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
JOURNAL COMMUNICATIONS, 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
<PAGE>
JOURNAL COMMUNICATIONS, INC.
333 West State Street
Milwaukee, Wisconsin 53203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 4, 1996
The Annual Meeting of the Stockholders of Journal Communications, Inc.
(the "Company") will be held at the lunchroom of NorthStar Print Group,
Inc., 1222 Perry Way, Watertown, Wisconsin 53094, on Tuesday, June 4,
1996, at 9:00 a.m. for the purpose of electing twenty-five (25) directors,
the names of whom are set forth in the accompanying proxy statement, to
serve until the 1997 Annual Meeting.
Stockholders of record at the close of business on May 3, 1996, will be
entitled to vote at this meeting or any adjournment thereof. Also, active
employees of the Company or its subsidiaries who hold units of beneficial
interest in the Journal Employees' Stock Trust as of May 3, 1996, are
entitled to vote pursuant to the enclosed proxy.
Regardless of the number of shares or units you own, it is important that
you be represented at the meeting. Therefore, please sign, date and
return the enclosed proxy form in the return envelope provided. If you
attend the meeting, you may revoke your proxy and vote in person if you so
desire.
By Order of the Board of Directors,
PAUL E. KRITZER,
Secretary
Dated: May 14, 1996
<PAGE>
TRUSTEES' PROXY TO UNITHOLDERS
For the Annual Meeting of Stockholders of Journal Communications, Inc.
to be held on June 4, 1996
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned holders of
12,960,000 shares of capital stock of Journal Communications, Inc., a
Wisconsin corporation, do hereby appoint each unitholder in the Journal
Employees' Stock Trust, as proxy with power of substitution, for and in
the name of the undersigned to vote one share of said stock for each Trust
unit held by such unitholder as evidenced on the transfer books of the
Trustees at the close of business on May 3, 1996, at the Annual Meeting of
Stockholders of said Company to be held at the time and place specified in
the foregoing notice and at any adjournment of said meeting, in relation
to any and all matters which may properly come before such meeting, with
all of the powers that the undersigned would possess if personally present
thereat. A certified list of such unitholders, together with the number
of shares they are so entitled to vote, has been delivered to the Company
by the Trustees.
This proxy is issued pursuant to the provisions of Section 21 of the
Journal Employees' Stock Trust Agreement dated May 15, 1937, and the
authority hereby conferred is subject to each of the restrictive
conditions expressed therein as follows:
"The Trustees, as soon as they shall receive notice of any meeting of
the owners of Journal Stock, shall issue to each owner of units,
except ex-employee-eligibles, employee benefit trusts and employee-
eligible-transferees, a proxy authorizing him/her or such other
person or persons as he/she may substitute for him/her to vote at
such meeting the number of shares of Journal Stock represented by the
units owned by him/her, provided, however, and each such proxy shall
so state, that neither the owner of such units nor his/her substitute
or substitutes shall have the power or authority to vote (a) to sell
or lease all or substantially all of the assets of the Company, or
(b) to dissolve the Company, or (c) to merge or consolidate the
Company with any other corporation or corporations in which the
Company and/or the stockholders of the Company upon completion of
such consolidation or merger do not control directly or indirectly a
majority of the voting stock, unless the employee-owners of at least
two-thirds of the outstanding units owned by employee-eligibles shall
have authorized the Trustees to offer all shares held by the Trustees
for sale in accordance with the provisions of Section 24 to the
classes of optionees therein defined and such options shall have
expired within three months prior to such vote. The Trustees may
authorize the affixing of a facsimile of their signatures to any
proxy with the same effect as though such proxy were signed by them
personally.
"The Trustees shall have exclusive authority to vote all shares of
Journal Stock represented by units owned by ex-employee-eligibles,
employee benefit trusts and employee-eligible transferees."
The Trustees will vote 5,593,876 units owned by ex-employee-eligibles,
employee benefit trusts and employee-eligible transferees.
