March 27, 1995
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Office of Reports and
Information Services
RE: Preliminary Proxy Statement
of Jacor Communications, Inc.
Dear Filing Officer:
Under cover of this letter, the following preliminary 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 preliminary proxy
statement relates to the Annual Meeting of the Company's Stockholders scheduled
for May 17, 1995. The Company desires to send its definitive proxy materials to
its stockholders no later than April 14, 1995. Accordingly, if the Staff has
any comments on the following materials, we will greatly appreciate your so
informing the undersigned as soon as possible by telephone at (513) 629-2828.
The required filing fee of $125 has been paid by the Company in accordance with
the procedures set forth in Instructions for Filing Fees - Rule 3a of the
Commission's Informal and Other Procedures. In addition, pursuant to
Instruction5 to Item 10 of Schedule 14A, please be advised that the Company
will register on Form S-8 the additional 1,250,000 shares of the Company's
Common Stock to become eligible for issuance under the Company's 1993 Stock
Option Plan following stockholder approval of the proposed amendment to that
Plan as described in the proxy statement.
Thank you for your cooperation and assistance in this matter.
Sincerely yours,
GRAYDON, HEAD & RITCHEY
Richard G. Schmalzl
Enclosure
c: Jon M. Berry (w/enc)
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:
X Preliminary Proxy Statement
Confidential, for Use of the Commission Only
[as permitted by Rule 14a-6(e)(2)]
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):
X $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:
(5) Total fee paid:
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:
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
April 14, 1995
Dear Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of
Shareholders to be held on Wednesday, May 17, 1995 at 10:30 a.m., local time,
in the Skyline Room of the Terrace Hotel, 15 West Sixth Street, 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, 1994.
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
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Jacor
Communications, Inc. (the "Company") will be held on Wednesday, May 17, 1995 at
10:30 a.m., local time, in the Skyline Room of the Terrace Hotel, 15 West Sixth
Street, Cincinnati, Ohio, for the purposes of considering and acting on the
following proposals:
1. To adopt the Jacor Communications, Inc. 1995 Employee Stock Purchase
Plan described in the attached Proxy Statement, providing for the sale of up to
200,000 shares of the Company's Common Stock to Company employees. A copy of
the Stock Purchase Plan is attached as Annex 1 to the Proxy Statement.
2. To amend the Jacor Communications, Inc. 1993 Stock Option Plan to
increase the number of shares of the Company's Common Stock eligible for
issuance upon the exercise of options granted under the Stock Option Plan
from 1,519,218 shares to 2,769,218 shares. A copy of the proposed amendment
to the Stock Option Plan is attached as Annex 2 to the Proxy Statement.
3. To amend the Company's Amended and Restated Articles of
Incorporation to add a new Article Fifth to clarify the Company's ability to
purchase and redeem its own shares as described in the attached Proxy
Statement. A copy of the proposed amendment is attached as Annex 3 to the
Proxy Statement.
4. To elect eight (8) Directors to serve until the next annual meeting
of shareholders and until their respective successors are elected and qualified.
5. 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 10, 1995 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, 1994. 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 14, 1995 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.
JACOR COMMUNICATIONS, INC.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
PROXY STATEMENT
Annual Meeting of Shareholders to be held on May 17, 1995
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 17, 1995 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 14, 1995. 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 10, 1995 (the "Record
Date").
As of April 10, 1995, there were outstanding XX,XXX,XXX 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, 1994,
including financial statements, is mailed with this Proxy Statement.
PROPOSAL NO. 1
PROPOSAL TO ADOPT 1995 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors of the Company, at its meeting on October 30, 1994,
adopted the Jacor Communications, Inc. 1995 Employee Stock Purchase Plan (the
"Stock Purchase Plan"), subject to approval of the Company's Shareholders. The
Stock Purchase Plan provides eligible employees with an opportunity to purchase
Company Common Stock through payroll deductions. The Stock Purchase Plan is
intended as an employment incentive, to encourage their continued employment
with the Company and to provide them with additional incentives to promote
the success of the Company.
Shares Reserved for the Stock Purchase Plan
The Stock Purchase Plan provides eligible employees of the Company with a
means to purchase up to 200,000 shares of the Company's Common Stock at a
discount, subject to adjustments under certain circumstances such as stock
splits, stock dividends, recapitalization or other changes in the outstanding
Common Stock. The reserved shares consist of authorized but unissued Common
Stock or shares of Common Stock reacquired by the Company, including any shares
purchased by the Company in the open market. In the event such shares would be
purchased on the open market, the Company will bear all brokerage costs and will
pay any difference between the actual stock purchase price and the amount paid
by employees under the Stock Purchase Plan.
Eligible Employees
Any person who is employed by the Company on the first day of each
calendar year (a "Plan Year") and has timely completed an enrollment form for
that Plan Year is eligible to participate in the Plan; provided, however,
that no employee who after the grant of options under the Plan owns shares
possessing 5% or more of the total combined voting power or value of all
classes of shares of the Company or its parent, if any, or any subsidiary
corporation, after taking into account outstanding options and certain
attribution rules, shall be eligible to receive an option. Approximately 650
employees were eligible to participate in the Stock Purchase Plan as of
January 1, 1995.
Material Features of the Stock Purchase Plan
The complete text of the Stock Purchase Plan is attached as Annex 1 to
this Proxy Statement. The following summary does not purport to be complete
and is qualified in its entirety by reference to Annex 1.
The Stock Purchase Plan authorizes the grant of options to purchase Common
Stock to eligible participating employees at the beginning of each Plan Year.
