April 21, 1994
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Office of Reports and
Information Services
RE: Definitive Proxy Statement
of Jacor Communications, Inc.
Dear Filing Officer:
Under cover of this letter, the following definitive proxy statement of Jacor
Communications, Inc. (the "Company") is being filed with the Commission via
EDGAR pursuant to Rule 101(a)(1)(iii) of Regulation S-T. The definitive proxy
statement relates to the Annual Meeting of the Company's Stockholders to be
held on May 18, 1994. The Company will be mailing its definitive proxy
materials to its stockholders on or about April 22, 1994.
The required filing fee of $125 has been previously paid by the Company upon
the filing of the Company's preliminary proxy statement on March 15, 1994.
Thank you for your cooperation and assistance in this matter.
Sincerely yours,
JACOR COMMUNICATIONS, INC.
Jon M. Berry
Senior Vice President
and Treasurer
ENCLOSURE
<PAGE>
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
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
(Name of Registrant as Specified in its Charter)
JACOR COMMUNICATIONS, INC.
Payment of Filing Fee (Check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
$500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11(a):
(4) Proposed maximum aggregate value of transaction:
(a) Set forth the amount on which the filing fee is
calculated and state how is was determined.
X 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: $125.00
(2) Form, Schedule or Registration Statement No.:
Preliminary Proxy Statement
(3) Filing Party: Registrant
(4) Date Filed: March 15, 1994
<PAGE>
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
April 22, 1994
Dear Shareholder:
You are cordially invited to attend the 1994 Annual Meeting
of Shareholders to be held on Wednesday, May 18, 1994 at 10:30
a.m., local time, in the Taft I Room of the Westin Hotel, at
Fountain Square, Cincinnati, Ohio.
The accompanying Notice of Annual Meeting and Proxy
Statement provide information concerning the proposals to be
considered and acted upon at the Annual Meeting. Also at the
Annual Meeting, we will report on the operations of the Company
during the year ended December 31, 1993.
It is important for you to exercise your voting rights as a
Shareholder regardless of the number of shares you own.
Please complete, sign, date and promptly return the Proxy in
the enclosed postage prepaid envelope. Please do so whether or
not you expect to attend the Annual Meeting and wish to vote in
person.
We look forward to receipt of your Proxy and to your
attendance at the Annual Meeting.
Sincerely,
/s/ David M. Schulte
David M. Schulte
Chairman of the Board
<PAGE>
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 1994
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Jacor Communications, Inc. (the "Company") will
be held on Wednesday, May 18, 1994 at 10:30 a.m., local time, in
the Taft I Room of the Westin Hotel, at Fountain Square,
Cincinnati, Ohio, for the purposes of considering and acting on
the following proposals:
1. To amend the Company's Amended and Restated Articles of
Incorporation to increase the number of authorized
shares of Common Stock of the Company from 40,000,000
to 100,000,000.
2. To amend the Company's Amended and Restated Code of
Regulations to increase the maximum allowable number of
Directors of the Company from nine (9) to fifteen (15).
3. To elect eight (8) Directors to serve until the next
annual meeting of shareholders and until their
respective successors are elected and qualified.
4. To transact such other business as may properly come
before the Annual Meeting or any adjournment or
adjournments thereof.
Holders of record of the Company's Common Stock at the close
of business on April 15, 1994 are entitled to notice of and to
vote at the Annual Meeting.
Enclosed herewith is a Proxy Statement, Proxy and Annual
Report for the year ended December 31, 1993. You are urged to
sign, date and return the enclosed Proxy promptly in the enclosed
addressed envelope, which requires no postage if mailed within
the United States.
By Order of the Board of Directors.
/s/ R. Christopher Weber
R. Christopher Weber
Cincinnati, Ohio Senior Vice President,
April 22, 1994 Chief Financial Officer and Secretary
Whether or not you plan to attend the Annual Meeting in
person, please complete, date, sign and return the enclosed
Proxy in the accompanying envelope. You may revoke your
Proxy in writing or at the Annual Meeting if you wish to
vote in person.
<PAGE>
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
PROXY STATEMENT
Annual Meeting of Shareholders to be held on May 18, 1994
The Board of Directors of Jacor Communications, Inc. (the
"Company") is soliciting the enclosed Proxy for use at the Annual
Meeting of Shareholders to be held on May 18, 1994 and at any
adjournments thereof (the "Annual Meeting"). This Proxy
Statement and the accompanying Proxy are first being mailed to
Shareholders on or about April 22, 1994. The record date for
purposes of determining those Shareholders entitled to notice of
and to vote at the Annual Meeting has been fixed by the Board of
Directors as April 15, 1994 (the "Record Date").
As of April 15, 1994, there were outstanding 19,566,860
shares of the Company's Common Stock, and each such share is
entitled to one vote, either in person or by proxy, on each
matter of business to be considered at the Annual Meeting;
provided, however, that with respect to the election of
directors, each Shareholder may be entitled to cumulate his votes
in the manner described below under "Election of Directors." A
majority of the outstanding shares entitled to vote at the Annual
Meeting will constitute a quorum.
All properly executed proxies received pursuant to this
solicitation (and not revoked before they are voted) will be
voted as designated at the Annual Meeting, and those not
designated will be voted FOR each proposal set forth herein, FOR
the director nominees named herein and, in the proxy holders'
best judgment, on any other matter that may properly come before
the Annual Meeting. Any Shareholder giving the enclosed Proxy
may revoke it at any time before it is voted by giving to the
Company notice of its revocation, in writing or in open meeting,
or a duly executed proxy bearing a later date.
The expense of this solicitation, which will include the
cost of preparing, assembling and mailing the Notice, Proxy
Statement and Proxy, will be borne by the Company. Proxies will
be solicited primarily by mail but may also be solicited through
personal interview, telephone and telecopy by directors, officers
and regular employees of the Company, without special
compensation therefor. The Company expects to reimburse banks,
brokers and other persons for their reasonable out-of-pocket
expenses in handling proxy materials for beneficial owners of the
Company's Common Stock.
The Company's Annual Report for the year ended December 31,
1993, including financial statements, is mailed with this Proxy
Statement.
<PAGE>
PROPOSAL NO. 1
AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK
The Board of Directors is proposing an amendment to the
Company's Amended and Restated Articles of Incorporation
("Articles of Incorporation") to increase the number of
authorized shares of Common Stock of the Company from 40,000,000
shares to 100,000,000 shares. All rights, privileges and other
features of the Company's Common Stock will continue as currently
set forth in the Articles of Incorporation.
The Board of Directors believes that increasing the number
of authorized shares of the Company's Common Stock will provide
the Company with additional flexibility for future growth. By
increasing the number of authorized shares of Common Stock, the
Company will then have sufficient shares available for future
stock offerings, dividends and acquisitions in the event the
Company should determine that any such transactions are in the
Company's best interests. The Board of Directors is not
presently contemplating any such actions in which additional
shares of the Company's Common Stock would be issued and there
can be no assurances that any such actions will be taken in the
future.