Dated: May 13, 1996
Trustees Under Journal Employees' Stock
Trust Agreement, dated May 15, 1937
ROBERT A. KAHLOR DOUGLAS G. KIEL
STEVEN J. SMITH PAUL M. BONAIUTO
THOMAS M. KARAVAKIS
<PAGE>
JOURNAL COMMUNICATIONS, INC.
333 West State Street
Milwaukee, Wisconsin 53203
PROXY STATEMENT
Solicitation of Proxies
The enclosed Proxy is solicited by the Board of Directors of Journal
Communications, Inc. (the "Company"), a Wisconsin corporation, for use at
the Annual Meeting of Stockholders at 9 a.m. on Tuesday, June 4, 1996 (the
"Annual Meeting"), in the lunchroom of NorthStar Print Group, Inc., 1222
Perry Way, Watertown, Wisconsin 53094. In addition to the use of the
mails at Company expense, the Company may, if it deems it desirable,
solicit proxies personally, by telephone, by e-mail, by facsimile or by
other written communication. Solicitations will be made by regular
employees of the Company at Company expense; however, no such person will
receive any compensation over and above his normal remuneration. A
stockholder or unitholder who executes a proxy may revoke it by giving
written notice to the Secretary of the Company before the meeting or by so
stating in the open meeting before the proxy is exercised. Any proxy that
is not revoked will be voted at the meeting in accordance with the
instructions given on the enclosed proxy form. This proxy statement and
enclosed proxy card are being sent to shareholders and unitholders on or
about May 14, 1996.
Outstanding Voting Securities
The Company has only one class of stock authorized and outstanding
("Journal Stock"). Stockholders of record at the close of business on May
3, 1996, are entitled to notice of the meeting and to vote the shares of
Journal Stock held on that date. Each share is entitled to one vote.
Directors will be elected by a plurality of votes cast at the Meeting
(assuming a quorum is present). For this purpose, "plurality" means that
the individuals receiving the largest number of votes are elected as
directors, up to the maximum number of directors to be chosen at the
election. Consequently, any shares or units of beneficial interest not
voted at the Meeting, whether due to abstention or otherwise, will have no
impact on the election of directors. On May 3, 1996, 14,400,000 shares
of Journal Stock were outstanding, of which 12,960,000 shares were held by
the Trustees of the Trust under the Journal Employees' Stock Trust
Agreement ("JESTA"), dated May 15, 1937, which shares were, in turn,
represented by a like number of units of beneficial interest ("units")
issued by the JESTA Trustees. See "Beneficial Ownership under JESTA" for
a further description of JESTA and the voting rights of the holders of
units ("unitholders"). On May 3, 1996, the Company was the holder of
1,199,087 units, which will not be voted at the meeting.
Principal Shareholders
Listed in the following table are the beneficial owners as of May 3, 1996,
of more than five percent (5%) of the issued Journal stock.
Name and Address Title of Type of Amount Percentage
Class Ownership Owned of Class
Journal Employees' Common Beneficial 12,960,000 90%
Stock Trust, and Record
333 W. State St.,
Milwaukee, WI
53203
Matex Inc., Common Beneficial 1,320,000 9.2%
735 N. Water St., and Record
Milwaukee, WI
53202
Ownership by Directors and Officers as a Group
Voting securities beneficially owned by directors and director nominees
are disclosed under "Election of Directors", below. The twenty-seven (27)
directors, director nominees and officers of the Company as a group (but
excluding David G. Meissner) are the beneficial owners of 531,447 units,
or 3.7% of the number of issued shares of Journal Stock. Mr. Meissner
owns no units but is an officer and director of Matex Inc., which owns
1,320,000 shares of Journal Stock. Mr. Meissner's wife and two adult
children are also officers and directors of Matex Inc., and together they
own or have a beneficial interest in 33% of the outstanding common stock
of Matex Inc. Mrs. Meissner also has a 33% beneficial interest in a trust
that holds 120,000 shares of Journal Stock. Other members of Mrs.