The option exercise price is payable by the employee through automatic payroll
deductions during the Plan Year, which deductions may not be less than $10 or
more than 10% of his or her base pay. No employee may subscribe for or receive
options to purchase shares of Common Stock with an aggregate Fair Market Value
of $25,000 or more in any Plan Year.
The purchase price for each share of Common Stock subject to an option
granted under the Stock Purchase Plan will be the lesser of (i) 85% of the Fair
Market Value of the Common Stock on the first business day of the Plan Year (or
such other date as determined by the plan administrator) (the "Offering Date"),
or (ii) 85% of the Fair Market Value of the Common Stock on the last business
day of the Plan Year. "Fair Market Value" is defined in the Plan as the closing
price for the Common Stock on a national stock exchange or, if the stock is not
traded on an exchange, the last sale price for the Common Stock as reported on
the National Association of Securities Dealers Automated Quotation System.
On the Offering Date, each eligible employee who elects to participate in
an offering receives an option to purchase the number of shares of Common Stock
that he or she will be able to purchase with the payroll deduction credited to
his or her account during such Plan Year. These options will be automatically
exercised as of the last business day of the Plan Year.
Subject to certain limitations set forth in the Stock Purchase Plan, an
employee is permitted, at any time prior to the end of the Plan Year, to
terminate or to withdraw all of the amount in his or her account, without
interest. Upon the termination of the employee's employment with the Company
prior to the last day of a Plan Year for any reason other than death, disability
or retirement, the employee's only right will be to receive the amount of cash
that is in his or her account, without interest. If an employee's employment is
terminated by reason of retirement, death or disability prior to the end of the
current Plan Year, he or she will have the right within 90 days thereafter, to
elect to have the balance of his or her account either paid to him or her in
cash or applied at the end of the current Plan Year toward the purchase of
Common Stock. Other than as set forth in this paragraph, an employee may not
change the amount of his or her payroll deductions during a Plan Year.
The Stock Purchase Plan may be amended from time to time by the Board of
Directors; provided, however, that no amendment will be effective without the
prior approval of the Shareholders to increase the aggregate number of shares to
be issued under the Plan, change the class of employees eligible to receive
options, or if approval is required to comply with Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The Stock Purchase Plan may be terminated at any time by the Board of Directors.
Federal Income Tax Consequences
The Stock Purchase Plan is intended to qualify as an employee stock
purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code"), such that the transfer of a share of Common Stock to an employee
pursuant to the Plan will generally be entitled to the benefits of Section
421(a) of the Code. Under that Section, an employee will not be required to
recognize income at the time the option is granted or at the time the option
is exercised. The Company will not be entitled to any deduction with respect
to the Stock Purchase Plan, except in connection with a disqualifying
disposition (as discussed below).
When a Plan participant disposes of Common Stock acquired under the Plan
(or in the event of the death of the employee while owning such Common Stock
whether or not the holding period requirements are met), he or she will
recognize compensation income (taxed as ordinary income) in an amount equal
to the lesser of (i) the excess of the fair market value of the Common Stock
at the time of such disposition or death over the amount paid for the Common
Stock, or (ii) the excess of the fair market value of the Common Stock on the
date the option was granted over an amount equal to 85% of the fair market
value of the Common Stock on the date the option was granted. Any additional
gain or any loss resulting from the disposition will be taxed as long-term
capital gain or loss.
In order to receive such favorable tax treatment, the Code requires that
the employee make no disposition of the Common Stock within two years from the
date the option was granted nor within one year from the date the option was
exercised and the Common Stock transferred to him or her. If an employee
disposes of Common Stock acquired under the Plan before the expiration of these
holding periods, the employee will recognize ordinary income in an amount equal
to the excess of the fair market value of the Common Stock on the date the
option was exercised over the option price. The amount recognized as
ordinary income will increase the employee's basis in such shares. Any gain
or loss resulting from the disposition will be taxed as capital gain or loss.
At the time of such a disqualifying disposition, the Company would be allowed
a deduction equal to the amount included in the employee's income as ordinary
income.
Options to be Granted under the Stock Purchase Plan
Subject to shareholder approval of the Stock Purchase Plan, the Company
has conditionally approved option grants thereunder for an aggregate of 49,000
shares of Common Stock to participating eligible employees. As described
above, the exercise price of these options will be the lower of 85% of the
closing sale price of the Company's Common Stock as reported on The Nasdaq
National Market on December 29, 1995 or $10.84 (i.e., 85% of $12.75, the
closing sale price on January 3, 1995). These options will be exercised
automatically on December 29, 1995. The last reported sale price of the
Company's Common Stock on The Nasdaq National Market through April 10, 1995
was $XX.XX.
The following table sets forth the number of options conditionally granted
under the Stock Purchase Plan to the named executives, all executive officers of
the Company as a group, and all employees other than executive officers as a
group. Non-employee directors are not eligible to participate in the Stock
Purchase Plan.
NEW PLAN BENEFITS
1995 Employee Stock Purchase Plan
Number of Dollar
Name and Principal Position Options Granted Value($)(1)
Randy Michaels
President and Co-Chief
Operating Officer 923 $ 1,763
Robert L. Lawrence
Co-Chief Operating Officer 1,959 3,742
R. Christopher Weber
Senior Vice President,
Chief Financial Officer
and Secretary 1,619 3,092
Jon M. Berry
Senior Vice President
and Treasurer 0 0
Executive Group (4 persons) 4,501 8,597
Non-Executive Officer
Employee Group
(218 participating employees) 44,390 84,785
(1) Computed as the difference between $12.75, the last reported sale price on
the option grant date, and $10.84, the discounted stock option price, times the
number of options. If the market value of the Common Stock is greater than
$12.75 on the exercise date, the value to the Plan participants will increase
accordingly.
