[COMPANY LETTERHEAD]
March 21, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of Central Newspapers, Inc. (the "Company")
will be held on Thursday, April 24, 1997, at 10:00 A.M., local time, at the
headquarters of Phoenix Newspapers, Inc., at 200 East Van Buren Street, Phoenix,
Arizona.
The Annual Meeting will be held for the following purposes:
1. To elect seven directors of the Company, each to serve for a
one year term.
2. To approve the appointment by the Board of Directors of Price
Waterhouse LLP as auditors for the Company for the fiscal year
ending December 28, 1997.
3. 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 17, 1997 are entitled
to vote at the meeting.
By Order of the Board of Directors
/s/ Louis A. Weil, III
Louis A. Weil, III
President and Chief Executive Officer
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[COMPANY LETTERHEAD]
March 21, 1997
To Our Shareholders:
The 1997 Annual Meeting of Shareholders of Central Newspapers, Inc. will be held
at the headquarters of Phoenix Newspapers, Inc., at 200 East Van Buren Street,
Phoenix, Arizona, on April 24, 1997. 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 1996, which is not a part of our proxy
soliciting material, is enclosed.
By Order of the Board of Directors
/s/ Louis A. Weil, III
Louis A. Weil, III
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>
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, Suite
1200, Indianapolis, Indiana 46204. This Proxy Statement and the enclosed proxy
were mailed on or about March 21, 1997.
The enclosed proxy is solicited for use at the Annual Meeting of the
Company's shareholders to be held on April 24, 1997 at 10:00 A.M., local time,
at the headquarters of Phoenix Newspapers, Inc., at 200 East Van Buren Street,
Phoenix, Arizona 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 seven directors, each to serve
for a one year term, (2) to approve the appointment of Price Waterhouse LLP as
auditors for the Company for the fiscal year ending December 28, 1997, and (3)
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 17, 1997 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. As of February 28, 1997,
23,181,211 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 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 and the approval of the
appointment of the auditors. 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 February 28, 1997 (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.
-1-
<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 21.9%
Class B Common Stock 26,640,000 (3) 84.4%
Eugene S. Pulliam Class A Common Stock 1,853,574 (4) 8.0%
Class B Common Stock 25,235,000 (3) 80.0%
Frank E. Russell Class A Common Stock 1,010,000 (5) 4.3%
Class B Common Stock 23,032,500 (3) 73.0%
First Chicago NBD Corporation Class A Common Stock 2,592,600 (6) 11.2%
One First National Plaza Class B Common Stock -0- --
Chicago, Illinois 60670
Ariel Capital Management, Inc. Class A Common Stock 1,292,507 (7) 5.6%
307 North Michigan Avenue Class B Common Stock -0- --
Chicago, Illinois 60601
Liberty Fund, Inc. Class A Common Stock 1,150,400 (8) 5.0%
8335 Allison Pointe Trail Class B Common Stock 190,000 (8) *
Suite 300
Indianapolis, Indiana 46250
</TABLE>
- --------------
* Less than one percent.
(1) Unless otherwise specified, all addresses: c/o Central Newspapers,
Inc., 135 North Pennsylvania Street, Suite 1200, Indianapolis, Indiana
46204.
(2) Calculated pursuant to Rule 13d-3(d)(1) promulgated under the
Securities Exchange Act of 1934, as amended, except that percentages do
not reflect rights to acquire shares of Class A Common Stock through
conversion of shares of Class B Common Stock. Each share of Class B
Common Stock is convertible into 1/10 of a share of Class A Common
Stock.
(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 Mrs. Pulliam as a Trustee, Mrs. Pulliam
has the power to control decisions regarding the Trust.
(4) Includes (a) 20,000 shares owned by Jane Pulliam, wife of Eugene S.
Pulliam, as to which shares Mr. Pulliam disclaims beneficial ownership,
(b) 1,734,736 shares held by the Eugene S. Pulliam Trust of which Mr.
Pulliam is the Trustee and (c) options held by Mr. Pulliam which are
currently exercisable for 65,000 shares of Class A Common Stock.
(5) Includes (a) 15,000 shares owned by Nancy M. Russell, wife of Frank E.
Russell, as to which shares Mr. Russell disclaims beneficial ownership,
(b) 702,000 shares held in eight separate trusts for which Frank E.
Russell acts as sole Trustee and as to which Mr. Russell disclaims
beneficial ownership and (c) options held by Mr. Russell which are
currently exercisable for 152,500 shares of Class A Common Stock.