Meissner's family own or have a beneficial interest in the remaining 67%
of Matex Inc. shares and the trust that holds the 120,000 shares of
Journal stock.
Beneficial Ownership Under JESTA
On May 3, 1996, the Journal Employees' Stock Trust (the "Stock Trust"), of
which Robert A. Kahlor, Steven J. Smith, Thomas M. Karavakis, Douglas G.
Kiel and Paul M. Bonaiuto are the Trustees, owned of record 12,960,000
shares or ninety percent (90%) of the outstanding Journal Stock. The
Stock Trust issues units, each unit representing one share of Journal
Stock. On May 3, 1996, the 12,960,000 units of beneficial ownership
issued by the Stock Trust were owned as follows: Active employee
unitholders, 6,167,037, retirees and trusts, 5,593,876, and Journal
Communications, Inc., 1,199,087.
The Trustees are required to deliver to each employee unitholder a proxy,
with the right of substitution, for the number of shares of Journal Stock
represented by his/her units. The Trustees' proxy, which is included with
this proxy statement, is subject to certain limitations in the Journal
Employees' Stock Trust Agreement. Those limitations are set forth in the
"Trustees' Proxy to Unitholders."
Whenever a unitholder ceases to be an employee of the Company for any
reason except retirement, corporate downsizing or restructuring, the
unitholder must offer his/her units for resale to employees designated by
the President of the Company. The President cannot allocate units to
himself. Employees who retire or are separated from the Company due to
downsizing or restructuring may retain a decreasing percentage of their
units for a limited number of years. Employee benefit trusts are eligible
to hold units. All units held by retirees, employee benefit trusts and
other trusts are voted by the Trustees of the Stock Trust. On the record
date, retirees and trusts held 5,593,876 units representing forty-two
percent (42%) of the outstanding and issued Journal Stock.
All of the Trustees are directors and officers of the Company and receive
no additional compensation for this service. They have no beneficial
interest in the Journal Stock owned by the Trust other than through the
units they own individually.
ELECTION OF DIRECTORS
The Company's By-laws provide that the number of directors shall be no
less than three (3) and no more than twenty-six (26) and that all
directors shall be elected annually. Twenty-five (25) directors have been
nominated to serve until the next Annual Meeting of Stockholders.
Management intends to vote its proxies for the election of the twenty-five
(25) nominees listed below. Although management expects that each of the
nominees will be available for election, if any of them is not a candidate
at the time the election occurs, the proxies will be voted for the other
nominees and may be voted for substituted nominees. Pursuant to the
Company's By-laws, written notice of other qualifying nominations for
election to the Board of Directors must have been received by the
Secretary by March 15, 1996. As no notice of any such other nominations
was received, no other nominations for election to the Board of Directors
may be made at the Meeting. The nominees for directors of the Company are
listed in the following table.
<TABLE>
<CAPTION>
Nominees Principal Occupation (1) Age Date Elected Units Owned
Director Beneficially (2)
<S> <C> <C> <C> <C>
Todd K. Adams Senior Vice President & 37 (3) 13,475
Chief Financial Officer,
Journal Sentinel Inc.
Paul M. Bonaiuto Senior Vice President & 45 June 8, 1993 13,000
Chief Financial Officer
James J. Ditter Vice President; 34 September 6, 1995 2,740
President, MRC
Telecommunications, Inc.
Robert M. Dye Vice President 48 March 6, 1990 41,580
Christine A. Assistant Secretary and 47 June 8, 1993 31,550
Farnsworth Corporate Retirement
Benefits Manager
Gregory H. Forbes Vice President; 46 June 8, 1993 25,000
President, IPC
Communication Services,
Inc.
Richard J. Gasper President, NorthStar Print 52 (3) 4,680
Group, Inc.
Rhonda G. Secretary to Marketing 42 (3) 2,075
Giebenrath Manager, Circulation
Department, Journal
Sentinel Inc.