The proposal to adopt the Stock Purchase Plan in the form attached to this
Proxy Statement as Annex 1 will be submitted to the Shareholders for adoption at
the Annual Meeting. Adoption of this proposal requires an affirmative vote by
the holders of a majority of the oustanding 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 the Stock Purchase Plan. 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 adopted the Stock Purchase Plan and recommends
that the Company's Shareholders vote FOR Proposal No. 1.
PROPOSAL NO. 2
PROPOSAL TO AMEND THE 1993 STOCK OPTION PLAN
The Board of Directors of the Company, at its meeting on January 25, 1995,
approved an amendment to the Jacor Communications, Inc. 1993 Stock Option Plan
(the "1993 Plan"). The 1993 Plan was originally adopted by the Company's
Shareholders at the 1993 Annual Meeting. The 1993 Plan permits the granting of
incentive stock options and non-qualified stock options to key employees of the
Company and its subsidiaries for the purchase of up to 1,519,218 shares of the
Company's Common Stock. Approximately 30 employees of the Company and its
subsidiaries are eligible to participate in the 1993 Plan, four of whom are
executive officers of the Company. Non-employee directors of the Company are
not eligible to participate in the 1993 Plan.
At December 31, 1994, there were 87,618 remaining shares of Common Stock
available for issuance upon the grant of additional options under the 1993
Plan. The purpose of amending the 1993 Plan is to increase the number of shares
eligible for issuance thereunder by 1,250,000 shares to an aggregate of
2,769,218 shares. The proposed amendment to the 1993 Plan will not result in
any new plan benefits to the Company's directors, executive officers or other
employees, other than providing them with an opportunity to acquire additional
stock options.
The purpose and intent of the 1993 Plan is to provide key employees of the
Company and its subsidiaries with an incentive to increase their efforts
promoting the success and progress of the Company and the value of the
investment of its shareholders to enable the Company to continue to attract and
retain highly qualified managerial and station personnel to fulfill positions of
responsibility in all areas of the Company. The Board of Directors believes
that the 1993 Plan accomplishes these results.
The proposal to approve and adopt the proposed amendment to the 1993 Plan
is contained in the resolution attached to this Proxy Statement as Annex 2 and
will be submitted to the Shareholders for adoption at the Annual Meeting.
Adoption of this proposal requires an affirmative vote by the holders of a
majority of the outstanding 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 the amendment to the 1993 Plan. Abstentions and shares not
voted by brokers and other benenficial owners will have the same effect as votes
cast against Proposal No. 2.
The Board of Directors has approved the proposed amendment to the 1993
Plan and recommends that the Company's Shareholders vote FOR Proposal No. 2.
PROPOSAL NO. 3
PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION
The Board of Directors is proposing an amendment to the Company's Amended
and Restated Articles of Incorporation (the "Articles of Incorporation") to
clarify the authority of the Company to purchase and redeem its own shares of
Common Stock or other securities. The Company's legal counsel has advised the
Company that the provisions of the Ohio General Corporation law set forth
specific conditions under which an Ohio corporation may purchase or redeem its
own shares. One such condition is that the corporation's articles of
incorporation expressly authorize such a purchase or redemption.
Although the Company's current Articles of Incorporation contemplate that
the Company would be able to purchase and redeem its own shares, such right is
not explicit. In order to remove any ambiguity as to the Company's legal
authority to purchase or redeem its own shares from time to time, the Board of
Directors is proposing that the Articles of Incorporation be amended to add a
new Article Fifth empowering the Company to purchase or redeem its shares upon
the affirmative vote of a majority of the Company's Board of Directors.
The Company announced in May, 1994 that its Board of Directors had
approved the repurchase of up to 1,000,000 shares of the Company's Common
Stock in the open market, but no such repurchases have been made to date. The
Company may make such repurchases, or authorize other purchases or redemptions
of its shares, in the future although the Company has no definitive plans to
do so as of the date of this Proxy Statement.
Accordingly, the resolution attached to the Proxy Statement as Annex 3 to
amend the Company's Articles of Incorporation to add a new Article Fifth will be
submitted to the Shareholders for adoption at the Annual Meeting. Ohio law
requires the affirmative vote by the holders of two thirds of the outstanding
Common Stock. Proxies received by the Company and not revoked prior to or at
the Annual Meeting will be voted FOR proposal No. 3 and the adoption of the
amendment to the Company's Articles of Incorporation. Abstentions and shares
not voted by brokers and other beneficial owners will have the same effect as
votes cast against Proposal No. 3.
The Board of Directors has approved the proposed amendment to the
Company's Articles of Incorporation and recommends that the Company's
Shareholders vote FOR Proposal No. 3.
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
fifteen members. In accordance with the Code of Regulations, the Board of
Directors has established the current number of Directors of the Company as
nine, but will be reduced to eight members effective as of the date of the
Annual Meeting. One of the Company's Directors, Samuel Zell, informed the
Company that he did not desire to stand for re-election due to the substantial
time commitments required of him by his numerous other business activities.
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 other than Mr. Zell 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.
The following table sets forth, with respect to each nominee for Director
of the Company, his or her age, principal occupation during the past five years,
other positions he or she holds with the Company, if any, and the year in which
he or she 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 48 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., Broadway Stores, Inc.,
Sealy Corporation, and Santa Fe Energy Resources.
JOHN W. ALEXANDER - A Managing Partner of 47 1993
Meringoff Equities, and a Managing Partner of
Mallard Creek Capital Partner, since 1987. Both
are private real estate and investment partnerships.
Mr. Alexander is also a Trustee of Equity
Residential Properties Trust, a real estate
investment trust.
