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] 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:
<PAGE>
JOURNAL COMMUNICATIONS, INC.
333 West State Street
Milwaukee, Wisconsin 53203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 3, 1997
The Annual Meeting of the Stockholders of Journal Communications, Inc.
(the "Company") will be held in the Board of Directors Room of Journal
Communications, Inc., 333 West State Street, Milwaukee, Wisconsin, 53203,
on Tuesday, June 3, 1997, at 9:30 a.m. for the purpose of electing twenty-
six (26) directors, the names of whom are set forth in the accompanying
proxy statement, to serve until the 1998 Annual Meeting.
Stockholders of record at the close of business on May 2, 1997 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 2, 1997 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,
/s/ Paul E. Kritzer
Paul E. Kritzer, Secretary
Dated: May 13, 1997
<PAGE>
TRUSTEES' PROXY TO UNITHOLDERS
For the Annual Meeting of Stockholders of Journal Communications, Inc.
to be held on June 3, 1997
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 2, 1997, 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 4,559,741 units owned by ex-employee-eligibles,
employee benefit trusts and employee-eligible transferees.
Dated: May 13, 1997
Trustees Under Journal Employees' Stock Trust Agreement,
dated May 15, 1937
/s/ Robert A. Kahlor
/s/ Paul M. Bonaiuto
/s/ Richard A. Williams
/s/ Douglas G. Kiel
/s/
<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 9:30 a.m. on Tuesday, June 3, 1997
(the "Annual Meeting"), in the Board of Directors Room of Journal
Communications, Inc., 333 West State Street, Milwaukee, Wisconsin 53203.
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 stockholders and
unitholders on or about May 13, 1997.
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
2, 1997 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 2, 1997, 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 2, 1997, the Company was the holder of
794,277 units, which will not be voted at the meeting.
Principal Shareholders
Listed in the following table are the beneficial owners as of May 2, 1997
of more than five percent (5%) of the issued Journal stock.
Title of Type of Amount Percentage
Name and Address 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-six (26)
directors, director nominees and officers of the Company as a group (but
excluding David G. Meissner, James L. Forbes and Roger D. Peirce) are the
beneficial owners of 609,262 units, or 4.5% of the number of issued and
outstanding 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. Mr. Forbes and
Mr. Peirce, as non-employees, are prohibited by JESTA from owning units.
Beneficial Ownership Under JESTA
On May 2, 1997, the Journal Employees' Stock Trust (the "Stock Trust"), of
which Robert A. Kahlor, Steven J. Smith, Douglas G. Kiel, Paul M. Bonaiuto
and Richard A. Williams are the Trustees, owned of record 12,960,000
shares or ninety percent (90%) of the outstanding Journal Stock. The
Stock Trust issues units of beneficial ownership ("units"), each unit
representing a beneficial interest in one share of Journal Stock. On May
2, 1997, the 12,960,000 units issued by the Stock Trust were owned as
follows: Active employee unitholders, 7,413,982, retirees and trusts,
4,559,741, Journal Communications, Inc. Investment Savings Plan, 192,000,
and Journal Communications, Inc., 794,277.
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 4,559,741 units representing 33.5% of the
outstanding and issued Journal Stock.
All of the Trustees are employees 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
determined by the Board of Directors, but shall be no less than three (3)
and no more than twenty-seven (27), and that all directors shall be
elected annually. Twenty-six (26) 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-six (26) 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 7, 1997. 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.
Units
Owned
Bene-
Principal Date Elected ficially
Nominees Occupation (1) Age Director (2)
Todd K. Adams Vice President; 38 June 4, 1996 16,395
Senior Vice
President & Chief
Financial Officer,
Journal Sentinel
Inc.
Donna M. Armstrong New Business 51 June 3, 1997 1,960
(3) Development
Specialist,
Advertising Dept.,
Journal Sentinel
Inc.
Paul M. Bonaiuto Senior Vice 46 June 8, 1993 20,340
President & Chief
Financial Officer
James J. Ditter Vice President; 35 September 6, 5,000
President, Norlight 1995
Telecommunications,
Inc.