The Board of Directors believes that it is prudent to
increase the number of authorized shares of the Company's Common
Stock at this time in order to enhance the Company's ability to
move expeditiously when appropriate circumstances arise. The
Company could be delayed in making strategic stock offerings or
acquisitions if such a transaction was dependent upon first
increasing the number of shares of the Company's Common Stock.
Such delay could result in less favorable terms to the Company or
could even prevent the transaction from proceeding entirely. If
Proposal No. 1 is adopted, this risk will be minimized because
the authorized shares of Common Stock will be in place in advance
of any negotiations or consideration of potential transactions in
which it may be desirable to issue Common Stock. As of April 15,
1994, 19,566,860 shares of the Company's Common Stock are
outstanding, 3,465,782 shares are reserved for issuance upon the
exercise of warrants and options and 16,967,358 shares are
unissued and not reserved for issuance.
<PAGE>
Increasing the number of authorized shares of the Company's
Common Stock to 100,000,000 will have no immediate effect on the
Company's existing shareholders. The Board of Directors does not
believe that this action will have, nor is it intended to have,
an anti-takeover effect on the Company. If additional shares of
Common Stock are subsequently issued and become outstanding, such
issuance may have a dilutive effect on the Company's then
existing shareholders. Shareholder approval of such issuances
would not be required by applicable law or by the Company's
Articles of Incorporation, nor is it anticipated that the Company
would seek shareholder approval. However, the Board of Directors
believes that additional issuances of Common Stock would only be
made if in the best interests of all the Company's shareholders.
Accordingly, the resolution attached to this Proxy Statement
as Annex I to amend the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock to
100,000,000 will be submitted to the Company's shareholders for
approval at the Annual Meeting. Ohio law requires the
affirmative vote of two thirds of the outstanding shares of the
Company's Common Stock. Proxies received by the Company and not
revoked prior to or at the Annual Meeting will be voted FOR
Proposal No. 1 and the adoption of such resolution. Abstentions
and shares not voted by brokers and other beneficial owners will
have the same effect as votes cast against Proposal No. 1.
The Board of Directors has approved this proposed amendment
to the Company's Articles of Incorporation and recommends that
the Company's shareholders vote FOR Proposal No. 1.
<PAGE>
PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED CODE OF REGULATIONS
TO INCREASE THE MAXIMUM NUMBER OF DIRECTORS
The Board of Directors is proposing an amendment to Article
II, Section 1 of the Company's Amended and Restated Code of
Regulations ("Code of Regulations") to increase the maximum
allowable number of Directors from nine (9) to fifteen (15). The
minimum number of Directors shall remain at five (5) and the
number of Directors that shall serve on the Board shall continue
to be established from time to time by a majority of the
Directors in office at the time. The Board of Directors has
currently established the number of Directors to serve on the
Board at eight (8).
The Company believes that increasing the maximum number of
directors will enhance the Board's ability to better serve the
Company and its shareholders. In the past year, the Company has
positioned itself for additional growth. If the Company grows as
anticipated, the demands that will be placed upon the Company's
Board of Directors will increase in terms of required time
commitments, experience, expertise and other areas. In order to
better utilize the time and talents of the Company's existing and
future Directors, the Board of Directors believes that increasing
the size of the Board may permit more effective delegation and
specialization of the unique talents that each Director brings to
the Board. Individual Directors will be able to devote more
attention to those areas and Board Committees in which he or she
possesses particular skills while other Directors can have
primary responsibility for those areas in which they are more
expert.
Increasing the maximum size of the Board of Directors will
also permit the Company flexibility to offer Board positions to
qualified individuals whom the Company may identify from time to
time, without having to wait for a vacancy to occur. Such
individuals may be highly qualified executives of other
companies, key management members of businesses acquired by the
Company, or members of the Company's existing management whose
performance and skills merit a position on the Board. The Board
of Directors believes that it is prudent to increase the maximum
number of directors at this time in order to enhance the
Company's ability to attract qualified individuals as
opportunities may arise. No such individuals have been currently
identified and it is not anticipated that the current size of the
Board would increase immediately following the adoption of
Proposal No. 2. Although it is not expected or intended that
increasing the size of the Board would have an anti-takeover
effect on the Company, such an increase could make it more
difficult for a potential acquiror to obtain control of a
majority of Board seats.<PAGE>
Accordingly, the resolution attached to this Proxy Statement
as Annex II to amend the Company's Code of Regulations to
increase the maximum number of Directors to fifteen (15) will be
submitted to the Company's shareholders for approval at the
Annual Meeting. The Company's Code of Regulations requires the
affirmative vote of two thirds of the outstanding shares of the
Company's Common Stock. Proxies received by the Company and not
revoked prior to or at the Annual Meeting will be voted FOR
Proposal No. 2 and the adoption of such resolution. Abstentions
and shares not voted by brokers and other beneficial owners will
have the same effect as votes cast against Proposal No. 2.
The Board of Directors has approved this proposed amendment
to the Company's Code of Regulations and recommends that the
Company's shareholders vote FOR Proposal No. 2.
<PAGE>
ELECTION OF DIRECTORS
The Company's Code of Regulations currently provides that
the Board of Directors of the Company shall consist of a minimum
of five and a maximum of nine members. In accordance with the
Code of Regulations, the Board of Directors has established the
current number of Directors of the Company as eight. At the
Annual Meeting, eight Directors will be elected and will hold
office until the next annual meeting of shareholders and until
their respective successors are duly elected and qualified. The
Board of Directors has nominated the eight incumbent Directors
for election by the shareholders at the Annual Meeting.
It is the intention of the persons named as proxy holders in
the Proxy to vote for the election of all nominees named. If any
nominee shall be unable to serve, which is not now contemplated,
the proxies will be voted for such substitute nominee as the
Board of Directors recommends.
Ohio law, under which the Company is incorporated, does not
require a minimum number of votes for the election of a director,
and those nominees receiving the greatest number of votes will be
elected as Directors. Thus, abstentions and shares not voted by
brokers and other entities holding shares on behalf of the
beneficial owners will have no effect in the election of
Directors.
Under Ohio law, any shareholder entitled to vote at the
Annual Meeting may give written notice to the President, a Vice
President, or the Secretary of the Company not less than forty-
eight (48) hours before the Annual Meeting that cumulative voting
for the election of Directors is desired. If the Chairman or the
Secretary announces the receipt of such notice upon the convening
of the Annual Meeting, each shareholder shall have the right to
cumulate his or her voting power in voting for the Company's
Directors.
Under cumulative voting, each shareholder entitled to vote
at the Annual Meeting would have an aggregate number of votes
equal to the number of Directors to be elected multiplied by the
number of shares of Common Stock of the Company held by such
shareholder on the Record Date. The resulting aggregate number
of votes may be cast by such shareholder for the election of any
single nominee standing for election, or such shareholder may
distribute such votes among any number or all of the nominees.
The nominees receiving the highest number of votes will be
elected to the Board of Directors for the term specified. The
proxies being solicited pursuant to this Proxy Statement may be
voted cumulatively for less than the entire number of nominees if
any situation arises which, in accordance with the proxy holders'
best judgment, makes such action necessary or desirable.<PAGE>
The following tables set forth, with respect to each
Director of the Company, his age, principal occupation during the
past five years, other positions he holds with the Company, if
any, and the year in which he first became a Director of the
Company. Each of the nominees is currently a Director of the
Company.