(6) Includes 2,485,200 shares held for the estate of Enid Goodrich over
which NBD Bank, N.A. (a subsidiary of First Chicago NBD Corporation),
as personal representative, has sole voting and dispositive power. In
total, First Chicago NBD Corporation, indirectly through one or more of
its subsidiaries, has sole voting power with respect to all 2,592,600
shares, sole dispositive power with respect to 2,549,900 shares, and
shared dispositive power with respect to 8,000 shares. This information
is as of February 4, 1997.
(7) 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 with respect to 1,190,807
shares, shared voting power with respect to 21,900 shares and sole
dispostive power with respect to 1,292,507 shares. This information is
as of February 6, 1997.
(8) The Board of Directors of Liberty Fund, Inc. has sole voting power and
sole dispositive power with respect to all such shares. This
information is as of February 12, 1997.
-2-
<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
February 28, 1997, by its directors, director-nominees, named executive officers
who served as executive officers during the fiscal year ended December 29, 1996
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 Class (1)
- ---------------- -------------- ------------------ ---------
<S> <C> <C> <C>
Kent E. Agness Class A Common Stock 5,000 (2) *
Class B Common Stock -0- --
Malcolm W. Applegate Class A Common Stock 66,449 (3) *
Class B Common Stock -0- --
William A. Franke Class A Common Stock 4,000 (4) *
Class B Common Stock -0- --
L. Ben Lytle Class A Common Stock -0- --
Class B Common Stock -0- --
Thomas K. MacGillivray Class A Common Stock 11,688 (5) *
Class B Common Stock -0- --
John F. Oppedahl Class A Common Stock 26,177 (6) *
Class B Common Stock -0- --
Eugene S. Pulliam Class A Common Stock 1,853,574 (7) 8.0%
Class B Common Stock 25,235,000 (8) 80.0%
Dan Quayle Class A Common Stock 36,850 (9) *
Class B Common Stock 25,000 *
James C. Quayle(10) Class A Common Stock 652,228(11) 2.8%
Class B Common Stock 662,500(12) 2.1%
Frank E. Russell Class A Common Stock 1,010,000(13) 4.3%
Class B Common Stock 23,032,500 (8) 73.0%
Richard Snell Class A Common Stock 1,000 --
Class B Common Stock -0- --
Eric S. Tooker Class A Common Stock 3,000 (14) *
Class B Common Stock -0- --
Louis A. Weil, III Class A Common Stock 107,259 (15) *
Class B Common Stock -0- --
All directors and Class A Common Stock 3,777,225 16.0%
executive officers as Class B Common Stock 26,047,500 (8) 82.6%
a group
</TABLE>
- ----------------
* Less than one percent.
(1) Calculated pursuant to Rule 13d-3(d)(1) promulgated under the
Securities Exchange Act of 1934, as amended, except that percentages do
not reflect rights to acquire shares of Class A Common Stock through
conversion of shares of Class B Common Stock. Each share of Class B
Common Stock is convertible into 1/10 of a share of Class A Common
Stock.
(2) Includes options held by Mr. Agness which are currently exercisable for
2,000 shares of Class A Common Stock.
(3) Includes (a) 7,000 restricted shares, (b) 949 shares held for the
benefit of Mr. Applegate by the Savings Plus Plan and (c) options held
by Mr. Applegate which are currently exercisable for 50,500 shares of
Class A Common Stock.
(4) Includes options held by Mr. Franke which are currently exercisable for
2,000 shares of Class A Common Stock.
(5) Includes (a) 5,000 restricted shares, (b) 1,188 shares held for the
benefit of Mr. MacGillivray by the Savings Plus Plan and (c) options
held by Mr. MacGillivray which are currently exercisable for 5,500
shares of Class A Common Stock.
-3-
<PAGE>
(6) Includes (a) 7,000 restricted shares, (b) 552 shares held for the
benefit of Mr. Oppedahl by the Savings Plus Plan and (c) options held
by Mr. Oppedahl which are currently exercisable for 18,500 shares of
Class A Common Stock.
(7) Includes (a) 20,000 shares owned by Jane Pulliam, wife of Eugene S.
Pulliam, as to which shares Mr. Pulliam disclaims beneficial ownership,
(b) 1,734,736 shares held by the Eugene S. Pulliam Trust of which Mr.
Pulliam is the Trustee and (c) options held by Mr. Pulliam which are
currently exercisable for 65,000 shares of Class A Common Stock.
(8) 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 Mrs. Pulliam as a Trustee, Mrs. Pulliam
has the power to control decisions regarding the Trust.
(9) Includes (a) 8,816 shares owned by Marilyn Tucker Quayle, wife of Dan
Quayle, and (b) options held by Mr. Quayle which are currently
exercisable for 2,000 shares of Class A Common Stock.