ROD F. DAMMEYER - President and Chief Executive 54 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.; Lomas Financial
Corporation; Capsure Holdings Corp; Falcon
Building Products, Inc.; The Vigoro Corporation;
and ANTEC Corporation. Mr. Dammeyer is a
trustee of several VanKampen American Capital,
Inc. trusts.
Year First
Name, Age and Principal Occupation Became
During Past Five Years Age Director
F. PHILIP HANDY - President of Winter Park 50 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.;
and Banca Quadrum, S.A. (formerly Servicios
Financieros Quadrum, S.A.).
MARC LASRY - Executive Vice President of Amroc 35 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 42 1993
Officer of the Company. Mr. Lawrence has
served as an officer of the Company since 1986.
RANDY MICHAELS - President and Co-Chief 42 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.
Year First
Name, Age and Principal Occupation Became
During Past Five Years Age Director
SHELI Z. ROSENBERG - President and a member 53 1994
of the law firm of Rosenberg & Liebentritt,
P.C. since 1980. Mrs. Rosenberg is also
Chief Executive Officer, President and a
director of Equity Financial and Management
Company and its parent successor Equity Group
Investments, Inc., a privately owned and
affiliated investment and management company.
She is also a director, Vice President and
Assistant Secretary of Great American
Management and Investment, Inc. ("GAMI") and
of Capsure Holdings Corp., an affiliate of
GAMI, and a trustee of Equity Residential
Properties Trust, a real estate investment
trust. Mrs. Rosenberg is also a director of
American Classic Voyages Co., CFI Industries,
Inc., Eagle Industries, Inc., Itel Corporation,
Revco D.S., Inc. and The Vigoro Corporation.
Mrs. Rosenberg was a Vice President of Madison
Management Group, Inc., which filed a petition
under the federal bankrukptcy laws on November
8, 1991. First Capital Benefits Administrators,
Inc., a wholly owned indirect subsidiary of
GAMI, also filed a federal bankruptcy petition
on January 3, 1995.
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.
BOARD OF DIRECTORS, ITS
COMMITTEES, MEETINGS AND FUNCTIONS
During the year ended December 31, 1994, the Board of Directors held four
regularly scheduled meetings. Each Director attended or participated in at
least 75% of the meetings of the Board of Directors and all Committees on
which he or she served in 1994, with the exception of Messrs. 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.
In 1994, the Compensation Committee consisted 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 1994. In 1995, the Compensation
Committee will consist of three Directors, Messrs. Schulte, Dammeyer and Handy.
In 1994, the Audit Committee consisted 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 one meeting during 1994.
In 1995, the Audit Committee will consist of three Directors, Messrs. Schulte
and Dammeyer and Mrs. Rosenberg.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Principal Shareholders and Management
The following table sets forth, as of April 10, 1995, 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 and 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%
Management
John W. Alexander 28,000(4) *
Rod F. Dammeyer 28,000(5) *
F. Philip Handy 38,000(6) *
Marc Lasry 18,000(4) *
Robert L. Lawrence 353,854(7) 1.77%
Randy Michaels 532,762(8)(9) 2.66%
Sheli Z. Rosenberg 0 *
David M. Schulte 13,349,720(10) 66.10%
Samuel Zell 13,349,720(10) 66.10%
R. Christopher Weber 376,960(9)(11) 1.90%
Jon M. Berry 226,820(9)(12) 1.15%
All executive officers
and directors as a
group (11 persons) 14,509,786(13) 68.42%
* Less than 1%
(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) Includes vested options to purchase 8,000 shares.
(5) Includes vested options to purchase 8,000 shares. Mr. Dammeyer indirectly
shares beneficial ownership of an 80% limited partnership interest in ZC
Limited. See Note (3) above.
(6) Includes vested options to purchase 8,000 shares. Mr. Handy indirectly
shares beneficial ownership of an 80% limited partnership interest in ZC
Limited. See Note (3) above.
(7) Includes vested options to purchase 348,655 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.
(8) Includes 126,952 shares issuable pursuant to warrants and vested options
to purchase 302,720 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 (9) below. Also includes
15 shares and 58 warrants owned by Mr. Michaels' wife, as to which Mr.
Michaels disclaims beneficial ownership. 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".
(9) Includes 221,165 shares (including 120,756 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
221,165 shares, 8,455 shares (including 5,022 shares issuable pursuant to
warrants) are beneficially owned by the named executives.
(10) 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.
(11) Includes 120,820 shares issuable pursuant to warrants and vested options
to purchase 155,715 shares. The number of shares indicated includes shares and
warrant shares held as co-trustee under the Retirement Plan. See Note (9)
above.
(12) Includes 120,959 shares issuable pursuant to warrants and vested options
to purchase 5,400 shares. The number of shares indicated includes shares and
warrant shares held as co-trustee under the Retirement Plan. See Note (9)
above.
(13) Includes 639,136 shares issuable pursuant to warrants, vested options to
purchase 844,490 shares and 221,165 shares (including 120,756 shares issuable
pursuant to warrants not included in the 639,136 above) held under the
Retirement Plan.
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, 1995 which report had been due
in April, 1994, relating to the termination of his beneficial interest in
2,000 shares of the Company's Common Stock owned by his former spouse.
EXECUTIVE COMPENSATIONN
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.
<TABLE>
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 1994 $269,993 $142,000 - $ 2,250
President and Co-Chief 1993 247,116 231,000 378,400 3,418
Operating Officer 1992 237,500 - - 3,288
Robert L. Lawrence 1994 264,430 140,000 - 2,250
Co-Chief Operating Officer 1993 247,116 231,000 442,710 3,707
1992 237,500 - - -
R. Christopher Weber 1994 171,892 98,000 - 2,250
Senior Vice President, 1993 148,654 138,600 200,000 2,230
Chief Financial Officer 1992 115,000 5,000 - 1,800
and Secretary
Jon M. Berry 1994 119,584 28,784 - 2,250
Senior Vice President 1993 111,648 65,000 14,800 1,564
and Treasurer 1992 109,225 - - 1,638
</TABLE>
(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.
