies and programs
effectively serve the interests of the shareholders and 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
Mannie L. Jackson
Walker Lewis
10
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation for 1998,
1997, the six-month transition period ended December 28, 1996, and the fiscal
year ended June 30, 1996, 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>
Robert C. Buhrmaster, 1998 500,000 324,000 47,452 0 75,000 286,344
Chairman, President and
Chief Executive Officer
1997 467,307 167,227 48,952 0 60,000 0
6 mos 217,692 0 10,988 0 0 0
1996 495,833 126,800 22,967 0 0 0
Carl H. Blowers, 1998 290,097 118,288 0 0 70,000 100,221
Senior Vice President-
Manufacturing(/5/)
1997 249,231 66,746 0 0 21,000 0
6 mos 110,769 42,000 0 0 0 0
1996 27,231 0 0 0 0 0
David J. Larkin, 1998 304,927 138,933 10,100 10,639 100,000 225,785
Executive Vice President
and Chief Operating
Officer(/6/)
1997 N/A N/A N/A N/A N/A 0
6 mos N/A N/A N/A N/A N/A 0
1996 N/A N/A N/A N/A N/A 0
John J. Mann, 1998 209,231 72,463 16,917 0 41,500 71,586
Vice President-
Scholastic Division(/7/)
1997 207,692 66,485 7,950 35,719 30,000 0
6 mos 92,308 0 0 0 15,000 0
1996 43,205 39,583 0 33,000 0 0
William N. Priesmeyer, 1998 229,154 70,513 16,917 15,491 85,000 162,186
Senior Vice President
and Chief Financial
Officer(/8/)
1997 77,692 23,663 2,750 0 21,000 0
6 mos N/A N/A N/A N/A N/A 0
1996 N/A N/A N/A N/A N/A 0
</TABLE>
- ---------------------
(1) Bonuses for fiscal year 1996 were paid in August of 1997. 1998 and 1997
bonuses were paid in February of the following year. Includes amounts paid
under Jostens' Performance Pays bonus program for 1998 as follows: Mr.
Buhrmaster: not eligible; Mr. Blowers, $10,792; Mr. Larkin, $11,343; Mr.
Mann, $7,783; and Mr. Priesmeyer, $8,525. Includes amounts paid under
Jostens Performance Pays bonus program for 1997 as follows: Mr.
Buhrmaster, $5,227; Mr. Blowers, $2,788; Mr. Larkin, $0; Mr. Mann, $2,323;
and Mr. Priesmeyer, $1,163. 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.
11
<PAGE>
(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 1998: Mr. Buhrmaster: $15,000,
$21,525, $8,427 and $2,500; Mr. Mann: $9,000, $1,100, $0 and $0; and Mr.
Priesmeyer: $11,917, $0, $0 and $5,000. 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; and Mr.
Priesmeyer: $2,750, $0, $0 and $0. 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. 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.
(3) Mr. Larkin's and Mr. Priesmeyer's award amounts reflect the restricted
stock awarded to them as part of their fiscal year 1998 bonus. These
restricted stock awards vest three years from the date of grant.
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. Mr. Mann's restricted stock awards each vest four years from the
date of grant.
(4) Includes conversion of performance shares granted in 1997 for 1998 company
performance. 110 percent of targets was achieved and the performance
shares were earned at that level and paid out half in cash and half in
Jostens common stock based on the market value of Jostens common stock on
the last trading day of 1998 ($26.0313). The amounts listed for Mr. Larkin
and Mr. Priesmeyer also include the portion of their fiscal year 1998
bonus that they elected to have paid in Jostens common stock, $42,525 and
$61,965, respectively.
(5) Mr. Blowers joined the company in May 1996 as an independent consultant
and was hired as an employee in 1997 and appointed to his current position
in February 1998.
(6) Mr. Larkin joined the company in February 1998.
(7) Mr. Mann joined the company in April 1996 as General Manager, Scholastic
and was named Vice President--Scholastic Division in May 1997.
(8) Mr. Priesmeyer joined the company in August 1997.
12
<PAGE>
Option Grants in Fiscal Year 1998
<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% ($38.23 per 10% ($60.87 per
Name Granted Fiscal Year ($/share) Date(/2/)(/3/) share) share)
---- ---------- ------------- ----------- -------------- -------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Buhrmaster.... 75,000 7.93% 23.4688 2/5/08 $ 1,107,000 $ 2,805,000
Carl H. Blowers ........ 70,000 7.40% 23.4688 2/5/08 1,033,200 2,618,000
David J. Larkin ........ 100,000 10.58% 23.4688 2/5/08 1,476,000 3,740,000
John J. Mann............ 41,500 4.39% 23.4688 2/5/08 612,540 1,552,100
William N. Priesmeyer .. 85,000 8.99% 23.4688 2/5/08 1,254,600 3,179,000
All Shareholders(/4/)... N/A N/A N/A N/A 517,926,555 1,312,361,325
</TABLE>
- ---------------------
(1) The potential realizable value shown is the potential gain if the options
are 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 price per share of granted options. For all shareholders,
the gain is calculated from the option price per share on February 5,
1998, 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 is described below in
Executive Change in Control Severance Pay Plan. 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 any 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
February 5 of 1999, 2000 and 2001.