Year First
Name, Age and Principal Occupation Became
During Past Five Years Age Director
DAVID M. SCHULTE - Founder and Managing 47 1993
General Partner of Chilmark Partners,
a merchant banking firm that has specialized
in providing corporate and investment banking
advice to companies on the restructuring
of their businesses in conjunction with
recapitalizations. Since 1984, Mr. Schulte's
principal occupation has been his position as
managing general partner of Chilmark Partners and,
since mid-1990, his positions with Zell/Chilmark
and its general partner, ZC Limited Partnership.
Mr. Schulte is a member of the boards of directors
of Revco D.S., Inc., Carter Hawley Hale Stores,
Inc., Sealy Corporation, and Santa Fe Energy
Resources.
JOHN W. ALEXANDER - Managing Partner and Chief 46 1993
Financial Officer of Meringoff Equities and a
Managing Partner of Mallard Creek Capital Partner.
Both are private real estate and investment
partnerships, since 1987. Mr. Alexander is also
a Trustee of Equity Residential Properties Trust,
a real estate investment trust.
ROD F. DAMMEYER - President and Chief Executive 53 1993
Officer of Itel Corporation, a Chicago-based
distribution and financial services company.
Mr. Dammeyer has been President of Itel
Corporation since 1985 and Chief Executive
Officer since 1993; and he has been President,
Chief Executive Officer and Director of Great
American Management and Investment, Inc., a
diversified manufacturing company, since
February, 1994. Mr. Dammeyer is a member of
the boards of directors of Revco D.S., Inc.;
Santa Fe Energy Resources, Inc.; Q-Tel, S.A.
de C.V.; Lomas Financial Corporation; Servicios
Financieros Quadrum, S.A.; Capsure Holdings Corp;
The Vigoro Corporation; and ANTEC Corporation.
Mr. Dammeyer is a trustee of several Van
Kampen Merritt trusts.
<PAGE>
Year First
Name, Age and Principal Occupation Became
During Past Five Years Age Director
F. PHILIP HANDY - President of Winter Park 49 1993
Capital Company, a private investment firm,
since 1980. Mr. Handy is a director of
Itel Corporation; Great American Management
and Investment, Inc.; Q-Tel, S.A. de C.V.;
Servicios Financieros Quadrum, S.A.; and
Bibb, Inc. He was an executive officer
of Tobago Bay Trading Company and, prior
to January 3, 1990, of Munford, Inc., both
of which filed petitions under the federal
bankruptcy laws in 1990.
MARC LASRY - Executive Vice President of Amroc 34 1993
Investments, Inc., a private investment firm,
since 1990. Mr. Lasry was the Director and
Senior Vice President of the corporate
reorganization department of Cowen & Co., a
privately-owned brokerage firm, from 1987 to
1989. From January 1989 to September 1990,
he was a portfolio manager for Amroc
Investments, L.P., a private investment fund.
ROBERT L. LAWRENCE - Co-Chief Operating 41 1993
Officer of the Company. Mr. Lawrence has
served as an officer of the Company since 1986.
RANDY MICHAELS - President and Co-Chief 41 1993
Operating Officer of the Company. Mr. Michaels,
whose legal name is Benjamin L. Homel, has
served as an officer of the Company since 1986.
<PAGE>
Year First
Name, Age and Principal Occupation Became
During Past Five Years Age Director
SAMUEL ZELL - Founder, Principal and Chairman 52 1993
of the Board of Equity Financial and Management
Company and its parent successor Equity Group
Investments, Inc., a privately owned and
affiliated investment and management company,
since 1968. Since 1983, Mr. Zell has been
Chairman of the Board of Great American Management
and Investment, Inc. ("GAMI"). Mr. Zell is Chairman
of the Board of Eagle Industries, Inc., Carter
Hawley Hale Stores, Inc. and Itel Corporation
and Chairman of the Board and Chief Executive
Officer of Capsure Holdings Corp. Mr. Zell is
Chairman of the Board of Trustees of Equity
Residential Properties Trust, a real estate
investment trust. Mr. Zell is Co-Chairman
of the Board of Manufactured Home Communities,
Inc. and Revco D.S., Inc. Mr. Zell was
President of Madison Management Group, Inc.
("Madison") prior to October 4, 1991. Madison
filed a petition under the federal bankruptcy
laws on November 8, 1991. Mr. Zell is also a
director of Catellus Development Corporation;
The Delta Queen Steamboat Co.; The Vigoro
Corporation; and Sealy Corporation.
There are no family relationships among any of the above-named
nominees for Director nor among any of the nominees and any
executive officers of the Company.
<PAGE>
BOARD OF DIRECTORS, ITS
COMMITTEES, MEETINGS AND FUNCTIONS
During the year ended December 31, 1993, the Board of
Directors held nine regularly scheduled and special meetings.
Each Director attended or participated in at least 75% of the
meetings of the Board of Directors and all Committees on which he
served in 1993, with the exception of Messrs. Alexander, Dammeyer
and Zell.
Standing committees of the Board of Directors include a
Compensation Committee and an Audit Committee. The Board of
Directors does not have a Nominating Committee.
The Compensation Committee consists of four Directors,
Messrs. Zell, Schulte, Dammeyer and Handy. The Compensation
Committee determines stock option grants to executive officers
and other key employees, as well as reviews salaries, bonuses,
and other elements of compensation of executive officers and
other key employees and makes recommendations to the Board of
Directors. The Compensation Committee held one meeting during
1993.
The Audit Committee consists of three Directors, Messrs.
Zell, Schulte and Dammeyer. The Audit Committee reviews the
financial statements of the Company, consults with the Company's
independent auditors and considers such other matters with
respect to the internal and external audit of the financial
affairs of the Company as may be necessary or appropriate in
order to facilitate accurate financial reporting. The Audit
Committee held two meetings during 1993.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Principal Shareholders and Management
The following table sets forth, as of April 15, 1994, the
number of shares and percentage of the Company's Common Stock
beneficially owned by each person who is known to the Company to
be the beneficial owner of more than 5% of the Company's Common
Stock, by each of the Company's Directors (who are also nominees
for election as Directors), by the Company's executive officers,
and by all of the Company's executive officers and Directors as a
group.
Amount and
Nature of Percent
Beneficial of
Name of Beneficial Owner Ownership(1) Class(2)
5% or More Beneficial Owners
Zell/Chilmark Fund L.P. 13,349,720(3) 66.10%
The Capital Group, Inc. 1,075,000(4) 5.49%
Management
John W. Alexander 26,000(5) *
Rod F. Dammeyer 26,000(6) *
F. Philip Handy 36,000(7) *
Marc Lasry 16,000(5) *
Robert L. Lawrence 259,800(8) 1.31%
Randy Michaels 434,230(9)(10) 2.18%
David M. Schulte 13,349,720(11) 66.10%
Samuel Zell 13,351,720(11)(12) 66.11%
R. Christopher Weber 309,895(10)(13) 1.56%
Jon M. Berry 207,521(10)(14) 1.05%
All executive officers
and directors as a
group (10 persons) 14,270,394(15) 68.09%
[FN]
* Less than 1%<PAGE>
(1) The Securities and Exchange Commission (the "Commission")
has defined beneficial ownership to include sole or shared
voting or investment power with respect to a security or the
right to acquire beneficial ownership of a security within
60 days. The number of shares indicated are owned with sole
voting and investment power unless otherwise noted and
includes certain shares held in the name of family members,
trusts and affiliated companies as to which beneficial
ownership may be disclaimed. The number of shares indicated
includes shares of Common Stock issuable pursuant to options
granted under the Company's 1993 Stock Option Plan and which
have vested.
