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 6, 2000
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 Tuesday, June 6,
2000, at 9:30 a.m. for the purpose of electing twenty-seven (27) directors, the
names of whom are set forth in the accompanying proxy statement, to serve until
the 2001 Annual Meeting.
Stockholders of record at the close of business on April 21, 2000, 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 21, 2000, 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 25, 2000 TO HAVE
YOUR VOTE COUNTED.
By Order of the Board of Directors,
/s/ Paul E. Kritzer
-----------------------------------
Paul E. Kritzer, Secretary
Dated: May 4, 2000
<PAGE>
TRUSTEES' PROXY TO UNITHOLDERS For the
Annual Meeting of Stockholders of Journal Communications, Inc.
to be held on June 6, 2000
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 21, 2000, 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 was 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 6,160,759 units owned by ex-employee-eligibles, employee
benefit trusts and employee-eligible transferees.
Dated: May 4, 2000
Trustees Under Journal Employees' Stock Trust Agreement, dated May 15, 1937,
as amended
ii
<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
Tuesday, June 6, 2000 (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 10, 2000.
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 21, 2000, 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 21, 2000, 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 21, 2000, the
Company was the holder of 2,053,248 units, which will not be voted at the
meeting.
Principal Stockholders
Listed in the following table are the beneficial owners as of April 21, 2000, of
more than five percent (5%) of the issued Journal stock:
--------------------------------------------------------------------------------
Ownership Amount Percentage
Name/Address Class Type Owned of Class
--------------------------------------------------------------------------------
Journal Employees' Common Beneficial 25,920,000 90%
Stock Trust Record
333 W. State Street
Milwaukee, WI 53203
--------------------------------------------------------------------------------
Matex Inc. Common Beneficial 2,640,000 9.2%
c/o Meissner, Tierney, Record
Fisher & Nichols
111 E. Kilbourn Avenue
Milwaukee, WI 53202
--------------------------------------------------------------------------------
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-seven (27)
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
1,047,533 units, or 3.6% 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 21, 2000, the Stock Trust, of which Steven J. Smith, Douglas G. Kiel,
Paul M. Bonaiuto, Keith K. Spore and James J. Ditter 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 21, 2000, the 25,920,000
units of beneficial interest issued by the Stock Trust were owned as follows:
Active Employee Unitholders, 17,705,993; Retirees and Employee Trusts,
6,160,759; Journal Communications, Inc., 2,053,248.
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 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 6,160,759 units representing a beneficial interest in 21.4
percent 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-seven (27) 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-seven (27) 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, 2000. 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>
The nominees for director of the Company are listed in the following table:
<TABLE>
<CAPTION>
----------------------- -------------------------- --- --------------------- ---------------
Nominee Principal Occupation (1) Age Date Elected Director Units Owned (2)
----------------------- -------------------------- --- --------------------- ---------------
<S> <C> <C> <C> <C>
Todd K. Adams Vice President; 41 June 4, 1996 42,490
Senior Vice President &
CFO, Journal
Sentinel Inc.
----------------------- -------------------------- --- --------------------- ---------------
David A. Anderson (3) Pressman; 49 June 6, 2000 14,657
Journal Sentinel Inc.
----------------------- -------------------------- --- --------------------- ---------------
Paul M. Bonaiuto Executive Vice 49 June 8, 1993 53,120
President & CFO
----------------------- -------------------------- --- --------------------- ---------------
James J. Ditter Vice President; 38 September 6, 1995 30,698
President, Norlight
Telecommunications, Inc.
----------------------- -------------------------- --- --------------------- ---------------
Carl L. Dittoe (3) Proofreader; Central 58 June 6, 2000 6,300
Ohio Advertiser (Add
Inc.)
----------------------- -------------------------- --- --------------------- ---------------
Robert M. Dye Vice President 52 March 6, 1990 104,240
----------------------- -------------------------- --- --------------------- ---------------
James L. Forbes Chairman; 67 September 4, 1996 0
Badger Meter, Inc.,
Milwaukee, WI
----------------------- -------------------------- --- --------------------- ---------------
Carl D. Gardner Vice President; 43 June 2, 1999 45,500
President-Radio, Journal
Broadcast
Group, Inc.
----------------------- -------------------------- --- --------------------- ---------------
Richard J. Gasper Vice President; 56 June 4, 1996 37,564
President, NorthStar
Print Group, Inc.
