SCHEDULE 14A
Information Required in Proxy Statement
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
CENTRAL NEWSPAPERS, INC.
(Name Of Registrant As Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
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(j)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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: N/A
<PAGE>
(2) Aggregate number of securities to which transaction
applies: N/A
(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]: N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(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. N/A
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
March 23, 1995
To Our Shareholders:
The 1995 Annual Meeting of Shareholders of Central Newspapers,
Inc. will be held at First Indiana Plaza, 135 North Pennsylvania
Street, 7th Floor, Indianapolis, Indiana, on April 18, 1995. The
meeting will start promptly at 10:00 A.M., local time.
We urge you to read the enclosed Notice of Annual Meeting and
Proxy Statement so that you may be informed about the business to
come before the meeting. At your earliest convenience, please
sign and return the accompanying proxy in the postage-paid
envelope furnished for that purpose.
A copy of our Annual Report for 1994, which is not a part of our
proxy soliciting material, is enclosed.
Central Newspapers, Inc.
/s/Frank E. Russell
Frank E. Russell
President and Chief Executive Officer
Please complete, date, sign and mail promptly the accompanying
proxy in the return envelope provided for that purpose,
whether or not you plan to attend the meeting.
<PAGE>
March 23, 1995
To Our Shareholders:
The Annual Meeting of Shareholders of Central Newspapers, Inc.
(the "Company") will be held on Tuesday, April 18, 1995, at 10:00
A.M., local time, at First Indiana Plaza, 135 North Pennsylvania
Street, 7th Floor, Indianapolis, Indiana.
The Annual Meeting will be held for the following purposes:
1. To elect eight directors of the Company, each for a one
year term.
2. To approve the appointment by the Board of Directors of
Geo. S. Olive & Co. LLC as auditors for the Company for
the fiscal year ending December 31, 1995.
3. To consider and act upon a proposal by the Board of
Directors to approve the Amended and Restated Central
Newspapers, Inc. Stock Compensation Plan.
4. To transact such other business as may properly come
before the meeting or any adjournment(s) thereof.
Shareholders of record at the close of business on March 15, 1995
are entitled to vote at the meeting.
By Order of the Board of
Directors
/s/ Marjorie C. Tarplee
Marjorie C. Tarplee
Secretary
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Central Newspapers, Inc., an Indiana corporation (the "Company"),
the principal executive offices of which are located at 135 North
Pennsylvania Street, Indianapolis, Indiana 46204. This Proxy
Statement and the enclosed proxy were mailed on or about
March 23, 1995.
The enclosed proxy is solicited for use at the Annual
Meeting of the Company's shareholders to be held on April 18,
1995, at 10:00 A.M., local time, at First Indiana Plaza, 135
North Pennsylvania Street, 7th Floor, Indianapolis, Indiana and
at any adjournment(s) thereof.
All shares represented by the enclosed proxy will be voted
at the meeting in accordance with instructions given by the
shareholder, but where no instruction is given, the shares will
be voted in favor of the action recommended by the Board of
Directors and, in the absence of any recommendation, in
accordance with the best judgment of the proxy holders. A
shareholder executing and delivering the enclosed proxy may
revoke it by a written notice delivered to the Secretary of the
Company or in person at the meeting, at any time before it is
exercised.
The entire cost of soliciting proxies will be borne by the
Company. The Company expects to reimburse brokers or other
persons for their reasonable out-of-pocket expenses in forwarding
proxy material to the beneficial owners.
PURPOSES OF MEETING
The purposes of the meeting are (1) to elect eight
directors, each for a one year term, (2) to approve the
appointment of Geo. S. Olive & Co. LLC as auditors for the
Company for the fiscal year ending December 31, 1995, (3) to
consider and act upon a proposal by the Board of Directors to
approve the Amended and Restated Central Newspapers, Inc. Stock
Compensation Plan, and (4) to transact such other business as may
properly come before the meeting. The Board of Directors is not
aware of any other business which will come before the meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The close of business on March 15, 1995 has been fixed as
the record date for determining which shareholders are entitled
to notice of, and to vote at, the meeting and at any
adjournment(s) thereof. On that date, 23,487,350 shares of the
Company's Class A Common Stock and 31,553,000 shares of the
Company's Class B Common Stock were outstanding. The Company has
no other class of capital stock outstanding. Each holder of
record of Class A Common Stock on the record date will be
entitled to 1/10 of a vote for each share registered in his or
her name on each matter presented to a vote of the shareholders
at the Annual Meeting. Each holder of record of Class B Common
Stock on the record date will be entitled to one vote for each
<PAGE>
share registered in his or her name on each matter presented to a
vote of the shareholders at the Annual Meeting. All shares of
Class A Common Stock and Class B Common Stock vote together as a
single class. A majority of the votes entitled to be cast, in
person or by proxy, is necessary for a quorum. Under Indiana
law, once a share is represented for any purpose at a meeting, it
is deemed present for quorum purposes for the remainder of the
meeting. The affirmative vote of a majority of the quorum is
required for the election of directors, the ratification of the
appointment of the auditors and for the approval of the Amended
and Restated Central Newspapers, Inc. Stock Compensation Plan.
Abstentions, broker non-votes and instructions on a proxy to
withhold authority to vote for one or more of the director
nominees will have the same effect as a vote against the
particular issue or nominee.
The persons listed in the following table are known by
management to own beneficially more than 5% of the outstanding
shares of the Company 's Class A Common Stock or Class B Common
Stock. The names and addresses of these persons, and the number
and percentage of shares of Class A Common Stock and Class B
Common Stock owned beneficially by them as of March 15, 1995
(based on the best information available to the Company on such
date) are included in the following table. To the Company's
knowledge, each shareholder has sole investment and voting power
with respect to the shares shown as beneficially owned by such
shareholder unless otherwise indicated.
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner(1) Title of Class Beneficial Ownership of Class(2)
<S> <C> <C> <C>
Eugene C. Pulliam Trust Class A Common Stock -0- --
Class B Common Stock 22,907,500 72.6%
Naomi M. Pulliam Class A Common Stock 5,073,600 21.6%
Class B Common Stock 26,640,000 (3) 84.4%
Eugene S. Pulliam Class A Common Stock 1,768,574 (4) 7.5%
Class B Common Stock 25,235,000 (3) 80.0%
Frank E. Russell Class A Common Stock 905,820 (5) 3.9%
Class B Common Stock 23,032,500 (3) 73.0%
Enid Goodrich Class A Common Stock 3,935,600 (6) 16.8%
One Indiana Square, Suite 600 Class B Common Stock 190,000 (7) *
Indianapolis, Indiana 46266
Liberty Fund, Inc. Class A Common Stock 1,232,600 5.2%
7440 Shadeland Avenue Class B Common Stock 190,000 (7) *
Indianapolis, Indiana 46250
NBD Bank, N.A. Class A Common Stock 1,568,800 (8) 6.7%
One Indiana Square, Suite 600 Class B Common Stock -0- --
Indianapolis, Indiana 46266
Ariel Capital Management, Inc. Class A Common Stock 2,160,576 (9) 9.2%
307 North Michigan Avenue Class B Common Stock -0- --
Chicago, Illinois 60601
<FN>
* Less than one percent.
(1) Unless otherwise specified, all addresses: c/o Central Newspapers, Inc., 135
North Pennsylvania Street, Indianapolis, Indiana 46204.
(2) Based upon 23,487,350 shares of Class A Common Stock and 31,553,000 shares of
Class B Common Stock outstanding as of March 15, 1995, which does not include
options which are currently exercisable for 569,950 shares of Class A Common
Stock held by certain officers and employees of the Company.
(3) Includes 22,907,500 shares owned by the Eugene C. Pulliam Trust of which Naomi
M. Pulliam, Eugene S. Pulliam and Frank E. Russell are Trustees. During the
term of Naomi M. Pulliam as a Trustee, Mrs. Pulliam controls the decisions of
the Trustees.
(4) Includes (a) 20,000 shares owned by Jane Pulliam, wife of Eugene S. Pulliam,
as to which shares Mr. Pulliam disclaims beneficial ownership, and (b)
1,729,736 shares held by the Eugene S. Pulliam Trust of which Eugene S.
Pulliam is the Trustee. Does not include shares issuable to Mr. Pulliam upon
exercise of options granted under the Stock Option Plan (as hereinafter
defined).
(5) Includes (a) 13,320 shares owned by Nancy M. Russell, wife of Frank E.
Russell, as to which shares Mr. Russell disclaims beneficial ownership and (b)
752,000 shares of Class A Common Stock owned by nine separate trusts for which
Frank E. Russell acts as sole trustee and as to which Mr. Russell disclaims
<PAGE>
beneficial ownership. Does not include shares issuable to Mr. Russell upon
exercise of options granted under the Stock Option Plan.
(6) Includes (a) 217,800 shares held by a trust, of which Enid Goodrich shares the
voting power, (b) 1,232,600 shares held by Liberty Fund, Inc., of which Enid
Goodrich is Vice Chairman and a Director, and (c) 1,251,600 shares held by NBD
Bank as agent for Enid Goodrich for which NBD Bank has sole voting power
pursuant to a revocable agreement with Enid Goodrich, but with respect to
which Enid Goodrich retains sole dispositive power.
(7) Includes 190,000 shares held by Liberty Fund, Inc., of which Enid Goodrich is
Vice Chairman and a Director.
(8) Represents shares held by NBD Bank, N.A. as agent for Enid Goodrich for which
NBD Bank has sole voting power pursuant to a revocable agreement with Enid
Goodrich, but with respect to which Enid Goodrich retains sole dispositive
power. This information is as of February 3, 1995.
(9) Ariel Capital Management, Inc. holds all such shares for client accounts, none
of which individually represents more than 5% of the outstanding Class A
Common Stock, and disclaims beneficial ownership of such shares. Ariel
Capital Management, Inc., in its capacity as investment advisor, has sole
voting power for 1,869,126 shares, shared voting power for 17,000 shares and
sole investment power for 2,160,576 shares. This information is as of
February 6, 1995.
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to
the beneficial ownership of the Company's Class A Common Stock
and Class B Common Stock, as of March 15, 1995, by its directors,
director-nominees, named executive officers and all directors and
executive officers as a group. Unless otherwise indicated, each
shareholder listed below has sole investment and voting power
with respect to the shares shown as beneficially owned by him.