David J. Hauser Layout Artist, Creative 41 (3) 2,445
Advertising Services,
Journal Sentinel Inc.
Thomas J. Heinen Suburban Issues Reporter, 47 (3) 7,620
Milwaukee Journal Sentinel,
Journal Sentinel Inc.
Stephen O. Huhta Vice President; 40 June 8,1993 26,355
Senior Vice President of
Operations, Add, Inc.
Robert A. Kahlor Chairman of the Board & CEO 62 March 6, 1973 90,435
Thomas M. Karavakis Senior Vice President; 65 June 5, 1984 77,035
President, Add, Inc.
Mark J. Keefe President, PrimeNet 36 (3) 3,000
Marketing Services, Inc.
Douglas G. Kiel Senior Vice President; 47 June 4, 1991 30,000
President, Journal
Broadcast Group, Inc.
Paul E. Kritzer Vice President and 54 June 5, 1990 35,070
Secretary
Ronald G. Kurtis Vice President; 49 June 8, 1993 54,800
Senior Vice President &
CFO, Journal Broadcast
Group, Inc.
David G. Meissner Executive Director, The 58 June 7, 1988 (4)
Public Policy Forum
Armin J. Ott Meteorologist, WTMJ News, 48 (3) 1,320
Journal Broadcast Group,
Inc.
Donna M. Riehle Investment Savings Plan 28 (3) 75
Assistant, Journal
Communications, Inc.
Ralph P. Schumacher Color Artist, Production 52 (3) 1,100
Department, Journal
Sentinel Inc.
Steven J. Smith President 46 June 2, 1987 73,880
Keith K. Spore Senior Vice President; 53 September 6, 1995 22,000
President, Journal Sentinel
Inc.
Christopher S. Marketing Manager, Add, 26 June 6, 1995 570
Thomas Inc. (Waupaca)
David M. Thomas Sheeter Operator, NorthStar 28 (3) 182
Print Group, Inc.
(Milwaukee)
<FN>
____________________________
(1) All nominees except David G. Meissner, Paul M. Bonaiuto, Gregory H.
Forbes, James J. Ditter, Mark J. Keefe, Richard J. Gasper and
Christopher S. Thomas have been employed by the Company for over five
(5) years at the time of the Annual Meeting. Mr. Meissner is not
employed by the Company. Mr. Bonaiuto has been Chief Financial
Officer since January 1996 and was elected Section Vice President on
March 5, 1996. Previously, he had been President of NorthStar Print
Group, Inc., from June 1994 to January 1996; Senior Vice President of
Perry Printing Corporation, then a subsidiary of the Company, from
July 1992 to June 1994, and Executive Vice President of The Peterson
Group, Wilmington, Delaware, a private equity investment firm, for
the remainder of the past five-year period. Mr. Forbes joined the
Company in 1992 when Imperial Printing Company, of which he was
President and owner, was acquired by the Company. Mr. Ditter was
elected President of MRC Telecommunications, Inc., in September 1995
after serving as that company's Chief Financial Officer, Vice
President and Senior Vice President since August 1992. Prior to
that, Mr. Ditter had been the Controller for Peck Foods Corporation,
Milwaukee. Mr. Keefe was elected President of PrimeNet Marketing
Services, Inc. in October 1995. Prior to that he had been a manager
in the Minneapolis office of FDC, Inc., where he was a vice president
from April 1992 to December 1993, and vice president and general
manager of the Computer Services Division of Donnelley Marketing,
Inc., in Minneapolis from January 1994 to September 1995. Mr. Gasper
was elected President of NorthStar Print Group, Inc., in January
1996. Prior to that, he had been the vice president and general
manager of Label Products & Design, Inc., from April 1993 to December
1995, and President of Competitive Advantage, Inc., a consulting
company in Florence, South Carolina, for two years. Mr. Thomas, who
joined Add, Inc. in March 1992, had previously been an educational
software writer for The Conover Company, Oshkosh, Wisconsin.
