SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 ss. 240.14a-11(c) or ss. 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 2, 1999
The Annual Meeting of the Stockholders of Journal Communications, Inc. (the
"Company") will be held in the Board of Directors room, Journal Communications,
Inc., 333 West State Street, Milwaukee, Wisconsin 53203, on Wednesday, June 2,
1999 at 9:30 a.m. for the purpose of electing twenty-nine (29) directors, the
names of whom are set forth in the accompanying proxy statement, to serve until
the 2000 Annual Meeting.
Stockholders of record at the close of business on April 9, 1999, 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 April 9, 1999, 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.
PLEASE VOTE AND SIGN YOUR PROXY AND RETURN NO LATER THAN MAY 24, 1999 TO HAVE
YOUR VOTE COUNTED.
By Order of the Board of Directors,
/s/Paul E. Kritzer
Paul E. Kritzer, Secretary
Dated: April 28, 1999
<PAGE>
TRUSTEES' PROXY TO UNITHOLDERS For the
Annual Meeting of Stockholders of Journal Communications, Inc.
to be held on June 2, 1999
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned holders of 25,920,000
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
April 9, 1999, 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, as amended, 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(s) 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(s) 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(s) 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 7,034,016 units owned by ex-employee-eligibles, employee
benefit trusts and employee-eligible transferees.
Dated: April 28, 1999
Trustees Under Journal Employees' Stock Trust Agreement, dated May
15, 1937, as amended
<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 of the Company to be held at 9:30 a.m. on
Wednesday, June 2, 1999 (the "Annual Meeting"), in the Board of Directors room
at 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 form are being sent
to stockholders and unitholders on or about May 3, 1999.
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 April 9, 1999, 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 April 9, 1999, 28,800,000 shares of
Journal Stock were outstanding, of which 25,920,000 shares were held by the
Trustees of the Trust under the Journal Employees' Stock Trust Agreement
("JESTA"), dated May 15, 1937, as amended, which shares were, in turn,
represented by a like number of units of beneficial interest ("units") issued by
the Trustees of the Journal Employees' Stock Trust (the "Stock Trust"). See
"Beneficial Ownership under JESTA" for a further description of JESTA and the
voting rights of the holders of units ("unitholders"). On April 9, 1999, the
Company was the holder of 1,797,127 units, which will not be voted at the
meeting.
Principal Stockholders
Listed in the following table are the beneficial owners as of April 9, 1999, of
more than five percent (5%) of the issued Journal stock:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Name/Address Class Ownership Type Amount Owned Percentage of Class
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Journal Employees' Stock Common Beneficial 25,920,000 90%
Trust, 333 W. State Street, Record
Milwaukee, WI 53203
- -----------------------------------------------------------------------------------------------------------------
Matex Inc., c/o Meissner, Common Beneficial 2,640,000 9.2%
Tierney, Fisher & Nichols, 111 Record
E. Kilbourn Avenue,
Milwaukee, WI 53202
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1 of 11
<PAGE>
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-nine (29)
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
1,505,669 units, or 5.2% 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
2,640,000 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 240,000 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 240,000 shares of Journal Stock. Mr. Forbes and Mr. Peirce, as
non-employees, are prohibited by JESTA from owning units.
Beneficial Ownership Under JESTA
On April 9, 1999, the Stock Trust, of which Steven J. Smith, Douglas G. Kiel,
Paul M. Bonaiuto, Keith K. Spore and Richard A. Williams are the Trustees, owned
of record 25,920,000 shares or ninety percent (90%) of the outstanding Journal
Stock. The Stock Trust issues units, each unit representing a beneficial
interest in one (1) share of Journal Stock. On April 9, 1999, the 25,920,000
units of beneficial interest issued by the Stock Trust were owned as follows:
Active Employee Unitholders, 17,088,857; Retirees and Employee Trusts,
7,034,016; Journal Communications, Inc., 1,797,127.
The Trustees are required to deliver to each active 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 JESTA. 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 (in which event special
rules apply), 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, separated employees, employee benefit trusts
and other trusts are voted by the Trustees of the Stock Trust. On the record
date, retirees and employee trusts held 7,034,016 units representing twenty-four
point four percent (24.4%) 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-nine (29) and that all directors shall be
elected annually. Twenty-nine (29) 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-nine (29) 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 February 1, 1999. 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.