(10) James C. Quayle resigned as a Director of the Company effective January
1, 1997.
(11) Includes (a) 418,900 shares owned by Corinne P. Quayle, wife of James
C. Quayle, as to which shares Mr. Quayle disclaims beneficial
ownership, (b) 1,000 shares held by the C&J Charitable Trust
Foundation, of which Mr. Quayle is a Co-Trustee, as to which shares Mr.
Quayle disclaims beneficial ownership, and (c) options held by Mr.
Quayle which are currently exercisable for 2,000 shares of Class A
Common Stock.
(12) Includes 305,000 shares owned by Corinne P. Quayle, wife of James C.
Quayle, as to which shares Mr. Quayle disclaims beneficial ownership.
(13) Includes (a) 15,000 shares owned by Nancy M. Russell, wife of Frank E.
Russell, as to which shares Mr. Russell disclaims beneficial ownership,
(b) 702,000 shares held in eight separate trusts for which Frank E.
Russell acts as sole Trustee and as to which Mr. Russell disclaims
beneficial ownership and (c) options held by Mr. Russell which are
currently exercisable for 152,500 shares of Class A Common Stock.
(14) Includes 2,500 restricted shares.
(15) Includes (a) 1,259 shares held for the benefit of Mr. Weil by the
Savings Plus Plan, (b) 2,500 shares held by the Louis A. Weil III
Family Trust, (c) 14,000 restricted shares and (d) options held by Mr.
Weil which are currently exercisable for 89,500 shares of Class A
Common Stock.
PROPOSAL I -- ELECTION OF DIRECTORS
Seven directors will be elected at the meeting for a one year term. All of
the nominees listed below, except L. Ben Lytle, 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 at least 1992,
tenure and age of each nominee for election as a director are as set forth
below.
William A. Franke, age 60, has been the Chairman and Chief Executive
Officer of America West Holdings Corporation, an aviation and travel service
company, since February 1997 and the Chairman of the Board of its principal
subsidiary, America West Airlines, Inc., an airline carrier. Mr. Franke was the
subsidiary's Chief Executive Officer from December 1993 until February 1997, and
its President from May 1996 until February 1997. He is a director of America
West Holdings Corporation, America West Airlines, Inc., Phelps Dodge
Corporation, Beringer Wine Estates, Mtel Latin America, Inc. and Air Transport
Association of America. He is a director and Chairman of the Board of Airplanes
Limited and a controlling trustee and Chairman of Airplanes U.S. Trust, entities
involved in aircraft financing and leasing.
L. Ben Lytle, age 50, has been President and Chief Executive Officer of
Anthem Insurance Companies, Inc., an insurance holding company, since 1989 and
presently serves as Chairman of the Board of Directors of its major
subsidiaries. He is a director of Acordia, Inc., IPALCO, Inc., Duke REIT, and
Bank One, Indianapolis, N.A.
Eugene S. Pulliam, age 82, 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 uncle
of Dan Quayle.
Dan Quayle, age 50, has been Chairman of Campaign America, a political
action committee, since 1995 and Chairman of BTC, Inc., a private company
-4-
<PAGE>
through which he operates certain of his personal business interests, since
1993. He served as Chairman of Circle Investors, Inc., a private financial
services and insurance holding company from 1993 until February 1997, and served
on the Board of Directors of Amtran, Inc. in 1996. He was Vice President of the
United States from January 1989 to January 1993 and a United States Senator from
January 1981 to January 1989. Mr. Quayle is a director of American Standard,
Inc., U.S. Filter Corporation and Circle Investors, Inc. He has been a director
of the Company since 1993. Mr. Quayle is the nephew of Eugene S. Pulliam.
Frank E. Russell, age 76, has been Chairman of the Company's Board of
Directors and Assistant Secretary of the Company since January 1996. Mr. Russell
served as President and Chief Executive Officer of the Company from 1979 through
1995. He has been a director of the Company since 1974.
Richard Snell, age 66, has been Chairman of the Board and Chief Executive
Officer of Pinnacle West Capital Corporation, a utility holding company and
Chairman of the Board of Arizona Public Service Company since 1990. He is also a
director of Aztar Corporation and Bank One Arizona Corporation. He has been a
director of the Company since September 1996.
Louis A. Weil, III, age 56, has been President and Chief Executive Officer
of the Company since January 1, 1996. From July 1991 through December 1996, Mr.