(2) Under rules promulgated by the Commission, any securities
not outstanding that are subject to options or warrants
exercisable within 60 days are deemed to be outstanding for
the purpose of computing the percentage of the class owned
by such person but are not deemed to be outstanding for the
purpose of computing the percentage of the class owned by
any other person.
(3) The address of Zell/Chilmark Fund L.P. ("Zell/Chilmark") is
Two North Riverside Plaza, Suite 1500, Chicago, Illinois
60606. Zell/Chilmark is a Delaware limited partnership
controlled by Samuel Zell and David M. Schulte, Directors of
the Company, as follows: the sole general partner of
Zell/Chilmark is ZC Limited Partnership ("ZC Limited"); the
sole general partner of ZC Limited is ZC Partnership; the
sole general partners of ZC Partnership are ZC, Inc. and CZ,
Inc.; Mr. Zell is the sole shareholder of ZC, Inc.; and Mr.
Schulte is the sole shareholder of CZ, Inc. Of the shares
beneficially owned by Zell/Chilmark, 629,117 are shares
issuable pursuant to warrants owned by Zell/Chilmark.
(4) The address of The Capital Group, Inc. is 333 South Hope
Street, Los Angeles, California 90071. The Capital Group,
Inc. is the parent company of six investment management
companies. The Capital Group, Inc. has informed the Company
that as of December 31, 1993, two of its operating
subsidiaries, Capital Guardian Trust Company and Capital
Research and Management Company, exercised investment
discretion with respect to 388,000 and 687,000 shares of the
Company's Common Stock, respectively, which shares were
owned by various institutional investors.
(5) Includes vested options to purchase 6,000 shares.
(6) Includes vested options to purchase 6,000 shares. Mr.
Dammeyer indirectly shares beneficial ownership of an 80%
limited partnership interest in ZC Limited. See Note (3)
above.
<PAGE>
(7) Includes vested options to purchase 6,000 shares. Mr. Handy
indirectly shares beneficial ownership of an 80% limited
partnership interest in ZC Limited. See Note (3) above.
(8) Includes vested options to purchase 254,601 shares and 3,556
shares issuable pursuant to warrants. Of the shares
indicated, 637 shares (including 481 shares issuable
pursuant to warrants) are owned by members of Mr. Lawrence's
family.
(9) Includes 131,922 shares issuable pursuant to warrants and
vested options to purchase 227,040 shares. The number of
shares indicated includes shares and warrant shares held as
co-trustee under the Jacor Communications, Inc. Retirement
Plan (the "Retirement Plan"). See Note (10) below. Does
not include 300,000 shares subject to a contingent right of
acquisition held by a corporation owned by Mr. Michaels.
See "Certain Relationships and Related Transactions".
(10) Includes 198,386 shares (including 125,784 shares issuable
pursuant to warrants) held under the Retirement Plan with
respect to which Messrs. Michaels, Weber and Berry as co-
trustees, share voting and investment power. Of these
198,386 shares, 7,803 shares (including 5,022 shares
issuable pursuant to warrants) are beneficially owned by the
named executives.
(11) All shares beneficially owned by Zell/Chilmark (See Note (3)
above) are included in the shares beneficially owned by
Messrs. Zell and Schulte. The address of Mr. Schulte is Two
North Riverside Plaza, Suite 1500, Chicago, Illinois 60606.
The address of Mr. Zell is Two North Riverside Plaza, Suite
600, Chicago, Illinois 60606. Mr. Schulte indirectly shares
beneficial ownership of a 20% limited partnership interest
in ZC Limited, and Mr. Zell indirectly shares beneficial
ownership of an 80% limited partnership interest in ZC
Limited.
(12) Includes 2,000 shares owned by Mr. Zell's wife, as to which
Mr. Zell disclaims beneficial ownership.
(13) Includes 125,848 shares issuable pursuant to warrants and
vested options to purchase 111,429 shares. The number of
shares indicated includes shares and warrant shares held as
co-trustee under the Retirement Plan. See Note (10) above.
(14) Includes 125,987 shares issuable pursuant to warrants and
vested options to purchase 8,880 shares. The number of
shares indicated includes 186 shares (including 148 shares
issuable pursuant to warrants) held by Mr. Berry's children
and shares and warrant shares held as co-trustee under the
Retirement Plan. See Note (10) above.
<PAGE>
(15) Includes 639,078 shares issuable pursuant to warrants,
vested options to purchase 625,950 shares and 198,386 shares
(including 125,784 shares issuable pursuant to warrants not
included in the 639,078 above) held under the Retirement
Plan.
Change in Control
In the first quarter of 1993, with the approval of its
shareholders the Company completed in January, 1993 a
recapitalization and restructuring of its bank debt, subordinated
debt and other claims and interests (the "Restructuring") and a
subsequent debt refinancing in March, 1993 (the "Refinancing").
As an integral element of the Restructuring and the Refinancing,
Zell/Chilmark Fund L.P., a Delaware limited partnership with
capital investments in excess of $1 billion ("Zell/Chilmark"),
acquired approximately 91% of the Company's outstanding shares of
Common Stock in consideration of Zell/Chilmark's capital
investment of approximately $67,483,000 in the Company.
Zell/Chilmark subsequently acquired another 964,006 shares of
Common Stock in consideration of Zell/Chilmark's additional
capital contribution of approximately $5,533,000. Zell/Chilmark
had expended such amount in acquiring radio station KAZY-FM in
Denver, Colorado on the Company's behalf, which station was then
acquired by the Company in July, 1993. In November, 1993, the
Company completed a public offering of its Common Stock which
reduced Zell/Chilmark's ownership interest in the Company to
approximately 66.1%. See "Security Ownership of Principal
Shareholders and Management."
Prior to Zell/Chilmark's acquisition of control of the
Company, the Company's policies were generally directed by the
Company's former Chairman of the Board and principal shareholder,
Terry S. Jacobs, and the other executive officers of the Company.
As a group, such persons beneficially owned approximately 25.5%
of the Company's outstanding voting shares and constituted a
majority of the Company's Board of Directors.
Reports of Changes in Beneficial Ownership
Section 16 of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder require the
Company's Directors, executive officers and 10% or more
beneficial owners to file certain reports with the Securities and
Exchange Commission regarding changes in beneficial ownership by
such persons in the Company's securities. One of the Company's
Directors, Samuel Zell, filed one late report in January, 1994
relating to one transaction in the Company's Common Stock by his
spouse which report had been due in December, 1993.