(4) 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 1998
And Fiscal Year End 1998 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 0 313,000 223,000 $2,110,021 $1,081,784
Carl H. Blowers......... 0 0 19,000 90,000 82,063 231,563
David J. Larkin......... 0 0 0 100,000 0 256,250
John J. Mann............ 0 0 20,000 66,500 52,188 163,845
William N. Priesmeyer... 0 0 7,000 99,000 8,969 235,751
</TABLE>
- ---------------------
(1) Based on a market price of $26.0313 on December 31, 1998.
13
<PAGE>
Executive Change in Control Severance Pay Plan
The company has implemented a Severance Pay Plan (the Plan) to provide
severance pay in the event of a change in control (as defined in the Jostens,
Inc. Executive Change in Control Severance Pay Plan) of the company for
individuals who are executive officers of the company or employed by the
company as a management or highly compensated employee, as determined by the
chief executive officer. The Plan provides for severance payments to eligible
employees whose employment is terminated, either voluntarily with "good
reason" (as defined in the Plan) or involuntarily during the 24 months
following a change in control. The amount of severance benefit is based upon
the employee's position in the company and the employee's base salary plus the
higher of the target of the current year's annual incentive or the three year
average of actual payouts of annual incentives. The range of severance benefit
is from 15 months to 36 months and would be paid in a lump sum upon
termination. Under the Plan, any severance benefit to an employee would be
reduced by the amount, if any, necessary to prevent any part of the benefit to
be treated as an "excess parachute payment" within the meaning of Section
280(G) of the Internal Revenue Code of 1986, as amended.
Executive Stock Purchase Program
In 1998, the Jostens Board of Directors approved an Executive Stock Purchase
Program (the Program) sponsored by the company. The Program offered certain
executives a one-time opportunity to purchase company stock, at current market
price, through unsecured, full-recourse loans financed by The First Chicago
National Bank and guaranteed by the company. The dollar value of shares that
participants were authorized to purchase under the Program was one to three
times their base salary, depending upon the executive's position within the
company. A minimum purchase of 50 percent of the authorized value was required
in order to participate. The Board of Directors also authorized a grant of
restricted shares of common stock equal to 15 percent of the number of shares
that each participant purchased in the Program. The restricted stock awards
under this Program vest three years from the date of grant. Dividends from the
stock purchased under this Program and the restricted stock may be applied to
the quarterly interest payments due on the loans. The remainder of the
interest will be capitalized and due at the end of the five-year loan period.
Four of the named executive officers in the Summary Compensation Table elected
to participate in this Program. Shares purchased under this Program and the
restricted stock grants are included in the Shares Held by Directors and
Officers. The principal amounts of loans to the named executive officers
guaranteed by the company are: Mr. Buhrmaster: $1,620,000; Mr. Blowers:
$770,000; Mr. Larkin: $950,000 and Mr. Priesmeyer: $798,000. The number of
shares purchased and related restricted stock granted for each of the named
executive officers are: Mr. Buhrmaster: 67,569 and 10,135; Mr. Blowers: 32,116
and 4,817; Mr. Larkin: 39,624 and 5,944; and Mr. Priesmeyer: 33,284 and 4,993.
14
<PAGE>
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.
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 $ 27,600 $ 36,800 $ 46,000 $ 55,200 $ 64,400
200,000 38,900 51,800 64,800 77,700 90,700
300,000 61,400 81,800 102,300 122,700 143,200
400,000 83,900 111,800 139,800 167,700 195,700
500,000 106,400 141,800 177,300 212,700 248,200
600,000 128,900 171,800 214,800 257,700 300,700
700,000 151,400 201,800 252,300 302,700 353,200
800,000 173,900 231,800 289,800 347,700 405,700
900,000 196,400 261,800 327,300 392,700 458,200
950,000 207,600 276,800 346,000 415,200 484,400
</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, 6.1
years; Mr. Blowers, 2.6 years; Mr. Larkin, 0.9 years; Mr. Mann, 2.7 years;
and Mr. Priesmeyer, 1.3 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 full calendar years of service as a corporate vice
president are eligible for a benefit equal to 1 percent of final base salary
for each full calendar 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. 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,
Blowers, Mann and Priesmeyer would be $70,000, $4,994, $16,800 and $18,360,
respectively. Mr. Larkin has waived his eligibility in 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 with the S&P 500 Index and a peer
group index comprising the 11 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
returns are based on an assumed investment of $100 on December 31, 1993, in
the company's common stock and both of the indexes, with all dividends
reinvested.