Page 2 of 11
<PAGE>
<TABLE>
<CAPTION>
The nominees for director of the Company are listed in the following table:
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Nominee Principal Occupation (1) Age Date Elected Director Units Owned (2)
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
Todd K. Adams Vice President; 40 June 4, 1996 38,990
Senior Vice President &
CFO, Journal
Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Paul M. Bonaiuto Executive Vice 48 June 8, 1993 51,120
President & CFO
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
James J. Ditter Vice President; 37 September 6, 1995 29,198
President, Norlight
Telecommunications, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Robert M. Dye Vice President 51 March 6, 1990 102,240
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
James L. Forbes President & CEO, 66 September 4, 1996 0
Badger Meter, Inc.,
Milwaukee, WI
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Carl D. Gardner (3) Vice President; 42 June 2, 1999 43,500
President-Radio, Journal
Broadcast
Group, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Richard J. Gasper Vice President; 55 June 4, 1996 36,064
President, NorthStar
Print Group, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Douglas G. Hosking Vice President; 42 September 4, 1996 20,668
President, IPC
Communication Services,
Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Dawn M. Howley (3) Corporate Credit and 37 June 2, 1999 1,454
Collections Manager,
IPC Communication
Services, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Stephen O. Huhta Vice President; 43 June 8, 1993 81,710
President, Add, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Robert A. Kahlor Retired; Former 65 March 6, 1973 193,701
Chairman of the Board
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Mark J. Keefe Vice President; 39 June 4, 1996 25,130
President, PrimeNet
Marketing Services,
Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Douglas G. Kiel President 50 June 4, 1991 81,998
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Paul E. Kritzer Vice President & 56 June 5, 1990 91,590
Secretary
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Ronald G. Kurtis Vice President; 52 June 8, 1993 128,500
Senior Vice President
& CFO, Journal
Broadcast Group, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
David G. Meissner Executive Director, The 61 June 7, 1988 (4)
Public Policy Forum
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
John E. Mollwitz Senior Copy Editor, 56 June 2, 1998 37,070
Journal Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Roger D. Peirce Corporate director and 61 September 4, 1996 0
consultant
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Page 3 of 11
<PAGE>
<CAPTION>
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
James P. Prather (3) Vice President; 41 June 2, 1999 15,780
President-Television,
Journal Broadcast
Group, Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
David D. Reszel (3) Metro Display Area 47 June 2, 1999 55,530
Manager, Retail
Advertising, Journal
Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Eric J. Seebacher (3) District Sales Manager, 29 June 2, 1999 5,400
Circulation Department,
Journal Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Anton J. Sinkovits (3) Production Art 36 June 2, 1999 4,460
Supervisor, PrimeNet
Marketing Services,
Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Steven J. Smith Chairman of the Board 49 June 2, 1987 172,060
& Chief Executive
Officer
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Keith K. Spore Senior Vice President; 56 September 6, 1995 62,000
President & Publisher,
Journal Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Karen O. Trickle (3) Vice President and 42 June 2, 1999 7,194
Treasurer
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Donna M. Wells (3) Sales Promotion 41 June 2, 1999 9,930
Director, Journal
Broadcast Group, Inc.
(WTMJ-TV
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Richard A. Williams Assistant Secretary & 61 June 3, 1997 123,790
Manager of Retirement
Benefits
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Lloyd W. Wright (3) Building Services 38 June 2, 1999 160
Technician, Journal
Sentinel Inc
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
Robert T. Zynda (3) Corporate Financial 27 June 2, 1999 3,132
Analyst, Add Inc.
- ---------------------------- -------------------------- ------- -------------------------- -------------------------
(1) All nominees except David G. Meissner, James L. Forbes, Roger D. Peirce,
Douglas G. Hosking, Mark J. Keefe, Karen O. Trickle, Anton J. Sinkovits and
Robert T. Zynda 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
with the Company. Mr. Kahlor retired on January 1, 1999. Mr. Meissner has been
the Executive Director of the Public Policy Forum Inc., Milwaukee, since March
29, 1995. Prior to that he had been President of Morgan&Myers/The Barkin Group,
a Milwaukee public relations firm, since 1990. 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. and Firstar Corporation.
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 The Brady Corporation. Mr.