----------------------- -------------------------- --- --------------------- ---------------
Joseph P. Hoffman (3) Account Executive; 30 June 6, 2000 2,800
Journal Broadcast
Group Inc.
----------------------- -------------------------- --- --------------------- ---------------
Stephanie E. Hughes (3) Sr. Financial Analyst; 31 June 6, 2000 200
Journal Sentinel Inc.
----------------------- -------------------------- --- --------------------- ---------------
Stephen O. Huhta Vice President; 44 June 8, 1993 83,210
President, Add, Inc.
----------------------- -------------------------- --- --------------------- ---------------
Mark J. Keefe Vice President; 40 June 4, 1996 27,130
President, PrimeNet
Marketing Services,
Inc.
----------------------- -------------------------- --- --------------------- ---------------
Douglas G. Kiel President 51 June 4, 1991 83,998
----------------------- -------------------------- --- --------------------- ---------------
Kenneth L. Kozminski Vice President; 35 December 7, 1999 14,390
President, IPC
Communication Services
Inc.
----------------------- -------------------------- --- --------------------- ---------------
Paul E. Kritzer Vice President & 57 June 5, 1990 93,590
Secretary
----------------------- -------------------------- --- --------------------- ---------------
Ronald G. Kurtis Vice President; 53 June 8, 1993 130,500
Senior Vice President
& CFO, Journal
Broadcast Group, Inc.
----------------------- -------------------------- --- --------------------- ---------------
Judith A. Leonard (3) Exec. Administrative 50 June 6, 2000 3,650
Assistant; Journal
Sentinel Inc.
----------------------- -------------------------- --- --------------------- ---------------
David G. Meissner (4) Executive Director, The 62 June 7, 1988 0
Public Policy Forum
----------------------- -------------------------- --- --------------------- ---------------
</TABLE>
Page 3 of 11
<PAGE>
<TABLE>
<CAPTION>
-------------------------- ----------------------- --- --------------------- ---------------
<S> <C> <C> <C> <C>
Roger D. Peirce Corporate director and 62 September 4, 1996 0
consultant
-------------------------- ----------------------- --- --------------------- ---------------
James P. Prather Vice President; 42 June 2, 1999 17,780
President-Television,
Journal Broadcast
Group, Inc.
-------------------------- ----------------------- --- --------------------- ---------------
Philippe L. Secker (3) Label Cutter, NorthStar 45 June 6, 2000 5,780
Print Group Inc.
-------------------------- ----------------------- --- --------------------- ---------------
Steven J. Smith Chairman of the Board 50 June 2, 1987 174,060
& Chief Executive
Officer
-------------------------- ----------------------- --- --------------------- ---------------
Keith K. Spore Senior Vice President; 57 September 6, 1995 63,500
President & Publisher,
Journal Sentinel Inc.
-------------------------- ----------------------- --- --------------------- ---------------
Thomas J. Szews (3) Sales Manager; 33 June 6, 2000 6,350
Norlight
Telecommunications
-------------------------- ----------------------- --- --------------------- ---------------
Joseph C. Taschler III (3) Deputy Business 34 June 6, 2000 1,532
Editor;
Journal Sentinel Inc.
-------------------------- ----------------------- --- --------------------- ---------------
Karen O. Trickle Vice President and 43 June 2, 1999 9,194
Treasurer
-------------------------- ----------------------- --- --------------------- ---------------
(1) All nominees except Mr. Meissner, Mr. Forbes, Mr. Peirce, Mr. Keefe, Ms. Trickle, Mr.
Hughes, Mr. Taschler III, Mr. Hoffman and Mr. Szews 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. In the past five (5) years, the
director-nominees have been involved in the following professional activities.
o Todd K. Adams: Vice President of the Company since June 1996, and Senior Vice
President and Chief Financial Officer of Journal Sentinel Inc. since June 1993.
o David A. Anderson: A pressman for Journal Sentinel Inc., he has been employed by
the Company since July 1968. A Unitholder Council representative.
o Paul M. Bonaiuto: Executive Vice President since June 1997 and Chief Financial
Officer since January 1996. Senior Vice President between March 1996 and June
1997. Vice President between June 1994 and March 1996. President of NorthStar
Print Group, Inc. between June 1994 and January 1996.
o James J. Ditter: Vice President since September 1995. President of Norlight
Telecommunications, Inc. since September 1995. Between April 1995 and September
1995, he was Vice President and General Manager of Norlight Telecommunications,
Inc.