(1) The peer group index comprises the 11 companies that are included in three
S&P consumer product indexes: 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The company prepares Section 16(a) forms on behalf of its officers and
directors based on the information provided by them. Based solely on review of
this information, including written representations from its officers and
directors that no other reports were required, the company believes that,
during the 1998 fiscal year, all Section 16(a) filing requirements applicable
to its officers and directors were complied with.
APPOINTMENT OF AUDITORS
The Board of Directors has appointed Ernst & Young as independent auditors
to examine the accounts of the company for 1999, 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.
16
<PAGE>
The board recommends a vote for ratification of Ernst & Young as independent
auditors for fiscal year 1999. 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 1999 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended to be presented in the proxy materials
relating to the 1999 Annual Meeting of Shareholders must be received by the
secretary of the company at its principal executive offices on or before
November 19, 1999. A shareholder who wishes to make a proposal at the 1999
Annual Meeting without including the proposal in the company's proxy statement
must notify the company by February 4, 2000. If a shareholder fails to give
notice by this date, then the persons named as proxies in the proxies
solicited by the company for the 1999 Annual Meeting will have discretionary
authority to vote on the proposal.
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 1998 TO
EACH PERSON WHO IS A SHAREHOLDER OF THE COMPANY AS OF MARCH 3, 1999. SUCH
REQUESTS SHOULD BE SENT TO JOSTENS INC., INVESTOR RELATIONS, 5501 NORMAN
CENTER DRIVE, MINNEAPOLIS, MN 55437, (612) 830-3214. FINANCIAL STATEMENTS AND
OTHER INFORMATION ABOUT JOSTENS ARE ALSO AVAILABLE ELECTRONICALLY VIA THE
WORLDWIDE WEB AT WWW.JOSTENS.COM.
BY ORDER OF THE BOARD OF DIRECTORS
William J. George
Secretary
March 25, 1999
17
<PAGE>
Printed on recycled paper.
<PAGE>
Jostens, Inc.
There are three ways to vote your Proxy
-------------------------------
COMPANY #
Your telephone or Internet vote authorizes the CONTROL #
Proxies to vote your shares in the same manner -------------------------------
as if you mark, sign and return your proxy
card.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326
. Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
. You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which is located above.
. Follow the simple instructions the voice provides you.
VOTE BY INTERNET -- http://www.eproxy.com/jos/
. Access the above Internet site to vote your proxy 24 hours a day, 7 days a
week.
. You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which is located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
provided.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
-- Please detach here --
The Board of Directors Recommends a Vote FOR Items 1 and 2.
1.Election of directors:
01 Robert C. Buhrmaster 02 Jack W. Eugster [ ] Vote FOR [ ] Vote WITHHELD
03 Brenda J. Lauderback all nominees from all nominees
(Instructions: To withhold ---------------------------------
authority to vote for any indicated
nominee, write the number(s) of the ---------------------------------
nominee(s) in the box provided to
the right.)
2. Ratification of Ernst & Young as [ ] For [ ] Against [ ] Abstain
independent auditors of the company
for fiscal year 1999.
3. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before
the Annual Meeting of Shareholders.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH ITEM.
Address Change? Mark Box [ ] Date ____________________________
Indicate changes below:
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the Proxy.
<PAGE>
[LOGO]
JOSTENS, INC.
ANNUAL MEETING
Thursday, April 22, 1999
10:00 a.m. local time
Auditorium of Jostens, Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Jostens, Inc.
5501 Norman Center Drive, Minneapolis, MN 55437 Proxy
- --------------------------------------------------------------------------------
This Proxy is solicited on behalf of the Board of Directors.
By signing this proxy, you revoke all prior proxies and appoint Robert C.
Buhrmaster and William J. George, or either one of them, as Proxies, each with
the power to appoint his substitute and to act without the other, and authorize
each of them to represent and to vote, as designated herein, all shares of
common stock of Jostens, Inc. held of record by the undersigned on March 3,
1999, at the Annual Meeting of Shareholders of the Company to be held on April
22, 1999 or any adjournment thereof.
If no choice is specified, the proxy will be voted "FOR" Items 1 and 2.
See reverse for voting instructions.