Weil served as Publisher and Chief Executive Officer of The Arizona Republic and
The Phoenix Gazette and Executive Vice President of Phoenix Newspapers, Inc. 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 an
independent director of Prudential's Domestic Equity, Domestic Fixed Income,
Global Fixed Income, and Municipal Bond 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, a
Compensation Committee, an Audit Committee and an Executive Committee. The Board
of Directors formerly had a separate Stock Option Committee which consisted of
the outside directors who served on the Compensation Committee. However, the
Stock Option Committee was merged into the Compensation Committee on April 17,
1996.
The Nominating Committee held meetings in March and August of 1996 and
February of 1997. The members of the Nominating Committee are Frank E. Russell
(Chairman), Eugene S. Pulliam and Louis A. Weil, III. 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 for election at the Company's 1998
Annual Meeting. 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 Frank E. Russell,
Chairman of the Board, Central Newspapers, Inc., 135 North Pennsylvania Street,
Suite 1200, Indianapolis, Indiana 46204 by November 21, 1997.
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. With the merger of
the Stock Option Committee into the Compensation Committee, the Compensation
Committee is also responsible for administering and interpreting the Central
Newspapers, Inc. Amended and Restated Stock Compensation Plan (the "Stock
Compensation Plan"). The Compensation Committee met in February, April and
September of 1996. The members of the Compensation Committee prior to April 17,
1996, were William A. Franke (Chairman), Kent E. Agness, James C. Quayle and
Eugene S. Pulliam. On April 17, 1996, Eugene S. Pulliam and James C. Quayle
resigned from the Committee and Dan Quayle was appointed to the Committee.
Richard Snell was appointed to the Committee pursuant to a written consent of
the Board of Directors dated December 3, 1996, and Kent E. Agness resigned
effective the same date. Therefore, the current members of the Compensation
Committee are William A. Franke (Chairman), Richard Snell, and Dan Quayle.
The Audit Committee is responsible for reviewing the services and fees of
the Company's independent accountants, financial statements, accounting
practices and adequacy of auditing and internal controls of the Company. Prior
to December 1996, the members of the Audit Committee were Kent E. Agness
-5-
<PAGE>
(Chairman), William A. Franke, and James C. Quayle. At the December 10, 1996
Board meeting, Richard Snell was appointed to the Committee and became Chairman.
James C. Quayle resigned from the Committee effective January 1, 1997.
Therefore, the current members are Richard Snell (Chairman), William A. Franke,
and Kent E. Agness. Mr. Agness is not standing for re-election to the Board of
Directors; therefore, upon completion of the election of directors at the
meeting, Mr. Agness will no longer serve on the Audit Committee. The Committee
met twice in February and once in September of 1996.
The Executive Committee, formed in September 1996, has all authority of the
Board during intervals between meetings of the Board subject to such limitations
as may be imposed by law, by subsequent resolution of the Board, or by the
By-Laws. The members of the Executive Committee are Louis A. Weil, III
(Chairman), Eugene S.
Pulliam and Frank E. Russell.
The Board of Directors held four meetings during the Company's fiscal year
ended December 29, 1996. No director attended fewer than 75% of the aggregate of
(i) the total number of meetings of the Board of Directors, and (ii) the total
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 $20,000, $1,000 for each meeting of the Board of Directors
attended and $750 for each meeting of a committee of the Board attended. Under
the Stock Compensation Plan, each non-employee director receives an annual grant
of stock options to purchase 1,000 shares of the Company's Class A Common Stock
upon election or re-election to the Board of Directors. Such options have an
exercise price equal to the fair market value of the Class A Common Stock on the
date of grant and a term of ten years. 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 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 1996 was $4,779,
$4,669 and $11,387 for Kent E. Agness, William A. Franke and Dan Quayle,
respectively. James C. Quayle and Richard Snell receive coverage under a death
benefit only arrangement. For 1996, the current year term cost of such insurance
for James C. Quayle and Richard Snell was $4,115 and $1,613, respectively. 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 $500,000 to one or more qualifying charitable
organizations chosen by the participant and the Company will be reimbursed by
life insurance proceeds. Individual participants derive no financial benefit
from this program since all charitable deductions accrue solely to the Company.