<TABLE>
<CAPTION>
Name of Number of Shares Percent of
Beneficial Owner Title of Class Beneficially Owned (1) Class(2)
<S> <C> <C> <C>
Kent E. Agness Class A Common Stock 2,000 *
Class B Common Stock -0- --
Malcolm W. Applegate Class A Common Stock 8,733 (3) *
Class B Common Stock -0- --
William A. Franke Class A Common Stock 2,000 *
Class B Common Stock -0- --
Eugene S. Pulliam Class A Common Stock 1,768,574 (5) 7.5%
Class B Common Stock 25,235,000 (4) 80.0%
Dan Quayle Class A Common Stock 34,850 (8) *
Class B Common Stock 25,000 *
James C. Quayle Class A Common Stock 651,889 (6) 2.8%
Class B Common Stock 662,500 (7) 2.1%
Frank E. Russell Class A Common Stock 905,820 (9) 3.9%
Class B Common Stock 23,032,500 (4) 73.0%
Wayne D. Wallace Class A Common Stock 350 *
Class B Common Stock -0- --
Louis A. Weil, III Class A Common Stock 3,260 (10) *
Class B Common Stock -0- --
All directors and Class A Common Stock 3,377,476 14.4%
executive officers as Class B Common Stock 26,047,500 (9) 82.6%
a group (9 persons)
<FN>
* Less than one percent.
(1) Does not include shares of Class A Common Stock issuable upon exercise
of options issued under the Company's Stock Option Plan.
(2) Based upon 23,487,350 shares of Class A Common Stock and 31,553,000
shares of Class B Common Stock outstanding as of March 15, 1995, which
does not include options which are currently exercisable for 569,950
shares of Class A Common Stock held by certain officers and employees of
the Company.
<PAGE>
(3) Includes 733 shares are held for the benefit of Mr. Applegate by the
Savings Plus Plan (as hereinafter defined).
(4) Includes 22,907,500 shares owned by the Eugene C. Pulliam Trust of which
Naomi M. Pulliam, Eugene S. Pulliam and Frank E. Russell are Trustees.
During the term of Naomi M. Pulliam as a Trustee, Mrs. Pulliam controls
the decisions regarding the Trust.
(5) Includes (a) 20,000 shares owned by Jane Pulliam, wife of Eugene S.
Pulliam, as to which shares Mr. Pulliam disclaims beneficial ownership,
and (b) 1,729,736 shares held by the Eugene S. Pulliam Trust of which
Eugene S. Pulliam is the Trustee.
(6) Includes (a) 418,900 shares owned by Corinne P. Quayle, wife of James C.
Quayle, as to which shares Mr. Quayle disclaims beneficial ownership,
and (b) 2,661 shares of The C&J Charitable Trust Foundation, of which
Mr. Quayle is a Co-Trustee, as to which shares Mr. Quayle disclaims
beneficial ownership.
(7) Includes 305,000 shares owned by Corinne P. Quayle, wife of James C.
Quayle, as to which shares Mr. Quayle disclaims beneficial ownership.
(8) Includes 8,816 shares owned by Marilyn Tucker Quayle, wife of Dan
Quayle.
(9) Includes (a) 13,320 shares owned by Nancy M. Russell, wife of Frank E.
Russell, as to which shares Mr. Russell disclaims beneficial ownership,
and (b) 752,000 shares held in nine separate trusts for which Frank E.
Russell acts as sole trustee and as to which Mr. Russell disclaims
beneficial ownership.
(10) Includes 760 shares held for the benefit of Mr. Weil by the Savings Plus
Plan and 2,500 shares held by the Louis A. Weil III Family Trust.
</TABLE>
PROPOSAL I -- ELECTION OF DIRECTORS
Eight directors will be elected at the meeting for a one
year term. All of the nominees listed below are currently
directors whose present terms of office will expire upon
completion of the election at the meeting. Unless otherwise
specified by the shareholder, the enclosed proxy will be voted in
favor of electing as directors the nominees listed below. If any
nominee should be unable to serve, the proxy will be voted for a
substitute nominee selected by the Board of Directors of the
Company.
The name, principal occupation, business experience since
1988, tenure and age of each nominee for election as a director
are as set forth below.
Kent E. Agness, age 45, has been a partner in the law firm
of Barnes & Thornburg since 1982. He has been a director of the
Company since 1990.
Malcolm W. Applegate, age 59, has been President of
Indianapolis Newspapers, Inc. since May 1993 and General Manager
of Indianapolis Newspapers, Inc. since July 1990. From July 1990
to May 1993 he was Vice President of Indianapolis Newspapers,
Inc. From 1985 until July 1990, Mr. Applegate was publisher of
<PAGE>
the Lansing (Michigan) State Journal. He has been a director of
the Company since 1991.
William A. Franke, age 57, has been President of Franke &
Company, Inc., Phoenix, Arizona, an investment firm, since 1987.
Since September 1992 he has acted as Chairman of the Board of
America West Airlines, Inc., an airline carrier, and has acted as
its Chief Executive Officer since December 1993. Mr. Franke
served as a director of Circle K Corporation, an international
convenience store chain, from 1983 to 1993. From November 1989
to June 1990, he performed certain executive duties for Circle K
Corporation as Chairman of its Executive Committee, and from June
1990 to July 1993 acted as Chairman of its Special Committee of
Directors. He is a director of America West Airlines, Inc. and
Phelps Dodge Corporation. He has been a director of the Company
since 1990.
Eugene S. Pulliam, age 80, has been Publisher of The
Indianapolis Star and The Indianapolis News since 1975 and
President of Phoenix Newspapers, Inc. since 1979. He has been a
director of the Company since 1954. Mr. Pulliam is the brother-
in-law of James C. Quayle and the uncle of Dan Quayle.
Dan Quayle, age 48, has been Chairman of Circle Investors,
Inc. and FX Strategic Advisors, Inc. since 1993. He was Vice-
President of the United States from January, 1989 to January,
1993 and a United States Senator from January, 1979 to January,
1989. Mr. Quayle is a director of American Standard, Inc. He
has been a director of the Company since 1993. Mr. Quayle is the
son of James C. Quayle and the nephew of Eugene S. Pulliam.
James C. Quayle, age 73, has been President of Huntington
Newspapers, Inc. since 1964. He has been a director of the
Company since 1979. Mr. Quayle is the brother-in-law of Eugene
S. Pulliam and the father of Dan Quayle.
Frank E. Russell, age 74, has been President of the Company
since 1979. He has been a director of the Company since 1974.
Louis A. Weil, III, age 53, has been Publisher and Chief
Executive Officer of The Arizona Republic and The Phoenix Gazette
and Executive Vice President of Phoenix Newspapers, Inc. since
July 1991. Mr. Weil served as Publisher of Time from May 1989 to
July 1991, and President and Publisher of The Detroit News from
May 1987 to May 1989. Mr. Weil serves as a member of the Board
of Directors of Global Government Plus Fund, Inc. as well as
eleven other investment companies within the Prudential family of
mutual funds. He has been a director of the Company since 1991.
COMMITTEES OF THE BOARD OF DIRECTORS AND
COMPENSATION OF DIRECTORS
The Board of Directors of the Company has a Nominating
Committee, an Audit Committee, a Stock Option Committee and a
<PAGE>
Compensation Committee. The Nominating Committee held meetings
in March, 1994 and March, 1995. The members of the Nominating
Committee are Frank E. Russell (Chairman) and Eugene S. Pulliam.
This Committee has the responsibility of nominating individuals
to serve on the Board of Directors of the Company.
Each nominee for election as a director of the Company named
herein was recommended by the Nominating Committee. The
Nominating Committee will consider nominees recommended by
shareholders. Any shareholder who wishes to make such a
recommendation to the Nominating Committee should submit the name
or names of the individuals being recommended in writing to the
Nominating Committee, c/o Marjorie C. Tarplee, Secretary, Central
Newspapers, Inc., 135 North Pennsylvania Street, Indianapolis,
Indiana 46204 by December 31, 1995.
The Compensation Committee is responsible for developing the
Company's executive compensation policies and for reviewing and
determining compensation to be paid to the Chief Executive
Officer and the other ten most highly compensated employees of
the Company and its subsidiaries. The Compensation Committee
held four meetings during 1994. The members of the Compensation
Committee are William A. Franke (Chairman), Kent E. Agness,
Eugene S. Pulliam and James C. Quayle.
The Stock Option Committee consists of the outside directors
serving on the Compensation Committee. The Stock Option
Committee administers, construes and interprets the Central
Newspapers, Inc. Stock Option Plan (the "Stock Option Plan").
The Stock Option Committee did not meet in 1994. The members of
the Stock Option Committee are James C. Quayle (Chairman), Kent
E. Agness and William A. Franke.
The Audit Committee is responsible for reviewing the
services and fees of the Company's independent accountants and
the financial statements, accounting practices and adequacy of
auditing and internal controls of the Company. Kent E. Agness
(Chairman), William A. Franke and Dan Quayle are the members of
the Audit Committee. The Audit Committee held two meetings in
1994 and met again in February, 1995 with regard to the Company's
audited financial statements for fiscal year 1994.
The Board of Directors held five meetings during the
Company's fiscal year ended December 25, 1994. Every director
attended all meetings of the Board of Directors and no director
attended fewer than 75% of the aggregate number of meetings of
the committees of which he was a member at the time of the
meeting.
Directors who are also employees of the Company receive no
director fees or other compensation for acting as a director.
Non-employee directors receive an annual retainer of $15,000,
$1,000 for each meeting of the Board of Directors attended and
$750 for each meeting of a committee of the Board attended. The
annual retainer will increase to $20,000 for the directors
elected on April 18, 1995. In addition, non-employee directors
receive certain life insurance coverage. Kent E. Agness, William
A. Franke and Dan Quayle receive coverage under split-dollar life
<PAGE>
insurance arrangements pursuant to which the Company will be
reimbursed for premiums paid. The dollar value benefit of the
premiums paid pursuant to such policies in 1994 was $5,390,
$6,161 and $12,273 for Kent E. Agness, William A. Franke and Dan
Quayle, respectively. James C. Quayle receives coverage under a
death benefit only arrangement. For 1994, the current year term
cost of such insurance for James C. Quayle was $2,674. All
directors also participate in the Company's Directors' and
Officers' Charitable Award Program. Under this program, upon the
death of a participating officer or director, the Company will
donate $500,000 to one or more qualifying charitable
organizations chosen by the participant and the Company will be
reimbursed by life insurance proceeds. Individual participants
derive no financial benefit from this program since all
charitable deductions accrue solely to the Company. If the
Amended and Restated Stock Compensation Plan is approved by the
shareholders, each director who is not an employee of the Company
will also receive stock options to purchase 1,000 shares of the
Company's Class A Common Stock.
COMPENSATION OF EXECUTIVE OFFICERS
Compensation For Services
The compensation for services rendered to the Company and
its primary operating subsidiaries, Phoenix Newspapers, Inc.