<PAGE>
The following table sets forth certain information concerning
compensation paid or awarded to or earned by the Company's Co-
Chief Operating Officers and each of the Company's other two most
highly compensated executive officers (the "named executives")
during each of the last three fiscal years. The Company's former
Chief Executive Officer, Terry S. Jacobs, is also included
because he was one of the Company's four most highly compensated
executive officers for 1993 notwithstanding his June, 1993
retirement.
<TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards All Other Com-
Salary(2) Bonus Stock Options pensation(3)
Name and Principal Position Year ($) ($) (# shares) ($)
<S> <C> <C> <C> <C> <C>
Randy Michaels 1993 $247,116 $231,000 378,400 $ 3,418
President and Co-Chief 1992 237,500 - - 3,288
Operating Officer 1991 234,615 - 25,000 (4) 2,149
Robert L. Lawrence 1993 247,116 231,000 442,710 3,707
Co-Chief Operating Officer 1992 237,500 - - -
1991 234,615 - 25,000 (4) 2,149
R. Christopher Weber 1993 148,654 138,600 200,000 2,230
Senior Vice President, 1992 115,000 5,000 - 1,800
Chief Financial Officer 1991 112,693 - 25,000 (4) 1,690
and Secretary
Jon M. Berry 1993 111,648 65,000 14,800 1,564
Senior Vice President 1992 109,225 - - 1,638
and Treasurer 1991 87,096 - 25,000 (4) -
Terry S. Jacobs 1993 174,468 - 163,300 1,872,280(6)
Former Chief Executive 1992 375,000 9,375 - 969
Officer (5) 1991 375,000 - 153,000 (4) 3,640
</TABLE>
[FN]
(1) Does not include perquisites and other personal benefits
because the aggregate amount of such compensation in each
year for each named executive did not exceed the lesser of
$50,000 or 10% of his total salary and bonus reported for
that year.
(2) Includes amounts deferred at the election of the recipient
under the Company's Retirement Plan.
(3) The amounts shown in this column represent matching Company
contributions under the Company's Retirement Plan, except
with respect to Mr. Jacobs for 1993. See Note (6) below.<PAGE>
(4) These stock options were canceled in conjunction with the
Restructuring.
(5) In June, 1993, Mr. Jacobs retired from all offices held with
the Company. Upon Mr. Jacob's retirement, he exercised
options for the purchase of 48,990 shares of Common Stock
and he surrendered his remaining options for the purchase of
114,310 shares of Common Stock. In November, 1993, Mr.
Jacobs resigned as a director of the Company.
(6) Includes amounts representing (i) the Company's matching
contributions under the Company's Retirement Plan, (ii)
Director fees of $11,945 subsequent to Mr. Jacobs'
retirement as a Company officer, (iii) $207,292 pursuant to
his employment agreement with the Company upon its
termination and his retirement, (iv) $64,000 pursuant to his
current consulting agreement with the Company, and (v)
$1,589,043 in forgiveness of indebtedness income arising
from the March, 1993 purchase for $800,000 by a Company
subsidiary from a bank of notes in the outstanding principal
amount of approximately $2,350,000 owed by Mr. Jacobs, which
debt was then restructured to equal the discounted amount
paid by the subsidiary, all as anticipated by the
Restructuring. See "Certain Relationships and Related
Transactions" for additional information regarding the
forgiveness of indebtedness and Mr. Jacobs' consulting and
employment agreements.
<PAGE>
Stock Option Grants in Last Calendar Year
The following table sets forth all stock option grants to
the named executive officers during the year ended December 31,
1993:
<TABLE>
<CAPTION>
Potential Realized Value at Assumed Annual
Rates of Stock Price Appreciation for
Individual Grants (1) Option Term
% of Total
Options Options Granted Exercise
Granted to Employees in Price Expiration
Name (#) Fiscal Year(2) ($/Sh) Date 5% ($) (6) 10% ($) (6)
<S> <C> <C> <C> <C> <C> <C>
Randy Michaels 113,520 $5.74 2/7/03 $ 411,000 $ 1,036,000
113,520 5.97 2/7/03 385,000 1,010,000
75,680(3) 6.21 2/7/03 238,000 655,000
75,680(4) 6.46 2/7/03 219,000 636,000
378,400 26.2% 1,253,000 3,337,000
Robert L. Lawrence 113,520 5.74 2/7/03 411,000 1,036,000
141,081 5.97 2/7/03 478,000 1,256,000
94,054(3) 6.21 2/7/03 296,000 815,000
94,055(4) 6.46 2/7/03 273,000 791,000
442,710 31.14% 1,458,000 3,898,000
R. Christopher Weber 45,000 5.74 2/7/03 163,000 411,000
66,429 5.97 2/7/03 225,000 591,000
44,286(3) 6.21 2/7/03 140,000 384,000
44,285(4) 6.46 2/7/03 128,000 372,000
200,000 13.02% 656,000 1,758,000
Jon M. Berry 4,440 5.74 2/7/03 16,000 41,000
4,440 5.97 2/7/03 15,000 40,000
2,960(3) 6.21 2/7/03 9,000 26,000
2,960(4) 6.46 2/7/03 9,000 25,000
14,800 1.00% 49,000 132,000
Terry S. Jacobs 48,990 5.74 (5)
114,310 (5) (5)
164,300 10.63% N/A N/A
</TABLE>
<PAGE>
[FN]
(1) All grants are under the Company's 1993 stock option plan and were made
in 1993 at 100% of the fair market value of a share of Common Stock on
the grant date.
(2) Total options granted to employees in 1993 were for 1,535,910 shares of
Common Stock (includes the regranting of the options for the purchase
of 114,310 shares of Common Stock surrendered by Mr. Jacobs).
(3) Options vest February 8, 1995.
(4) Options vest February 8, 1996.
(5) Upon his retirement in June, 1993, Mr. Jacobs exercised his vested
options to purchase 48,990 shares of Common Stock at $5.74 per share
and surrendered his remaining options to purchase 114,310 shares of
Common Stock. As Mr. Jacobs no longer holds any options, the balance
of the above table is not applicable to him.
(6) Calculated based upon assumed stock prices for the Company's Common
Stock of $9.36 and $14.87, respectively, if 5% and 10% annual rates of
stock price appreciation are achieved over the full term of the option.
The potential realizable gain equals the product of the number of
shares underlying the stock option grant and the difference between the
assumed stock price and the exercise price of each option.
<PAGE>
Option Exercises and Year-End Option Values
The following table sets forth information concerning all
exercises of stock options and the fiscal year end values of all
unexercised stock options to the named executive officers as of
December 31, 1993.
<TABLE>
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Options at Fiscal Year- In-The-Money Options at
on Value End Fiscal Year-End (2)
Name Exercise(#) Realized(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Randy Michaels 0 - 113,520 264,880 $ 980,245 $2,171,070
Robert L. Lawrence 0 - 113,520 329,190 980,245 2,698,182
R. Christopher Weber 0 - 45,000 155,000 388,575 1,270,447
Jon M. Berry 0 - 4,440 10,360 38,339 84,915
Terry S. Jacobs 48,990 $282,182 - - - -
</TABLE>
[FN]
(1) Value is calculated by determining the difference between the per share
exercise price and the per share fair market value of the stock as of the
exercise date, multiplied by the number of shares acquired upon the
exercise of the options.