COMPENSATION OF EXECUTIVE OFFICERS
Compensation For Services
The compensation for services rendered to the Company and its primary
operating subsidiaries, Phoenix Newspapers, Inc. ("PNI") and Indianapolis
Newspapers, Inc. ("INI"), during the fiscal year ended December 29, 1996, paid
to the Chief Executive Officer and the four other most highly compensated
executive officers of the Company who served in such positions during the fiscal
year ended December 29, 1996 is set forth below:
-6-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term
----------------------------------- Compensation
Other ------------------------ All
Name and Principal Position Annual Restricted Securities Other
During the Fiscal Year Compen- Stock Underlying Compen-
Ended December 29, 1996 Year Salary ($) Bonus ($) sation($) Awards ($) Options(#) sation($)
- ----------------------- ---- ---------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Louis A. Weil, III 1996 435,150 304,500 (1) 505,750(2) 80,000 68,423 (7)
President and Chief 1995 390,817 176,581 (1) -0- 42,000(6) 67,207 (8)
Executive Officer 1994 371,667 175,313 (1) -0- -0- 68,854 (9)
John F. Oppedahl 1996 275,150 146,300 (1) 252,875(3) 30,000 27,885 (7)
Publisher and Chief 1995 --- --- --- --- --- ---
Executive Officer of PNI 1994 --- --- --- --- --- ---
Malcolm W. Applegate 1996 263,900 140,315(1) 252,875(4) 16,000 31,267 (7)
President and 1995 248,067 109,908 (1) -0- 42,000(6) 33,550 (8)
General Manager of INI 1994 223,067 85,748 (1) -0- -0- 33,686 (9)
Frank E. Russell 1996 300,150 -0- (1) -0- -0- 16,548 (7)
Chairman of the 1995 466,817 256,749 (1) -0- 125,000(6) 33,058 (8)
Board of Directors 1994 420,983 180,000 (1) -0- -0- 26,993 (9)
Thomas K. MacGillivray 1996 190,150 106,400 (1) 180,625(5) 32,000 17,440 (7)
Treasurer and Chief 1995 --- --- --- --- --- ---
Financial Officer 1994 --- --- --- --- --- ---
</TABLE>
- ------------
(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) At the close of the 1996 fiscal year, Mr. Weil held 14,000 restricted
shares, the aggregate value of which were $600,250. Dividends are currently
paid on the restricted shares.
(3) At the close of the 1996 fiscal year, Mr. Oppedahl held 7,000 restricted
shares, the aggregate value of which were $300,125. Dividends are currently
paid on the restricted shares.
(4) At the close of the 1996 fiscal year, Mr. Applegate held 7,000 restricted
shares, the aggregate value of which were $300,125. Dividends are currently
paid on the restricted shares.
(5) At the close of the 1996 fiscal year, Mr. MacGillivray held 5,000
restricted shares, the aggregate value of which were $214,375. Dividends
are currently paid on the restricted shares.
(6) Represents option grants made with respect to 1994 and 1995.
(7) Includes the following for Messrs. Weil, Oppedahl, Applegate, Russell, and
MacGillivray: (a) Company matching contributions to the Savings Plus Plan
of $4,750, and (b) contributions to the Company's Non-Qualified Savings
Plan of $24,836, $12,108, $11,419, $7,256, and $7,112 for each named
executive officer, respectively. In addition, with respect to Messrs. Weil,
Oppedahl, Applegate and MacGillivray this amount includes $38,837, $11,027,
$15,098, $5,578, 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,
this amount includes $4,542, which represents the current year term cost of
the insurance.
(8) Includes the following for Messrs. Weil, Applegate and Russell, (a) Company
matching contributions to the Savings Plus Plan of $4,620, and (b) Company
matching contributions to the Company's Non-Qualified Savings Plus Plan of
$18,076, $9,699, and $24,323 for each named executive officer,
respectively. In addition, with respect to Messrs. Weil and Applegate, this
amount includes $44,511 and $19,231, 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, this amount includes $4,115 which represents the
current year term cost of the insurance.
(9) Includes for Messrs. Weil, Applegate and Russell, (a) Company matching
contributions to the Savings Plus Plan of $4,620, and (b) Company matching
contributions to the Company's Non-Qualified Savings Plan of $17,259,
$7,733 and $19,419 for each named executive officer, respectively. In
addition, with respect to Messrs. Weil and Applegate, this amount includes
$46,975 and $21,333, 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,
this amount includes $2,954 which represents the current year term cost of
the insurance.
-7-
<PAGE>
Option Grants, Exercises and Holdings
The following tables set forth information relating to option grants,
exercises and holdings with respect to each of the executive officers named in
the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Number of Percent of Value Assuming
Securities Total Options Annual Rates of Stock
Underlying Granted To Exercise Price Appreciation
Options Employees in Price Per Expiration For Option Term
Name Granted Fiscal Year Share Date 5% (3) 10% (3)
- --------------------- ----------- ------------- --------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Louis A. Weil, III 40,000(1) 11.80% $36.125 2/23/06 $908,947 $2,302,954
40,000(2) 11.80% $37.75 9/13/06 $949,625 $2,406,547
John F. Oppedahl 12,000(1) 3.54% $36.125 2/23/06 $272,624 $ 690,886
18,000(2) 5.31% $37.75 9/13/06 $427,331 $1,082,946
Malcolm W. Applegate 16,000(2) 4.72% $37.75 9/13/06 $379,850 $ 962,618
Frank E. Russell -0- --- --- --- --- ---
Thomas K. MacGillivray 12,000(1) 3.54% $36.125 2/23/06 $272,624 $ 690,886
20,000(2) 5.90% $37.75 9/13/06 $474,812 $1,203,273
</TABLE>
- ------------
(1) All such options become exercisable on February 23, 1999, the third
anniversary of the date of grant.