o Carl L. Dittoe: A proofreader with the Production Department of the Central Ohio
Advertiser, a division of Add, Inc., where he has been employed since 1989. A
Unitholder Council representative.
o Robert M. Dye: Vice President since March 1990.
o James L. Forbes: Chairman of Badger Meter, Inc. Milwaukee, a marketer and
manufacturer of flow measurement and control products since April 1999. Also at
Badger Meter, Inc., he was President since 1982 and Chief Executive Officer
since 1987. He is a director of Badger Meter, Inc., Universal Foods Corporation,
Blue Cross and Blue Shield United of Wisconsin, and United Wisconsin Services,
Inc.
o Carl D. Gardner: Vice President since March 1999. President of Radio for Journal
Broadcast Group, Inc. since December 1998. Prior to that he was Executive Vice
President (Radio) between December 1997 and December 1998 and Vice President of
Radio Operations/WTMJ-AM between June 1996 to December 1997 for Journal
Broadcast Group, Inc. General Manager of WTMJ-AM prior to June 1996.
</TABLE>
Page 4 of 11
<PAGE>
o Richard J. Gasper: Vice President since June 1996. President of
NorthStar Print Group, Inc. since January 1996. Vice President and
General Manager of Label Products & Design, Inc., a subsidiary of
NorthStar Print Group, Inc., between April 1993 and January 1996.
o Joseph P. Hoffman: Advertising Account Executive for WKTI-FM,
Milwaukee, a division of Journal Broadcast Group, Inc., since August
1995. Previously he has been an account executive with WMYX-FM,
Milwaulee. A Unitholder Council representative.
o Stephanie E. Hughes: Senior financial analyst in the Circulation
Department of Journal Sentinel Inc. since February 1998. Previously,
she has been a data coordinator at the Medical College of Wisconsin
following her graduation from Lakeland College in June 1995. A
Unitholder Council representative.
o Stephen O. Huhta: Vice President since June 1993. President of Add,
Inc. since August 1996. Senior Vice President of Operations of Add,
Inc. between June 1992 and August 1996.
o Mark J. Keefe: Vice President since March 1996. President of PrimeNet
Marketing Services, Inc. since October 1995. Previously he was Vice
President and General Manager of the Computer Services Division of
Donnelley Marketing, Inc., Minneapolis.
o Douglas G. Kiel: President since December 1998. Executive Vice
President between June 1997 and December 1998. President of Journal
Broadcast Group, Inc. between June 1992 and December 1998.
o Kenneth L. Kozminski: Vice President since December 1999. President of
IPC Communication Services, Inc. since July 1999. Also with IPC
Communication Services, Inc., he has served as Vice President and
General Manager of the Eastern Region between July 1998 and July 1999,
as Vice President of Operations between May 19998 and July 1998, as
General Manager of IPC Communication Services Europe, a French
subsidiary, between February 1997 and May 19998, and Director of Print
Operations between February 1995 and February 1997.
o Paul E. Kritzer: Vice President since June 1990, and Secretary since
September 1992.
o Ronald G. Kurtis: Vice President since June 1993. Senior Vice
President and Chief Financial Officer of Journal Broadcast Group, Inc.
since June 1994.
o Judith A. Leonard: Executive Administrative Assistant in the
Advertising Department of Journal Sentinel Inc., where she has been
employed since September 1981. A Unitholder Council representative.
o David G. Meissner: Executive Director of the Public Policy Forum,
Inc., Milwaukee, since March 1995.
o Roger D. Peirce: Corporate consultant and director since his
retirement as the Chief Operating Officer of Super Steel Products
Corp., Milwaukee in December 1994. He is also a director of Brady
Corporation, Milwaukee.
o James P. Prather: Vice President since March 1999. President of
Television for Journal Broadcast Group, Inc. since December 1998.
Prior to that he was employed by Journal Broadcast Group, Inc. as
Executive Vice President (Television) between December 1997 and
December 1998, and General Manager of WTMJ-TV between 1995 and
December 1998.
o Philippe L. Secker: Label Cutter in the Finishing Department of
NorthStar Print Group, Inc. (Milwaukee). Employed by the Company since
April 1976. A Unitholder Council representative.
o Steven J. Smith: Chairman of the Board since December 1998, and Chief
Executive Officer since March 1998. President between September 1992
and December 1998. Also a member of the Board of Directors of Badger
Meter, Inc., Milwaukee, since February 2000.
o Keith K. Spore: Senior Vice President September 1995. President of
Journal Sentinel Inc. since July 1995, and Publisher of the Milwaukee
Journal Sentinel since June 1996. Editor of the Editorial Page of the
Milwaukee Journal Sentinel between April 1995 and July 1995.
o Thomas J. Szews: Sales manager (commercial sales) for Norlight
Telecommunications, Inc. since October 1996. Prior to that he was a
graduate assistant in the Management Department at the Fogelman School
of Business, University of Memphis, Memphis, Tennessee. A Unitholder
Council representative.
