<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
JACOR COMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
JACOR COMMUNICATIONS, INC.
50 EAST RIVERCENTER BOULEVARD
12TH FLOOR
COVINGTON, KENTUCKY 41011
April 23, 1998
Dear Jacor Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Jacor Communications, Inc. to be held on Wednesday, May 20, 1998 at 10:30
a.m., local time, in the Fifth Third Bank Theatre at the Aronoff Center for the
Arts, located at the corner of East Seventh Street and Main Street, Cincinnati,
Ohio.
Business items to be acted upon at the Annual Meeting are the election of
ten directors to serve for a one-year term, the approval of two amendments to
the Jacor Communications, Inc. 1997 Long-Term Incentive Stock Plan and the
transaction of any other business properly brought before the meeting.
Additionally, we will report on the progress of Jacor Communications, Inc., and
stockholders will have the opportunity to present questions of general interest.
We encourage you to read the accompanying Proxy Statement carefully and
complete, sign and return your Proxy in the postage prepaid envelope provided,
even if you plan to attend the meeting. Returning your proxy to us will not
prevent you from voting in person at the meeting, or from revoking your Proxy
and changing your vote at the meeting, if you are present and intend to do so.
The directors and officers of Jacor Communications, Inc. appreciate your
continuing interest in the business of the Company. We hope you can join us at
the Annual Meeting.
Sincerely,
/s/ Samuel Zell
Samuel Zell
CHAIRMAN OF THE BOARD
<PAGE>
JACOR COMMUNICATIONS, INC.
50 EAST RIVERCENTER BOULEVARD, 12TH FLOOR
COVINGTON, KENTUCKY 41011
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
------------------------
The Annual Meeting of Stockholders of Jacor Communications, Inc., a Delaware
corporation (the "Company"), will be held on Wednesday, May 20, 1998 at 10:30
a.m., local time, in the Fifth Third Bank Theatre at the Aronoff Center for the
Arts, located at the corner of East Seventh Street and Main Street, Cincinnati,
Ohio for the purposes of considering and acting on the following proposals:
1. A proposal to elect ten (10) directors to serve until the next annual
meeting of stockholders and until their respective successors are elected
and qualified;
2. A proposal to amend the Jacor Communications, Inc. 1997 Long-Term
Incentive Stock Plan (the "LTIP Plan") to increase the number of shares
of the Company's common stock eligible for issuance under the LTIP Plan
from 1,800,000 shares to 4,800,000 shares, including an increase in the
number of incentive stock options issuable under the LTIP Plan from
500,000 shares to 1,350,000 shares. A copy of the proposed amendment to
the LTIP Plan is attached as Annex 1 to the Proxy Statement.
3. A proposal to amend the LTIP Plan to add a new provision to limit the
number of shares of restricted stock that may be granted annually to any
participant under the LTIP Plan to 100,000 shares. A copy of the proposed
amendment is attached as Annex 2 to the Proxy Statement.
4. To transact such other business as may properly be presented at 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 3, 1998 are entitled to notice of and to vote at the Annual Meeting.
Enclosed herewith is a Proxy Statement, Proxy, and an Annual Report for the
year ended December 31, 1997.
By Order of the Board of Directors:
/s/ Paul F. Solomon
Paul F. Solomon
SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
APRIL 23, 1998
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. YOUR COOPERATION IN SIGNING AND PROMPTLY RETURNING YOUR PROXY IS GREATLY
APPRECIATED.
<PAGE>
JACOR COMMUNICATIONS, INC.
50 EAST RIVERCENTER BOULEVARD, 12TH FLOOR
COVINGTON, KENTUCKY 41011
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1998
The Board of Directors of Jacor Communications, Inc. ("Jacor" or the
"Company") is soliciting the enclosed Proxy from stockholders for use at the
Annual Meeting of Stockholders to be held on May 20, 1998, and at any
adjournments thereof. This Proxy Statement and the accompanying Proxy are first
being mailed to stockholders on or about April 23, 1998. The record date for
purposes of determining those stockholders entitled to notice of and to vote at
the Annual Meeting has been fixed by the Board of Directors as April 3, 1998
(the "Record Date").
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 the proposals 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 stockholder 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 Jacor, without special compensation therefor.
The Company may engage a proxy solicitation firm to assist in soliciting proxies
for the Annual Meeting, but has not engaged any such third party as of the date
hereof. 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, $.01 par value ("Jacor Common
Stock").
The Annual Report for the year ended December 31, 1997, including financial
statements, is being mailed with this Proxy Statement.
As of April 3, 1998, there were outstanding 50,885,220 shares of Jacor
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. A
majority of the outstanding shares entitled to vote at the Annual Meeting will
constitute a quorum.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of members of the Board of Directors of the Company is currently
fixed at ten pursuant to the Company's Bylaws and resolutions adopted by the
Board of Directors. At the Annual Meeting, ten directors will be elected and
will hold office until the next annual meeting of stockholders and until their
respective successors are duly elected and qualified. The Board of Directors has
nominated the ten incumbent directors for election by the stockholders 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. The Board of Directors does not
know of any nominee who will be unable to stand for election or otherwise serve
as a director. If for any reason any nominee shall be unable to serve, which is
not now contemplated, the shares represented by proxy will be voted for such
substitute nominee as the Board of Directors recommends, unless an instruction
to the contrary is indicated on the proxy card.
Delaware law, under which the Company is incorporated, does not require a
minimum number of votes for the election of a director. The Company's Bylaws,
however, provide that directors shall be elected by a plurality of votes cast by
the holders of Jacor Common Stock, meaning that the individuals who receive the
largest number of votes cast are elected, up to the maximum number of number of
directors to be elected at the meeting. 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.
Below please find, 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 Jacor. Each of the nominees is currently a director of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION
OF THE TEN NOMINEES FOR DIRECTOR.
NOMINEES FOR DIRECTOR
JOHN W. ALEXANDER (Age 51)
Mr. Alexander has been President of Mallard Creek Capital Partners, Inc.,
which is primarily an investment company with interests in real estate and
development companies, since February 1994. Mr. Alexander has also been a
partner of Meringoff Equities, a real estate and investment company, since 1987.
Mr. Alexander has been a director of Jacor since 1993. Mr. Alexander is also a
trustee of Equity Residential Properties Trust, a real estate investment trust.
PETER C. B. BYNOE (Age 47)
Mr. Bynoe has been a partner in the law firm of Rudnick & Wolfe since 1995.
Prior to joining Rudnick & Wolfe, Mr. Bynoe founded Telemat Ltd., a business
consulting firm, in 1982. From March 1988 to June 1992, Mr. Bynoe served as
Executive Director of the Illinois Sports Facilities Authority, a joint venture
of the City of Chicago and the State of Illinois created to develop the new
Comiskey Park for the Chicago White Sox baseball club. From November 1989 to
August 1992, he was Managing General Partner of the National Basketball
Association's Denver Nuggets. Mr. Bynoe has been a director of Jacor since March
1997. He is also a director of Uniroyal Technology Corporation.
2
<PAGE>
ROD F. DAMMEYER (Age 57)
Mr. Dammeyer is a Managing Director of EGI Corporate Investments, a
privately owned investment and management company. Mr. Dammeyer is also Vice
Chairman and a director of Anixter International, Inc., a Chicago-based provider
of integrated networking and cable solutions, for which he also served as Chief
Executive Officer and President until February 1998. Mr. Dammeyer has been a
director of Jacor since 1993. He is also a director of Antec Corporation, CNA
Surety Corp., IMC Global, Inc., Lukens Inc., Metal Management, Inc., Stericycle,
Inc., TeleTech Holdings, Inc. and Transmedia Network, Inc. Mr. Dammeyer is also
a trustee of several Van Kampen American Capital, Inc. closed-end funds and
trusts.