(2) No director or officer owns one percent (1%) of the outstanding
Journal Stock, except as noted above in "Ownership by Directors and
Officers as a Group."
(3) New nominee for election as director of the Company at the Annual
Meeting.
(4) See "Ownership of Directors and Officers as a Group," above.
</TABLE>
Directors' Fees
The Company does not pay fees to its directors for their service on the
Board of Directors or for attendance at meetings of the Board. All
Directors except Mr. Meissner are full-time employees of the Company or a
subsidiary and are compensated in their capacities as employees. The
members of the Compensation Committee receive an annual retainer of $3,000
plus $1,000 for each meeting of the Compensation Committee attended.
Board of Directors' Affiliations
The following affiliation existed between the Company and a director in
1995. David G. Meissner was President of Morgan&Myers/The Barkin Group, a
Milwaukee public relations firm, through March 1995. Upon management's
request, his firm provided consulting services to the Company at a cost of
$11,021 between January 1, 1995, and March 28, 1995. On March 29, 1995,
Mr. Meissner terminated his employment and equity ownership with this
firm.
The Board of Directors and Committees
The Board of Directors met four (4) times during 1995. All of the
directors of the Company during 1995 attended at least 75% of the
aggregate of the (i) full meetings of the Board of Directors and (ii)
meetings of committees of the Board of Directors. In addition, the
Board of Directors adopted resolutions by unanimous written consent
without a meeting on three (3) occasions in 1995.
The Board of Directors has one committee, the Compensation Committee,
which held two (2) meetings in 1995. The Board of Directors does not have
an executive committee, an audit committee or a nominating committee.
The Compensation Committee is charged with the responsibility for assuring
that the officers and key management personnel of the company are
effectively compensated in terms of salary and benefits that are
internally equitable and externally competitive. The members of the
Compensation Committee are David G. Meissner (Chair), James L. Forbes and
Roger D. Peirce. (James L. Forbes is not related to Gregory H. Forbes).
Mr. Forbes and Mr. Peirce are not directors of the Company. No member of
the Compensation Committee can be an employee of the Company. In March
1995, Mr. Meissner became the Executive Director of The Public Policy
Forum, a non-profit civic organization dedicated to providing research on
civic issues in Milwaukee, Mr. Forbes ws President/CEO of Badger Meter,
Inc., Milwaukee, and Mr. Peirce was President of Valuation Research
Corporation, Milwaukee.
Executive Compensation
The following table sets forth the 1995 compensation for the Company's
Chief Executive Officer and the four highest-paid executive officers, as
well as the total compensation paid to each individual for the last three
fiscal years:
<TABLE>
Summary Compensation Table
Annual Compensation
<CAPTION>
Name & Principal Incentive All Other
Position Year Salary Compensation Compensation
<S> <C> <C> <C> <C>
Robert A. Kahlor 1995 486,971 67,275 3,750
Chairman of the Board 1994 397,150 55,500 3,750
and Chief Executive 1993 362,619 0 5,896
Officer
Steven J. Smith 1995 366,468 37,571 3,750
President 1994 297,730 33,595 3,750
1993 271,173 0 2,358
Peter P. Jarzembinski 1995 300,300 9,900 3,750
Senior Vice President 1994 229,474 24,958 3,750
& CFO (Resigned 1993 206,517 0 5,380
January 3, 1996)
Thomas M. Karavakis 1995 240,973 23,500 3,750
Senior Vice President; 1994 212,710 82,416 3,750
President of Add, Inc. 1993 190,290 22,792 4,757
Douglas G. Kiel 1995 271,678 82,960 3,750
Senior Vice President, 1994 208,246 84,000 3,124
President of Journal 1993 181,549 15,481 3,569
Broadcast Group, Inc.
</TABLE>
Other Compensation.