Stock Option Grants in Last Calendar Year
The Company made no stock option grants to the named executive
officers during the year ended December 31, 1994.
Option Exercises and Year-End Option Values
The following table sets forth information concerning the fiscal
year end values of all unexercised stock options to the named executive
officers as of December 31, 1994. The named executive officers exercised no
stock options in 1994.
<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 - 227,040 151,360 $1,678,961 $1,046,654
Robert L. Lawrence 0 - 254,601 188,109 1,879,605 1,300,774
R. Christopher Weber 0 - 111,429 88,571 821,553 612,469
Jon M. Berry 0 - 8,880 5,920 65,668 40,937
</TABLE>
(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 $13.25 per share, the last reported sale price of the
Common Stock on the Nasdaq National Market on December 31, 1994, and the
exercise price of the option as of such date, multiplied by the number of
shares subject to options.
Compensation Committee Report
The report of the 1994 Compensation Committee with respect to 1994
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 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 indices 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.
The Compensation Committee applied the above considerations in determining
the 1994 compensation for the Company's Co-Chief Operating Officers, Messrs.
Michaels and Lawrence (the "COOs"). In March, 1994, the Compensation Committee
established the base salary levels for the COOs and the Company's other
executive officers. Consistent with the Committee's policy of establishing
competitive salary levels, each COO received approximately an average $20,000
salary increase for 1994. The Compensation Committee also established 1994
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 1994. 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 1994 performance targets by a substantial
margin. The Compensation Committee rewarded the COOs accordingly by granting
substantial bonuses for 1994 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 1994 results. The Compensation
Committee awarded no stock options to executive officers in 1994 in light of
the substantial number of options granted in 1993.
Based on the Company's past compensation practices, the Committee does not
currently believe that Section 162(m) of the Internal Revenue Code regarding the
deductibility of executive compensation will adversely affect the Company's
ability to obtain a tax deduction for compensation paid to its executive
officers.
1994 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.
In January, 1993, the Company consummated a complete recapitalization and
restructuring of its capital structure, bank debt, subordinated debt and other
claims and interests (the "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 two 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.
CUMULATIVE SHAREHOLDER RETURN COMPARISON
[A paper copy of the performance graph is being submitted supplementally to the
Company's Branch Chief in the Division of Corporation Finance as required by
Rule 304(d) of Regulation S-T. The data as presented in such graph is set forth
below.]
Jacor Communications, Inc.
................. Nasdaq Total Return Index (US)
----------------- Nasdaq Telecommunications Stock Index
=====================================================================
January 11, December 31, December 31,
1993 1993 1994
Jacor Communications, Inc. $100 $244 $225
Nasdaq Total Return Index (US) 100 114 112
Nasdaq Telecommunications Stocks Index 100 154 128
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 director's annual fee.
In December, 1994, the Company granted nonqualified stock options to purchase up
to 5,000 shares of the Company's Common Stock to each of Messrs. Alexander,
Dammeyer, Handy and Lasry and to Mrs. Rosenberg at a minimum exercise price of
$12.75 per share. These options are exercisable for ten years from the grant
date and vest 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 $12.75 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.
Compensation Committee Interlocks and Insider Participation
In 1994, 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" 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"
is 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).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 1, 1994, a subsidiary of the Company and a corporation
wholly owned by Randy Michaels, the President of the Company, formed a limited
partnership (the "Partnership") in a transaction whereby the Partnership now
owns all of the stock of Critical Mass Media,Inc. ("CMM") a marketing research
and radio consulting business. 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 on the Company
and its business and the Company's subsidiary is now the sole manager of the
Partnership's business.
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
Company, 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 Company or Zell/Chilmark fails to have its designees constitute at least a
majority of the members of the Company'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.
In 1994, the Company entered into a real estate lease for new office space
for its Atlanta operations from an affiliate of Zell/Chilmark. The annual
rental rate will be approximately $330,000. The Company believes that the
terms of such lease were negotiated at arm's length and were competitive with
prevailing market rates for similar space in the Atlanta market. During 1994,
the Company also paid legal fees to the law firm of Rosenberg & Liebentritt,
P.C., of which firm Mrs. Rosenberg, a director of the Company, is President
and a member.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Coopers & Lybrand L.L.P. (the
"Auditors") was engaged by the Company to audit the Company's consolidated
financial statements for the year ended December 31, 1994. 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 1995.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Shareholders may submit proposals to be voted on at the 1996 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 1996 Annual Meeting. In order for a Shareholder
proposal to be included in the proxy statement and form of proxy for the 1996
Annual Meeting of Shareholders, the proposal must be received at the Company's
principal executive offices not later than December 1, 1995 and must otherwise
comply with applicable requirements established by the Securities and Exchange
Commission.
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 14, 1995
Annex 1
JACOR COMMUNICATIONS, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of the Plan. This 1995 Employee Stock Purchase Plan (the
"Plan") is intended as an incentive and to encourage stock ownership by all
eligible employees of Jacor Communications, Inc., an Ohio corporation (the
"Company") and its Subsidiaries, so that they may share in the fortunes of the
Company by acquiring or increasing their proprietary interest in the Company.
The Plan is designed to encourage eligible employees to remain in the employ of
the Company. It is intended that options issued pursuant to this Plan shall
constitute options issued pursuant to an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Definitions.
2.1 "Agent" shall mean the stock transfer agent for the Common Stock.