(2) These options vest in three equal annual installments beginning on
September 13, 1997.
(3) These gains are based upon assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over the
full option term. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on option exercises and Class A
Common Stock holdings are dependent on the future performance of the
Company's Class A Common Stock and overall stock market conditions. There
can be no assurance that the amounts reflected on this table will be
achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
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>
Louis A. Weil, III -0- --- 89,500 122,000 $1,888,312 $1,087,000
John F. Oppedahl 7,500 $119,063 18,500 42,500 $ 372,562 $ 350,750
Malcolm W. Applegate 10,000 $181,250 50,500 58,000 $1,240,000 $ 694,000
Frank E. Russell 15,000 $345,000 167,500 125,000 $3,628,750 $1,775,000
Thomas K. MacGillivray -0- --- 5,500 43,500 $ 104,500 $ 351,187
</TABLE>
- ----------------
(1) Based on the closing price for Class A Common Stock on December 27, 1996
which was $42.875 per share.
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").
-8-
<PAGE>
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 early retirement age.
For service prior to 1994, a participant's annual retirement income under
the Pension Plan is equal to the sum of his or her basic credits and his
supplemental credits, subject to a special dollar limitation under the Code.
However, the Participating Companies 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 earned basic credits for
each week's participation in the Pension Plan equal to the amount of his or her
weekly earnings, up to $312.00, multiplied by 1-7/8%. A participant could choose
to earn supplemental credits for each week of participation in the Pension Plan
by voluntarily contributing 3-3/4% of the participant's 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 chose to make such voluntary contributions, he or
she received 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 received
from the Internal Revenue Service a favorable determination as to the
tax-qualified status of the Pension Plan, as amended and restated.
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) $120,000 in fiscal 1996 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") 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 $120,000 (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.
-9-
<PAGE>
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
Summary Compensation Table if such officers had both attained age 65 and retired
on January 1, 1997. 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 1997.
Estimated Annual
Benefits at January 1, 1997
---------------------------
Louis A. Weil, III $43,558
John F. Oppedahl $10,215
Malcolm W. Applegate $33,100
Frank E. Russell $88,456
Thomas K. MacGillivray $ 8,121
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:
o Provide compensation opportunities which are comparable to those
offered by other similar companies in the newspaper and media
industry, thus allowing the Company to compete for and retain talented
executives who are critical to the Company's long-term success;
o Reward key executive officers annually based on an overall assessment
of their performance; and
o 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.
During the fiscal year ended December 29, 1996, the Company's executive
compensation program was comprised of base salary, annual incentive bonuses and
long-term incentive opportunities in the form of stock options and restricted
stock.
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
-10-
<PAGE>
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. In setting salaries for fiscal 1996, the Compensation
Committee reviewed recommendations of management that were developed in
conjunction with a compensation consultant retained by the Company. These
recommendations were prepared, in part, based upon comparative compensation data
relating to newspaper and other media companies which actively compete with the
Company for executive talent, some of which are included in the index of peer
companies used to construct the performance graph which follows this report. In
addition to such recommendations, in determining an executive's base salary the
Compensation Committee took into account the executive's tenure and individual
experience, as well as the Compensation Committee's subjective assessment of
individual performance. None of the factors considered in determining base
salaries were assigned relative weights.
Effective January 1, 1996, the Compensation Committee increased by 11.4%
the salary paid to Louis A. Weil, III. This increase reflected the Compensation
Committee's subjective assessment of Mr. Weil's individual performance, as well
as recognition of the additional duties Mr. Weil would be undertaking in
connection with his promotion to the position of Chief Executive Officer of the
Company. Based upon information obtained from the Company's compensation
consultant, the Compensation Committee believes Mr. Weil's base salary is below
the mid-point of the range of salaries paid to chief executive officers by other
similar companies in the newspaper industry generally.
Incentive Bonus Awards
Incentive bonuses for the executive officers of the Company named in the
Summary Compensation Table which precedes this report were determined under a
Management By Objectives program instituted at the Company and its primary
operating subsidiaries, INI and PNI (the "MBO Program"). Awards under the MBO
Program are based on Company, operating subsidiary and individual objectives.