("PNI") and Indianapolis Newspapers, Inc. ("INI"), during the
fiscal year ended December 25, 1994, paid to the Chief Executive
Officer and the four other most highly compensated executive
officers of the Company is set forth below:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Other Annual Securities All Other
Compensa- Underlying Compensa-
Name and Principal Position Year Salary ($) Bonus ($) tion ($) Options (#) tion ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Frank E. Russell 1994 420,983 180,000 (1) -0- 26,993 (4)
President and Chief 1993 394,266 100,000 (1) 52,500 4,771 (3)
Executive Officer 1992 360,933 65,000 (1) 50,000 5,602 (2)
Wayne D. Wallace 1994 133,483 33,370 (1) -0- 19,151 (4)
Treasurer 1993 123,850 31,250 (1) 11,000 14,649 (3)
1992 116,350 20,000 (1) 10,000 16,280 (2)
Eugene S. Pulliam 1994 99,727 -0- (1) -0- 9,327 (4)
President of PNI and 1993 99,678 -0- (1) 25,000 6,563 (3)
Publisher of the Company's 1992 99,678 -0- (1) 25,000 6,375 (2)
Indianapolis Newspapers
Malcolm W. Applegate 1994 223,067 85,748 (1) -0- 33,686 (4)
President and 1993 198,850 66,600 (1) 22,500 39,298 (3)
<PAGE>
General Manager of INI 1992 184,267 35,000 (1) 20,000 43,917 (2)
Louis A. Weil, III 1994 371,667 175,313 (1) -0- 68,854 (4)
Executive Vice President of 1993 349,125 164,438 (1) 32,000 51,269 (3)
PNI and Publisher of the 1992 329,317 100,292 305,663 (5) 30,000 59,331 (2)
Company's Phoenix Newspapers
<FN>
(1) Executive officers of the Company receive certain perquisites, but with
respect to this executive officer the incremental cost of providing such
perquisites does not exceed the lesser of $50,000 or 10% of the
officer's salary and bonus.
(2) Includes the following for Messrs. Russell, Wallace, Pulliam, Applegate
and Weil, (i) Company matching contributions to the Savings Plus Plan of
$2,182, $2,182, $1,994, $2,182 and $2,182 for each named executive
officer, respectively; and (ii) group term life insurance policy
premiums paid by the Company for the period prior to the revision of the
Company's life insurance arrangements of $1,263, $553, $474, $1,774 and
$2,218 for each named executive officer, respectively. In addition,
with respect to Messrs. Wallace, Applegate and Weil, this amount
includes $13,545, $39,961 and $54,931, respectively, representing the
dollar value benefit of premium payments under split-dollar life
insurance policies under which the Company will be reimbursed for
premiums paid. With respect to Mr. Russell and Mr. Pulliam, this amount
includes $2,157 and $3,907, respectively, which represents the premiums
paid pursuant to a death benefit only life insurance arrangement.
(3) Includes, for Messrs. Russell, Wallace, Pulliam, Applegate and Weil,
Company matching contributions to the Savings Plus Plan of $2,249,
$2,249, $1,994, $2,249 and $2,249 for each named executive officer,
respectively. In addition, with respect to Messrs. Wallace, Applegate
and Weil, this amount includes $12,400, $37,049 and $49,020,
respectively, representing the dollar value benefit of premium payments
under split-dollar life insurance policies under which the Company will
be reimbursed for premiums paid. With respect to Mr. Russell and Mr.
Pulliam, this amount includes $2,522 and $4,569, respectively, which
represents the premiums paid pursuant to a death benefit only life
insurance arrangement.
(4) Includes, for Messrs. Russell, Wallace, Pulliam, Applegate and Weil, (i)
Company matching contributions to the Savings Plus Plan of $4,620,
$4,620, $3,987, $4,620 and $4,620 for each named executive officer,
respectively; and (ii) contributions to the Company's Non-Qualified
Savings Plan of $19,419, $2,054, $2, $7,733 and $17,259 for each named
executive officer, respectively. In addition, with respect to Messrs.
Wallace, Applegate and Weil, this amount includes $12,477, $21,333 and
$46,975, respectively, representing the dollar value benefit of premium
payments under split-dollar life insurance policies under which the
Company will be reimbursed for premiums paid. With respect to Mr.
Russell and Mr. Pulliam, this amount includes $2,954 and $5,338,
respectively, which represents the current year term cost of the
insurance.
(5) Includes $271,788 paid to Mr. Weil as reimbursement for moving expenses
and interim housing costs associated with Mr. Weil's relocation to
Phoenix and to compensate him for taxes payable as a result of the
reimbursement of these relocation expenses.
</TABLE>
<PAGE>
Option Grants, Exercises and Holdings
No stock options were granted in the fiscal year ended
December 25, 1994. The following tables set forth information
relating to option exercises and holdings with respect to each of
the named executive officers in the fiscal year ended December
25, 1994, as well as the end of the fiscal year:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Value of
No. of Unexercised
Unexercised In-The-Money
Options at Options at
Shares Value Fiscal Year-End Fiscal Year-End
Acquired on Realized At Exer- Unexer- Exer- Unexer-
Name
Exercise Exercise Date cisable cisable cisable (1) cisable (1)
<S> <C> <C> <C> <C> <C> <C>
Frank E. Russell 0 -- 130,000 52,500 $977,500 $170,625
Wayne D. Wallace 2,000 $ 22,750 25,000 11,000 186,375 35,750
Eugene S. Pulliam 10,000 103,750 60,000 25,000 436,250 81,250
Malcolm W. Applegate 4,000 44,000 42,000 22,500 288,750 73,125
Louis A. Weil, III 2,500 25,000 57,500 32,000 374,688 104,000
<FN>
(1) Based on the closing price for Class A Common Stock on the last business day of the Company's 1994
fiscal year, which was $27.125 per share.
</TABLE>
Defined Benefit Plans
The Company maintains the Central Newspapers, Inc.
Retirement Plan (the "Pension Plan") for its employees. The
Pension Plan is a tax qualified defined benefit plan under the
Internal Revenue Code of 1986, as amended (the "Code") and is
subject to requirements imposed under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
Employees of the Company and certain of its subsidiaries
(collectively, the "Participating Companies") automatically
become participants in the Pension Plan on the first day of the
month following completion of at least 1,000 hours of service in
a designated one year period of employment with the Participating
Companies. Benefits are fully vested upon completion of at least
five years of service. Benefits also become vested upon a
participant's death, disability or attainment of normal
retirement age.
For service prior to 1994, a participant's annual retirement
income under the Pension Plan is equal to the sum of his basic
credits and his supplemental credits, subject to a special dollar
limitation under the Code. However, the Participating Companies
<PAGE>
have periodically increased the amount of retirement income
payable to participants. The Participating Companies contribute
amounts to the Pension Plan on a periodic basis which, when
aggregated with voluntary employee contributions, are sufficient
to fund the Pension Plan in accordance with actuarial
assumptions. Benefits are payable upon normal, early or
disability retirement and deferred vested benefits are payable on
other terminations of employment. Benefits with an actuarial
value in excess of $3,500 are payable on a monthly basis. Under
certain circumstances, survivor benefits are payable upon the
death of a participant.
For service prior to 1994, a participant generally earns
basic credits for each week's participation in the Pension Plan
equal to the amount of his weekly earnings, up to $312.00,
multiplied by 1-7/8%. A participant may choose to earn
supplemental credits for each week of participation in the
Pension Plan by voluntarily contributing 3-3/4% of his weekly
earnings over $312.00 (including salary, wages, overtime, bonuses
and contributions to the Central Newspapers, Inc. Savings Plus
Plan (the "Savings Plus Plan")) to the Pension Plan. If a
participant chooses to make such voluntary contributions, he
receives supplemental credits equal to 60% of the voluntary
contributions made each week.
Effective January 1, 1994 the Pension Plan eliminated the
voluntary employee contribution feature, provided future benefits
based on the participants' years of service and average
compensation at retirement and enhanced the pension benefits of
early retirees who begin receiving their benefits before age 65.
Specifically, a participant's retirement benefit for periods of
service after 1993 equals 1.2% of the participant's average
annual compensation for the highest 5 of his last 10 years of
employment with the Participating Companies multiplied by his
number of years of service with the Participating Companies after
1993. Plan participants who had attained age 50 on December 31,
1993 could elect to continue making voluntary employee
contributions and have benefits provided under the pre-1994 plan
provisions. The benefits provided to existing retirees and
beneficiaries were increased by varying amounts up to ten
percent. The Participating Companies have filed a determination
request with the Internal Revenue Service seeking its approval of
these amendments.
The aggregate annual benefit payments receivable by a
participant under the Pension Plan are subject to a maximum
benefit amount equal to the lesser of the following amounts: (i)
$118,800 in fiscal 1994 subject to specified limitations and
adjustments under the Code; or (ii) 100% of the participant's
average annual income (as defined under Section 415 of the Code)
from the Participating Companies during the three consecutive
years in which the employee was a participant in the Pension Plan
and had the greatest aggregate income from the Participating
Companies.
Effective January 1, 1994, the Participating Companies
adopted a supplemental retirement plan (the "Supplemental Plan")
<PAGE>
for those employees who are eligible for split dollar insurance
coverage under the Executive Life Insurance Plan and who make
more than $150,000 per year (as indexed for inflation each year
under Internal Revenue Service rules). The Supplemental Plan
allows each participant to accrue a benefit each year equal to:
(a) the benefits that participant would be entitled to receive
under the Pension Plan without regard to the limits imposed by
Sections 401(a)(17) and 415 of the Code; minus (b) the benefits
that participant is entitled to receive under the Pension Plan.
Section 401(a)(17) of the Code provides that only the first
$150,000 of an individual's annual compensation may be considered
in calculating that individual's accrued benefit under the
Pension Plan. Section 415 of the Code limits each participant to
a $118,800 (indexed for inflation) annual benefit under the
Pension Plan. The accrued benefits calculated under this formula
are based solely on service on and after January 1, 1994.
The Supplemental Plan is not tax qualified. Benefits under
the Supplemental Plan are payable solely from the general assets
of the Participating Companies and are not funded in any manner.
Participants are not subject to income tax on their Supplemental
Plan benefits until these benefits are actually paid. The
actuarial present value of the Supplemental Plan benefits a
participant earns each year is currently subject to employment
taxes, but will not later be subject to employment taxes when
paid to the participant.
Benefits under the Supplemental Plan are paid in a single
lump sum cash payment at the time the participant's employment
with the Participating Companies terminates for any reason. If
the participant's employment terminates by reason of his or her
death, the participant's spouse or other beneficiary designated
under the Pension Plan will be entitled to a single lump sum cash
payment computed in the same manner as the death benefit he or
she is entitled to receive under the Pension Plan. In lieu of a
single lump sum cash payment, each participant may make an
irrevocable election, within 30 days after becoming a participant
in the Supplemental Plan, to have his or her, his or her spouse's
or his or her beneficiary's benefits under the Supplemental Plan
paid in the same form and at the same time as his or her benefits
are paid under the Pension Plan.