Hosking joined IPC Communication Services, Inc. in April 1996 and was named
President of that company in July 1996. Previously, he had been Vice President
for Commercial Development
Page 4 of 11
<PAGE>
and General Manager of the Food Fiber division of Opta Food Ingredients, Inc.,
for two years and Executive Vice President of Courier Corp., San Francisco, a
national book printer. Mr. Keefe was elected President of PrimeNet Marketing
Services, Inc. in October 1995. Prior to that he had been Vice President and
General Manager of the Computer Services Division of Donnelley Marketing, Inc.
in Minneapolis from January 1994 to September 1995 and a manager in the
Minneapolis office of FDC, Inc. where he was a Vice President from April 1992 to
December 1993. Ms. Trickle joined Journal Communications, Inc. as Treasurer in
September 1996 and was elected Vice President in March 1999. Previously, she was
Assistant Treasurer of Harnischfeger Industries, Inc., Milwaukee, from September
1994 to September 1996 and Assistant Treasurer of Applied Power Inc., Butler,
Wisconsin, from 1988 to September 1994. Mr. Sinkovits was employed by Mega
Direct, Inc., Clearwater, Florida, in April 1994 as a four-color stripper and
has been an employee of the Company since it acquired Mega Direct, Inc. in June
1995. He was promoted to Production Art Supervisor in October 1998. Mr. Zynda
has been employed since September 1996 by Add, Inc., Waupaca, where he is the
Financial Analyst. He graduated in May 1995 from the University of
Wisconsin-Stevens Point with a degree in Managerial Accounting. He was employed
as Plant Accounting Manager at Wallace Computer Services, Elk Grove Village,
Illinois in 1995-1996.
(2) No director or officer beneficially owns one percent (1%) or greater 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 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,
Executive or Audit Committee attended. Mr. Forbes earned $30,000, Mr. Peirce
earned $30,000 and Mr. Meissner earned $15,000 in directors' fees in 1998. (Mr.
Meissner declined the annual retainer fee.) Of the twenty-six (26) directors in
1998, twenty-three (23) were employees and three (3) were not. 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 five (5) times in 1998. All of the directors of the
Company during 1998 attended at least 75% of the (a) full meetings of the Board
of Directors and (b) 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 three (3) meetings in 1998. 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.
The Board of Directors has authorized a nine-member Executive Committee and
delegated certain powers of the Board to it for use 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, Kiel, Spore, Meissner, Forbes, Peirce and
Zynda. The Executive Committee held no meetings in 1998.
The Board of Directors has 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
Page 5 of 11
<PAGE>
Audit Committee is comprised of the three non-employee directors, Messrs.
Meissner, Forbes and Peirce. The Audit Committee held two (2) meetings in 1998.
Executive Compensation
The following table sets forth the 1998 compensation for the Company's Chief
Executive Officer and the four other highest-paid executive officers, as well as
the total compensation paid to each individual for the last three fiscal years:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
- ------------------------------------------------------------------------------------------------------------------
Name and Principal Position Year Salary 4 Bonus Long-term All
(as of December 31, 1998) (Annual LTIP Other
Incentive Payments Comp 5
Comp
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert A. Kahlor, Chairman of 1998 571,539 371,013 503,800 4,000
the Board 1 1997 562,393 356,457 202,400 4,000
1996 522,853 237,725 -0- 3,750
- ------------------------------------------------------------------------------------------------------------------
Steven J. Smith, President 1998 432,019 246,912 275,831 4,000
and CEO 2 1997 409,923 203,711 113,850 4,000
1996 385,175 136,145 -0- 3,750
- ------------------------------------------------------------------------------------------------------------------
Douglas G. Kiel, Executive 1998 321,923 141,857 181,476 4,000
Vice President; President 1997 319,704 132,565 126,500 4,000
Journal Broadcast Group, Inc. 1996 290,147 121,500 66,799 3,750
3
- ------------------------------------------------------------------------------------------------------------------
Paul M. Bonaiuto, Executive 1998 270,385 137,201 149,423 4,000
Vice President & Chief 1997 267,523 125,837 45,474 4,000
Financial Officer 1996 218,563 83,250 -0- 3,750
- ------------------------------------------------------------------------------------------------------------------
Keith K. Spore, Senior Vice 1998 288,847 74,785 153,047 4,000
President; President Journal 1997 292,525 127,276 -0- 4,000
Sentinel Inc. 1996 254,454 31,850 -0- 3,750
- ------------------------------------------------------------------------------------------------------------------
1 Relinquished title of Chief Executive Officer on March 3, 1998, and
retired as Chairman of the Board on January 1, 1999.
2 Elected Chief Executive Officer on March 3, 1998, and Chairman of the
Board on December 1, 1998, effective January 1, 1999.
3 Elected President on December 1, 1998, effective January 1, 1999.
4 1997 salaries are based on 27 pay periods. 1998 salaries are based on 26
pay periods.
5 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.