Page 5 of 11
<PAGE>
o Joseph C. Taschler III: Deputy Business Editor of the Milwaukee
Journal Sentinel since September 1997. Business Editor of the Topeka
Capital Journal between April 1995 and September 1997. A Unitholder
Council representative.
o Karen O. Trickle: Vice President since March 1999 and Treasurer since
December 1996. Prior to joining the Company in September 1996, she was
Assistant Treasurer (International) for Harnischfeger Industries,
Inc., Brookfield, Wisconsin, between September 1994 and September
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.
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 $31,500, Mr. Peirce
earned $33,000, Robert A. Kahlor earned $22,500, and Mr. Meissner earned $18,000
in directors' fees in 1999. (Mr. Meissner declined the annual retainer fee.) Of
the twenty-nine (29) directors in 1999, twenty-five (25) were employees and four
(4) were not. (Mr. Kahlor elected not to be a nominee for election to the board
of directors for 2000-2001). 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 1999. All of the directors of the
Company during 1999 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 four (4) meetings in 1999. The
Compensation Committee has the responsibility to assure that officers and key
managers are effectively compensated on an internally equitable and externally
competitive basis. 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
Robert T. Zynda. The Executive Committee held one (1) meeting in 1999.
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
Audit Committee is comprised of three non-employee directors, Messrs. Meissner,
Forbes and Peirce. The Audit Committee held two (2) meetings in 1999.
Executive Compensation
The following table sets forth the 1999 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:
Page 6 of 11
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation
-----------------------------------------------------------------------------------------------------------
Name and Principal Position Year Salary 3 Bonus Long-term All
(as of December 31, 1999) (Annual LTIP Other
Incentive Payments Comp 4
Comp.)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Steven J. Smith, Chairman of 1999 490,000 73,500 423,077 4,005
the Board and CEO 1 1998 432,019 246,912 275,831 4,000
1997 409,923 203,711 113,850 4,000
-----------------------------------------------------------------------------------------------------------
Douglas G. Kiel, President 2 1999 360,000 50,400 164,427 4,005
1998 321,923 141,857 181,476 4,000
1997 319,704 132,565 126,500 4,000
-----------------------------------------------------------------------------------------------------------
Paul M. Bonaiuto, Executive 1999 290,000 30,694 208,800 4,005
Vice President & Chief 1998 270,385 137,201 149,423 4,000
Financial Officer 1997 267,523 125,837 45,474 4,000
-----------------------------------------------------------------------------------------------------------
Keith K. Spore, Senior Vice 1999 302,000 29,543 189,750 4,005
President; President, 1998 288,847 74,785 153,047 4,000
Journal Sentinel Inc. 1997 292,525 127,276 -0- 4,000
-----------------------------------------------------------------------------------------------------------
James J. Ditter, Vice 1999 227,692 77,565 127,650 4,005
President; 1998 198,746 93,508 109,319 4,000
President, Norlight 1997 190,962 82,181 58,671 4,000
Telecommunications, Inc.
-----------------------------------------------------------------------------------------------------------
(1) Elected Chief Executive Officer on March 3, 1998, and Chairman of the Board on December 1, 1998,
effective January 1, 1999.
(2) Elected President on December 1, 1998, effective January 1, 1999.
(3) 1997 salaries are based on 27 pay periods. 1998 and 1999 salaries are based on 26 pay periods.
(4) All of the five highest-compensated officers were participants in the Journal Communications, Inc.
Investment Savings Plan (ISP). Employer contributions to the ISP and to the cafeteria benefits plan on
behalf of these officers represent all of the compensation in the "All Other Compensation" column in
the Summary Compensation Table above.