F. PHILIP HANDY (Age 53)
Mr. Handy is a Managing Director of EGI Corporate Investments, a privately
owned investment and management company. Prior to joining EGI Corporate
Investments, Mr. Handy was a partner of Winter Park Capital Company, a private
investment firm, since 1980. He is also acting Chief Executive Officer and a
director of Chart House Enterprises, Inc. Mr. Handy has been a director of Jacor
since 1993. Mr. Handy is also a director of Anixter International, Inc., Q-Tel,
S.A. de C.V., and Banca Quadrum, S.A. (formerly Servicios Financieros Quadrum,
S.A.).
MARC LASRY (Age 38)
Mr. Lasry has been an Executive Vice President of Amroc 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. Mr. Lasry has been a director of Jacor since 1993.
ROBERT L. LAWRENCE (Age 44)
Mr. Lawrence has been President and Chief Operating Officer of the Company
since November 1996. Mr. Lawrence also served as Co-Chief Operating Officer from
May 1990 to November 1996. He has been an officer of Jacor since 1986, and a
director of Jacor since 1993.
RANDY MICHAELS (Age 45)
Mr. Michaels has been Chief Executive Officer of the Company since November
1996. Mr. Michaels, whose legal name is Benjamin L. Homel, also served as
President from June 1993 to November 1996 and Co-Chief Operating Officer from
May 1990 to November 1996. He has served as an officer of Jacor since 1986, and
has been a director of Jacor since 1993.
SHELI Z. ROSENBERG (Age 56)
Mrs. Rosenberg has been Vice Chairman of the Board of the Company since
April 1997, and served as Board Chair from February 1996 to April 1997. Since
1994 Mrs. Rosenberg has been Chief Executive Officer, President and a director
of Equity Group Investments, Inc., a privately owned investment management
company. She was a principal of the law firm of Rosenberg & Liebentritt, P.C.,
from 1980 until 1997, and was Chairman of the firm until September 1996. Mrs.
Rosenberg has been a director of Jacor since 1994. Mrs. Rosenberg is also a
director of American Classic Voyages Co., Anixter International, Inc., CVS
Corporation, Illinova Inc. and its subsidiary Illinois Power Company. Mrs.
Rosenberg is also a trustee for the following boards: Equity Residential
Properties Trust, Equity Office Properties Trust and Capital Trust. Mrs.
Rosenberg was a vice president of First Capital Benefits Administrators, Inc.,
which filed a petition under the federal bankruptcy laws on January 3, 1995,
which resulted in its liquidation on November 15, 1995.
3
<PAGE>
MARY AGNES WILDEROTTER (Age 43)
Ms. Wilderotter has been President and Chief Executive Officer of Wink
Communications, Inc., a leading interactive media company, since 1997. Ms.
Wilderotter was the Executive Vice President of National Operations for AT&T
Wireless Services, Inc. and Chief Executive Officer of AT&T's Aviation
Communications Division, from 1995 to 1997. She was also Senior Vice President
of McCaw Cellular Communications, Inc. and Regional President of its
California/Nevada/Hawaii Region from 1991 to 1995. Ms. Wilderotter served 12
years at Cable Data/US Computer Services, Inc., including the role of Senior
Vice President and General Manager from 1985 to 1991. Ms. Wilderotter has been a
director of Jacor since March 1997. She is also a director of Airborne Express,
Gaylord Entertainment and Electric Lightwave, Inc.
SAMUEL ZELL (Age 56)
Mr. Zell has been Chairman of the Board of Directors of the Company since
April 1997. He is also the Chairman of the Board of Equity Group Investments,
Inc., a privately owned investment management company, for which he also served
as President from 1990 to 1994. Mr. Zell has been Chairman of the Board since
1995, and Chief Executive Officer from 1995 to 1996, of Manufactured Home
Communities, Inc. and was President of Great American Management and Investment,
Inc., a diversified manufacturing company, from 1990 to 1994. Mr. Zell is also
Chairman of the Board of Directors of American Classic Voyages Co. and Anixter
International Inc. He is also a director of Chart House Enterprises, Inc., Fred
Meyer, Inc., Ramco Energy plc and TeleTech Holdings, Inc. Mr. Zell is Chairman
of the Trustees of Equity Residential Properties Trust, Equity Office Properties
Trust and Capital Trust. Mr. Zell was a director of Jacor from January 1993 to
May 1995.
There are no family relationships among any of the above-named nominees for
directors nor among any of the nominees and any executive officers of the
Company.
THE BOARD OF DIRECTORS, ITS COMMITTEES,
MEETINGS AND FUNCTIONS
During the year ended December 31, 1997, the Board of Directors held five
regularly scheduled meetings and eight 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 or she served in 1997. Standing committees of the
Board of Directors include the Compensation Committee, the LTIP/STIP Committee
and the Audit Committee. The Board of Directors does not have a Nominating
Committee.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive in lieu of an annual cash
retainer, on July 1 of each year, a number of common stock units equal in value
to $50,000, based upon the fair market value of an equal number of shares of
Jacor Common Stock on the date of grant. In 1997, Jacor's eight non-employee
directors were each awarded 1,345 stock units pursuant to the Company's
Non-Employee Directors Stock Plan in lieu of their annual cash retainer. Such
units are convertible into Jacor Common Stock at the earlier of the time a
director ceases his or her service on the Board and/or other conditions
established by the director prior to the award date. Prior to May 1997,
non-employee directors of the Company also received an additional $1,000 for
each Board of Directors meeting attended in person or by telephone. Directors
are reimbursed for all reasonable expenses incurred in connection with their
services.
In 1997, pursuant to the Company's 1997 Non-Employee Directors Stock Plan,
each of the Company's eight non-employee directors were awarded 5,000
non-qualified stock options. These options vest 25% upon grant and 25% annually
thereafter and have an exercise price equal to the fair market value of a share
of Jacor Common Stock on the grant date. Messrs. Alexander, Bynoe, Handy, Lasry
and Zell and Mrs. Rosenberg and Ms. Wilderotter also participated in the
Company's 1997 Non-Employee Director
4
<PAGE>
Stock Purchase Plan in 1997. Under that plan, each of Messrs. Alexander, Bynoe,
Handy, Lasry and Zell and Mrs. Rosenberg purchased 3,256 shares of Jacor Common
Stock for $100,000 and Ms. Wilderotter purchased 296 shares of Jacor Common
Stock for $10,000. All shares were purchased at a per share price equal to 85%
of the market value of Jacor Common Stock on the first day of the applicable
purchase period.
Mr. Michaels and Mr. Lawrence receive no additional compensation for serving
on the Board of Directors.
COMPENSATION COMMITTEE
In 1997, the Compensation Committee consisted of three directors, Messrs.
Handy and Dammeyer and Mrs. Rosenberg. In 1997, the Compensation Committee
established base salaries for all executive officers and key employees, and
administered the employee compensation plans of the Company other than the 1997
Long-Term Incentive Stock Plan (the "LTIP Plan"), the 1997 Short-Term Incentive
Stock Plan (the "STIP Plan") and the Amended and Restated 1995 Employee Stock
Purchase Plan. The Compensation Committee held three meetings during 1997. In
1998, the Compensation Committee will consist of three directors, Messrs. Handy
and Dammeyer and Mrs. Rosenberg.
LTIP/STIP COMMITTEE
The Company has taken steps in an effort to ensure that all of the
compensation paid to its executive officers will be deductible under Section
162(m) of the Internal Revenue Code, as amended ("Section 162(m)"), for the
foreseeable future, including the establishment of a committee made up entirely
of "outside directors," as required under Section 162(m) (the "LTIP/STIP
Committee"), which administers the LTIP Plan and the STIP Plan. For 1997, Mr.
Bynoe and Ms. Wilderotter served as the two outside directors comprising the
LTIP/STIP Committee, made all grants under the LTIP Plan and established all
performance goals for grants made under both the LTIP Plan and the STIP Plan. In
addition, because the LTIP/STIP Committee is also made up of "non-employee
directors," as that term is defined and used under Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended ("the Exchange
Act"), the LTIP/STIP Committee also administers the Amended and Restated 1995
Employee Stock Purchase Plan. The LTIP/STIP Committee held two meetings during
1997. In 1998, the LTIP/STIP Committee will consist of two directors, Mr. Bynoe
and Ms. Wilderotter.