The table below shows the estimated annual benefits
expressed in single life annuity form that would be provided by
the Pension Plan and the Supplemental Plan (if applicable) for
the executive officers named in the cash compensation table if
such officers had both attained age 65 and retired on January 1,
1995. All such executive officers have made the maximum possible
voluntary contributions to the Pension Plan. For officers
currently receiving mandatory distributions, the table shows the
amount of benefits expected to be received during 1995.
<TABLE>
<CAPTION>
Estimated Annual
Benefits at January 1, 1995
<S> <C>
Frank E. Russell $68,231.00
<PAGE>
Wayne D. Wallace $26,264.00
Eugene S. Pulliam $58,589.00
Malcolm W. Applegate $18,718.00
Louis A. Weil, III $19,978.00
</TABLE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Statement of Compensation Policies
The Compensation Committee of the Board of Directors of the
Company (the "Compensation Committee") is responsible for
developing the Company's executive compensation policies. The
Compensation Committee has adopted the following list of
objectives to be achieved through its compensation of executive
officers:
- Provide compensation opportunities which are
comparable to those offered by other similar
companies in our industry, thus allowing the
Company to compete for and retain talented
executives who are critical to the Company's
long-term success;
- Reward key executive officers annually based
on an overall assessment of their
performance; and
- Align the interest of executives with the
long-term interests of shareholders by
enabling executives to develop and maintain a
significant, long-term ownership position in
the Company's Class A Common Stock.
At present, the Company's executive compensation program is
comprised of base salary, annual incentive bonuses and long-term
incentive opportunities in the form of stock options.
Base Salary
The Compensation Committee determines, on an annual basis,
the base salary of the Chief Executive Officer and each of the
other ten most highly compensated employees of the Company and
its subsidiaries. Base salary levels for the Company's executive
officers are targeted to fall into the middle range of salaries
offered for comparable positions by other similar companies in
the newspaper industry. The Compensation Committee's primary
sources of comparative data are the companies selected for
inclusion in the index of peer companies used in constructing the
performance graph which follows this report, although salary data
from other media companies which actively compete with the
Company for executive talent is also considered. In determining
salaries, the Compensation Committee also takes into account an
executive's position, tenure and individual experience and the
<PAGE>
Compensation Committee's subjective assessment of individual
performance. None of the factors considered in determining base
salaries are assigned relative weights.
Effective March 1, 1994, the Compensation Committee
increased the salary paid to Frank E. Russell, Chief Executive
Officer of the Company. This increase reflected the Compensation
Committee's subjective assessment of Mr. Russell's individual
performance. The increase was also intended to make Mr.
Russell's salary more competitive with the salaries paid to chief
executive officers by other similar companies in the newspaper
industry. Based upon information it has received through
compensation consultants and otherwise, the Compensation
Committee believes Mr. Russell's base salary is below the median
of the range of salaries paid to chief executive officers by
other similar companies in the peer group and in the newspaper
industry generally.
Incentive Bonus Awards
The Compensation Committee is responsible for determining
the amount of incentive bonus for the Chief Executive Officer of
the Company. In determining the amount of annual incentive bonus
paid to Mr. Russell for 1994, the Compensation Committee
considered its subjective assessment of (i) Mr. Russell's
individual performance, in particular his achievements in
completing the successful buy-out of certain minority interests
in INI, in planning and managing the significant capital projects
undertaken by the Company and in continuing to develop the
Company's management team, and (ii) the overall financial
performance of the Company. The Compensation Committee also
considered information received from an independent compensation
consultant which indicates that Mr. Russell's total compensation
is below the median of the range of total compensation paid to
chief executive officers by other similar companies in the peer
group and in the newspaper industry generally. In addition, the
Compensation Committee considered the amounts paid as bonuses to
Mr. Weil and Mr. Applegate under the MBO Programs (as defined
below). The determination of the Compensation Committee was
subjective and no relative weight was assigned to any of the
particular factors considered by the Compensation Committee in
determining the amount of Mr. Russell's bonus for 1994.
Mr. Weil and Mr. Applegate received bonuses for 1994
pursuant to Management by Objectives Programs at PNI and INI,
respectively (the "MBO Programs"). The MBO Programs pay bonuses
based upon certain factors, including the achievement of
operating income and individual objectives. The operating income
goal for each company and the individual objectives for each
participating employee are set each year by management of PNI and
INI, respectively, and are approved by the Chief Executive
Officer of the Company. The Compensation Committee has not been
involved in administering the MBO Programs, but has determined
that it will review and approve the income goals and individual
objectives for the CEO and top ten compensated employees in the
future.
<PAGE>
The awards under the MBO Program at PNI are based on three
criteria: (i) achievement of an operating income goal by PNI,
(ii) achievement of individual improvement objectives by each
participant, and (iii) evaluations by management of each
participant. Each of these criteria is assigned a different
weight depending on a participant's level in management, with the
achievement of the operating income goal being weighted most
heavily (up to 75%) for Mr. Weil and other members of senior
management. The level of an individual's participation is
determined as a percentage of the participant's base salary, with
such percentage being determined based upon the participant's
position in management and the amount, if any, by which PNI
exceeds its operating income goal.
The awards under the MBO Program at INI are based upon two
criteria: (i) achievement of an operating income goal by INI,
and (ii) achievement of individual objectives by each
participant. Each of these criteria is equally weighted in
determining awards. The level of an individual's participation
is determined as a percentage of the participant's base salary,
with such percentage being determined based upon the
participant's position in management and the amount, if any, by
which CNI exceeds its operating income goal.
The amount of incentive bonus paid to Mr. Wallace for 1994
was determined by the Chief Executive Officer based upon his
subjective evaluation of (i) Mr. Wallace's performance in
achieving certain individual objectives, and (ii) the overall
financial performance of the Company. Mr. Russell's
determination was subjective and no relative weight was assigned
to any of the particular factors considered by Mr. Russell in
determining Mr. Wallace's bonus for 1994.
Stock Option Awards
The Central Newspapers, Inc. Stock Option Plan is the
Company's long-term incentive plan for executive officers and key
managers. Option grants are made by the Stock Option Committee,
which consists of the three members of the Compensation Committee
who are outside directors.
No stock options were granted during fiscal year 1994. The
grant of options which otherwise would have occurred in fiscal
year 1994 was delayed to give the Compensation Committee an
opportunity to consider the recommendations of an independent
compensation consultant retained by the Company to study the
Company's executive compensation, including the methods used in
determining the size of option grants. The review of
recommendations with respect to stock options was completed in
early 1995 and the Stock Option Committee anticipates making the
delayed option grant in the near future.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code, enacted in 1993
and applicable to the Company beginning with its 1995 fiscal
year, generally disallows a tax deduction to public companies for
<PAGE>
compensation over $1 million paid to a corporation's chief
executive officer and the four other most highly compensated
executive officers. Section 162(m) provides that qualifying
performance-based compensation will not be subject to the
deduction limit if certain requirements are met. Certain of the
provisions of the proposed Amended and Restated Central
Newspapers, Inc. Stock Compensation Plan described herein are
intended to permit the grant of stock options and restricted
stock awards that will qualify as performance-based compensation
for purposes of Section 162(m). Even though the amount of
compensation which was paid in fiscal 1994 to individual
executive officers was substantially less than $1 million, the
Compensation Committee is continuing to consider whether other
aspects of the Company's executive compensation program should be
amended to meet the deductibility requirements of Section 162(m).
<TABLE>
<S> <C> <C>
William A. Franke, Chairman James C. Quayle, Chairman Frank E. Russell,
Kent E. Agness Kent E. Agness Chief Executive Officer
Eugene S. Pulliam William A. Franke (with respect to the determina-
James C. Quayle Members of the Stock tion of bonuses pursuant to the
Members of the Compensation Option Committee MBO Programs and the
Committee determination of the bonus for
Wayne D. Wallace)
</TABLE>
February 21, 1995
<PAGE>
COMPANY PERFORMANCE
The following graph show a comparison of cumulative total
returns for the Company's Class A Common Stock, the Standard &
Poor's 500 Stock Index (the "S&P 500") and an index of peer
companies selected by the Company.
<TABLE>
<CAPTION>
COMPARISON OF FIVE FISCAL YEAR CUMULATIVE TOTAL RETURN (1)
Among Central Newspapers, Inc., S & P 500 and a Peer Group (2)
12/31/89 12/30/90 12/29/91 12/27/92 12/26/93 12/25/94
<S> <C> <C> <C> <C> <C> <C>
Central Newspapers Inc 100 76 87 104 130 132
Peer Group 100 80 90 112 125 118
S & P 500 100 97 126 136 150 152
<FN>
(1) The total cumulative return on investment (change in the
year end stock price plus reinvested dividends) (the "Total
Return") for the Company's Class A Common Stock is based on
a $100 investment as of the market close on December 31,
1989 (the trading day prior to the beginning of the
Company's fifth preceding fiscal year). Total Return for
the peer group and the S & P 500 is based on a $100
investment as of December 31, 1989. The Total Return for
the Class A Common Stock, the peer group and the S & P 500
is shown through December 25, 1994.
<PAGE>
(2) Investment in the peer group is weighted based on market
capitalization as of December 31, 1989. Companies in the
peer group are as follows: Gannett Co., Inc., Knight-
Ridder, Inc., Lee Enterprises, Incorporated, McClatchy
Newspapers, Inc., The New York Times Company, Pulitzer
Publishing Company, The E.W. Scripps Company, Tribune
Company and The Washington Post Company.
</TABLE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of
Directors is composed of William A. Franke (Chairman), Kent E.
Agness, Eugene S. Pulliam and James C. Quayle. Eugene S. Pulliam
is the Executive Vice President of the Company, the President of
PNI and Publisher of the Company's Indianapolis newspapers. The
members of the Stock Option Committee of the Board of Directors
are James C. Quayle (Chairman), Kent E. Agness and William A.
Franke. Frank E. Russell, Chief Executive Officer and a Director
of the Company, is responsible for determining or approving the
amount of incentive bonuses awards for certain of the Company's
executive officers other than himself. See "Compensation
Committee Report on Executive Compensation - Incentive Bonus
Awards."
On September 17, 1992, PNI became the holder of a $544,500
promissory note of America West Airlines, Inc. The note was
issued pursuant to a facility in which a number of lenders
extended debtor-in-possession financing to America West Airlines,
Inc. while it was operating in Chapter 11 under the Federal
bankruptcy laws. The note, which provided for the payment of
interest at a rate of 3.5% in excess of the London Interbank
Offered Rate, was paid on August 25, 1994. William A. Franke
became the Chairman of the Board of America West Airlines, Inc.
on September 17, 1992 and currently acts as its Chief Executive
Officer.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Louis A. Weil, III, Executive Vice President of PNI and
Publisher of the Company's Phoenix Newspapers, is party to a
Termination Benefits Agreement, dated as of August 1, 1991, with
PNI which entitles him to receive a payment from PNI in the event
he is terminated for any reason other than cause (as defined in
the agreement) or his death, total disability or attainment of
age 65. Such payment shall be in an amount equal to ten percent
(10%) of Mr. Weil's annual base salary on the date of termination
for each full six months of service prior to termination,
provided that such payment is limited to 100% of Mr. Weil's
annual base salary.