2.2 "Base Pay" means regular straight time earnings or draw, but
excludes compensation for overtime, commissions, bonuses, amounts paid as
reimbursement of expenses and other additional compensation; provided, however
Base Pay for account executives means sales commissions for the most recent
calendar year.
2.3 "Common Stock" means the Company's Common Stock, no par value.
2.4 "Fair Market Value" means the closing price for the Common Stock
on a national stock exchange or, if the stock is not traded on an exchange, the
last sale price for the Common Stock as reported on the National Association of
Securities Dealers Automated Quotation System.
2.5 "Investment Account" shall mean the separate account for each
participating employee reflecting the number of shares of Common Stock purchased
under the terms of the Plan that have not been withdrawn by the employee.
2.6 "Offering Date" means the commencement date of the offering if
such date is a regular business day or the first business day following such
commencement date. A different date may be set by resolution of the Board of
Directors of the Company (the "Board").
2.7 "Parent" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company if each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
2.8 "Payroll Deduction Account" shall mean the funds accumulated with
respect to an individual employee as a result of deductions from his or her
paycheck for the purpose of purchasing stock under this Plan. The funds
allocated to an employee's Payroll Deduction Account shall remain the property
of the respective employee at all times during each offering.
2.9 "Plan Year" means the calendar year.
2.10 "Subsidiary" or "Subsidiaries" means any corporation or
corporations other than the Company in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
3. Employees Eligible to Participate. All employees of the Company
and its Subsidiaries as may be designated for such purpose from time to time by
the Plan Administrator shall be eligible to participate in the Plan, provided
each of such employees:
(a) is employed on the first day of each applicable Plan Year and has
timely completed an Enrollment Agreement described in Section 8 for that Plan
Year; and
(b) does not own, immediately after the right to purchase Shares under
the Plan is granted, stock possessing Five Percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or a
Subsidiary. In determining stock ownership for purposes of the preceding
sentence, the rules of Section 424(d) of the Code shall apply and stock which
the employee may purchase under outstanding options shall be treated as stock
owned by the employee.
4. Offerings. The first offering under this Plan shall commence on
January 1, 1995 and terminate on December 31, 1995. Thereafter, offerings shall
commence on January 1 and terminate on December 31 of the following year until
the Plan is terminated by the Board or no additional shares of Common Stock of
the Company are available for purchase under the Plan.
5. Price. The purchase price per share shall be the lesser of (1)
85% of the Fair Market Value of the Common Stock on the Offering Date; or (2)
85% of the Fair Market Value of the Common Stock on the last business day of
the offering.
6. Stock Subject to the Plan. The stock subject to the options
shall be shares of the Company's authorized but unissued Common Stock or shares
of Common Stock reacquired by the Company, including shares purchased in the
open market. The aggregate number of shares which may be issued pursuant to
the Plan is 200,000, subject to increase or decrease by reason of stock split-
ups, reclassifications, stock dividends, changes in par value and the like.
7. Changes in Capital Structure.
7.1 In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation, by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares, or
dividend payable in shares, appropriate adjustment shall be made by the Board in
the number or kind of shares as to which an option granted under this Plan shall
be exercisable, to the end that the participant's proportionate interest shall
be maintained as before the occurrence of such event. Any such adjustment made
by the Board shall be conclusive.
7.2 If the Company is not the surviving or resulting corporation in
any reorganization, merger, consolidation or recapitalization, each outstanding
option shall be assumed by the surviving or resulting corporation and each
option shall continue in full force and effect, and shall apply to the same
number and class of securities of the surviving corporation as a holder of the
number of shares of Common Stock subject to the option would be entitled under
the terms of the reorganization, merger, consolidation or recapitalization.
8. Participation. An eligible employee may become a participant by
completing, signing and filing an enrollment agreement ("Enrollment Agreement")
and any other necessary papers with the Company at least ten days prior to the
commencement of the particular offering in which he or she wishes to
participate. Payroll deductions for a participant shall commence on the
Offering Date and shall end on the termination date of such offering unless
earlier terminated by the employee as provided in Section 14. Participation
in one offering under the Plan shall neither limit, or require, participation
in any other offering.
9. Payroll Deductions.
9.1 At the time a participant files his or her Enrollment Agreement,
he or she shall elect to have deductions made from his or her pay at such
regular intervals as may be determined by the Committee during the time he or
she is a participant in an offering at not less than $10 or more than 10% of
his or her Base Pay.
9.2 All payroll deductions made for a participant shall be credited to
his or her Payroll Deduction Account under the Plan. A participant may not make
any separate cash payment into such Payroll Deduction Account nor may payment
for shares be made other than by payroll deduction.
9.3 A participant may discontinue his or her payroll deductions or
participation in the Plan as provided in Section 14, but no other change can be
made during an offering and, specifically, except as provided in Section 14, a
participant may not alter the rate of his or her payroll deductions for that
offering.
10. Granting of Option.
10.1 On the Offering Date, this Plan shall be deemed to have granted to
the participant an option for as many full shares as he or she will be able to
purchase with the payroll deductions credited to his or her Payroll Deduction
Account during his or her participation in that offering; provided that the
maximum number of shares that a participant may purchase under an offering shall
be the participant's Base Pay on the Offering Date divided by the Fair Market
Value of the Common Stock on that Offering Date.
10.2 Notwithstanding the foregoing, no employee shall be granted an
option which permits his or her rights to purchase Common Stock under the Plan
and any similar employee stock purchase plans of the Company and, if applicable,
a Subsidiary and, if applicable, a Parent to accrue at a rate which exceeds
$25,000 of Fair Market Value of such stock (determined at the time such option
is granted) for each calendar year which such option is outstanding at any time.