(2) The value of unexercised options is calculated by determining the
difference between $14.375 per share, the last reported sale price of the
Common Stock on the Nasdaq Stock Market on December 31, 1993, and the
exercise price of the option as of such date, multiplied by the number of
shares subject to options.
<PAGE>
Compensation Committee Report
The report of the 1993 Compensation Committee with respect
to 1993 executive compensation is as follows:
The primary function of the Compensation Committee, which
consists entirely of non-employee directors, is to oversee
policies relating to executive compensation including salary,
incentive bonuses, fringe benefits and stock option awards. Its
objective is to attract and retain qualified individuals by
providing competitive compensation, while, at the same time,
linking such compensation to corporate objectives. The Committee
believes that providing a direct relationship between corporate
results and executive compensation will best serve shareholder
interests.
This link between executive compensation and corporate
performance is facilitated through incentive bonuses based on
earnings and also through stock option awards. The Committee may
grant stock options to individuals to create additional economic
incentives for these individuals to achieve improved corporate
performance goals so that they can thereby participate in any
resultant increases in shareholder value. The options are
exercisable at the fair market value of the stock on the date of
grant and therefore only provide benefits to the grantee if
shareholder value increases through the increase in share price.
The compensation of each executive officer and radio station
general manager is reviewed annually by the Compensation
Committee. It is the Compensation Committee's policy to
establish base salaries for its executives at levels that it
perceives are fair and competitive with those of executives with
similar responsibilities at companies that are considered to be
comparable in terms of assets, net worth, revenue, operating cash
flow and/or earnings per share, based upon such information as
may be acquired by the Committee from annual reports and proxy
materials of such other companies, business and industry
publications and other sources as may be available from time to
time. Such comparisons of executive compensation are not
necessarily with the same companies included in the peer group
index used in the performance graph included in this Proxy
Statement given that the Company's competitors for executive
and/or broadcasting talent are not limited to the entities
included in such index.
<PAGE>
The Compensation Committee applied the above considerations
in determining the 1993 compensation for the Company's former
Chief Executive Officer, Mr. Terry Jacobs, (the "CEO"), and for
the Company's Co-Chief Operating Officers, Messrs. Michaels and
Lawrence (the "COOs"). In February, 1993, the Compensation
Committee approved the grant of 164,300 stock options to the CEO
and 378,400 stock options to each COO as approved by the
Company's shareholders as part of the Restructuring plan. The
stock option grants were designed to provide a significant
economic incentive to those executive officers to continue to
improve the Company's performance, and stock value, in the coming
years and to compensate those executive officers for their hard
work and dedication to the Company in the difficult years prior
to the Restructuring. In determining the magnitude of the 1993
grants, the Compensation Committee considered the fact that such
executive officers surrendered all previously granted options in
the Restructuring. The Committee anticipates that future annual
stock option grants will be fewer in number.
In June, 1993, the Compensation Committee awarded an
additional 64,310 stock options to Mr. Lawrence as additional
incentive and compensation due to added responsibilities placed
upon Mr. Lawrence by virtue of Mr. Jacobs' retirement. Those
options became available for grant upon Mr. Jacobs' surrender of
114,310 unvested options when he ceased to be a Company employee.
In March, 1993, the Compensation Committee established the
base salary levels for the CEO, the COOs and the Company's other
executive officers. Consistent with the Committee's policy of
establishing competitive salary levels, the CEO's base salary
remained the same as in 1992 pursuant to his employment agreement
and each COO received a modest $10,000 salary increase for 1993.
The Compensation Committee also established 1993 incentive
performance targets for all Company employees, including the
executive officers, that created the potential for significant
incentive bonuses if the Company achieved certain cash flow
levels in 1993. If the Company met or exceeded its cash flow
performance targets a bonus pool was to be created. The monies
in the pool were to be distributed 50% based upon the employee's
salary in relation to all corporate employee salaries, and 50%
based upon the Committee's subjective determinations of the
employee's overall individual performance and contributions to
the Company's achievement of the target levels.
The Company exceeded the 1993 performance targets by a
substantial margin. The Compensation Committee rewarded the COOs
accordingly by granting substantial bonuses for 1993 determined
in accordance with the incentive formula. A significant portion
of the COO bonuses was based upon the Committee's determination
that Messrs. Michaels and Lawrence were directly responsible for
much of the Company's improved 1993 results. No bonus was
awarded the Company's former CEO in light of his June, 1993
retirement.
<PAGE>
The Committee has been informed that the Company is evaluating
the possible impact, if any, on the Company of the new $1,000,000
compensation deduction cap imposed by Section 162(m) of the
Internal Revenue Code and that the Company intends to take any
necessary steps to conform its compensation practices to comply
with those tax provisions.
1993 Compensation Committee: Rod F. Dammeyer
R. Philip Handy
David M. Schulte
Samuel Zell
Stock Performance
The following performance graph compares the Company's
cumulative shareholder returns, adjusted for stock splits and
dividends, in the Company's Common Stock, the Nasdaq Total Return
Index (US) and the Nasdaq Telecommunications Stocks Index. The
graph assumes that an investment of $100 was made on January 11,
1993 in the Company's Common Stock and in each index. Total
shareholder return is based on the increase in the price of the
stock and assumes that all dividends were reinvested.
As described under "Security Ownership of Certain Beneficial
Owners and Management - Change in Control", the Company was
entirely recapitalized in the January, 1993 Restructuring. As
part of the Restructuring, all of the Company's formerly
outstanding capital stock was exchanged for new securities of the
Company, including the Common Stock which is now outstanding and
warrants to acquire Common Stock. Accordingly, a one year
comparison of cumulative shareholder return relating to the
Company's Common Stock, which was first registered under Section
12 of the Securities Exchange Act of 1934 in connection with the
Restructuring, is provided below.
<PAGE>
CUMULATIVE SHAREHOLDER RETURN COMPARISON
[A paper copy of the performance graph has been filed with the
Commission under cover of Form SE on or prior to the date of the
electronic submission of this filing in accordance with Rule
304(d) of Regulation S-T.]
Jacor Communications, Inc.
................. Nasdaq Total Return Index (US)
----------------- Nasdaq Telecommunications Stock Index
January 11, December 31,
1993 1993
Jacor Communications, Inc. $100 $244
Nasdaq Total Return Index (US) 100 114
Nasdaq Telecommunications Stocks Index 100 154
Directors Compensation
Directors who are not employees of the Company receive an annual
fee of $10,000 and a fee of $1,000 plus travel expenses for each
Board of Directors meeting attended. For each Board of Directors
meeting missed, $1,000 is deducted from the directors annual fee.