AUDIT COMMITTEE
In 1997, the Audit Committee consisted of four directors, Messrs. Alexander,
Bynoe and Lasry and Ms. Wilderotter. 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 1997. In 1998, the Audit Committee will consist of four
directors, Messrs. Alexander, Bynoe and Lasry and Ms. Wilderotter.
5
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company, their ages, and the positions they
hold with the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------------------- --- ------------------------------------------------------------
<S> <C> <C>
Samuel Zell................................... 56 Chairman of the Board
Sheli Z. Rosenberg............................ 56 Vice Chairman of the Board
Randy Michaels................................ 45 Chief Executive Officer and Director
Robert L. Lawrence............................ 45 President, Chief Operating Officer and Director
David H. Crowl................................ 44 President/Radio Division
R. Christopher Weber.......................... 42 Senior Vice President and Chief Financial Officer
John Hogan.................................... 41 Senior Vice President
Jon M. Berry.................................. 51 Senior Vice President and Treasurer
Jerome L. Kersting............................ 48 Senior Vice President
Thomas P. Owens............................... 43 Senior Vice President--Programming
Paul F. Solomon............................... 38 Senior Vice President, General Counsel and Secretary
Martin R. Gausvik............................. 41 Vice President--Finance
Alfred Kenyon III............................. 47 Vice President--Engineering
Nicholas J. Miller............................ 45 Vice President--Marketing
William P. Suffa.............................. 40 Vice President--Strategic Development
Pamela C. Taylor.............................. 43 Vice President--Corporate Communications
</TABLE>
Executive officers are elected annually by the Board of Directors and serve
at the discretion of the Board. Information with respect to the business
experience, principal occupations during the past five years and affiliations of
the executive officers of Jacor who are not also directors is set forth below.
Information regarding Messrs. Zell, Michaels and Lawrence and Mrs. Rosenberg is
set forth above.
David H. Crowl has been President/Radio Division of the Company since
September 1996. From 1991 to September 1996, Mr. Crowl served as President/Radio
Group of Citicasters, Inc.
R. Christopher Weber has been Senior Vice President and Chief Financial
Officer of the Company since 1990, and has served as an officer of Jacor since
1986. Mr. Weber also served as Secretary of the Company from 1993 to March 1997,
and has been Assistant Secretary since March 1997.
John E. Hogan has been Senior Vice President of the Company since November
1996. From 1992 to November 1996, Mr. Hogan was Vice President and General
Manager of the Company's radio station WPCH-FM in Atlanta, Georgia.
Jon M. Berry has been Senior Vice President and Treasurer of the Company
since 1988, and has served as an officer of Jacor since 1982.
Jerome L. Kersting has been Senior Vice President of the Company since
September 1996. From January 1994 to September 1996, Mr. Kersting served as
Senior Vice President--Business Affairs of Citicasters, Inc., and from 1987 to
January 1994, Mr. Kersting served as Vice President--Business Affairs, Broadcast
Group, of Citicasters, Inc.
Thomas P. Owens has been Senior Vice President--Programming of the Company
since October 1997. From September 1996 to October 1997, Mr. Owens served as
Vice President--Programming of the Company. Mr. Owens has been an officer of a
subsidiary of the Company since 1994. From 1986 to
6
<PAGE>
1994, Mr. Owens was the Program Director of the Company's radio station WEBN-FM
in Cincinnati, Ohio.
Paul F. Solomon has been Senior Vice President and General Counsel of the
Company since February 1997, as well as Secretary since March 1997. From October
1992 to February 1997, Mr. Solomon was a partner in the Cincinnati-based law
firm of Graydon, Head & Ritchey.
Martin R. Gausvik has been Vice President--Finance since May 1997. From
September 1996 to May 1997, Mr. Gausvik served as the Company's Controller. From
October 1984 to September 1996, Mr. Gausvik was employed by Citicasters, Inc. in
various capacities in its accounting and finance department, most recently as
Controller.
Alfred S. Kenyon III has been Vice President--Engineering since November
1996. From 1991 to November 1996, Mr. Kenyon was the director of engineering for
the Company.
Nicholas J. Miller has been Vice President--Marketing of the Company since
September 1996. Mr. Miller served as Vice President--Marketing Radio & TV of
Citicasters, Inc. from 1991 to September 1996.
William P. Suffa has been Vice President--Strategic Development of the
Company since August 1996. From 1989 to August 1996, Mr. Suffa was President and
Managing Principal of Suffa and Cavell, Inc., an independent consulting firm.
Pamela C. Taylor has been Vice President--Corporate Communications of the
Company since May 1997. From 1982 to May 1997, Ms. Taylor was Director of
Investor and Financial Media Relations for The Kroger Co., the country's largest
retail food company.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 3, 1998, the number of shares
and percentage of Jacor Common Stock beneficially owned by each person who is
known to the Company to be the beneficial owner of more than 5% of Jacor's
Common Stock, by each of the Company's directors and nominees for election as
directors, by the Company's named executive officers, and by all of the
Company's executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ------------------------------------------------------------ ------------ --------
<S> <C> <C>
5% OR MORE BENEFICIAL OWNERS
Zell/Chilmark Fund L.P...................................... 13,349,720(3) 26.23%
David M. Schulte............................................ 13,349,720(4) 26.23%
FMR Corp. and related reporting persons..................... 3,780,952(5) 7.43%
Massachusetts Financial Services Company.................... 3,362,052(6) 6.61%
DIRECTORS AND EXECUTIVE OFFICERS
John W. Alexander........................................... 53,779(7) *
Peter C.B. Bynoe............................................ 8,039(8) *
Rod F. Dammeyer............................................. 13,356,503(4)(9) 26.25%
F. Philip Handy............................................. 73,879(10) *
Marc Lasry.................................................. 40,779(11) *
Robert L. Lawrence.......................................... 601,863(12) 1.17%
Randy Michaels.............................................. 795,685(13)(14) 1.55%
Sheli Z. Rosenberg.......................................... 13,872,150(4)(15) 27.22%
Mary Agnes Wilderotter...................................... 4,108(16) *
Samuel Zell................................................. 13,855,860(3)(4)(17) 27.20%
David H. Crowl.............................................. 68,355(18) *
John E. Hogan............................................... 47,147(19) *
R. Christopher Weber........................................ 528,057(14)(20) 1.03%
All executive officers and directors as a group (22
persons).................................................. 16,118,555(21) 30.53%
</TABLE>
- ------------------------
* 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 Jacor Common Stock issuable pursuant to
vested options currently exercisable granted under the Company's 1993 Stock
Option Plan, as amended, the LTIP Plan and the 1997 Non-Employee Directors
Stock Plan.
(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 600, Chicago, Illinois 60606. Zell/Chilmark is a
Delaware limited partnership controlled by Samuel Zell, Chairman of the
Board of the Company, and David M. Schulte, a former director of the
Company, as follows: the sole general partner of Zell/Chilmark is ZC
Limited Partnership ("ZC Limited"); the
8
<PAGE>
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
stockholder of ZC, Inc.; and Mr. Schulte is the sole stockholder of CZ,
Inc.
(4) All shares beneficially owned by Zell/Chilmark (See Note (3) above) are
included in the shares beneficially owned by Messrs. Zell, Schulte and
Dammeyer and Mrs. Rosenberg, who constitute all of the members of the
management committee of ZC Limited. The address of Mr. Schulte is 875 N.
Michigan Avenue, Suite 2200, Chicago, Illinois 60611. The address of
Messrs. Zell and Dammeyer and Mrs. Rosenberg 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.