Company performance is evaluated based upon the achievement of an after-tax net
income goal, operating subsidiary performance is evaluated based upon
achievement of an operating income goal, and individual performance is evaluated
based upon the achievement of certain individual objectives set by the
participant and other members of management. The Company net income goal and the
subsidiary operating income goal are approved by the Compensation Committee.
Each of the three objectives is assigned a different weight depending on a
participant's position in management, with the achievement of the net income
goal for the Company being weighted most heavily for the Company's corporate
executives (100% for Mr. Weil and Mr. MacGillivray), and with the achievement of
the applicable subsidiary operating income goal being weighted most heavily for
members of the senior management of its operating subsidiaries (60% for Mr.
Oppedahl and Mr. Applegate). The size of an incentive bonus payable under the
MBO Program is determined as a percentage of the participant's base salary, with
such percentage being determined based upon (i) the participant's position in
management, and (ii) the actual performance of the Company, the operating
subsidiaries and the individual participant, as applicable, when measured
against their respective objectives.
The amount of incentive bonus for 1996 paid to Mr. Weil as Chief Executive
Officer of the Company was determined under the terms of the MBO Program. This
bonus was based upon the achievement by the Company of its net income goal.
Stock Option and Restricted Stock Awards
The Amended and Restated Central Newspapers, Inc. Stock Compensation Plan
is the Company's long-term incentive plan for executive officers and key
managers. Grants under the Stock Compensation Plan prior to April 17, 1996, were
made by the Stock Option Committee, which consisted of the outside directors on
the Compensation Committee. On April 17, 1996, the Stock Option Committee was
merged into the Compensation Committee, and thereafter, all grants were made,
and will in the future be made, by the Compensation Committee.
In 1996, certain officers were granted restricted stock awards under the
Stock Compensation Plan. Under the Stock Compensation Plan, the recipients of
the restricted stock awards cannot transfer their shares and must forfeit their
shares if they cease to be employees of the Company other than by reason of
death or permanent and total disability. Restrictions on most of the restricted
stock awards made will lapse five years from the date of grant, or at the end of
the third or fourth year if the market price of the Company's Class A Common
Stock has increased by a targeted annual compounded percentage. However, one
half of the restricted stock award made to Mr. Weil will only vest if the
Company achieves a target annual rate of growth in net operating income over the
-11-
<PAGE>
five year vesting period. The awards of restricted stock under the Stock
Compensation Plan are not intended to be made annually but rather to be made
periodically as incentives for management retention. In determining the amount
of individual awards, the Committee considered recommendations of the Company's
compensation consultant and the Committee's subjective assessment of the
recipient's level of responsibility and contribution to the Company. The factors
considered by the Committee were not assigned relative weights.
Two grants of stock options were also made in fiscal 1996. The first grant,
in February 1996, was made in recognition of the promotions of certain executive
officers. The second grant, made in September 1996, represented the annual
option grants for fiscal 1996. Both grants were made using the same procedures,
as outlined below.
To assist in determining the size of option grants, the Company retained an
independent compensation consultant to make specific recommendations regarding
the number of options that should be granted to each executive officer and key
manager. Such recommendations were based on the consultant's review of the
practices of newspaper and other media companies, including some of the
companies in the index of peer companies used in constructing the performance
graph which follows this report. In determining the amount of individual grants,
the Stock Option Committee (with respect to the February 1996 grant) and the
Compensation Committee (with respect to the September 1996 grant) also
considered recommendations received from the Chief Executive Officer (with
regard to all grant recipients other than the Chief Executive Officer),the size
of previous option grants, internal relativity and the Committee's subjective
assessment of the grant recipient's level of responsibility and contribution to
the Company. The factors considered by the Committees were not assigned relative
weights.
With regard to option grants and grants of restricted stock made to the
Chief Executive Officer, the Committee followed the same procedure as it did
with regard to other grant recipients. The option grants made to Mr. Weil in
both February and September matched the number of option grants recommended by
the Company's compensation consultant and were consistent with the Committee's
objectives based on previous grants made to Mr. Weil and to others in the
Company. The number of shares of restricted stock granted to Mr. Weil in
February also matched the recommendation by the Company's compensation
consultant.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for 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. The provisions of the Company's Stock Compensation Plan permit the
grant of stock options and restricted stock awards that qualify as
performance-based compensation for purposes of Section 162(m). One half of the
restricted Class A Common Stock granted to Mr. Weil in February 1996 was
intended to be qualifying performance-based compensation. None of the executive
officers of the Company received compensation in excess of the Section 162(m)
deductibility limits in fiscal 1996. The Compensation Committee will continue to
consider the effect of the deductibility limits of Section 162(m) in its future
determination of executive compensation.