Robert M. Dye Vice President 49 March 6, 1990 47,800
James L. Forbes President & Chief 64 September 4, 0
Executive Officer, 1996
Badger Meter, Inc.,
Milwaukee
Kathleen A. Investment Writer, 37 June 3, 1997 5,515
Gallagher (3) Milwaukee Journal
Sentinel
Journal Sentinel
Inc.
Richard J. Gasper Vice President; 53 June 4, 1996 9,090
President,
NorthStar Print
Group, Inc.
Douglas G. Hosking Vice President; 40 September 4, 6,420
President, IPC 1996
Communication
Services, Inc.
Stephen O. Huhta Vice President; 41 June 8,1993 38,355
President, Add,
Inc.
Donald L. Jaeschke Harris Systems 48 June 3, 1997 6,000
(3) Manager, Publishing
Systems Department,
Journal Sentinel
Inc.
Robert A. Kahlor Chairman of the 63 March 6, 1973 96,435
Board & Chief
Executive Officer
Mark J. Keefe Vice President; 37 June 4, 1996 9,000
President, PrimeNet
Marketing Services,
Inc.
Douglas G. Kiel Senior Vice 48 June 4, 1991 36,000
President;
President, Journal
Broadcast Group,
Inc.
Paul E. Kritzer Vice President and 55 June 5, 1990 42,445
Secretary
Ronald G. Kurtis Vice President; 50 June 8, 1993 61,000
Senior Vice
President & CFO,
Journal Broadcast
Group, Inc.
Kirk T. Leigeb (3) Building Services 41 June 3, 1997 6,000
Department,
Journal Sentinel
Inc.
David G. Meissner Executive Director, 59 June 7, 1988 (4)
The Public Policy
Forum
Roger D. Peirce Corporate director 59 September 4, 0
and advisor 1996
John C. Rogge (3) Accounting Manager, 31 June 3, 1997 550
Lake Country
Publications,
Hartland, WI,
Add, Inc.
Thomas K. Sheridan WTMJ-AM Sales 40 June 3, 1997 14,955
(3) Account
Representative,
Journal Broadcast
Group, Inc.
Steven J. Smith President & Chief 47
47 June 2, 1987 81,870
Operating Officer
Keith K. Spore Senior Vice 54 September 6, 28,500
President; 1995
President &
Publisher
Journal Sentinel
Inc.
David M. Thomas Purchasing/Inventor 28 June 3, 1997 197
y Control,
NorthStar Print
Group-Milwaukee
Richard A. Williams Manager of 59 June 3, 1997 58,895
(3) Retirement Benefits
Ronald A. Zinda (3) District Sales 38 June 3, 1997 425
Manager,
Circulation
Department
Journal Sentinel
Inc.
____________________________
(1) All nominees except David G. Meissner, James L. Forbes, Roger D.
Peirce, Paul M. Bonaiuto, James J. Ditter, Mark J. Keefe, Richard J.
Gasper, Kathleen A. Gallagher and John C. Rogge have been employed by
the Company for over five (5) years at the time of the Annual
Meeting. Messrs. Meissner, Forbes and Peirce are not employed by the
Company. Mr. Meissner has been the Executive Director of the Public
Policy Forum Incorporated, Milwaukee, since March 29, 1995. Prior to
that he had been President of Morgan&Myers/The Barkin Group, a
Milwaukee public relations firm, since 1992. Mr. Forbes has been the
President and Chief Executive Officer of Badger Meter, Inc.,
Milwaukee, a marketer and manufacturer of flow measurement and
control products, for more than five years. He is also a director of
Universal Foods Corporation, Blue Cross and Blue Shield United of
Wisconsin, United Wisconsin Services, Inc., Firstar Corporation and
Firstar Trust Company. Mr. Peirce was an executive of Super Steel
Products Corp., Milwaukee, for more than seven years and was its Vice
Chairman and Chief Executive Officer at the time of his retirement
on January 1, 1994. Subsequently he has been a corporate director
and consultant. He is also a director of W. H. Brady Co. Mr.