(5) On February 11, 1998, FMR Corp. ("FMR"), Fidelity Management and Research
Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp., and the
affiliates of FMR Corp. set forth below, as a group, filed with the
Commission Amendment No. 1 to Schedule 13G reporting beneficial ownership
of Jacor Common Stock as of December 31, 1997. FMR reported beneficial
ownership of 3,780,952 shares of Jacor Common Stock. Fidelity reported
beneficial ownership of 3,711,226 shares of Jacor Common Stock as a result
of acting as an investment advisor to various investment companies. This
number of shares includes 251,126 shares of Jacor Common Stock resulting
from the assumed conversion of $18,724,000 principal amount of Liquid Yield
Option Notes ("LYONs") (13.412 shares of Jacor Common Stock for each $1,000
principal amount of LYONs). Edward C. Johnson 3d, Chairman of FMR Corp.,
and FMR Corp., through their control of Fidelity, each reported having the
sole power to dispose of the 3,711,226 shares owned by the various
investment funds ("Fidelity Funds"). Neither FMR Corp. nor Mr. Johnson
reported the sole power to vote or direct the voting of the shares owned
directly by the Fidelity Funds, which power reportedly resides in the
Fidelity Funds' Boards of Trustees. Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp, reported having beneficial ownership
of 69,726 shares of Jacor Common Stock as a result of its serving as
investment manager of institutional accounts. This number of shares
includes 48,726 shares of Jacor Common Stock resulting from the assumed
conversion of $3,633,000 principal amount of the LYONs. Mr. Johnson and FMR
Corp., through their control of Fidelity Management Trust Company, each
reported having the sole power to dispose of 69,726 shares, the sole power
to vote or to direct the voting of 57,923 shares, and no power to vote or
to direct the vote of 11,803 shares owned by the institutional accounts.
Members of Mr. Johnson's family and trusts for their benefit are the
predominant owners of the Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. Mr. Johnson
owns 12% and Abigail P. Johnson owns 24.5% of the aggregate outstanding
voting stock of FMR Corp. Mr. Johnson is the Chairman of FMR Corp., and
Mrs. Johnson is a director of FMR Corp. The Johnson family group and all
other Class B shareholders of FMR Corp. have entered into a shareholders'
voting agreement under which all Class B shares of FMR Corp. will be voted
in accordance with the majority vote of Class B shares. Accordingly,
members of the Johnson family may be deemed to be a controlling group with
respect to FMR Corp. under the Investment Company Act of 1940. The address
of such entities and persons is 82 Devonshire Street, Boston, Massachusetts
02109.
(6) On February 12, 1998, Massachusetts Financial Services Company ("MFS")
filed with the Commission Amendment No. 1 to Schedule 13G reporting
beneficial ownership of Jacor Common Stock as of December 31, 1997. MFS
reported having sole voting power with respect to 3,337,252 shares of Jacor
Common Stock and sole dispositive power over 3,362,052 shares of Jacor
Common Stock. In the aggregate, MFS reported beneficial ownership of
3,362,052 shares of Jacor Common Stock, which are also beneficially owned
by other non-reporting entities as well as MFS. The address of MFS is 500
Boylston Street, Boston, Massachusetts 02116-3741.
(7) Includes vested options currently exercisable to purchase 21,500 shares.
9
<PAGE>
(8) Includes vested options currently exercisable to purchase 2,500 shares.
(9) Includes vested options currently exercisable to purchase 4,500 shares. Mr.
Dammeyer indirectly shares beneficial ownership of an 80% limited
partnership interest in ZC Limited. See Note (4) above.
(10) Includes vested options currently exercisable to purchase 11,500 shares.
Of the shares indicated, 100 shares are held by Mr. Handy's spouse, as to
which Mr. Handy disclaims beneficial ownership. Also includes (a) 6,000
shares held by the Handy Family Partnership, Ltd., of which Mr. Handy is
the sole stockholder of the corporate general partner and a limited
partner and (b) 7,000 shares held by the Blaine Trust of which Mr. Handy
is the sole beneficiary and co-trustee.
(11) Includes vested options currently exercisable to purchase 1,250 shares.
(12) Includes vested options currently exercisable to purchase 592,460 shares.
Of the shares indicated, 397 shares are owned by members of Mr. Lawrence's
family.
(13) Includes vested options currently exercisable to purchase 565,900 shares.
The number of shares indicated includes shares held as co-trustee under
the Jacor Communications, Inc. Retirement Plan (the "Retirement Plan").
See Note (14) below. Also includes 15 shares 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."
(14) Includes 218,267 shares held under the Retirement Plan with respect to
which Messrs. Michaels and Weber as co-trustees, share voting and
investment power. Of these 218,267 shares, 8,407 shares are beneficially
owned by the named executives.
(15) Includes vested options currently exercisable to purchase 11,500 shares.
Mrs. Rosenberg indirectly shares beneficial ownership of an 80% limited
partnership interest in ZC Limited. See Note (4) above. Also, Mrs.
Rosenberg is a partner in SZ2 (IGP) Partnership, an Illinois general
partnership ("SZ2"), which beneficially owns 60,243 shares issuable upon
the exercise of certain warrants. Other partners of SZ2 include trusts
created for the benefit of Mr. Zell. As a result, Mrs. Rosenberg and Mr.
Zell may be deemed to be the beneficial owners of the warrants. Mrs.
Rosenberg and Mr. Zell disclaim beneficial ownership of such warrants. See
Note (17) below. In addition, includes 437,858 shares beneficially owned
by Samstock, L.L.C., a Delaware limited liability company ("Samstock").
One of the indirect members of Samstock is ZFT Partnership, an Illinois
general partnership ("ZFT"). Mrs. Rosenberg is the trustee of the 15
trusts which are partners of ZFT and as such may be deemed to be the
beneficial owner of the shares. Mrs. Rosenberg disclaims beneficial
ownership of such shares. See Note (17) below.
(16) Includes vested options currently exercisable to purchase 2,500 shares.
(17) Includes vested options currently exercisable to purchase 2,500 shares.
Also includes 60,243 shares issuable pursuant to warrants. The warrants
are beneficially owned by SZ2. Certain partners of SZ2 include Mrs.
Rosenberg and trusts created for the benefit of Mr. Zell. As a result,
Mrs. Rosenberg and Mr. Zell may be deemed to be beneficial owners of the
warrants reported herein. Mrs. Rosenberg and Mr. Zell disclaim beneficial
ownership of such warrants. See Note (15) above. In addition, includes
437,858 shares beneficially owned by Samstock, L.L.C., a Delaware limited
liability company ("Samstock"). The indirect members of Samstock are
trusts created for the benefit of Samuel Zell and a corporation whose sole
stockholder is a trust in which Mr. Zell is both trustee and beneficiary
and as such may be deemed to be the beneficial owner of the shares. Mr.
Zell disclaims beneficial ownership of such shares.
(18) Includes vested options currently exercisable to purchase 30,001 shares.
The number of shares indicated also includes 37,710 shares issuable
pursuant to warrants.
10
<PAGE>
(19) Includes vested options currently exercisable to purchase 43,760 shares.
(20) Includes vested options currently exercisable to purchase 305,750 shares.
The number of shares indicated includes shares held as co-trustee under
the Retirement Plan. See Note (14) above.
(21) Includes 116,727 shares issuable pursuant to warrants (beneficial
ownership of 60,243 shares of which is disclaimed, as described in Notes
(15) and (17) above), vested options currently exercisable to purchase
1,789,102 shares and 218,267 shares held under the Retirement Plan. Does
not include an aggregate of 13,500 outstanding stock units granted in 1996
and 1997 to Jacor's non-employee directors. These stock units are
convertible into Jacor Common Stock at times established by each director
in advance of the award date, generally the earlier of when such
individual no longer serves as a Jacor director and/or when Jacor Common
Stock exceeds a designated price for a specified time period. Also does
not include an aggregate of 22,487 outstanding stock units granted in 1996
to certain executive officers of Jacor (including 9,569 stock units to
each of Messrs. Michaels and Lawrence, named executive officers). These
units are convertible into Jacor Common Stock at the earlier of the
executive officer's retirement, death, permanent disability or separation
from service or upon a change in control of Jacor.