The purposes of the limitation in the preceding sentence is to comply with
Section 423(b)(8) of the Code.
10.3 If the total number of shares for which options are to be
granted on any date in accordance with Paragraph 10.1 exceeds the number of
shares then available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Company shall make
a pro rata allocation of the shares remaining available in as nearly a uniform
manner as shall be practical and as it shall determine to be equitable.
11. Exercise of Option. Each employee who continues to be a
participant in an offering on the last business day of that offering shall be
deemed to have exercised his or her option on such date and shall be deemed to
have purchased from the Company such number of full shares of Common Stock
(subject to the limitations under Section 10) reserved for the purpose of the
Plan as his or her accumulated payroll deductions on such date will pay for at
the purchase price. All such shares purchased shall be credited to the
participant's Investment Account. The Agent shall hold in its name or in the
name of its nominee all certificates for shares purchased until shares are
withdrawn by the participant under Section 13.
12. Employee's Rights as a Stockholder.
12.1 No participating employee shall have any right as a stockholder
with respect to any shares under the Plan until the shares have been purchased
in accordance with Section 11 above and the stock certificate has actually been
issued.
12.2 All cash dividends paid with respect to shares of Common Stock
in a participant's Investment Account shall, unless otherwise directed by the
Committee, be used to purchase additional shares of Common Stock on the next
date shares are purchased pursuant to Section 11, subject to the limitations in
Section 10. Such shares shall be added to the participant's Investment Account.
12.3 Each participant shall be entitled to direct the Agent as to the
voting of any shares of Common Stock held in the participant's Investment
Account.
13. Withdrawal from Investment Account.
13.1 A participant shall have the right to withdraw a certificate for
all or a portion of the Common Stock credited to his or her Investment Account
by giving notice to the Company; provided such requests may not be made more
frequently than once per calendar quarter.
13.2 Each certificate withdrawn by a participant may be registered
only in the name of the participant, or if the participant so directs, in the
names of the participant and one other person, as joint tenants with right of
survivorship, tenants in common, or as community property, to the extent and in
the manner permitted by applicable law.
14. Withdrawal from Payroll Deduction Account.
14.1 An employee may withdraw from the Plan, in whole but not in part,
at any time prior to the last business day of each offering by delivering a
withdrawal notice ("Withdrawal Notice") to the Company, in which event the
Company will refund the entire balance of his or her Payroll Deduction Account
as soon as practicable thereafter.
14.2 To re-enter the Plan, an employee who has previously withdrawn
must file a new Enrollment Agreement in accordance with Section 8. His or her
re-entry into the Plan cannot, however, become effective before the beginning of
the next offering following his or her withdrawal.
14.3 An employee may elect to discontinue his or her payroll
deductions during the course of a particular offering, at any time prior to the
last business day preceding the final pay day during such offering by
delivering an election to discontinue deductions to the Company, and such
election shall not constitute a withdrawal for the purposes of this Section
14. In the event that an employee elects to discontinue his or her payroll
deductions pursuant to this Paragraph 14.3, the employee shall remain a
participant in such offering and shall be entitled to purchase from the
Company such number of full shares of Common Stock as set forth in and in
accordance with Section 11 of the Plan.
15. Carryover of Payroll Deduction Account. The Company shall carry
over the balance of a participant's Payroll Deduction Account to the next
offering unless the participant does not enroll in the next offering, in which
event the balance of the participant's Payroll Deduction Account shall be
refunded to the participant. Upon termination of the Plan, the balance of each
participant's Payroll Deduction Account shall be returned to the participant.
16. Interest. No interest will be paid or allowed on any money in
the Payroll Deduction Accounts of participating employees.
17. Rights Not Transferable. No participant shall be permitted to
sell, assign, transfer, pledge, or otherwise dispose of or encumber either the
payroll deductions credited to his or her Payroll Deduction Account, Common
Stock credited to his or her Investment Account, or any rights with regard to
the exercise of an option or to receive shares under the Plan other than by
will or the laws of descent and distribution, and such right and interest shall
not be liable for, or subject to, the debts, contracts, or liabilities of the
employee. If any such action is taken by the participant, or any claim is
asserted by any other party in respect of such right and interest whether by
garnishment, levy, attachment or otherwise, such action or claim will be
treated as an election to withdraw in accordance with Sections 13 or 14,
whichever is applicable.
18. Termination of Employee's Rights. An employee's rights under the
Plan will terminate when he or she ceases to be an employee because of
resignation, layoff, or discharge. A Withdrawal Notice will be considered as
having been received from the employee on the day his or her employment ceases,
and all payroll deductions not used will be refunded.
If an employee's employment shall be terminated by reason of
retirement, death, or disability prior to the end of the current offering, he or
she (or his or her designated beneficiary, in the event of his or her death, or
if none, his or her legal representative) shall have the right, within 90 days
thereafter, to elect to have the balance of his or her Payroll Deduction Account
either paid to him or her in cash or applied at the end of the current offering
toward the purchase of Common Stock.
19. Administration of the Plan. The Plan shall be administered by
the Board, if each director is a "disinterested person" (as defined below).
If all directors are not "disinterested persons," the Plan shall be
administered by a committee consisting of two or more members of the Board,
each of whom shall be a "disinterested person," which committee (the
"Committee") may be an executive, compensation or other committee, including
a separate committee especially created for this purpose. The Committee shall
have such of the powers and authority vested in the Board hereunder as the
Board may delegate to it (including the power and authority to interpret any
provision of this Plan or of any option). The members of such Committee shall
serve at the discretion of the Board. A majority of the members of the
Committee shall constitute a quorum, and all actions of the Committee shall
be taken by a majority of the members present. Any action may be taken by a
written instrument signed by all of the members of the Committee and any
action so taken shall be fully effective as if it had been taken at a meeting.