</TABLE>
Page 6 of 11
<PAGE>
Pension Plan and Supplemental Benefit Plan
The following table shows the approximate retirement benefit payable on
retirement at age 65 under the Journal Communications, Inc. Employees' Pension
Plan 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 $ 47,724 $ 71,580 $ 87,516
$300,000 $ 73,716 $110,580 $135,012
$400,000 $ 99,720 $149,568 $182,508
$500,000 $125,724 $188,568 $230,004
$600,000 $151,716 $227,568 $277,512
$700,000 $177,720 $266,568 $325,008
The Journal Employees' 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 Corporation (and its
subsidiaries), 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 for
the last five years of employment (taking into account gross earnings 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 an unfunded 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.
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 28
years of plan participation, Mr. Smith has 24 years, Mr. Kiel has 13 years, Mr.
Spore has 32 years and Mr. Bonaiuto has 3 years as of the date of this document.
Compensation Committee Report
The Board of Directors has 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 (1) independently review and approve the compensation
plan proposed by the Chairman/CEO for the President, the Executive Vice
President and the Presidents of the subsidiaries, and (2) formulate and
implement a compensation plan for the Chairman/CEO. For 1998, 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 was assisted by Hewitt Associates (Chicago). In 1998,
the Compensation Committee also acted in an advisory capacity involving the
executive succession plan set in motion by the retirement of Chairman Kahlor at
the end of 1998.
Page 7 of 11
<PAGE>
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. The Compensation Committee
reviewed the Company's historical performance, current salary levels and media
industry marketplace information. With that information, the Committee received
recommendations from management and approved executive pay grade levels that
took into consideration market salary medians for 1998.
2. Executive Annual Incentive Plan
The Compensation Committee approved 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 equity or 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 some
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 participant shall determine the minimum, median and maximum payments
receivable annually under the plan. Each participant is apprised annually of the
financial performance matrix and other goals that will determine the potential
incentive payment the participant can receive. In 1998, 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 approved the 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 or invested capital
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 were limited to the Chairman/CEO, President,
Executive Vice President and the Presidents of the subsidiaries. Payment amounts
are listed in the Summary Compensation Table above.
The following table shows the Threshold, Target and Maximum awards which are
potentially payable to the named executive officers in 2002 for the performance
period of 1999-2001 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 on 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.
Page 8 of 11
<PAGE>
Management Long-Term Incentive Plan
Potential Payments in 2002 as a Percentage
of Average Base Salary for Performance Period 1999-2001
--------------------------------------------------------
Name Threshold Target Maximum
---- --------- ------ -------
Steven J. Smith 22% 88% 132%
Douglas G. Kiel 16.5% 66% 99%
Paul M. Bonaiuto 14.5% 58% 87%
Keith K. Spore 11.5% 46% 69%
4. Chairman/CEO's Compensation
Mr. Kahlor's total yearly compensation in 1998 was determined by the
Compensation Committee, based primarily upon the Company's overall performance
and growth of shareholder value. Mr. Kahlor served as Chairman through all of
1998 and as CEO through March 1998. Factors influencing the committee's
determination of Mr. Kahlor's base compensation for 1998 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 initiation and execution of an executive succession plan
and the chairman's continued efforts to diversify the Company's business. Based
on the Company's performance in 1998, Mr. Kahlor was awarded an annual incentive
bonus of $371,013 which was paid in 1999. Based on the Company's aggregate
performance for the three-year period of 1996-1998, Mr. Kahlor was awarded a
long-term incentive compensation bonus of $503,800 which was paid in 1999. The
compensation of Mr. Smith, who became Chairman on January 1, 1999, will be
determined by the Compensation Committee based on similar guidelines. The
Compensation Committee continues to review the effect of Section 162(m) of the
Revenue Code. This has not had, and is not expected to have, a material effect
due to the officers' compensation levels.
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 (although such corporations do not have the
Company's blend of other diversified businesses, such as telecommunications,
printing, production and distribution of materials and services for the computer
industry and direct mail which, in the aggregate, provide about 37.6% of the
Company's annual revenues).