No agreements, formal or informal, exist among the various officers and
directors to vote their shares collectively.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Officers, directors and greater than ten percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, for the period January 1,
1997 through December 31, 1997, all filing requirements applicable to its
officers and directors were complied with, except for Thomas P. Owens who filed
one late Form 5 reporting that he had inadvertently failed to file a Form 4 in
September, 1997 reporting the sale of 599 shares of Jacor Common Stock.
11
<PAGE>
PROPOSAL NO. 2
PROPOSAL TO AMEND THE JACOR COMMUNICATIONS, INC. 1997
LONG-TERM INCENTIVE STOCK PLAN TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AND
INCENTIVE STOCK OPTIONS ISSUABLE THEREUNDER
The Board of Directors of the Company, at its meeting on April 2, 1998,
approved an amendment to the Jacor Communications, Inc. 1997 Long-Term Incentive
Stock Plan. The LTIP Plan permits the granting of incentive stock options,
non-qualified stock options, restricted stock, stock appreciation rights,
performance units, performance shares and other stock units to executive
officers and other key employees of the Company and its subsidiaries for the
purchase of up to 1,800,000 shares of Jacor Common Stock. Approximately 110
employees of the Company and its subsidiaries are eligible to participate in the
LTIP Plan including all of the executive officers of the Company. Non-employee
directors of the Company are not eligible to participate in the LTIP Plan.
At April 3, 1998, there were 265,812 remaining shares of Jacor Common Stock
available for issuance upon the grant of additional awards under the LTIP Plan.
The purpose of amending the LTIP Plan is to increase the number of shares
eligible for issuance thereunder by 3,000,000 shares to an aggregate of
4,800,000 shares. The proposed amendment also increases the number of incentive
stock options issuable under the LTIP Plan by 850,000 shares, from 500,000
shares to 1,350,00 shares. The proposed amendment to the LTIP 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-based incentive awards.
The purpose and intent of the LTIP Plan is to provide key employees of the
Company and its subsidiaries with an incentive to continue their efforts
promoting the success and progress of the Company and the value of the
investment of its stockholders 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 LTIP Plan accomplishes these results.
The proposal to approve and adopt the proposed amendment to the LTIP Plan is
contained in the resolution attached to the Proxy Statement as Annex 1 and will
be submitted to the stockholders for adoption at the Annual Meeting. Adoption of
this proposal requires an affirmative vote by the majority of the shares of
Jacor Common Stock entitled to vote and present in person or by proxy at the
Annual Meeting. Abstentions from voting are treated as votes against, while
shares not voted by brokers will have no effect on the adoption of this
proposal. Proxies received by the Company and not revoked prior to or at the
Annual Meeting will be voted FOR Proposal No. 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 2.
12
<PAGE>
PROPOSAL NO. 3
PROPOSAL TO AMEND THE JACOR COMMUNICATIONS, INC. 1997 LONG-TERM
INCENTIVE STOCK PLAN TO RESTRICT THE NUMBER OF SHARES OF
RESTRICTED STOCK THAT MAY BE GRANTED TO ANY PARTICIPANT
IN ANY CALENDAR YEAR
The Board of Directors of the Company, at its meeting on April 2, 1998,
approved an amendment to the Jacor Communications, Inc. 1997 Long-Term Incentive
Stock Plan. The LTIP Plan permits the granting of incentive stock options,
non-qualified stock options, restricted stock, stock appreciation rights,
performance units, performance shares and other stock units to executive
officers and other key employees of the Company and its subsidiaries.
The LTIP Plan was adopted in part to allow the Company to comply with
Section 162(m) of the Internal Revenue Code of 1986, as amended the (the
"Code"). Section 162(m) of the Code generally disallows a tax deduction to
public companies for compensation over $1,000,000 paid to a company's Chief
Executive Officer and four other most highly compensated executive officers (the
"Covered Employees"). However, qualifying, "performance-based" compensation will
not be subject to this deduction limit if certain requirements are met. For
grants of restricted stock to qualify as "performance-based" compensation, the
stockholders must approve either the maximum amount of restricted stock that
could be granted to a Covered Employee in a calendar year or the formula used to
calculate the amount of restricted stock to be granted to a Covered Employee in
a calendar year if a performance goal is attained.
To ensure that the provisions of the LTIP Plan that allow the LTIP Committee
to grant restricted stock meet the performance-based compensation requirements
of Section 162(m) of the Code and the regulations promulgate thereunder, the
proposed amendment to the LTIP Plan would set a maximum number of shares of
restricted stock that can be granted to a Covered Employee in any calendar year.
As indicated above, a purpose and intent of the LTIP Plan is to allow the
Company to deduct compensation paid to its Covered Employees. The Board of
Directors believes that the proposed amendment to the LTIP Plan furthers this
objective.
The proposal to approve and adopt the proposed amendment to the LTIP Plan is
contained in the resolution attached to the Proxy Statement as Annex 2 and will
be submitted to the stockholders for adoption at the Annual Meeting. Adoption of
this proposal requires an affirmative vote by the majority of the shares of
Jacor Common Stock entitled to vote and present in person or by proxy at the
Annual Meeting. Abstentions from voting are treated as votes against, while
shares not voted by brokers will have no effect on the adoption of this
proposal. Proxies received by the Company and not revoked prior to or at the
Annual Meeting will be voted FOR Proposal No. 3.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 3.
13
<PAGE>
REPORT OF BOARD OF DIRECTORS COMMITTEES
ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers, including its Chief
Executive Officer and the named executive officers, is established by the Board
of Directors through the Compensation Committee and the LTIP/STIP Committee. See
"THE BOARD OF DIRECTORS, ITS COMMITTEES, MEETINGS AND FUNCTIONS--Compensation
Committee and LTIP/STIP Committee." The Compensation Committee has at all times
been, and currently is, comprised solely of non-employee directors.
In 1997, the Board of Directors adopted the 1997 Long-Term Incentive Stock
Plan and the 1997 Short-Term Incentive Plan, which were approved by the
Company's stockholders at the 1997 Annual Meeting of Stockholders. These plans
permit the Company to comply with Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code") and provide the Company with greater flexibility
in the types of stock-based incentives that could be awarded to executive
officers. To the extent that the annual compensation paid to the Company's Chief
Executive Officer and four other most highly compensated executive officers
might exceed $1,000,000, the Company can preserve its corporate tax deduction
for such compensation if the Section 162(m) requirements for "performance-based"
compensation are met. Section 162(m) also requires that awards under the LTIP
Plan and STIP Plan must be made by a committee of "outside directors." Because
the Code defines "outside directors" in a manner that excludes non-employee
directors in certain circumstances, the Company's Board of Directors created the
LTIP/STIP Committee, composed entirely of outside directors, to separately
administer the LTIP Plan and the STIP Plan.
Therefore, the Compensation Committee established the 1997 base salaries for
the Company's Chief Executive Officer and other executive officers. The
LTIP/STIP Committee established bonuses under the STIP Plan for these same
individuals for 1997. The Compensation Committee retained responsibility for all
other matters relating to executive compensation, including grants of stock
options in 1997 under the Company's 1993 Stock Option Plan, as amended. The
reports of both committees regarding their respective executive compensation
decisions are set forth below.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The primary function of the Compensation Committee is to oversee certain
policies relating to executive compensation, including base salary and fringe
benefits. The Compensation Committee's objective is to attract and retain
qualified individuals by providing competitive compensation. The Compensation
Committee believes that a direct relationship between executive compensation and
an individual's contribution to corporate results best serves stockholder
interests.
The Compensation Committee's policy is to establish base salaries for the
Company's executives at levels that it perceives to be 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 cash flow per share. 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 Jacor's
competitors for executive and/or broadcasting talent are not limited to the
entities included in such indices. The Compensation Committee also subjectively
analyzes the impact of an executive's individual performance on corporate
results and believes that outstanding performance merits increases in base
salary in addition to stock-based incentives.
The Compensation Committee applied the above considerations in determining
the 1997 base salary levels for Randy Michaels, the Company's Chief Executive
Officer, and Robert Lawrence, the Company's President. In 1997, the Compensation
Committee increased Mr. Michaels' base salary by approximately 55% and Mr.