The Journal Communications, Inc. Investment Savings Plan is maintained for
eligible employees of Journal Communications, Inc., Journal Sentinel
Inc., Journal Broadcast Group, Inc., Add, Inc. (and its subsidiaries),
PrimeNet Marketing Services, Inc., NorthStar Print Group, Inc., Trumbull
Printing, Inc., and MRC Telecommunications, Inc. (and its subsidiaries).
Employees of IPC Communication Services, Inc. became eligible to
participate in the Journal Communications, Inc. Investment Savings Plan
on January 1, 1996. Employees covered by union pension plans that
receive Company contributions may also participate in the Company's
Investment Savings Plan, but such employees are not eligible to receive
matching Company funds.
All of the five highest-compensated officers were participants in the
Journal Communications, Inc. Investment Savings Plan. Employer
contributions to the plan on behalf of these officers are listed in the
Summary Compensation Table above.
Pension Plan
The Journal Employees' Pension Trust is completely funded by the Company.
The amount of the Company's annual contributions to the plan cannot be
determined on an individual basis, because the plan has no individual
accounts. Company contributions are accrued based on amounts required to
be funded under provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). The amount of accrued benefits is actuarially determined
by Hewitt & Associates under the accrued benefit valuation method. The
plan was approved by the IRS on October 6, 1986. It is a defined benefit
pension plan that provides benefits for employees of Journal
Communications, Inc., Journal Sentinel Inc., Journal Broadcast Group,
Inc., Add, Inc. (and its subsidiaries), MRC Telecommunications, Inc. (and
its subsidiaries), Trumbull Printing, Inc., and PrimeNet Marketing
Services, Inc. who meet minimum age and service eligibility requirements.
The normal monthly retirement benefit under the plan, assuming attainment
of the normal retirement age specified by the plan and payments in the
form of a life annuity, is determined in accordance with a formula that
takes into account the following factors: final average monthly
compensation during the last five years of employment (taking into account
base salary and incentive compensation as reported in the Summary
Compensation Table), number of years of active plan participation and an
actuarially determined Social Security offset.
The following table shows the approximate annual retirement benefit
payable on retirement at age 65 under the Journal Communications, Inc.
Employees' Pension Trust for employees in specified compensation ranges
with varying years of participation in the plan:
Estimated Annual Retirement Benefit
Five Year Years of Plan Participation
Average Compensation 20 30 40
$200,000 $ 48,400 $ 72,600 $ 88,700
250,000 61,400 92,100 112,500
300,000 74,400 111,600 136,200
350,000 87,400 131,100 160,000
400,000 100,400 150,600 183,700
With respect to the officers and directors listed in the "Summary
Compensation Table" above, all five were participants in the pension plan.
Mr. Kahlor has 24 years of plan participation, Mr. Smith has 20 years, Mr.
Jarzembinski has 16 years, Mr. Karavakis has 15 years, and Mr. Kiel has 9
years.
Employee Incentive Plan
All full-time and part-time employees with at least one year of service
with Journal Communications, Inc., Journal Sentinel Inc., Journal
Broadcast Group, Inc., NorthStar Print Group, Inc., MRC
Telecommunications, Inc., Add, Inc., and PrimeNet Marketing Services, Inc.
(and, starting on January 1, 1996, IPC Communication Services, Inc.), are
eligible to share in the benefits of the Employee Incentive Plan. Under
this plan, employee incentive bonuses are based on the operating earnings
goals their company or operating unit achieves. Goals for each company
are established annually by management. For an employee whose entity
achieves operating earnings targets, the bonus payment will equal between
two percent (2%) and six percent (6%) of the employee's eligible base pay,
which includes commissions but excludes overtime.
Compensation Committee Report
In 1993, the Board of Directors established a compensation committee to be
comprised of three members, none of whom would be an employee, to develop
and implement compensation plans for senior management. The Board of
Directors charged the Compensation Committee with the responsibility for
assuring that officers and key management personnel of the corporation are
effectively compensated in terms of salaries and benefits that are based
on performance as well as being internally equitable and competitive with
the market. Specifically, the Compensation Committee was directed to (i)
independently review and approve the compensation plan proposed by the
Chairman/CEO for the President, the Senior Vice President/CFO and the
Presidents of the subsidiaries, and (ii) formulate and implement a
compensation plan for the Chairman/CEO.