Bonaiuto has been Chief Financial Officer since January 1996 and was
elected Senior 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. Ditter was elected President of Norlight
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. Ms. Gallagher was a communications
consultant for the Federal Reserve Bank of Chicago from January 1992
until she was employed as a business news reporter by the Milwaukee
Sentinel in December 1993. Since the merger of the Sentinel and The
Milwaukee Journal in April 1995, Ms. Gallagher has been an investment
reporter for the Business Page of the Milwaukee Journal Sentinel.
Mr. Rogge was employed by Journal Sentinel as a circulation
accountant in June 1992. On September 19, 1994, he transferred to
his current position as Accounting Manager for Lake Country
Publications, a division of Add, Inc., in Hartland, 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.
Directors' Fees
The Company pays directors' fees only to those directors who are not
employees of the Company. They are eligible to receive an annual retainer
fee of $15,000 a year plus $1,500 for each Board meeting or meeting of the
Compensation or Audit Committee attended. Members of the Executive
Committee are not compensated for their services. Mr. Forbes and Mr.
Peirce received $17,000 and Mr. Meissner received $9,500 in directors'
fees in 1996. Of the 26 nominees, 3 are not employees and 23 are. All
directors who are full-time employees of the Company or a subsidiary are
compensated in their capacities as employees.
The Board of Directors and Committees
The Board of Directors met four (4) times in 1996. All of the directors
of the Company during 1996 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 on which the respective directors
served.
The Board of Directors has three (3) committees: compensation, executive
and audit. The Compensation Committee held (3) meetings in 1996. The
Compensation Committee has the responsibility to assure that officers and
key managers are effectively compensated in terms of salary and benefits
that are internally equitable and externally competitive. The committee's
members, none of whom can be an employee, are Messrs. Meissner, Forbes and
Peirce.
On September 4, 1996, the Board of Directors authorized a nine-member
Executive Committee and delegated certain powers of the Board to it for
use when it is deemed necessary for the Company to act on urgent matters
efficiently, quickly and decisively. All members of the Executive
Committee are Directors. Elected as members of the Executive Committee
were Messrs. Kahlor, Smith, Bonaiuto, Meissner, Kiel, Spore, Forbes,
Peirce and Ott. The Executive Committee did not hold a meeting in 1996.
On December 3, 1996, the Board of Directors authorized a three-member
Audit Committee to assist the Board in fulfilling its responsibility for
the Company's accounting and financial reporting practices and to provide
a channel of communications between the Board and the Company's
independent auditors and internal audit staff. The Audit Committee is
comprised of the three non-employee directors, Messrs. Meissner, Forbes
and Peirce. The Audit Committee held one (1) meeting in 1996.
Executive Compensation
The following table sets forth the 1996 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>
Annual Long-Term
Name & Principal Incentive Incentive All Other
Position Year Salary Compensation Compensation Compensation
<S> <C> <C> <C> <C> <C>
Robert A. Kahlor 1996 522,853 237,725 0 3,750
Chairman of the Board 1995 486,971 67,275 -- 3,750
and Chief Executive 1994 397,150 55,500 -- 3,750
Officer
Steven J. Smith 1996 385,175 136,145 0 3,750
President and Chief 1995 366,468 37,571 -- 3,750
Operating Officer 1994 297,730 33,595 -- 3,750
Douglas G. Kiel 1996 290,147 121,500 66,799 3,750
Senior Vice President 1995 271,678 82,960 -- 3,750
& President Journal 1994 208,246 84,000 -- 3,124
Broadcast Group, Inc.
Thomas M. Karavakis 1996 254,447 31,000 20,769 3,750
Senior Vice President; 1995 240,973 23,500 -- 3,750
Vice Chairman of Add, 1994 212,710 82,416 -- 3,750
Inc. (Retired 1/1/97)
Keith K. Spore 1996 254,454 31,850 0 3,750
Senior Vice President, 1995 189,737 8,675 -- 3,750
President of Journal 1994 127,692 24,817 -- - 0 -
Sentinel, 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., Norlight Telecommunications, Inc. and IPC Communication
Services, Inc. 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 represent all of the
compensation in the "All Other Compensation" column in the Summary
Compensation Table above.