Lawrence's base salary by approximately 18%. The Compensation Committee also
awarded Messrs. Michaels and Lawrence discretionary bonuses of $100,000 and
$80,000, respectively, and stock options under the Company's 1993 Stock Option
Plan, as amended, for 125,000 shares and 75,000 shares of Jacor Common Stock,
respectively. The Compensation Committee determined that the substantial
14
<PAGE>
increase in their base salaries, their discretionary bonuses and their stock
option awards were merited given their superior performances during the
Company's 1996 fiscal year, their key roles in growing the Company through
successful strategic acquisitions and their increased responsibilities in
managing a larger Company in the rapidly changing radio broadcast industry.
In 1997, the Compensation Committee also approved the base salary levels and
stock option awards for the Company's other executive officers upon
recommendations by Messrs. Michaels and Lawrence. Based on individual
performances, the Company's successful results and competitive comparisons, the
Compensation Committee agreed that the salaries of these individuals warranted
increases ranging from 15% to 20% and that substantial stock option awards
aggregating 692,500 shares of Jacor Common Stock were appropriate to incentivize
their continued efforts to enhance stockholder value.
1997 COMPENSATION COMMITTEE:
ROD F. DAMMEYER SHELI Z. ROSENBERG F. PHILIP HANDY
REPORT OF THE LTIP/STIP COMMITTEE ON EXECUTIVE COMPENSATION
The LTIP/STIP Committee believes that providing a direct relationship
between corporate results and executive compensation best serves stockholder
interests. This link between executive compensation and corporate performance is
facilitated through incentive cash bonuses based on the attainment of corporate
objectives and also through awards of stock-based incentives.
The LTIP/STIP Committee is responsible for administering the STIP Plan and
the LTIP Plan in conformity with the terms of those plans and Section 162(m) of
the Code. The LTIP/STIP Committee believes that all 1997 cash bonuses paid to
executive officers in 1997 under the STIP Plan will be properly deductible under
the Code.
For 1997, the LTIP/STIP Committee established incentive performance targets
under the STIP Plan that created the potential for significant incentive bonuses
if the Company achieved or exceeded certain pro forma broadcast cash flow levels
for the last six months of 1997 based on the Company's completed acquisitions
through May 28, 1997, the date the STIP Plan was adopted by the Company's
stockholders. The ability of each executive officer to earn a bonus in 1997 was
based 50% on the Company's overall pro forma broadcast cash flow and 50% on
increasing the broadcast cash flow of the Company's "stick" properties (I.E.
properties with insignificant ratings and/or little or no positive broadcast
cash flow). The amount of each executive officer's potential 1997 cash bonus was
further based upon the extent to which the threshold performance levels were
exceeded (with the potential amount of each portion of the bonus floating from
0% to 150%) and upon a predetermined percentage of the individual's base salary,
ranging from 35% to 100%, as set by the LTIP/STIP Committee.
Because the STIP Plan was not adopted by stockholders until May 28, 1997,
the last six months of 1997 was selected as the relevant time period for
measuring performance in order to comply with Section 162(m) requirements that
performance based targets be objectively established sufficiently in advance of
the determination period. The LTIP/STIP Committee established performance
targets in 1997 that it believed were achievable only upon substantial progress
by the Company's executive officers in rapidly realizing the desired operating
results from the Company's numerous acquisitions. For 1998 and future years, the
LTIP/STIP Committee intends to establish performance targets based on entire
year results.
The Company exceeded the overall broadcast cash flow performance threshold,
thereby entitling each executive officer to 97.8% of one half of his or her
maximum potential bonus. Mr. Michaels' target bonus was established at 100% of
his base salary, given the LTIP/STIP Committee's belief that the Company's Chief
Executive Officer's compensation should be substantially contingent upon the
Company's performance. Accordingly, based on the same formula that was applied
to all of the other executive officers, Mr. Michaels' 1997 bonus was $342,317
which represented 48.9% of his 1997 base salary. The Company
15
<PAGE>
did not exceed the minimum threshold relating to the increase in broadcast cash
flow for its stick properties, and no bonus was paid with respect to that
portion of the potential bonus.
The LTIP/STIP Committee also may grant stock-based awards under the LTIP
Plan to create additional economic incentives for executive officers and other
key employees to achieve improved corporate performance goals so that they can
thereby participate in any resultant increases in stockholder value. Because the
LTIP Plan was not adopted by stockholders until May 28, 1997, the LTIP/STIP
Committee did not award any additional stock-based incentive awards to the
Company's executive officers in 1997 under the LTIP Plan. All grants of stock
options and other stock-based awards subsequent to May 1997 are expected to be
made under the LTIP Plan.
1997 LTIP/STIP COMMITTEE:
PETER C.B. BYNOE MARY AGNES WILDEROTTER
COMMON STOCK PERFORMANCE
The following performance graph compares the Company's cumulative total
stockholder return (change in stock price plus reinvested dividends) to
stockholders of Jacor Common Stock from January 11, 1993 through December 31,
1997, with the Nasdaq Telecommunications Stock Index and the Nasdaq Total Return
Index (US). The graph assumes that an investment of $100 was made on January 11,
1993 in Jacor Common Stock and in each index. The comparisons in this table are
required by the Securities and Exchange Commission, and therefore, are not
intended to forecast or be indicative of the possible future performance of
Jacor Common Stock.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
JACOR COMMUNICATIONS, NASDAQ TELECOMMUNICATIONS NASDAQ TOTAL RETURN
<S> <C> <C> <C>
Inc. Stock Index Index (US)
1/11/93 100 100 100
12/31/93 244 154 115
12/31/94 225 127 112
12/31/95 298 169 159
12/31/96 465 172 195
12/31/97 903 255 240
</TABLE>
16
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, each person who served as the
Company's Chief Executive Officer during 1997 and each of the Company's other
four most highly compensated executive officers (the "named executives") during
each of the last three fiscal years or such shorter period during which the
named executive served as an executive officer of the Company.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS
----------------------
ANNUAL SECURITIES UNDERLYING
COMPENSATION(1) OTHER
-------------------- ----------------------
SALARY BONUS OPTIONS UNITS(3) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (2)($) ($) (#) (#) (4)($)
- -------------------------------------- --------- --------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Randy Michaels........................ 1997 631,741 442,317 125,000 -- 3,200
Chief Executive Officer 1996 446,154 750,000 112,000 9,569 2,250
1995 294,278 117,800 41,000 -- 2,250
Robert L. Lawrence.................... 1997 518,321 285,390 75,000 -- 3,200
President and Chief 1996 446,154 650,000 95,000 9,569 2,250
Operating Officer 1995 293,817 117,800 41,000 -- 2,250
R. Christopher Weber.................. 1997 293,486 88,024 58,000 -- 3,200
Senior Vice President 1996 253,440 515,000 69,000 -- 2,250
and Chief Financial Officer 1995 190,979 76,575 25,000 -- 2,250
David H. Crowl(5)..................... 1997 293,486 88,024 35,000 -- 3,200
President/Radio Division 1996 243,283 50,000 25,000 -- 4,454
John E. Hogan(6)...................... 1997 249,442 61,128 25,000 -- 3,200
Senior Vice President 1996 225,437 70,105 15,000 -- 2,250
</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 $50,000 or 10% of his total salary and bonus
for that year.
(2) Includes amounts deferred at the election of the recipient under the
Retirement Plan.
(3) The common stock units were granted in November 1996 and are convertible
into Jacor Common Stock at the earlier of the executive officer's
retirement, death, permanent disability or separation from service or upon a
change in control of Jacor.
(4) The amounts shown in this column represent matching Company contributions
under the Retirement Plan.
(5) Mr. Crowl first became an executive officer of the Company in September
1996.
(6) Mr. Hogan first became an executive officer of the Company in November 1996.