For 1995, senior management compensation was reviewed by the Compensation
Committee, and, where appropriate, was adjusted to continue phasing base
salary levels closer to the targeted range of 90% of the median for the
industry. The Compensation Committee has established the following
policies for executive base compensation, an annual incentive program, a
long-term incentive program, and compensation for the chief executive
officer.
1. Executive Base Compensation Plan.
The Compensation Committee adopted the principle that the Company's
executive compensation policy should be based primarily on performance.
Compensation should also reflect the Company's desire to attract and
retain quality talent and the need to be competitive in the marketplace.
With information provided by the Actuarial, Benefits and Compensation
Division of Ernst & Young (Chicago), the Compensation Committee reviewed
the Company's historical performance, current salary levels and the media
industry workplace. With that information, the Committee received
recommendations from management and approved executive pay grade levels
that take into consideration market salary medians for 1995.
2. Executive Annual Incentive Plan.
The Compensation Committee designed the Management Annual Incentive Plan
to reward key individuals for achieving pre-established financial and non-
financial goals that support the Company's annual business objectives and
mission to enhance the value of employee-owners' investment. This annual
incentive plan rewards executive performance as measured by net return on
invested capital and annual growth in revenue, factors that primarily
determine unitholders' value. For executives of Journal Communications,
Inc., the annual incentives are based eighty percent (80%) on corporate
financial performance and twenty percent (20%) on non-financial goals.
For subsidiary presidents and other key managers, the annual incentives
are based sixty percent (60%) on subsidiary performance, twenty percent
(20%) on corporate performance and twenty percent (20%) on non-financial
goals. Participation in this plan is limited to key employees of the
Company and its subsidiaries whose job responsibilities have a direct
impact on the strategic goals of the Company. The goals established for
each employee shall determine the minimum, median and maximum payments
receivable annually under the plan. Minimum performance is expected to be
achieved eighty percent (80%) of the time, median performance fifty
percent (50%) of the time and maximum performance twenty percent (20%) of
the time. Each participant will be apprised annually of the financial
performance matrix and other goals that will determine the potential
incentive payment the participant can receive.
3. Executive Long-Term Incentive Plan.
The Compensation Committee established a Management Long-Term Incentive
Plan to motivate and drive management behavior to achieve results that
will enhance the employee-owner's investment over the long term. The
incentive plan approved by the Committee is based on net return on equity
over a three-year period. Corporate executives will be rewarded one
hundred percent (100%) on Journal Communications' performance while
subsidiary presidents will be rewarded sixty percent (60%) on subsidiary
performance and forty percent (40%) on corporate performance.
Participation in this incentive plan is limited to key employees of the
Company and its subsidiaries whose job responsibilities have a direct
impact on the strategic goals of the Company. The initial participants in
this plan are limited to the Chairman/CEO, President, Senior Vice
President/CFO and the Presidents of the subsidiaries. No payments will be
achievable until 1996, and no awards were made under this plan as of the
end of fiscal year 1995.
4. CEO's Compensation.
The Chairman/CEO's total yearly compensation is dependent upon the
Company's overall performance and growth of shareholder value. Factors
influencing the Compensation Committee's determination of the
Chairman/CEO's base compensation included the continued growth of the
Company, the increased growth in the value of Journal Communications'
stock units, the execution of the sale of Perry Printing Corporation and
the merger of the Milwaukee newspapers, the chairman's continued efforts
to diversify the Company's business, and recognition that his current
compensation is below competitive norms within the industry.