PROPOSAL II -- APPROVAL OF AUDITORS
The Board of Directors has selected, subject to the approval
of the shareholders, the firm of Geo. S. Olive & Co. LLC,
certified public accountants, as independent accountants to audit
the financial statements of the Company for its fiscal year
ending December 31, 1995. Geo. S. Olive & Co. LLC is a successor
firm to Geo. S. Olive & Co. which has served in that capacity for
over 40 years. Representatives of Geo. S. Olive & Co. LLC will
be present at the Annual Meeting, will have the opportunity to
make a statement, if they desire to do so, and will respond to
appropriate questions.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF GEO. S. OLIVE & CO. LLC AS AUDITORS FOR FISCAL 1995.
PROPOSAL III -- APPROVAL OF AMENDED
AND RESTATED STOCK COMPENSATION PLAN
On March 21, 1995 the Board of Directors adopted the Amended
and Restated Central Newspapers, Inc. Stock Compensation Plan
(the "Stock Plan"), subject to shareholder approval at the 1995
Annual Meeting of Shareholders. The Stock Plan amends and
restates the Company's existing Stock Option Plan for the purpose
of: (i) permitting the grant of restricted stock; (ii) providing
for the annual grant of stock options to non-employee members of
the Board of Directors ("Director Options"); (iii) increasing the
number of shares available for issuance pursuant to the Stock
Plan to 3,000,000; and (iv) adding provisions which would permit
stock options or restricted stock granted to the Chief Executive
Officer and the four other most highly compensated executive
officers of the Company to constitute qualified performance-based
compensation excluded from the deduction limits of Section 162(m)
of the Code ("Qualified Awards"). See "Compensation Committee
Report on Executive Compensation - Deductibility of Executive
Compensation" herein. The following summary of certain
provisions of the Stock Plan does not purport to be complete and
is qualified in its entirety by reference to the Stock Plan, a
copy of which is attached to this Proxy Statement as Exhibit A.
General Information
The overall purpose of the Stock Plan is to provide key
employees and non-employee directors of the Company with an
increased incentive to work for the success of the Company and
its subsidiaries, thereby enabling the Company to attract and
retain capable executive personnel. The Stock Plan will be
administered generally by a committee appointed by the Board of
Directors (the "Committee"). However, provisions of the Stock
Plan relating to the grant of Qualified Awards shall be
administered and interpreted only by members of the Committee who
qualify as an "outside director" within the meaning of Section
162(m) of the Code. The provisions of the Stock Plan relating to
Director Options are intended to be self-administering; however,
in certain cases such provisions will be administered and
interpreted by those members of the Board of Directors who are
not eligible to receive Director Options.
Shares Subject to Stock Plan
Subject to adjustment as described below, a maximum of
3,000,000 shares of the Company's Class A Common Stock may be
issued for grants under the Stock Plan. As of December 25, 1994,
there were options for 868,450 shares of the Company's Class A
Common Stock outstanding under the Company's current Stock Option
Plan and 144,050 shares which had been acquired upon exercise of
stock options granted pursuant to the Company's current Stock
Option Plan. In the event of a recapitalization, stock split,
stock dividend, combination of shares or other relevant change
<PAGE>
affecting the Company's Class A Common Stock, the Stock Plan
provides that adjustments may be made to the number of shares
available for grants and to the number of shares and exercise
price under outstanding grants made before the event.
Grants Under the Stock Plan
Stock Options. Under the Stock Plan, the Committee may
grant non-qualified options and Incentive Stock Options ("ISOs").
The Committee shall establish the option price, which may not be
less than 100% of the fair market value of the Company's Class A
Common Stock on the date of grant. The term of the option and
the period during which it may be exercised are also established
by the Committee, subject to provisions relating to death,
retirement or disability and provided that the term may not
exceed ten years. The option price may be satisfied in cash or,
if permitted by the Committee, by delivering to the Company
previously acquired shares of the Company's Class A Common Stock,
or a combination of cash and shares, having an aggregate fair
market value equal to the total option price. In order for stock
options granted under the Stock Plan to constitute Qualified
Awards, the Chief Executive Officer may not receive options for
more than 100,000 shares in any fiscal year under the Stock Plan
and each of the four other most highly compensated executive
officers of the Company may not receive options for more than
50,000 shares in any fiscal year under the Stock Plan.
Restricted Stock Grants. The Committee may also issue
shares of Class A Common Stock under a restricted stock grant.
The grantees will not be permitted to sell, assign, pledge or
otherwise transfer the shares of Class A Common Stock subject to
such a grant until the lapse of the restrictions specified and/or
the attainment of certain certified objective performance goals.
A stock certificate will be issued to the grantee, but will be
subject to forfeiture upon the failure to meet the restrictions
specified by the grant. The grantee will, however, be entitled
to vote the shares and receive dividends during the period prior
to the lapse of the restrictions. In order for restricted stock
granted under the Stock Plan to constitute Qualified Awards, (i)
the grant must be subject to forfeiture if the Company or a
subsidiary does not meet a specified operating income target,
(ii) the Chief Executive Officer may not receive more than 20,000
restricted shares in any fiscal year under the Stock Plan and,
(iii) each of the four other most highly compensated executive
officers of the Company may not receive more than 10,000
restricted shares in any fiscal year under the Stock Plan.
Director Options. Under the terms of the Stock Plan, on the
first day following each Annual Meeting of Shareholders, each
director who is not employed by the Company and who has been
elected to the Board of Directors at such meeting will
automatically be granted Director Options to purchase 1,000
shares of the Company's Class A Common Stock. Each Director
Option granted under the Stock Plan shall be a non-qualified
stock option. The option price shall be 100% of the fair market
value of the Company's Class A Common Stock on the date of the
grant. The Director Option will be exercisable at any time
<PAGE>
during the period that begins six months after the date of grant
and shall terminate on the ten year anniversary of the grant
date, subject to provisions relating to death, retirement or
disability. The option price may be satisfied in cash or by
delivering to the Company previously acquired shares of Class A
Common Stock, or a combination of cash and shares, having a fair
market value equal to the option price.
Federal Income Tax Consequences
The grant of a stock option (including Director Options)
will not result in taxable income at the time of grant for the
optionee or the Company. A grantee will not have taxable income
upon exercising an ISO (except that the alternative minimum tax
may apply), and the Company will receive no deduction when an ISO
is exercised. Upon exercising a non-qualified stock option, a
grantee will recognize ordinary income in the amount by which the
fair market value exceeds the option price; the Company will be
entitled to a deduction for the same amount.
The award of shares of Class A Common Stock under a
restricted stock grant will not result in taxable income to the
grantee at the time of the award as long as the shares are
subject to a substantial risk of forfeiture. At the time the
shares are no longer subject to substantial risk of forfeiture,
the grantee will recognize ordinary income in an amount equal to
the fair market value of the shares at the time the restrictions
lapse, and the Company will be entitled to a deduction for the
same amount.
Value of Grants
No grants of stock options or restricted stock under the
Stock Plan have been made since the date of its adoption by the
Board of Directors on March 21, 1995. Therefore, the value of
any future awards are not determinable. For information
regarding the option exercises and holdings for the fiscal year
ended December 25, 1994 with respect to each of the executive
officers named in the Summary Compensation Table, see
"Compensation of Executive Officers - Option Grants, Exercises
and Holdings" herein.
No grants of Director Options under the Stock Plan have been
made as of the date of this Proxy Statement. The following table
sets forth summary information concerning the hypothetical value
of grants of Director Options to all eligible directors under the
Stock Plan as of December 25, 1994, based on the assumption that
such grants were made as of April 22, 1994 (the day following the
1994 Annual Meeting of Shareholders):
<TABLE>
<CAPTION>
Plan Participants Number of Shares Dollar Value(1)
<S> <C> <C>
Kent E. Agness 1,000 $2,375.00
William A. Franke 1,000 $2,375.00
Dan Quayle 1,000 $2,375.00
<PAGE>
James C. Quayle 1,000 $2,375.00
Non-Employee Directors 4,000 $9,500.00
as a Group
___________________
<FN>
(1) Assumes a per share stock price of $27.125 (the closing price of the
Company's common stock on December 25, 1994), a per share exercise price
of $24.75 (the closing price of the Company's common stock on April 22,
1994) and that all Director Options were exercisable.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE STOCK PLAN.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Company retains as its legal counsel the law firm of
Barnes & Thornburg, of which Kent E. Agness is a partner. The
amount of fees paid to Barnes & Thornburg for the 1994 fiscal
year was less than 5% of the Company's gross revenues for such
fiscal year and less than 5% of Barnes & Thornburg's gross
revenues for the same period.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's directors, executive officers and
persons who own more than ten percent of the Company's Common
Stock, to file with the Securities and Exchange Commission and
the New York Stock Exchange initial reports of ownership and
reports of changes in ownership of Common Stock of the Company.
Officers, directors and greater than ten-percent shareholders are
required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) forms they
file.
Specific due dates for these reports have been established,
and the Company is required to disclose in this Proxy Statement
any failure to file by these dates during 1994. To the Company's
knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no
other reports were required, with respect to the fiscal year
ended December 25, 1994, all Section 16(a) filing requirements
applicable to the Company's officers, directors and greater than
ten-percent shareholders were complied with, except that Forms 5
for the fiscal year ending December 25, 1994 for Messrs.
Applegate, Pulliam, James Quayle and Weil were filed late.
However, such filings were made within one week of the filing
deadline.
<PAGE>
SHAREHOLDER PROPOSALS
The Company's Code of By-Laws provides that only such
business may be conducted at a meeting of shareholders as shall
have been properly brought before the meeting and as shall have
been determined to be lawful and appropriate for consideration by
shareholders at the meeting. To properly bring business before
the meeting of shareholders, written notice thereof must be
delivered to or mailed and received by the Secretary of the
Company not less than ten (10) days prior to the meeting. A
shareholder's notice shall set forth as to each matter the
shareholder proposes to bring before the meeting (a) a brief
description of the business desired to be brought before the
meeting, (b) the name and address, as they appear on the
Company's shareholder list, of the shareholder proposing such
business, (c) the class and number of shares of the Company which
are beneficially owned by the shareholder, and (d) any interest
of the shareholder in such business.