Pension Plan and Supplemental Benefit Plan
The Journal Employees' Pension Trust (Pension Plan) is completely funded
by the Company. 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 (Chicago) under the accrued
benefit valuation method. 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), Norlight Telecommunications, Inc. and Trumbull Printing,
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 Journal Communications Supplemental Benefit Plan is a defined benefit
plan that supplements payments under the Pension Plan. Benefits payable
under the plan are calculated without regard to the limitations imposed on
the amount of compensation that may be taken into account under the
Pension Plan. The Supplemental Plan pays the excess, if any.
The following table shows the approximate annual retirement benefit
payable on retirement at age 65 under the Journal Communications, Inc.
Employees' Pension Trust and the Journal Communications, Inc. Supplemental
Benefit Plan 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 $ 48,200 $ 72,300 $ 88,300
300,000 74,200 111,300 135,900
400,000 100,200 150,300 183,300
500,000 126,200 189,300 230,800
600,000 152,200 228,300 278,300
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 25 years of plan participation, Mr. Smith has 21 years, Mr.
Kiel has 10 years, Mr. Karavakis has 16 years and Mr. Spore has 30 years
as of the date of this document.
Employee Incentive Plan ("JCI Comp")
All full-time and part-time employees who meet the minimum "time on the
job" and "hours worked" requirements with Journal Communications, Inc.,
Journal Sentinel Inc., Journal Broadcast Group, Inc., NorthStar Print
Group, Inc., Norlight Telecommunications, Inc., Add, Inc., PrimeNet
Marketing Services, Inc. and 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 Company 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 1996, senior management compensation was reviewed by the Compensation
Committee, and, where appropriate, base salaries were adjusted to targets
within median ranges 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 Hewitt Associates (Chicago), the Compensation
Committee reviewed the Company's historical performance, current salary
levels and the media industry marketplace. With that information, the
Committee received recommendations from management and approved executive
pay grade levels that take into consideration market salary medians for
1996.
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. 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.
In 1996, with information provided by Hewitt Associates (Chicago), annual
bonus targets were compared to bonuses received in the marketplace and
were found to be within median ranges.
3. Executive Long-Term Incentive Plan.
The Compensation Committee established a Management Long-Term Incentive
Plan (LTIP) 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. In 1996, two plan
participants received payments under this plan. Payment amounts are
listed in the Summary Compensation Table on page 5. Payments were made
under the plan for the first time as of the end of fiscal year 1996 to Mr.
Kiel and Mr. Karavakis.
The following table shows the Threshold, Target, and Maximum awards which
are potentially payable to the named executive officer in 2000 for the
performance period of 1997-1999 under the LTIP. Payouts of awards are
tied to the three-year average return on shareholder's equity of Journal
Communications and the three-year average return of invested capital for
the subsidiary companies. Performance measures and goals for the
corporation and subsidiaries are recommended by the CEO and approved by
the Compensation Committee of the Board for each eligible participant.
Each participant's award is determined based on the degree to which three
year performance at the corporate and/or subsidiary level is achieved at
the conclusion of the performance cycle.
Management Long-Term Incentive Plan
Potential Payments in 2000 as a Percentage
of Base Salary for Performance Period of 1997-1999
Name Threshold Target Maximum
Robert A. Kahlor 22% 88% 132%
Steven J. Smith 16.5% 66% 99%
Douglas G. Kiel 11.5% 46% 69%
Keith K. Spore 11.5% 46% 69%
Thomas M. Karavakis* 0 0 0
(* Mr. Karavakis, who retired on January 1, 1997, is no longer eligible
for participation.)