The Board and/or the Committee, if one has been established by the Board, shall
be referred to in this Plan as the "Plan Administrator." "Disinterested
person" shall be defined by reference to the rules and regulations
promulgated under Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Act"). The Human Resources Committee shall be the Plan
Administrator until a different Plan Administrator is established by the Board.
Subject to the provisions of this Plan, and with a view to effecting
its purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (a) designate from time to time the Subsidiaries whose employees
will be eligible to participate in the Plan; (b) construe and interpret this
Plan; (c) define the terms used in this Plan; (d) prescribe, amend and rescind
rules and regulations relating to this Plan; (e) correct any defect, supply any
omission or reconcile any inconsistency in this Plan; (f) determine all other
terms and conditions of options; and (g) make all other determinations necessary
or advisable for the administration of this Plan. All decisions, determinations
and interpretations made by the Plan Administrator shall be binding and
conclusive on all participants in this Plan and on their legal representatives,
heirs and beneficiaries.
20. Termination and Amendments to Plan. The Plan may be terminated
at any time by the Board. The Plan will terminate in any case on the date on
which all or substantially all of the unissued shares of Common Stock reserved
for the purpose of the Plan have been purchased. Upon termination of the Plan,
all payroll deductions not used to purchase Common Stock will be refunded.
The Board also reserves the right to amend the Plan from time to time
in any respects, provided, however, that no amendment shall be effective without
prior approval of the stockholders (a) which would, except as provided in
Section 6 and 7, increase the aggregate number of shares of Common Stock to be
issued under the Plan, (b) which would, except as provided in Section 3, change
the class of employees eligible to receive options under the Plan or (c) if such
amendment requires stockholder approval for any other reason in order for the
Plan to be eligible or continue to qualify for the benefits conferred by
Securities and Exchange Commission Rule 16b-3, as amended from time to time, or
any successor rule or regulatory requirements.
21. Effective Date. The Plan shall become effective on January 1,
1995 provided that it has been adopted by the Board and provided further that
within 12 months after the date the Plan is adopted by the Board, the Plan is
approved and adopted by the holders of a majority of the outstanding shares of
stock of the Company entitled to vote thereon. If the Plan shall not be
subsequently approved and adopted by the shareholders of the Company as
specified herein, the Plan shall be null and void and all funds in any Payroll
Deduction Account shall be returned to the participants.
Annex 2
Proposed Amendment to the
1993 Stock Option Plan
RESOLVED, that the Jacor Communications, Inc. 1993 Stock Option Plan
paragraph 4 is hereby amended to read in its entirety as follows:
4. Shares Subject to Plan. Subject to adjustments provided in paragraph
13 hereof, the number of shares of Common Stock which may be delivered
pursuant to the exercise of ISOs granted under the Plan shall be 2,769,218
shares. The aggregate number of shares of Common Stock which may be delivered
pursuant to the exercise of Options granted under the Plan shall not exceed
2,769,218 shares. Such shares may consist, either in whole or
in part, of the Company's authorized and issued Common Stock reacquired by the
Company and held in its Treasury, as may from time to time be determined by the
Board. If an Option granted under the Plan is surrendered, expires unexercised
or for any reason ceases to be exercisable in whole or in part, the shares of
Common Stock issuable pursuant to such Option, but as to which such Option has
not been exercised, shall again be available for the purposes of the Plan.
Annex 3
Proposed Amendment to the Company's
Amended and Restated Articles of Incorporation
RESOLVED, that the Company's Amended and Restated Articles of
Incorporation are hereby amended to renumber existing Article Fifth as a new
Article Sixth and to add the following new Article Fifth in its entirety to
read as follows:
FIFTH: When authorized by the affirmative vote of a majority of the members of
the Board of Directors of the Corporation, without the action or approval of the
shareholders of the Corporation, the Corporation may redeem, purchase or
contract to purchase, at any time and from time to time, shares of any class of
stock issued by the Corporation for such prices and upon and subject to such
terms and conditions as the Corporation's Board of Directors may determine.
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 17, 1995 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 Terrace Hotel, 15
West Sixth Street, Cincinnati, Ohio on May 17, 1995 at 10:30 a.m., local time,
and at any adjournment thereof.
1. Proposal to adopt the
Jacor Communications,
Inc. 1995 Employee
Stock Purchase Plan
providing for the sale of
shares of the Company's
Common Stock to Company
employees.
2. Proposal to amend the Jacor
Communications, Inc. 1993
Stock Option Plan increasing
the number of shares reserved
for issuance under the Plan. (CHANGE OF ADDRESS)
3. Proposal to amend the
Company's Amended and
Restated Articles of
Incorporation to clarify
the Company's ability
to purchase and redeem its
own shares.
(If you have written in the
4. 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,
Sheli Z. Rosenberg, and
David M. Schulte.
5. 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
X Please mark your votes SHARES IN YOUR NAME
as in this example.
FOR AGAINST ABSTAIN
1. Proposal to adopt the
Jacor Communications,
Inc. 1995 Employee
Stock Purchase Plan
providing for the sale
of shares of the Company's
Common Stock to Company
employees.
2. Proposal to amend the
Jacor Communications,
Inc. 1993 Stock Option
Plan increasing the
number of shares reserved
for issuance under the
Plan.
3. Proposal to amend the
Company's Amended and
Restated Articles of
Incorporation to clarify
the Company's ability to
purchase and redeem its
own shares.
FOR WITHHELD
4. Election of Directors
(SEE REVERSE)
For, except vote withheld from the following
nominee(s):
FOR AGAINST ABSTAIN
5. 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.