In May, 1993, the Company granted nonqualified stock options to
purchase up to 10,000 shares of the Company's Common Stock to
each of Messrs. Alexander, Dammeyer, Handy and Lasry at a minimum
exercise price of $5.74 per share. These options vested 30% upon
grant, 30% upon the first anniversary of the grant date and 20%
per year for each of the next two years thereafter. The exercise
price of the options that vested upon grant is $5.74 per share,
and the options that subsequently vest on each anniversary date
of the grant have an exercise price 4% greater than the options
that vested in the previous year. Once an option vests, the
exercise price for that option is fixed for the remaining term of
the option.<PAGE>
In June, 1993, the Company entered into restricted stock
agreements for the purchase of an aggregate of 80,000 shares of
the Common Stock with Mr. Alexander (20,000 shares), Mr. Dammeyer
(20,000 shares), Mr. Handy (30,000 shares), and Mr. Lasry (10,000
shares). The shares were purchased at a price of $5.74 per share
and remain restricted until the first anniversary of the
Directors' appointment as a member of the Board of Directors of
the Company.
Compensation Committee Interlocks and Insider Participation
In 1993, Messrs, Dammeyer, Handy, Schulte and Zell were non-
employee directors of the Company and comprised the Company's
entire Compensation Committee. No executive officer of the
Company serves on any board of directors or compensation
committee of any entity which compensates any of Messrs.
Dammeyer, Handy, Schulte and Zell. As described under "Security
Ownership of Certain Beneficial Owners and Management - Change in
Control" and "Certain Relationships and Related Transactions",
Messrs. Schulte and Zell are the principals of Zell/Chilmark, a
merchant banking firm, which invested over $73,000,000 in capital
in the Company in the Restructuring and other transactions.
Other Securities Filings
The information contained in this Proxy Statement under the
headings "Executive Compensation--Compensation Committee Report"
and "--Stock Performance" are not, and should not be deemed to
be, incorporated by reference into any filings by the Company
under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that purport to incorporate other Company Securities and
Exchange Commission filings or portions thereof by reference
(including this Proxy Statement).
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As contemplated in connection with the Restructuring, in
March, 1993 a subsidiary of the Company purchased for $800,000
two notes from a bank that had extended loans to Terry S. Jacobs,
a former Chairman of the Board, President, Chief Executive
Officer and director of the Company, and to Mr. Jacobs' family
partnership. The loans had unpaid balances of approximately
$2,350,000. Mr. Jacobs, on behalf of his family partnership,
executed a new note in the amount of $800,000 payable to the
Company's subsidiary. The balance of the prior indebtedness has
been canceled. The new note, which is personally guaranteed by
Mr. Jacobs, is due in five years with interim installments of
principal payable quarterly. This note bears interest at 7% and
is collateralized by a pledge of substantially all of the stock
and warrants in the Company owned by Mr. Jacobs and his family
partnership. Although the Company expects that his note
receivable will be repaid by Mr. Jacobs largely from amounts paid
to him under his consulting agreement with the Company, as
described in the following paragraph, based upon the fact that
the note is substantially collateralized by a pledge of the
Company's securities and because these securities constitute the
substantial portion of Mr. Jacobs' assets, the Company recorded
an allowance for loss on the full amount of the note as part of
the Restructuring. Such allowance for loss will be reduced as
payments on the note are made.
Mr. Jacobs retired from all offices of the Company in June,
1993 but continues to serve the Company under a four-year
consulting agreement. The consulting agreement provides that (i)
Mr. Jacobs will receive for his services as much as $247,250 in
1994; $233,250 in 1995; $219,250 in 1996 and $155,250 in 1997 and
will apply any payments he receives to any balance due under the
$800,000 note to the Company from Mr. Jacobs' family partnership
which is guaranteed by Mr. Jacobs and (ii) Mr. Jacobs will
receive in lieu of his former employment agreement $93,750 in
1994. Prior to his retirement, Mr. Jacobs had an employment
agreement with the Company that provided for a base salary of
$375,000 and which by its terms would have terminated in March,
1994.
As part of the Restructuring, the Company and Zell/Chilmark
agreed with the Company's senior lenders that, on September 1,
1993, those lenders could put their debt to Zell/Chilmark for its
face amount and, under a number of circumstances, the interest
rate on that debt would be reset at a level that could be
substantially higher than the interest rate the Company was
paying as of January 11, 1993. Since such a higher interest rate
could have had a material adverse effect on the Company's
financial position, the Company determined that it should
attempt, through a refinancing, to replace its senior debt with
debt that did not have similar put and interest rate-reset
provisions.
<PAGE>
A syndicate of lenders indicated its willingness to provide
loans for the refinancing on the condition that Zell/Chilmark
invest an additional $20 million of equity into the Company, and
Zell/Chilmark indicated that it was willing to make such an
investment. The Company's Board of Directors, with Samuel Zell
and David M. Schulte, the principals of Zell/Chilmark, not
voting, decided to permit Zell/Chilmark to make such an equity
investment at $5.74 per share of Common Stock and also to permit
the Company's other shareholders to make similar equity
investments on a pro rata basis, at the same price, in order to
give the other shareholders the opportunity to prevent dilution
of their equity interests in the Company as such interests
existed as a result of the Restructuring. In connection with the
Refinancing, and in order to take full advantage of a prepayment
discount applicable to the senior debt being prepaid in the
refinancing, Zell/Chilmark purchased in a private placement a
total of 3,484,321 shares of Common Stock at a price of $5.74 per
share, for an aggregate purchase price of $20 million.
On December 3, 1992, the Company entered into a local
marketing agreement with respect to radio station KAZY(FM),
Denver, Colorado. On that same date, Zell/Chilmark agreed to
acquire the station, subject to that local marketing agreement,
from parties not related to Zell/Chilmark or the Company for a
purchase price of approximately $5.5 million. This agreement by
Zell/Chilmark to acquire the station was entered into in
contemplation of the Restructuring and a subsequent resale of the
station by Zell/Chilmark to the Company in exchange for shares of
the Common Stock having a value, based upon the value of $5.74
per share established at the time of the Restructuring, equal to
Zell/Chilmark's cost for the station plus related acquisition
expenses. KAZY(FM) was sold to the Company by Zell/Chilmark on
July 21, 1993 whereupon the Company issued 964,006 shares of
Common Stock to Zell/Chilmark.
During 1993, the Company incurred charges of approximately
$591,000 for market research performed by Critical Mass Media,
Inc. ("CMM") a marketing research business and a radio consulting
business in Cincinnati, Ohio, which was owned by Randy Michaels,
the President of the Company. Effective January 1, 1994, a
subsidiary of the Company and a corporation wholly owned by Mr.
Michaels formed a limited partnership (the "Partnership") in a
transaction whereby the Partnership now owns all of the CMM stock
and Mr. Michaels' corporation owns a 95% limited partnership
interest in the Partnership. The Company's subsidiary obtained a
5% general partnership interest in exchange for its contribution
of approximately $126,000 cash to the Partnership. The Company
initiated this transaction primarily to allow Mr. Michaels to
focus his full time and energy to the Company and its business
and the Company's subsidiary is now the sole manager of the
Partnership's business.