Page 9 of 11
<PAGE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Among Journal Communications, Inc., S&P 500 and a Peer Group
Proxy Stock Performance Graph
[GRAPHIC OMITTED]
- ------------------------- ------- ------- ------- ------- --------
1994 1995 1996 1997 1998
- ---------------- -------- ------- ------- ------- ------- --------
JCI 100 107 116 125 155 190
- ---------------- -------- ------- ------- ------- ------- --------
S&P 500 100 102 139 171 229 294
- ---------------- -------- ------- ------- ------- ------- --------
Peer Group 100 95 117 149 217 241
- ---------------- -------- ------- ------- ------- ------- --------
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, 1994. 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 over a five (5) year period and book value at
the time of calculation. The formula is stated in Section 25 of JESTA. The Total
Return for the S&P 500 is based on a $100 investment as of January 1, 1994. The
Total Return for the Peer Group is based on a $100 investment in the ten (10)
companies included in the Index, as of January 1, 1994. 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 ("Ernst & Young"), 111 E. Kilbourn Avenue, Milwaukee, Wisconsin 53202, as
the independent auditor for the year 1998 and is expected to reappoint the firm
for 1999 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 1998 Annual Report, which was mailed to all stockholders and
unitholders during March of this year, will be officially accepted at the annual
meeting on June 2, 1999. Any shareholder or unitholder having a question about
the 1998 Annual Report or the Company's relationship with Ernst & Young should
direct it to Paul M. Bonaiuto, Executive Vice President/CFO, P. O. Box 661,
Milwaukee, Wisconsin 53201 (333 W. State Street, Milwaukee, Wisconsin 53203) or
e-mail at [email protected]. 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 at least 74
years. During 1998, 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 and Exchange Commission.
Page 10 of 11
<PAGE>
Additionally, Ernst & Young performed the annual audits of Journal Employees'
Stock Trust; Journal Communications, Inc. Investment Savings Plan; Journal
Communications, Inc. Employees' Pension Plan, and Journal Communications, Inc.
Employees' Welfare Benefit Master Plan and Trust.
Other Matters
A copy of the Company's Annual Report on Form 10-K as filed with the Securities
& Exchange Commission on March 31, 1999, 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 W. State Street, Milwaukee, Wisconsin 53203), or e-mail at
[email protected].
A stockholder or unitholder wishing to include a proposal pursuant to Rule 14a-8
under the Exchange Act ("Rule 14a-8") in the Company's proxy statement for the
2000 Annual Meeting of Stockholders must forward the proposal to the Company so
that it is received by Tuesday, February 1, 2000. The Company's By-laws
establish procedures for stockholder nominations for elections for directors of
the Company and for bringing business before any annual meeting of stockholders
of the Company. Among other things, under terms as currently in effect, to bring
business before an annual meeting, a stockholder must give written notice to the
Secretary of the Company not less than 90 days prior to the first anniversary of
the date of the Annual Meeting of Stockholders of the Company in the immediately
preceding year. The notice must also contain certain information about the
proposed business or the nominee and the stockholder making the proposal. Under
the By-laws as currently in effect, if the Company does not receive a
stockholder proposal submitted otherwise than pursuant to Rule 14a-8 prior to
March 4, 2000, then the notice will be considered untimely and the Company is
not required to present such proposal at the 2000 Annual Meeting of
Stockholders. If the Board of Directors chooses to present such proposal at the
2000 Annual Meeting of Stockholders, then the persons named in proxies solicited
by the Board of Directors for the 2000 Annual Meeting of Stockholders may
exercise discretionary voting power with respect to such proposal.
Company 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
April 28, 1999
Page 11 of 11
<PAGE>
Treasury
UHID 100
Department
Clock
Units 1,797,127
IMPORTANT - PLEASE READ: This form is machine read:
1. Please use a #2 PENCIL to mark your selection.
2. Color in small red box. Do not use Xs or check marks.
3. Do not damage any part of this form, especially the left edge. Thank you!
Steven J. Smith and Douglas C. Kiel, 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 annual meeting and at any adjournment thereof, upon the matter
indicated below:
JOURNAL EMPLOYEES' STOCK TRUST
PROXY
Annual Meeting, June 2, 1999
Soliciated by the Board of Directors
Mark Only One Box
FOR Election of all the following nominees: [ ]
T.K. Adams, P.M. Bonaiuto, J.J. Ditter, R.M. Dye, J.L. Fobes, C.D. Gardner,
R.J. Gasper, D.G. Hosking, D.M. Howley, S.O. Huhta, R.A. Kahlor, M.J. Keefe,
D.G. Kiel, P.E. Kritzer, R.G. Kurtis, D.G. Meissner, J.E. Mollwitz, R.D. Peirce,
J.P. Prather, D.D. Reszel, E.J. Seebacher, A.J. Sinkovits, S.J. Smith,
K.K. Spore, K.O. Trickle, D.M. Wells, R.A. Williams, L.W. Wright, R.T. Zynda
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.
PLEASE SIGN IN INK, DATE AND RETURN THIS FORM PROMPTLY.
ENVELOPE ENCLOSED
Signed ________________________________________ Date _________________________