17
<PAGE>
OPTION GRANTS TABLE
OPTION GRANTS IN 1997 FISCAL YEAR
The following table sets forth certain information regarding grants by the
Company of stock options to each of the named executives during 1997. Under the
1997 Long-Term Incentive Stock Plan, no participant could be granted options for
in excess of 100,000 shares of Jacor Common Stock in 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------ POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM(2)
OPTIONS IN FISCAL BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#) YEAR(3) ($/SHARE) DATE 5%($) 10%($)
- ------------------------------------- ----------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Randy Michaels....................... 125,000(4) 14.01% 28.625 5/2/07 2,252,500 5,703,750
Robert L. Lawrence................... 75,000(4) 8.40% 28.625 5/2/07 1,351,500 3,422,250
R. Christopher Weber................. 58,000(4) 6.50% 28.625 5/2/07 1,045,160 2,646,540
David H. Crowl....................... 35,000(4) 3.92% 28.625 5/2/07 630,700 1,597,050
John E. Hogan........................ 25,000(4) 2.80% 28.625 5/2/07 450,500 1,140,750
</TABLE>
- ------------------------
(1) Grants were made under the Jacor 1993 Stock Option Plan, as amended, during
1997.
(2) Calculated based upon assumed stock prices for Jacor's Common Stock of
$46.64 and $74.25 if 5% and 10% annual rates of stock appreciation,
respectively, are achieved over the full term of the options. The potential
realizable gain equals the product of the number of shares underlying the
stock option grant and the difference between the assumed stock price and
the exercise price of each option.
(3) Total options granted to all executive officers and other employees of the
Company in 1997 were for an aggregate of 892,500 shares of Jacor Common
Stock, excluding 303,688 options issued to employees of Premiere Radio
Networks, Inc. in replacement of their outstanding Premiere stock options
upon Jacor's acquisition of Premiere in June 1997.
(4) 25% of the options granted vested upon grant, 25% of the options granted
vest on May 2, 1998, 25% of the options granted vest on May 2, 1999, and the
remaining 25% of the options granted vest on May 2, 2000.
OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION EXERCISES IN 1997 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information regarding the fiscal
year-end values of all unexercised stock options held by the named executive
officers. The named executives exercised no options in 1997.
<TABLE>
<CAPTION>
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN- THE-MONEY OPTIONS
12/31/97 AT 12/31/97(1)
----------------- ----------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE (#) UNEXERCISABLE ($)
- ------------------------------------ --------------------- ------------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Randy Michaels...................... 0 -- 498,450/157,950 21,594,790/4,348,143
Robert L. Lawrence.................. 0 -- 541,760/111,950 24,043,102/3,164,830
R. Christopher Weber................ 0 -- 269,000/83,000 11,613,634/2,327,563
David H. Crowl...................... 0 -- 21,251/38,749 567,658/996,353
John E. Hogan....................... 0 -- 35,310/28,650 1,271,428/745,404
</TABLE>
- ------------------------
(1) Represents the difference between $53.125 per share, the last reported sale
price of Jacor Common Stock on the Nasdaq National Market on December 31,
1997, and the exercise price of such option as of such date, multiplied by
the number of shares subject to the option.
18
<PAGE>
SUMMARY OF BENEFITS UNDER THE AMENDED
AND RESTATED 1995 EMPLOYEE STOCK PURCHASE PLAN
It is not possible to determine the number of shares of Jacor Common Stock
that will in the future be purchased under the Amended and Restated 1995
Employee Stock Purchase Plan ("the Stock Purchase Plan") by any particular
individual. The following table sets forth the number of shares purchased during
the 1997 annual offering by, and the number of options conditionally granted
under the Stock Purchase Plan for the January 1, 1998, offering to the named
executives, all executive officers of Jacor as a group and all employees other
than the executive officers as a group. Non-employee directors are not eligible
to participate in the Stock Purchase Plan.
<TABLE>
<CAPTION>
JANUARY 1, 1998 OFFERING
1997 OFFERING ------------------------
------------------------ NUMBER
NUMBER OF PER SHARE OF DOLLAR
SHARES PURCHASE OPTIONS VALUE
NAME AND PRINCIPAL POSITION PURCHASED PRICE ($) GRANTED ($)(1)
- ------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Randy Michaels..................................................... 1,073 23.2688 570 24,986
Chief Executive Officer
Robert L. Lawrence................................................. 1,072 23.2688 569 24,960
President and Chief Operating Officer
R. Christopher Weber............................................... 1,074 23.2688 570 24,986
Senior Vice President and Chief Financial Officer
David H. Crowl..................................................... 644 23.2688 342 15,000
President/Radio Division
John E. Hogan...................................................... 966 23.2688 570 24,999
Senior Vice President
Executive Officer Group (14 persons)............................... 7,796 23.2688 4,706 206,161
Non-Executive Officer Employee Group............................... 79,308 23.2688 82,123 3,597,149
</TABLE>
- ------------------------
(1) Computed as the difference between $51.5313, the last reported sale price on
the option grant date (January 2, 1998), and $43.8016, the discounted stock
option price, times the number of options. If the market value of Jacor
Common Stock is greater than $51.5313 on the exercise date (December 31,
1998), the value to the plan participants will increase accordingly.
19
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Dammeyer and Handy and Mrs. Rosenberg comprised the Company's entire
Compensation Committee during 1997, and none served as employees of the Company.
Mr. Bynoe and Ms. Wilderotter served as the two outside directors comprising the
LTIP/STIP Committee. No director or executive officer of the Company serves on
any board of directors or compensation committee of any entity which compensates
Messrs. Dammeyer, Handy or Bynoe, or Mrs. Rosenberg or Ms. Wilderotter.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS AND CHANGE IN
CONTROL PROVISIONS
The Company has no employment agreement with any of the named executives. In
November 1996, Messrs. Michaels and Lawrence and certain other executive
officers of the Company were awarded stock units representing the right to
receive an amount payable 100% in Jacor Common Stock on the date of payout. The
stock units are convertible into Jacor Common Stock at the earlier to occur of
the executive officer's retirement, death, permanent disability or separation of
service or upon a change in control of Jacor. As of December 31, 1997, each of
Messrs. Michaels and Lawrence held 9,569 stock units having a value to each of
them equal to $508,353.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 1, 1994, a subsidiary of Jacor and a corporation
wholly-owned by Randy Michaels, the Chief Executive Officer of Jacor, 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. Jacor's subsidiary obtained a
5% general partnership interest in exchange for its contribution of
approximately $126,000 cash to the Partnership. Jacor initiated this transaction
primarily to allow Mr. Michaels to focus his full time and energy on Jacor and
its business, and Jacor's subsidiary is now the sole manager of the
Partnership's business.
In connection with the formation of the Partnership, Jacor 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 Jacor 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 the year 2001 in exchange for 300,000 shares of
Jacor Common Stock. In addition, if certain events occur prior to January 1,
1999, including, without limitation, Mr. Michaels' termination as Chief
Executive Officer of Jacor, a reduction of Mr. Michaels' annual base salary by
more than 10%, 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 Jacor or Zell/Chilmark fails to have its designees constitute at
least a majority of the members of the Jacor Board of Directors, then Mr.
Michaels' corporation will have the right to either (a) purchase Jacor'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 Jacor Common Stock.
Jacor has engaged CMM on a regular basis to perform market research for the
Company in its existing broadcast areas and in new broadcast areas entered by
the Company through its numerous acquisitions. In 1998, the Company paid
approximately $4,590,000 to CMM for these services and has paid an additional
$1,330,000 through March 31, 1998. CMM provides its services to Jacor at rates
which Jacor believes are competitive with prevailing market rates and which are
no greater than the rates CMM charges unrelated third parties for similar
services.
Since 1996 CMM has borrowed $1,440,000 in aggregate principal amount from
the Company, all of which remains outstanding as of the date hereof. Of such
amount, $900,000 bears interest at 10% per
20
<PAGE>
annum and $540,000 bears interest at 8.5% per annum. These borrowings were
incurred to support the expansion of CMM's business.
From 1994 until May 1997, Jacor leased office space for its Atlanta
operations from an affiliate of Zell/Chilmark at an annual rental rate of
approximately $330,000. Jacor 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.