4. CEO's Compensation.
The Chairman/CEO's total yearly compensation is determined by the
Compensation Committee, based primarily upon the Company's overall
performance and growth of shareholder value and assisted by information
provided by Hewitt Associates. Factors influencing the committee's
determination of the Chairman/CEO's base compensation for 1996 included
the continued growth of the Company, the increased growth in the value of
Journal Communications' stock units, the protection of the best interests
of the employee-owners, the chairman's continued efforts to diversify the
Company's business, and recognition that his current compensation is below
competitive norms within the industry. Based on the Company's
performance in 1996, the Chairman/CEO was awarded an annual incentive
bonus of $237,725, which was paid in 1997. Based on the Company's
aggregate performance for three-year period of 1994-1996, the Chairman/CEO
was not awarded a long-term incentive compensation payment or LTIP for
1996.
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) corporations that
concentrate on newspapers and broadcast operations (but do not include the
Company's blend of other diversified businesses, such as
telecommunications, commercial printing, software documentation and
direct mail, which, in the aggregate, provide about 40% of the Company's
annual revenues).
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Among Journal Communications, Inc., S&P 500 and a Peer Group
[Stock Performance Graph]
1992 1993 1994 1995 1996
JCI 100 109 118 127 138 149
S&P 500 100 108 118 120 165 203
Peer 100 116 133 127 156 198
Group
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, 1992. 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,
1992. 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, 1992. 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.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors of Journal Communications, Inc., appointed Ernst &
Young, LLP, 111 East Kilbourn Avenue, Milwaukee, Wisconsin 53202, as the
independent auditor for the year 1997 and is expected to reappoint the
firm for 1998 at the Annual Meeting. In accordance with past Company
practice, it is not expected that a representative of Ernst & Young will
attend the Annual Meeting. The 1996 Annual Report, which was mailed to
all stockholders during March of this year, will be officially accepted at
the annual meeting on June 3, 1997. Any shareholder or unit holder having
a question about the 1996 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 independent auditor for many
years. During 1996, 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 Company's Annual Report on Form 10-K as filed with the
Securities & Exchange Commission on March 31, 1997. 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 1998 Annual Meeting of Stockholders must forward
the proposal to the Secretary so it is received by Monday, February 2,
1998. 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 party 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,
/s/ Paul E. Kritzer
Paul E. Kritzer
Vice President & Secretary
May 13, 1997
<PAGE>
M&I Marshall & Ilsley Bank IMPORTANT - PLEASE READ: This form is
machine read and as such must be filled out
in the following manner:
UHID 22371
1. Please use a #2 PENCIL
Department 2. Color in small red box. Do not use Xs or
check marks.
Clock 3. Do not damage any part of this form,
especially the left edge. Thank you!
Units
Robert A. Kahlor and Steven J. Smith, and each of
them, with full power of substitution, are hereby
appointed proxies to vote all shares of the common
stock of Journal Communications, Inc., which the
undersigned is entitled to vote at the above Annual
Meeting and at any adjournment thereof, upon the
matter indicated below:
Journal Employees' Stock Trust
PROXY
Annual Meeting , June 3, 1997
Solicited by the Board of Directors
Mark Only One Box
FOR Election of all the following nominees: [ ]
T. K. Adams, D. M. Armstrong, P. M. Bonaiuto, J. J. Ditter,
R. M. Dye, J. L. Forbes, K. A. Gallagher, R. J. Gasper, D.
G. Hosking, S. O. Huhta, D. L. Jaeschke, R. A. Kahlor, M. J.
Keefe, D. G. Kiel, P. E. Kritzer, R. G. Kurtis, K. T.
Leigeb, D. G. Meissner, R. D. Peirce, J. C. Rogge, T. K.
Sheridan, S. J. Smith, K. K. Spore, D. M. Thomas, R. A.
Williams, R. A. Zinda
For Election of all the listed nominees, except for: [ ]
WITHHOLD authority to vote for all listed nominees: [ ]
Unless otherwise specified, this proxy shall be voted for all directors.
Signed Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY.
ENVELOPE ENCLOSED - No Postage Required