Shareholders of the Company may also nominate persons for
election to the Board of Directors by providing written notice to
the Secretary of the Company. Such notice must be delivered to
or mailed and received at the principal office of the Company not
less than ten (10) days prior to the meeting and must set forth
as to each person whom the shareholder proposes to nominate
(a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such
person, (c) the class and number of shares of the Company which
are beneficially owned by such person, (d) any other information
relating to such person that is required to be disclosed in
solicitation of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (including
without limitation such person's written consent to serving as a
director if elected), and (e) the qualifications of the nominee
to serve as a director of the Company. The Company may require
any proposed nominee to furnish such other information as may
reasonably be required by the Company to determine the
eligibility of such proposed nominee to serve as a director of
the Company.
Proposals of shareholders intended to be presented at the
next Annual Meeting to be held in April, 1996 must be received by
the Company at its principal executive offices for inclusion in
the Proxy Statement and form of proxy relating to that meeting no
later than December 31, 1995.
ANNUAL REPORT
The Annual Report for the Company's fiscal year ended
December 25, 1994, is being mailed with this Proxy Statement to
all shareholders. The Annual Report is not a part of the proxy
soliciting material.
<PAGE>
OTHER MATTERS
Insofar as any of the information in this Proxy Statement
may rest peculiarly within the knowledge of persons other than
the Company, the Company relies upon information furnished by
others for the accuracy and completeness thereof. Management is
not aware of any business to come before the Annual Meeting other
than that described in the Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it
is intended that the proxies solicited hereby will be voted with
respect to those other matters in accordance with the judgment of
the persons voting the proxies.
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CENTRAL NEWSPAPERS, INC.
STOCK COMPENSATION PLAN
1. Purpose. The purpose of the Central Newspapers, Inc.
Stock Option Plan (the "Plan") is to provide to certain key
employees and non-employee directors of Central Newspapers, Inc.
(the "Corporation") and other key employees of any of the 50% or
greater owned subsidiaries of the Corporation or 50% or greater
owned subsidiaries of a 50% or greater owned subsidiary of the
Corporation (individually a "Subsidiary" and collectively the
"Subsidiaries") who are materially responsible for the management
or operation of the business of the Corporation or a Subsidiary,
a favorable opportunity to acquire Class A Common Stock without
par value of the Corporation ("Common Stock"), thereby providing
them with an increased incentive to work for the success of the
Corporation and the Subsidiaries and better enabling the
Corporation and the Subsidiaries to attract and retain capable
executive personnel. The three means by which an individual may
acquire Common Stock are:
(a) the grant to a key employee of an option to
acquire shares of Common Stock (an "Option") in accordance
with Section 5 or Section 8;
(b) the award to a key employee of shares of Common
Stock without the payment of consideration therefor (an
"Award") in accordance with Section 6 or Section 8; and
(c) the grant to a member of the Board of Directors of
the Corporation who is not employed by the Corporation (an
"Outside Director") of an option to acquire shares of Common
Stock (a "Director Option") in accordance with Section 7.
2. Administration of the Plan. Except with respect to
Director Options granted pursuant to Section 7, the Plan shall be
administered, construed and interpreted by a committee (the
"Committee"), consisting of at least three (3) members of the
Board of Directors of the Corporation, who shall be designated
from time to time by the Board of Directors of the Corporation.
No member of the Committee shall be eligible, at any time when he
or she is such a member or within one (1) year prior to his or
her appointment to the Committee, to be granted an Option or
Award under the Plan or to be selected as a person to whom stock,
stock options, or stock appreciation rights may be allocated or
granted under any other plan of the Corporation or a Subsidiary.
The decision of a majority of the members of the Committee shall
constitute the decision of the Committee, and the Committee may
act either at a meeting at which a majority of the members of the
Committee is present or by a written consent signed by all
members of the Committee. The Committee shall have the sole,
final and conclusive authority to determine, consistent with and
subject to the provisions of the Plan:
<PAGE>
(a) the individuals (the "Optionees") to whom Options
or successive Options shall be granted under the Plan;
(b) the individuals ("Recipients") to whom Awards
shall be granted under the Plan;
(c) the time when Options and/or Awards shall be
granted hereunder;
(d) the number of shares of Common Stock of the
Corporation to be covered under each Option;
(e) the number of shares of Common Stock of the
Corporation to be awarded under each Award;
(f) the option price to be paid upon the exercise of
each Option;
(g) the period within which each Option may be
exercised;
(h) the extent to which an Option is an incentive
stock option or a non-qualified stock option;
(i) the terms and conditions of the respective option
agreements by which Options granted shall be evidenced; and
(j) the terms and conditions of the respective stock
award agreements by which Awards shall be evidenced.
The Committee shall also have authority to prescribe, amend and
rescind rules and regulations relating to the Plan and to make
all other determinations necessary or advisable in the
administration of the Plan.
Those members of the Committee who are currently "outside
directors" as defined in Prop. Reg. Section 1.162-27(e)(3) shall
constitute a subcommittee (the "Incentive Compensation
Subcommittee") which shall administer and interpret the
provisions of Section 8 of this Plan. In the event that there
are, at any time, fewer than two members of the Incentive
Compensation Subcommittee, the Board of Directors shall appoint,
from its remaining members, one or more additional Incentive
Compensation Subcommittee members so that the Incentive
Compensation Subcommittee shall include at least two "outside
directors" as defined in Prop. Reg. Section 1.162-27(e)(3).
Those provisions of the Plan (including, but not limited to,
Section 7) that are applicable to the administration,
construction or interpretation of Director Options (the "Director
Option Provisions") shall be administered, construed and
interpreted by those members of the Board of Directors of the
Corporation who are not Outside Directors (the "Inside
Directors"). The decision of a majority of the Inside Directors
shall constitute the decision of the Inside Directors in the
aggregate, and the Inside Directors may act either at a meeting
at which a majority of the Inside Directors is present or by a
<PAGE>
written consent signed by all the Inside Directors. The Inside
Directors shall have the sole, final and conclusive authority to
interpret and construe the Director Option Provisions and to
prescribe, amend and rescind rules and regulations relating to
the Director Option Provisions.
3. Eligibility. The Committee may, consistent with the
purposes of the Plan, grant Options or make Awards to officers
and other key employees of the Corporation or of a Subsidiary
who, in the opinion of the Committee, are from time to time
materially responsible for the management or operation of the
business of the Corporation or of a Subsidiary; provided,
however, that in no event may any employee who owns (after
application of the ownership rules in Section 425(d) of the
Internal Revenue Code of 1986, as amended, and any rules or
regulations promulgated thereunder (the "Code")) shares of stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation be granted an incentive
stock option hereunder unless, at the time such incentive stock
option is granted, the option price is at least 110% of the fair
market value of the Common Stock subject to the incentive stock
option and such incentive stock option by its terms is not
exercisable after the expiration of five (5) years from the date
such incentive stock option is granted. Subject to the
provisions of Section 4 hereof, an individual who has been
granted an Option or Award under the Plan, if otherwise eligible,
may be granted additional Options or Awards if the Committee
shall so determine.
4. Stock Subject to the Plan. There shall be reserved for
issuance upon the exercise of Options granted, or for the purpose
of making Awards, under the Plan, three million (3,000,000)
shares of the Corporation's Class A Common Stock which will be
authorized but unissued shares of the Corporation. Subject to
Section 10 hereof, the shares granted pursuant to an Award and/or
for which Options and/or Director Options may be granted under
the Plan shall not exceed that number. If any Option or Director
Option shall expire or terminate for any reason without having
been exercised in full or if any shares of Common Stock awarded
pursuant to an Award are forfeited, the unpurchased or forfeited
shares subject thereto shall (unless the Plan shall have
terminated) become available for other Options, Director Options
or Awards under the Plan.
5. Terms of Option. Each Option granted under the Plan
shall be evidenced by a Stock Option Agreement between the
Corporation and the Optionee and shall be subject to the
following terms and conditions and to such other terms and
conditions not inconsistent therewith as the Committee may deem
appropriate in each case:
(a) Option Price. The price to be paid for shares of
Common Stock upon the exercise of each Option shall be
determined by the Committee at the time such Option is
granted, but such price in no event shall be less than the
fair market value, as determined by the Committee consistent
<PAGE>
with the requirements of Section 422A of the Code, of the
Common Stock on the date on which such Option is granted.
(b) Period for Exercise of Option. An Option shall
not be exercisable after the expiration of such period as
shall be fixed by the Committee at the time such Option is
granted, but such period in no event shall exceed ten (10)
years from the date on which such Option is granted;
provided, however, that no incentive stock option shall be
exercisable prior to the date on which the Plan is approved
by the shareholders of the Corporation as required by
Section 422A of the Code.
(c) Exercise of Options. The option price of each
share of Common Stock purchased upon exercise of an Option
shall be paid in full in cash at the time of such exercise;
provided, however, that an Optionee may, with the approval
of the Committee, exercise an Option in whole or in part by
tendering to the Corporation whole shares of Common Stock or
any combination of whole shares of Common Stock and cash,
having a fair market value equal to the cash exercise price
of the shares with respect to which the Option is being
exercised. For this purpose, the fair market value of the
shares tendered by the Optionee shall be computed as of the
exercise date in such manner as determined by the Committee
consistent with the requirements of Section 422A of the
Code. The Committee shall have the authority to grant
Options exercisable in full at any time during their term or
exercisable in such quotas as the Committee shall determine.
An Option may be exercised at any time or from time to time
during the term of the Option as to any or all whole shares
which have become subject to purchase pursuant to the terms
of the Option (including, without limitation, any quotas
with respect to Option exercise) or the Plan.
(d) Termination of Option. Any Option granted to an
Optionee shall terminate as of the date the Optionee ceases
to be an employee of the Corporation or of the Subsidiaries
for any reason other than retirement, permanent and total
disability (within the meaning of Section 105(d)(4) of the
Code), or death. Leave of absence approved by the Committee
shall not constitute cessation of employment. If an
Optionee ceases to be an employee of the Corporation or the
Subsidiaries by reason of retirement, any Option granted to
that Optionee may be exercised by the Optionee in whole or
in part within three (3) years after the date of the
Optionee's retirement whether or not the Option was
otherwise exercisable at the date of such retirement. (The
term "retirement" as used herein means such termination of
employment on or after attaining age 60). If an Optionee
ceases to be an employee of the Corporation or the
Subsidiaries by reason of permanent and total disability
(within the meaning of Section 105(d)(4) of the Code), any
Option granted to that Optionee may be exercised by the
Optionee in whole or in part within three (3) years after
the date of the Optionee's termination of employment by
reason of such disability whether or not the Option was
<PAGE>
otherwise exercisable at the date of such termination of
employment. If an Optionee dies while in the employ of the
Corporation or the Subsidiaries, any Option granted to that
Optionee may be exercised in whole or in part by the
executor or administrator of the Optionee's estate or by the
person or persons entitled to the Option by will or by
applicable laws of descent and distribution within three (3)
years after the date of the Optionee's death, whether or not
the Option was otherwise exercisable at the date of the
Optionee's death. Notwithstanding the foregoing provisions
of this subsection (d), no Option shall in any event be
exercisable after the expiration of the period fixed by the
Committee in accordance with subsection (b) above.