Equity Group Investments, Inc. ("Equity Group"), an affiliate of
Zell/Chilmark, provided Jacor certain tax consultation during 1997. In
consideration for such services, Jacor paid Equity Group a fee of approximately
$68,900 in 1997. The services that have been and will continue to be provided by
Equity Group could not otherwise be obtained by Jacor without the engagement of
outside professional advisors. Jacor believes that such fee is less than what it
would have had to pay outside professional advisors for similar services. Two of
Jacor's directors, Mr. Zell and Mrs. Rosenberg, are the Chairman of the Board
and the Chief Executive Officer, respectively, of Equity Group. In addition,
Messrs. Dammeyer and Handy, directors of Jacor, are managing directors of EGI
Corporate Investments, which is an Equity Group affiliate.
During 1997, the Company also engaged Mallard Creek Capital Partners, Inc.
("Mallard Creek"), a real estate company wholly owned by Mr. Alexander, a Jacor
director, to perform certain real estate services including an assessment of the
Company's lease obligations in its various locations, standardizing the
Company's systems and specifications at its locations and assistance in specific
transactions. The Company paid Mallard Creek approximately $255,000 in 1997 and
approximately $104,000 through the first quarter of 1998. The Company also
leases its broadcasting studios in Salt Lake City at an annual rate of
approximately $386,000 from a limited liability company jointly owned by Mallard
Creek and Mr. Alexander. Jacor believes that the terms of these engagements and
lease were negotiated at arm's length and are competitive with prevailing market
rates.
The Company also loaned $3,200,000 in aggregate principal amount to Mallard
Creek in connection with Mallard Creek's joint venture acquisition of the
building leased by the Company for its Salt Lake City broadcasting studios. This
loan is due in full in September 1998, bears interest at the rate of 7% per
annum and is secured by a first mortgage on the real estate. In addition, prior
to September 30, 1998, the Company has an option to acquire for $1,000 Mallard
Creek's 49% interest in this joint venture.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Coopers & Lybrand L.L.P. (the
"Auditors") was engaged by Jacor to audit Jacor's consolidated financial
statements for the year ended December 31, 1997. It is anticipated that a
representative of the Auditors will attend the Jacor 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 recommended that the Auditors be
retained as Jacor's principal accounting firm for 1998, and the Board of
Directors approved the appointment of the Auditors at its meeting on April 2,
1998.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholders may submit proposals to be voted on at the 1999 Annual Meeting
of Stockholders. 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
Jacor'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
1999 Annual Meeting. In order for a stockholder proposal to be included in the
Proxy Statement and form of Proxy for the 1999 Annual Meeting, the proposal must
be received at Jacor's principal executive offices no later than December 31,
1998, and must otherwise comply with applicable requirements established by the
Securities and Exchange Commission.
21
<PAGE>
OTHER MATTERS
At the Annual Meeting it is intended that the election of directors and the
two proposed amendments to the LTIP Plan attached hereto as Annexes 1 and 2, all
as set forth in the accompanying Notice and described in this Proxy Statement,
will be presented. The Board of Directors of the Company is not aware of any
other matters which may be presented at the meeting. If any other matters should
be properly presented at the meeting, the persons named in the enclosed Proxy
intend to vote the Proxy according to their best judgment.
You are urged to complete, sign, date and return your Proxy promptly to make
certain that your shares will be voted at the 1998 Annual Meeting. For your
convenience in returning the Proxy, an addressed envelope is enclosed, requiring
no additional postage if mailed in the United States.
A copy of Jacor's Annual Report on Form 10-K for the year ended December 31,
1997, as filed with the Securities and Exchange Commission, will be mailed
without charge to stockholders upon request. Requests should be addressed to the
Company at 50 East RiverCenter Boulevard, 12th Floor, Covington, Kentucky 41011,
Attention: Investor Services Department. The Form 10-K includes certain exhibits
which will be provided only upon payment of a fee covering the Company's
reasonable expenses.
By Order of the Board of Directors:
/s/ Paul F. Solomon
Paul F. Solomon
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Covington, Kentucky
April 23, 1998
22
<PAGE>
ANNEX 1
PROPOSED AMENDMENT TO JACOR COMMUNICATIONS, INC.
1997 LONG-TERM INCENTIVE STOCK PLAN
RESOLVED, that the Jacor Communications, Inc. 1997 Long-Term Incentive Stock
Plan be hereby amended as follows:
"The first two sentences of Section 4.1 are hereby deleted and the
following two new sentences are inserted in place thereof:
'Subject to adjustment as provided in Section 4.3 hereof, the
aggregate number of Shares that may be delivered under the Plan at
any time shall not exceed Four Million Eight Hundred Thousand
(4,800,000) Shares of common stock of the Company. No more than
one-half of such aggregate number of such Shares shall be issued as
Restricted Stock under Article 8 of the Plan and no more than One
Million Three Hundred Fifty Thousand (1,350,000) Shares shall be
issued upon exercise of Incentive Stock Options under Article 6 of
the Plan.' "
<PAGE>
ANNEX 2
PROPOSED AMENDMENT TO JACOR COMMUNICATIONS, INC.
1997 LONG-TERM INCENTIVE STOCK PLAN
RESOLVED, that the Jacor Communications, Inc. 1997 Long-Term Incentive Stock
Plan be hereby amended as follows:
"The following new sentence is hereby inserted at the end of Section 8.1:
'Subject to adjustment as set forth in Section 4.3, the maximum
number of Shares of Restricted Stock granted to any individual
Participant in any calendar year shall be one hundred thousand
(100,000) Shares.' "
<PAGE>
PROXY
JACOR COMMUNICATIONS, INC.
FIFTH THIRD BANK THEATRE
ARONOFF CENTER FOR THE ARTS
EAST SEVENTH STREET AND MAIN STREET
CINCINNATI, OHIO
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- MAY 20, 1998
The undersigned hereby appoints Randy Michaels, R. Christopher Weber and
Jon M. 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 Stockholders to be held at Fifth Third Bank Theatre at the Aronoff
Center for the Arts, located at the corner of East Seventh Street and Main
Street, Cincinnati, Ohio on May 20, 1998, at 10:30 a.m., local time, and at
any adjournment thereof, and in their discretion to act upon any other
matters that may properly come before the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED AS YOU SPECIFY. IF NOT SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL OF
THE PROPOSALS.
Please mark sign and date this proxy on the reverse side and return the
completed proxy promptly in the enclosed envelope.
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH PROPOSAL
PLEASE MARK
YOUR VOTES AS
INDICATED IN X
THIS EXAMPLE
1. ELECTION OF DIRECTORS John W. Alexander Robert L. Lawrence
Peter C.B. Bynoe Randy Michaels
FOR all WITHHOLD Rod F. Dammeyer Sheli Z. Rosenberg
nominees AUTHORITY F. Philip Handy Mary Agnes Wilderotter
listed to vote for all Marc Lasry Samuel Zell
(except as nominees
marked to listed
the contrary) (INSTRUCTION: To withhold authority to
vote for any individual nominee, strike a
line through the nominee's name)
2. Proposal to amend the 1997 Long-Term Incentive Stock Plan to increase the
number of shares of Common Stock and the number of incentive stock options
issuable thereunder to 4,800,000 and 1,350,000, respectively.
FOR AGAINST ABSTAIN
3. Proposal to amend the 1997 Long-Term Incentive Stock Plan to limit the
number of shares of restricted stock that may be granted annually to any
participant to 100,000 shares of Common Stock.
FOR AGAINST ABSTAIN
Change of
Address
Attend
Meeting
SHARES IN YOUR NAME(S)
Each proposal is fully explained in the enclosed Notice of Annual Meeting of
Stockholders and Proxy Statement. To vote your proxy, please MARK by placing
an "X" in the appropriate box, SIGN and DATE the proxy. Then please DETACH
and RETURN the completed proxy promptly in the enclosed envelope, postage
prepaid.
SIGNATURE(S)_________________ SIGNATURE(S)_______________DATE __________, 1998
NOTE: Please sign exactly as the name appears above. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title.