<PAGE>
In connection with the formation of the Partnership, the
Company agreed that Mr. Michaels' corporation has the right
between January 1, 1999 and January 1, 2000 to put its limited
partnership interest to the Partnership's general partner in
exchange for 300,000 shares of Common Stock. If the put is not
exercised by January 1, 2000, the general partner has the right
to call the limited partnership interest prior to 2001 in
exchange for 300,000 shares of Common Stock. In addition, if
certain events occur prior to January 1, 1999 including without
limitation, Mr. Michaels' termination as President of the general
partner, a reduction of Mr. Michaels' annual base salary by more
than 10%, or generally any transaction by which any person or
group other than Zell/Chilmark shall become the owner of more
than 30% of the outstanding voting securities of the general
partner or Zell/Chilmark fails to have its designees constitute
at least a majority of the members of the general partner's Board
of Directors, then Mr. Michaels' corporation will have the right
to either (a) purchase the Company's general partnership interest
at a price generally equal to the balance of the partnership
capital account, or (b) sell its limited partnership interest to
the general partner in exchange for 300,000 shares of Common
Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Coopers & Lybrand
(the "Auditors") was engaged by the Company to audit the
Company's consolidated financial statements for the year ended
December 31, 1993. It is anticipated that a representative of
the Auditors will attend the Annual Meeting for the purpose of
responding to appropriate questions. At the meeting, a
representative of the Auditors will be afforded an opportunity to
make a statement if the Auditors so desire. The Audit Committee
has recommended that the Auditors be retained as the Company's
principal accounting firm for 1994.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Shareholders may submit proposals to be voted on at the 1995
Annual Meeting of Shareholders. At the time any such proposal is
submitted, the proponent must be a record or beneficial owner of
at least 1% or $1,000 in market value of the Company's shares
entitled to vote on the proposal and must have held such shares
for at least one year and continue to own such shares through the
date of the 1995 Annual Meeting. In order for a Shareholder
proposal to be included in the proxy statement and form of proxy
for the 1995 Annual Meeting of Shareholders, the proposal must be
received at the Company's principal executive offices not later
than December 1, 1994 and must otherwise comply with applicable
requirements established by the Securities and Exchange
Commission.<PAGE>
GENERAL
The Board of Directors knows of no business to be transacted
at the Annual Meeting other than that set forth in the
accompanying Notice of Annual Meeting. If, however, other
matters requiring a vote of Shareholders properly come before the
meeting, it is intended that the persons designated in the
accompanying Proxy to vote the shares of Common Stock represented
thereby will do so in accordance with their best judgment on such
matters. If a Shareholder specifies a different choice on the
Proxy, his or her shares of Common Stock will be voted in
accordance with the specification so made.
Upon receipt of a written request from any Shareholder, the
Company will mail, at no charge to the Shareholder, a copy of the
Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission for the Company's most recent fiscal
year. Written requests for such report should be directed to:
Jacor Communications, Inc.
Investor Services Department
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
It is important in order to exercise your rights that your
shares be represented at this Annual Meeting, regardless of the
number of shares held by you. Please complete, sign, date and
promptly return the enclosed Proxy in the envelope provided,
regardless of whether you plan to attend the meeting.
By Order of the Board of Directors.
/s/ R. Christopher Weber
R. Christopher Weber
Senior Vice President, Chief
Financial Officer and Secretary
Cincinnati, Ohio
April 22, 1994
<PAGE>
Annex I
PROPOSAL TO AMEND FIRST PARAGRAPH
OF ARTICLE FOUR OF AMENDED AND
RESTATED ARTICLES OF INCORPORATION
RESOLVED, That the first paragraph of Article Four of the
Company's Amended and Restated Articles of Incorporation is
hereby amended in its entirety to read as follows:
Fourth: The maximum aggregate number of shares which
the corporation is authorized to have outstanding is
One Hundred Four Million (104,000,000) shares, divided
into three classes. The first class consists of One
Hundred Million (100,000,000) shares of common stock,
without par value. The second class consists of Two
Million (2,000,000) shares of Class A preferred stock,
without par value. The third class consists of Two
Million (2,000,000) shares of Class B preferred stock,
without par value. The preferred shares are senior to
the common shares, and the common shares are subject to
the rights and preferences of the preferred shares as
hereinafter set forth.
<PAGE>
Annex II
PROPOSAL TO AMEND ARTICLE II,
SECTION 1 OF AMENDED AND RESTATED
CODE OF REGULATIONS
RESOLVED, That Article II, Section 1 of the Company's
Amended and Restated Code of Regulations is hereby amended in its
entirety to read as follows:
"Section 1. Number of Directors. The number of Directors
shall be five (5) unless changed as provided in this
paragraph. The number of Directors may be increased from
time to time by the Board of Directors to a maximum of
fifteen (15) and decreased from time to time to a minimum of
five (5) without further amendment of these regulations upon
the adoption of a resolution offered for that purpose at any
regular or special meeting of the Board of Directors
pursuant to the vote of a majority of Directors in office at
the time of the meeting. In addition, the Board of
Directors may, pursuant to the vote of a majority of the
Directors in office at the time of the meeting, fill any
Director's position that is created by an increase in the
number of Directors. No reduction in the number of
Directors shall have the effect of removing from office any
Director prior to the expiration of his term in office.
<PAGE>
PROXY
JACOR
COMMUNICATIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
ANNUAL MEETING of The undersigned hereby appoints Randy
SHAREHOLDERS Michaels, R. Christopher Weber and Jon M.
MAY 18, 1994 Berry, and each of them, as Proxy Holders
for the undersigned, with full power of
substitution, to appear and vote all of the
shares of Jacor Communications, Inc. which
the undersigned is entitled to vote at the
Annual Meeting of Shareholders to be held at
the Westin Hotel, Cincinnati, Ohio on May 18,
1994 at 10:30 a.m., local time, and at any
adjournment thereof.
1. Proposal to amend the
Company's Amended and
Restated Articles of
Incorporation increasing
the number of authorized
shares of Common Stock
of the Company from
40,000,000 shares to
100,000,000 shares.
(CHANGE OF ADDRESS)
2. Proposal to amend the
Company's Amended and
Restated Code of
Regulations to increase
the maximum allowable
number of Directors of the
Company from nine to fifteen.
(If you have written in the
3. Election of eight Directors above space, please mark the
for a one year term. corresponding box on the
reverse of this card.)
Nominees: John W. Alexander,
Rod F. Dammeyer, F. Philip
Handy, Marc Lasry, Robert L.
Lawrence, Randy Michaels,
David M. Schulte, and Samuel
Zell.
4. To act in accordance with
their best judgment on
any other business which
may properly come before
the meeting.
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of
Directors' recommendations. The Proxies cannot vote your shares
unless you sign and return this Card.
SEE REVERSE
SIDE
<PAGE>
X Please mark your votes SHARES IN YOUR NAME
as in this example.
FOR AGAINST ABSTAIN
1. Proposal to amend
the Company's Amended
and Restated Articles
of Incorporation
increasing the number
of authorized shares
of Common Stock of the
Company from 40,000,000
shares to 100,000,000
shares.
2. Proposal to amend the
Company's Amended and
Restated Code of
Regulations to increase
the maximum allowable
number of Directors of
the Company from nine
to fifteen.
FOR WITHHELD
3. Election of Directors
(SEE REVERSE)
For, except vote withheld from the following
nominee(s):
FOR AGAINST ABSTAIN
4. To act in accordance
with their best
judgment on any other
business which may
properly come before
the meeting.
Change
of
Address
Attend
Meeting
SIGNATURE(S) DATE
SIGNATURE(S) DATE
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such.