(e) Nontransferability of Option. An Option may not
be transferred by the Optionee otherwise than by will or the
laws of descent and distribution, and during the lifetime of
the Optionee shall be exercisable only by the Optionee,
except that any non-qualified stock options granted
hereunder may be transferred by an Optionee who is not
subject to the provisions of Section 16 of the Securities
Exchange Act of 1934, as amended, to a revocable trust or
any other trust qualifying as a "grantor trust" under
Sections 671-677 of the Code to be held during the lifetime
of the Optionee for his or her benefit.
(f) Maximum Incentive Stock Options. The aggregate
fair market value (determined as of the time the incentive
stock option is granted) of Common Stock subject to
incentive stock options that are exercisable for the first
time by an employee during any calendar year under the Plan
or any other plan of the Corporation or any Subsidiary shall
not exceed $100,000. For this purpose, the fair market
value of such shares shall be determined as of the date the
incentive stock option is granted and shall be computed in
such manner as shall be determined by the Committee
consistent with the requirements of Section 422A of the
Code. If the immediate exercisability of incentive stock
options arising from the retirement, death or permanent and
total disability of an Optionee pursuant to Section 5(d)
above would cause this $100,000 limitation to be exceeded
for an Optionee, the Committee shall convert as of the date
on which such incentive stock options become exercisable all
or a portion of the outstanding incentive stock options held
by such Optionee to non-qualified stock options to the
extent necessary to comply with the $100,000 limitation.
(g) Tax Benefit. The Committee may, in its sole
discretion, include a provision in any non-qualified stock
option agreement that provides for an additional cash
payment from the Corporation to the Optionee of such
non-qualified option as soon as practicable after the
exercise date of such non-qualified stock option equal to
all or a portion of the tax benefit to be received by the
Corporation attributable to its federal income tax deduction
resulting from the exercise of such non-qualified stock
option.
<PAGE>
(h) Certificates. The certificate or certificates for
the shares issuable upon an exercise of an Option shall be
issued as promptly as practicable after such exercise. An
Optionee shall not have any rights of a shareholder in
respect to the shares of Common Stock subject to an Option
until the date of issuance of a stock certificate for such
shares. In no case may a fraction of a share be purchased
or issued under the Plan, but if, upon the exercise of an
Option, a fractional share would otherwise be issuable, then
the Corporation shall pay cash in lieu thereof.
(i) No Right to Continued Service. Nothing in this
Plan or in any agreement entered into pursuant hereto shall
confer on any person any right to continue in the employ of
the Corporation or its Subsidiaries or affect any rights the
Corporation, a Subsidiary or the shareholders of the
Corporation may have to terminate that person's service at
any time.
6. Terms of Award. Each Award made under the Plan shall
be evidenced by a Stock Award Agreement between the Corporation
and the Recipient and shall be subject to the following terms and
conditions and to such other terms and conditions not
inconsistent therewith as the Committee may deem appropriate in
each case:
(a) Number of Shares. The Stock Award Agreement shall
evidence the number of shares of Common Stock subject to the
Award.
(b) Transfer Restrictions. None of the shares of
Common Stock subject to an Award may be sold, assigned,
pledged or otherwise transferred, voluntarily or
involuntarily, by the Recipient except upon the lapse of
those restrictions and/or the attainment of those objective
performance goals specified in the Stock Award Agreement.
The shares of Common Stock subject to an Award shall be
forfeited to the Corporation upon the Recipient's
termination of employment with the Corporation or its
Subsidiaries (other than termination of employment due to
the Recipient's permanent and total disability (within the
meaning of Section 105(d)(4) of the Code) or death) prior to
the date any restrictions lapse or objective performance
goals are achieved in accordance with the preceding
sentence. Leave of absence approved by the Committee shall
not constitute cessation of employment.
(c) Death or Disability. Upon the Recipient's death
or permanent and total disability (within the meaning of
Section 105(d)(4) of the Code) prior to the date any
restrictions lapse or objective performance goals are
achieved in accordance with Section 6(b), the shares of
Common Stock subject to an Award shall become freely
transferable by the Recipient or the executor or
administrator of the Recipient's estate or by the person or
persons entitled to the shares by will or by applicable laws
of descent and distribution.
<PAGE>
(d) Tax Benefit. The Committee may, in its sole
discretion, include a provision in any Stock Award Agreement
that provides for an additional cash payment from the
Corporation to the Recipient as soon as practicable after an
Award is no longer subject to a substantial risk of
forfeiture under Section 83(b) of the Code (or such other
time as the Recipient first becomes subject to federal
income tax as the result of the receipt of an Award) equal
to all or a portion of the tax benefit to be received by the
Corporation attributable to its federal income tax deduction
resulting from the Award.
(e) Certificates. The certificate or certificates for
the shares subject to an Award shall be issued as promptly
as practicable after such Award. Subject to the
restrictions set forth in Section 6(b), a Recipient shall
have all rights of a shareholder (including any voting
rights and the right to receive dividends) with respect to
the shares of Common Stock subject to an Award as of the
date of issuance of a stock certificate for such shares.
(f) No Right to Continued Service. Nothing in this
Plan or in any agreement entered into pursuant hereto shall
confer on any person any right to continue in the employ of
the Corporation or its Subsidiaries or affect any rights of
the Corporation or a Subsidiary may have to terminate that
person's service at any time.
7. Director Options. Director Options shall be granted as
of the first day following each annual meeting of the
Corporation's shareholders (a "Grant Date"). As of each Grant
Date, each Outside Director serving as a director of the
Corporation on that Grant Date shall automatically be granted a
Director Option to purchase 1,000 shares of Common Stock. Each
Director Option granted under the Plan shall be a non-qualified
stock option and shall be evidenced by a Director Stock Option
Agreement between the Corporation and the Outside Director. The
Director Stock Option Agreement shall specify the number of
shares of Common Stock subject to the Director Option and shall
also be subject to the following terms and conditions:
(a) Director Option Price. The price to be paid for
shares of Common Stock upon the exercise of each Director
Option shall be the average of the high and low prices of
the Common Stock as traded on the New York Stock Exchange on
the Grant Date; provided, however, that if the Grant Date
falls on a day when shares of Common Stock are not traded,
the option price of the Director Option shall be determined
as of the first day following the Grant Date on which such
shares are traded on the New York Stock Exchange.
(b) Period for Exercise of Director Option. A
Director Option shall be exercisable any time during the
period that begins six months after the Grant Date on which
such Director Option is granted and that ends on the ten
(10) year anniversary of that Grant Date.
<PAGE>
(c) Exercise of Director Options. The option price of
each share of Common Stock purchased upon exercise of a
Director Option shall be paid in full in cash at the time of
such exercise; provided, however, that an Outside Director
may exercise a Director Option in whole or in part by
tendering to the Corporation whole shares of Common Stock or
any combination of whole shares of Common Stock and cash,
having a fair market value equal to the cash exercise price
of the shares with respect to which the Director Option is
being exercised. For this purpose, the fair market value of
the shares tendered by the Outside Director shall be the
average of the high and low prices of the Common Stock as
traded on the New York Stock Exchange on the exercise date
(or, if the Common Stock is not traded on that date, the
first preceding date on which the Common Stock was traded on
the New York Stock Exchange). A Director Option may be
exercised at any time or from time to time during the term
of the Director Option as to any or all whole shares which
have become subject to purchase pursuant to the terms of the
Director Option or the Plan.
(d) Termination of Director Option. If an Outside
Director ceases to be a director of the Corporation for any
reason other than death, any Director Option granted to that
Outside Director may be exercised in whole or in part at any
time within the three (3) year period immediately following
the date on which his or her status as a director
terminated. Leave of absence approved by the Inside
Directors shall not constitute termination of status as
director. In the event of the death of an Outside Director
while serving as a director of the Corporation, any Director
Option granted to that Outside Director may be exercised in
whole or in part by the executor or administrator of the
Outside Director's estate or by the person or persons
entitled to the Director Option by will or by applicable
laws of descent and distribution within three (3) years
after the date of the Outside Director's death, whether or
not the Director Option was otherwise exercisable at such
date of death. Notwithstanding the foregoing provisions of
this subsection (d), no option shall in any event be
exercisable after the expiration of the period set forth in
Section 7(b) above.
(e) Nontransferability of Director Option. A Director
Option may not be transferred by the Outside Director
otherwise than by will or the laws of descent and
distribution, and during the lifetime of the Outside
Director shall be exercisable only by that Outside Director.
(f) Certificates. The certificate or certificates for
the shares issuable upon an exercise of a Director Option
shall be issued as promptly as practicable after such
exercise. An Outside Director shall not have any rights of
a shareholder in respect to the shares of Common Stock
subject to a Director Option until the date of issuance of a
stock certificate for such shares. In no case may a
fraction of a share be purchased or issued under the Plan,
<PAGE>
but if, upon the exercise of a Director Option, a fractional
share would otherwise be issuable, then the Corporation
shall pay cash in lieu thereof.
(g) No Right to Continued Service. Nothing in this
Plan or in any agreement entered into pursuant hereto shall
confer on any person any right to continue as a director of
the Corporation or affect any rights the Corporation or the
shareholders of the Corporation may have to terminate that
person's status as a director at any time.
8. Section 162(m) Compliance. The purpose of this Section
8 is to permit the Incentive Compensation Subcommittee to grant
Options or make Awards to a key employee who is a "covered
employee" as defined in Prop. Reg. Section 1.162-27(c)(2) (a
"Covered Employee") in a manner that causes such Options or
Awards to be treated as qualified performance-based compensation
excluded from the deduction limits of Section 162(m) of the Code.
Options or Awards may be granted or made to a Covered Employee
under this Section 8 in lieu of or in addition to Options or
Awards granted or made under Section 5 or Section 6.
Any Options granted under this Section 8 shall be subject to
all terms and conditions set forth in Section 5 and shall also be
subject to the following additional terms and conditions:
(a) The number of shares of Common Stock subject to an
Option granted under this Section 8 in any calendar year
shall not exceed:
(i) in the case of the chief executive officer of
the Corporation, one hundred thousand (100,000) shares;
and
(ii) in the case of each of the four highest paid
officers of the Corporation and its Subsidiaries, other
than the chief executive officer of the Corporation,
fifty thousand (50,000) shares.
Any Awards made under this Section 8 shall be subject to all
terms and conditions set forth in Section 6 and shall also be
subject to the following additional terms and conditions:
(b) An Award made under this Section 8 shall provide
that shares of Common Stock subject thereto shall become
freely transferable (and any other restrictions applicable
thereto shall lapse) only upon the satisfaction of
objective, quantified performance standards based on the
Corporation's (or a Subidiary's) net operating income before
taxes and extraordinary charges against income. The
Incentive Compensation Subcommittee shall be solely
responsible for setting actual performance targets in
accordance with the performance standards set forth in the
preceding sentence and for determining whether such targets
have been attained.