</TABLE>
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
Years of Plan Participation
Five Year ---------------------------
Average Compensation 20 30 40
-------------------- -- -- --
$200,000 $ 47,436 $ 71,152 $ 87,014
$300,000 $ 73,435 $110,148 $135,514
$400,000 $ 99,435 $149,145 $182,013
$500,000 $125,434 $188,142 $229,413
$600,000 $151,433 $227,139 $277,013
$700,000 $177,433 $266,137 $324,512
Page 7 of 11
<PAGE>
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 certain of its
subsidiaries), Add Inc. and Norlight Telecommunications, 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 annual 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 are participants in the Pension Plan. Mr. Smith has 25
years of Pension Plan participation, Mr. Kiel has 14 years, Mr. Spore has 33
years, Mr. Bonaiuto has 4 years and Mr. Ditter has 7 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 can 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 receive compensation based on
performance that is 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
1999, 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).
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 1999.
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
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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 key managers, the annual
incentives are based on a combination of subsidiary performance, corporate
performance and 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 1999, 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. The participants in this plan are the Chairman/CEO,
President, Executive Vice President and the Presidents of the subsidiaries.
Corporate executives are rewarded one hundred percent (100%) on Journal
Communications' performance while subsidiary presidents are rewarded sixty
percent (60%) on subsidiary performance and forty percent (40%) on corporate
performance. 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 2003 for the performance
period of 2000-2002 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.
Management Long-Term Incentive Plan
Potential Payments in 2003 as a Percentage
of Average Base Salary for Performance Period 2000-2002
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%
James J. Ditter 11.5% 46% 69%
4. Chairman/CEO's Compensation
Mr. Smith's total yearly compensation in 1999 was determined by the Compensation
Committee, based primarily upon the Company's overall performance and growth of
shareholder value. Factors influencing the committee's determination of Mr.
Smith's base compensation for 1999 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 and the chairman's
continued efforts to diversify the Company's business. Based on the Company's
performance in 1999, Mr. Smith was awarded an annual incentive bonus of $73,500,
paid in 2000. Based on the Company's aggregate performance for the three-year
period of 1997-1999, Mr. Smith was awarded a long-term incentive compensation
bonus of $423,077, paid in 2000. The compensation of Mr. Kiel, who became
President on January 1, 1999, the executive vice president and the subsidiary
presidents 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.
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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 43.5% 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
------------------------- --------- --------- ---------- --------- ---------
1995 1996 1997 1998 1999
------------------------- --------- --------- ---------- --------- ---------
JCI 100 108 118 144 177 216
---------------- -------- --------- --------- ---------- --------- ---------
S&P 500 100 137 169 225 290 351
---------------- -------- --------- --------- ---------- --------- ---------
Peer Group 100 123 157 229 254 296
---------------- -------- --------- --------- ---------- --------- ---------
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, 1995. 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, 1995. 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, 1995. 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 1999 and is expected to reappoint the firm
for 2000 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 1999 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 6, 2000. Any shareholder or unitholder having a question about
the 1999 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
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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 75
years. During 1999, 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.
Additionally, Ernst & Young performs 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 30, 2000, 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
2001 Annual Meeting of Stockholders must forward the proposal to the Company so
that it is received by Thursday, February 1, 2001. 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
Wednesday, March 7, 2001, then the notice will be considered untimely and the
Company is not required to present such proposal at the 2001 Annual Meeting of
Stockholders. If the Board of Directors chooses to present such proposal at the
2001 Annual Meeting of Stockholders, then the persons named in proxies solicited
by the Board of Directors for the 2001 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
May 4, 2000
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Treasury
UHID 100
Department
Clock
Units 2,053,248
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 G. 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 COMMUNICATIONS, INC.
PROXY
Annual Meeting, June 6, 2000
Solicited by the Board of Directors
Mark Only One Box
FOR Election of all the following nominees: [ ]
T.K. Adams, D.A. Anderson, P.M. Bonaiuto, J.J. Ditter, C.L. Dittoe, R.M. Dye,
J.L. Forbes, C.D. Gardner, R.J. Gasper, J.P. Hoffman, S.E. Hughes, S.O. Huhta,
M.J. Keefe, D.G. Kiel, K.L. Kozminski, P.E. Kritzer, R.G. Kurtis, J.A. Leonard,
D.G. Meissner, R.D. Peirce, J.P. Prather, P.L. Secker, S.J. Smith, K.K. Spore,
T.J. Szews, J.C. Taschler III, K.O. Trickle
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, DATE AND RETURN THIS FORM PROMPTLY.
ENVELOPE ENCLOSED
Signed ________________________________________ Date _________________________