Stock Performance Graph
The following graph shows a comparison of cumulative total returns for the
Company's Common Stock ("JCI"), the Standard & Poor's 500 Stock Index
("S&P 500") and a "Peer Group" comprised of ten (10) other diversified
media corporations.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Among Journal Communications, Inc., S&P 500 and a Peer Group
[Stock performance graph]
1990 1991 1992 1993 1994 1995
S & P 500 100 130 140 155 157 215
Peer Group 100 120 139 160 152 187
JCI 100 109 119 129 139 150
The total cumulative return on investment (change in the year-end stock
price plus reinvested dividends) (the "Total Return") for Journal Stock is
based on a $100 investment as of January 1, 1991. The price of Journal
Stock is calculated thirteen (13) times a year, or every four (4) weeks,
using a formula that is based on the Company's earnings and assets over a
five (5) year period. The formula is stated in Section 25 of the Journal
Employees' Stock Trust Agreement, dated May 15, 1937. The Total Return
for the S & P 500 Index is based on a $100 investment as of January 1,
1991. The Total Return for the Peer Group Index is based on a $100
investment in the ten (10) companies included in the Index, as of January
1, 1991. Companies in the Peer Group are: A. H. Belo Corporation,
Gannett, Inc., Knight Ridder, Inc., Lee Enterprises, Inc., McClatchy
Newspapers, Inc., The New York Times Company, Pulitzer Publishing Company,
The E. W. Scripps Company, Tribune Company and The Washington Post
Company. (Affiliated Publications, Inc., was merged into The New York
Times Company in 1993 and has been deleted from the Peer group.)
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of Journal Communications, Inc., appointed Ernst &
Young, LLP, 111 East Kilbourn Avenue, Milwaukee, Wisconsin 53202, as the
independent public accountant for the year 1995. In accordance with past
Company practice, it is not expected that a representative of Ernst &
Young will attend the Annual Meeting. The 1995 Annual Report, which was
mailed to all stockholders during March of this year, will be officially
accepted at the annual meeting on June 4, 1996. Any shareholder or
unitholder having a question about the 1995 Annual Report or the Company's
relationship with Ernst & Young should direct it to Paul M. Bonaiuto,
Senior Vice President/CFO, P. O. Box 661, Milwaukee, Wisconsin 53201 (333
West State Street, Milwaukee, Wisconsin 53203). Mr. Bonaiuto will forward
questions to Ernst & Young, and it will respond to such questions as soon
as possible.
Ernst & Young has served as the Company's certified public accountant for
many years. During 1995, it performed an audit examination of the
consolidated financial statements of the Company for inclusion in the
Annual Report to stockholders and required filings with the Securities &
Exchange Commission. Additionally, Ernst & Young performed the annual
audit of Journal Employees' Stock Trust, the Journal Employees' Profit-
Sharing Trust, the Journal Employees' Retirement Trust and the Journal
Communications Pension Trust. (On October 1, 1995, the Journal Employees'
Profit-Sharing Trust and the Journal Employees' Retirement Trust were
consolidated into the Journal Communications Investment Savings Plan.)
OTHER MATTERS
A copy of the Form 10-K as filed with the Securities & Exchange Commission
will be furnished without charge to stockholders or unitholders upon
written request directed to Paul E. Kritzer, Secretary, Journal
Communications, Inc., P. O. Box 661, Milwaukee, Wisconsin 53201 (333 West
State Street, Milwaukee, Wisconsin 53203).
A stockholder or unitholder wishing to include a proposal in the Company's
proxy statement for the 1997 Annual Meeting of Stockholders must forward
the proposal to the Secretary so it is received by Monday, February 3,
1997. The Company's By-laws establish procedures for nominations for
elections of directors of the Company and for bringing business before any
annual meeting of stockholders of the Company. Any such notice must
contain certain information about the proposed business or the nominee and
the stockholder or unitholder making the proposal.
The management does not intend to present to the meeting any matters not
referred to in the foregoing Notice of Annual Meeting and does not know of
any matters that will be presented to the meeting by others.
By Order of the Board of Directors,
PAUL E. KRITZER
Vice President & Secretary
May 14, 1996