<PAGE>
(c) The number of shares of Common Stock subject to an
Award made under this Section 8 in any calendar year shall
not exceed:
(i) in the case of the chief executive officer of
the Corporation, twenty thousand (20,000) shares; and
(ii) in the case of each of the four highest paid
officers of the Corporation and its Subsidiaries, other
than the chief executive officer of the Corporation,
ten thousand (10,000) shares.
9. Incentive Stock Options and Non-Qualified Stock
Options. Options granted under the Plan may be incentive stock
options under Section 422A of the Code or non-qualified stock
options. All Options granted hereunder shall be clearly
identified as either incentive stock options or non-qualified
stock options. In no event shall the exercise of an incentive
stock option affect the right to exercise any non-qualified stock
option, nor shall the exercise of any non-qualified stock option
affect the right to exercise any incentive stock option. Nothing
in this Plan shall be construed to prohibit the grant of
incentive stock options and non-qualified stock options to the
same person; provided, however, that incentive stock options and
non-qualified stock options shall not be granted in a manner
whereby the exercise of a non-qualified stock option or incentive
stock option affects the exercisability of the other.
Notwithstanding the foregoing, Director Options shall in all
events be non-qualified stock options.
10. Adjustment of Shares. In the event of any change after
the effective date of the Plan in the outstanding stock of the
Corporation by reason of any reorganization, recapitalization,
stock split, stock dividend, combination of shares, exchange of
shares, merger or consolidation, liquidation, or any other change
in the nature of the shares of stock of the Corporation, the
Committee (or, in the case of shares to be reserved for issuance
pursuant to Director Options, the Inside Directors) shall
determine what changes, if any, are appropriate in the number and
kind of shares reserved under the Plan and in the option price
under and/or the number and kind of shares covered by outstanding
Options, Director Options or Awards granted under the Plan. Any
determination of the Committee (or the Inside Directors)
hereunder shall be conclusive.
11. Tax Withholding. Whenever the Corporation proposes or
is required to issue or transfer shares of Common Stock under the
Plan or whenever a Recipient first becomes subject to federal
income tax on an Award of shares, the Corporation shall have the
right to require the Optionee (or Recipient) or his or her legal
representative to remit to the Corporation an amount sufficient
to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or
certificates for such shares, and whenever under the Plan
payments are to be made in cash, such payments shall be net of an
amount sufficient to satisfy any federal, state and/or local
withholding tax requirements.
<PAGE>
12. Amendment. The Board of Directors of the Corporation
may amend the Plan from time to time and, with the consent of the
affected Optionee, Outside Director or Recipient, the terms and
provisions of his or her Option, Director Option or Award, except
that, without the approval of the Corporation's shareholders:
(a) the number of shares of Common Stock which may be
reserved for issuance under the Plan may not be increased
except as provided in Section 10 hereof;
(b) the option price under any Option (or Director
Option) may not be reduced to less than the fair market
value, as determined by the Committee (or the Inside
Directors) consistent with the requirements of Section 422A
of the Code, of the Common Stock on the date such Option or
Director Option is granted except as provided in Section 10
hereof;
(c) the period during which an Option or Director
Option may be exercised may not be extended beyond ten (10)
years from the date on which such Option or Director Option
was granted;
(d) the class of employees or directors to whom
Awards, Options or Director Options may be granted under the
Plan shall not be modified materially; and
(e) the benefits accruing to Recipients, Optionees or
Outside Directors under the Plan shall not be increased
materially within the meaning of Reg. 16b-3(a)(2)(ii)(A)
promulgated under the 1934 Act.
No amendment of the Plan, however, may, without the consent
of the affected Optionee, Outside Director or Recipient, make any
changes in any outstanding Options, Director Options or Awards
theretofore granted under the Plan which would adversely affect
the rights of such Optionee, Outside Director or Recipient.
Furthermore, Section 7 of the Plan may not be amended more than
once in any six (6) month period other than to comply with the
requirements of the Code.
13. Termination. The Board of Directors of the Corporation
may terminate the Plan at any time and no Options, Director
Options or Awards shall be granted thereafter. Such termination,
however, shall not affect the validity of any Option, Director
Option or Award theretofore granted under the Plan. In any event,
no Option, Director Option or Award may be granted after the
conclusion of a ten (10) year period commencing on the date the
Plan was originally adopted or, if earlier, the date the Plan is
approved by the Corporation's shareholders.
14. Successors. The Plan shall be binding upon the
successors and assigns of the Corporation.
15. Governing Law. The terms of any Options, Director
Options or Awards granted hereunder and the rights and
obligations hereunder of the Corporation, the Optionees, Outside
<PAGE>
Directors and Recipients and their successors in interest shall,
except to the extent governed by federal law, be governed by
Indiana law.
16. Government and Other Regulations. The obligations of
the Corporation to issue or transfer and deliver shares under
Options, Director Options and Awards granted under the Plan shall
be subject to compliance with all applicable laws, governmental
rules and regulations, and administrative action.
17. Effective Date. The Plan as amended shall become
effective when it shall have been approved by the Corporation's
shareholders and the Corporation's Board of Directors.
Adopted July 14, 1989
Amended May 16, 1991
Amended September 22, 1992
Amended March 17, 1993
Amended March 21, 1995
<PAGE>
CENTRAL NEWSPAPERS, INC.
CLASS B COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 18, 1995
The undersigned appoints Eugene S. Pulliam and Frank E. Russell,
or either of them, with full power of substitution, as proxies to
vote all shares of CLASS B COMMON STOCK held by the undersigned
at the Annual Meeting of Shareholders of Central Newspapers, Inc.
to be held April 18, 1995, at 10:00 a.m., Indianapolis time, and
at any adjournment thereof, on the following matters:
1. ELECTION OF DIRECTORS
FOR all eight nominees listed below (except
as marked to the contrary below) [_]
WITHHOLDING AUTHORITY to vote for all nominees
listed below [_]
KENT E. AGNESS, MALCOLM W. APPLEGATE, WILLIAM A. FRANKE,
EUGENE S. PULLIAM, DAN QUAYLE, JAMES C. QUAYLE,
FRANK E. RUSSELL, LOUIS A. WEIL, III
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the line provided below.)
______________________________________________________
2. APPROVAL OF AUDITORS
FOR approval of Geo. S. Olive & Co. LLC as auditors for
Central Newspapers, Inc. for the fiscal year ending
December 31, 1995 [_]
AGAINST approval of Geo. S. Olive & Co. LLC [_]
ABSTAIN [_]
3. APPROVAL OF THE AMENDED AND RESTATED CENTRAL
NEWSPAPERS, INC. STOCK COMPENSATION PLAN
FOR approval of the Amended and Restated Central Newspapers,
Inc. Stock Compensation Plan [_]
AGAINST approval of the Amended and Restated Stock
Compensation Plan [_]
ABSTAIN [_]
4. In their discretion, upon such other business (none of
which is known to management of Central Newspapers,
Inc. as of the mailing date of this proxy) as may
properly come before the meeting.
IMPORTANT - This Proxy must be signed and dated on the reverse
side.
<PAGE>
[Reverse Side of Proxy]
(Continued from other side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THE
SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON
THE OTHER SIDE OF THIS PROXY CARD. IF ANY DIRECTOR NOMINEE
SHOULD BE UNABLE TO SERVE, THE SHARES WILL BE VOTED FOR A
SUBSTITUTE NOMINEE SELECTED BY THE BOARD OF DIRECTORS. IF ANY
OTHER BUSINESS COMES BEFORE THE MEETING, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED IN FAVOR OF THE ACTION RECOMMENDED BY
THE BOARD OF DIRECTORS AND, IN THE ABSENCE OF A RECOMMENDATION,
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY HOLDERS.
Please sign exactly and as fully as shown below. When shares are
held by two or more persons, all of them should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership
name by authorized person.
Dated: _________________________, 1995
________________________________________
(Signature)
________________________________________
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
CENTRAL NEWSPAPERS, INC.
CLASS A COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 18, 1995
The undersigned appoints Eugene S. Pulliam and Frank E. Russell,
or either of them, with full power of substitution, as proxies to
vote all shares of CLASS A COMMON STOCK held by the undersigned
at the Annual Meeting of Shareholders of Central Newspapers, Inc.
to be held April 18, 1994, at 10:00 a.m., Indianapolis time, and
at any adjournment thereof, on the following matters:
1. ELECTION OF DIRECTORS
FOR all eight nominees listed below (except
as marked to the contrary below) [_]
WITHHOLDING AUTHORITY to vote for all nominees
listed below [_]
KENT E. AGNESS, MALCOLM W. APPLEGATE, WILLIAM A. FRANKE,
EUGENE S. PULLIAM, DAN QUAYLE, JAMES C. QUAYLE,
FRANK E. RUSSELL, LOUIS A. WEIL, III
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the line provided below.)
_________________________________________________
2. APPROVAL OF AUDITORS
FOR approval of Geo. S. Olive & Co. LLC as auditors for
Central Newspapers, Inc. for the fiscal year ending
December 31, 1995 [_]
AGAINST approval of Geo. S. Olive & Co. LLC [_]
ABSTAIN [_]
3. APPROVAL OF THE AMENDED AND RESTATED CENTRAL
NEWSPAPERS, INC. STOCK COMPENSATION PLAN
FOR approval of the Amended and Restated Central Newspapers,
Inc. Stock Compensation Plan [_]
AGAINST approval of the Amended and Restated Stock
Compensation Plan [_]
ABSTAIN [_]
4. In their discretion, upon such other business (none of
which is known to management of Central Newspapers,
Inc. as of the mailing date of this proxy) as may
properly come before the meeting.
IMPORTANT - This Proxy must be signed and dated on the reverse
side.
[Reverse Side of Proxy]
<PAGE>
(Continued from other side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THE
SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON
THE OTHER SIDE OF THIS PROXY CARD. IF ANY DIRECTOR NOMINEE
SHOULD BE UNABLE TO SERVE, THE SHARES WILL BE VOTED FOR A
SUBSTITUTE NOMINEE SELECTED BY THE BOARD OF DIRECTORS. IF ANY
OTHER BUSINESS COMES BEFORE THE MEETING, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED IN FAVOR OF THE ACTION RECOMMENDED BY
THE BOARD OF DIRECTORS AND, IN THE ABSENCE OF A RECOMMENDATION,
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY HOLDERS.
Please sign exactly and as fully as shown below. When shares are
held by two or more persons, all of them should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership
name by authorized person.
Dated: ______________________, 1995
__________________________________
(Signature)
__________________________________
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