William A. Franke, Chairman
Richard Snell
Dan Quayle
Members of the
Compensation Committee
March 11, 1997
-12-
<PAGE>
COMPANY PERFORMANCE
The following graph shows 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.
COMPARISON OF FIVE FISCAL YEAR CUMULATIVE TOTAL RETURN (1)
Among Central Newspapers, Inc., S & P 500 and a Peer Group (2)
[GRAPH OMITTED]
<TABLE>
<CAPTION>
12/29/91 12/27/92 12/26/93 12/25/94 12/31/95 12/29/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Central Newspapers, Inc. 100 120 150 152 180 250
Peer Group 100 124 139 131 161 199
S&P 500 100 110 122 123 169 208
</TABLE>
- ----------
(1) The total cumulative return on investment (change in the year end stock
price plus reinvested dividends) (the "Total Return") is based on a
$100 investment as of the market close on December 29, 1991 (the
trading day prior to the beginning of the Company's fifth preceding
fiscal year). The Total Return is shown through December 29, 1996.
(2) Investment in the peer group is weighted based on market capitalization
as of December 29, 1991. 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors for the
majority of the fiscal year ended December 29, 1996 was composed of William A.
Franke (Chairman), Kent E. Agness, and Dan Quayle. Eugene S. Pulliam, Executive
Vice President of the Company, Publisher of The Indianapolis Star and The
Indianapolis News and President of PNI, was a member of the Compensation
Committee until April 17, 1996. The members of the Stock Option Committee of the
Board of Directors for the fiscal year ended December 29, 1996, prior to its
merger into the Compensation Committee in April 1996, were James C. Quayle, Kent
E. Agness and William A. Franke.
-13-
<PAGE>
TERMINATION BENEFITS AGREEMENT
Louis A. Weil, III, the President and Chief Executive Officer of the
Company since January 1, 1996, is a party to a Termination Benefits Agreement,
dated as of February 23, 1996, which entitles Mr. Weil to receive certain
benefits from the Company in the event his employment as Chief Executive Officer
of the Company is terminated for any reason other than cause (as defined in the
agreement) or his death, total disability or attainment of age 65. In such
event, Mr. Weil shall be entitled to receive (i) a lump sum payment equal to
200% of his annual base salary on the date of termination, (ii) a lump sum
payment equal to 200% of the pro rata portion of the bonus he would have
received if he had been employed on the last day of the year in which the
termination occurred, which amount will be payable on or before March 31 of the
calendar year following the termination, and (iii) continuation of medical
coverage for two years following the termination.
PROPOSAL II -- APPROVAL OF AUDITORS
The Board of Directors has selected, subject to the approval of the
shareholders, the firm of Price Waterhouse LLP, certified public accountants, as
independent accountant to audit the financial statements of the Company for its
fiscal year ending December 28, 1997. The independent accountant engaged to
audit the Company's financial statements for the two most recent fiscal years
was Geo. S. Olive & Co. LLC. The Audit Committee solicited proposals from
independent accounting firms and based on those bids recommended the selection
of Price Waterhouse LLP. Based upon recommendation of the Audit Committee, the
Board of Directors approved the change in accountants from Geo. S. Olive & Co.
LLC to Price Waterhouse LLP. The reports of Geo S. Olive & Co. LLC on the
financial statements for the past two fiscal years have not contained an adverse
opinion or a disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles. The Company and Geo. S.
Olive & Co. LLC have had no disagreements on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.
Representatives of Geroge 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. Representatives of Price Waterhouse
LLP will not be present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF PRICE WATERHOUSE LLP AS AUDITORS FOR FISCAL 1997.
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 1996 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 1996. 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, all Section 16(a) filing requirements applicable
to the Company's officers, directors and greater than ten percent shareholders
were complied with in respect of the fiscal year ended December 29, 1996, except
-14-
<PAGE>
for the following: (a) one report on Form 4 was filed late, on a Form 5, by
Eugene S. Pulliam, a Director of the Company, (b) one report on Form 4 was filed
late, on a Form 5, by John F. Oppedahl, an Officer of PNI, (c) one initial
report on Form 3 was filed late by Eric S. Tooker, an Officer of the Company and
(d) one initial report on Form 3 was filed late by Robert L. Lowry, an Officer
of the Company.
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 at the principal office 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 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, 1998 must be received by the Company at its
principal executive offices no later than November 21, 1997 for inclusion in the
Proxy Statement and form of proxy relating to that meeting.
ANNUAL REPORT
The Annual Report for the Company's fiscal year ended December 29, 1996 is
being mailed with this Proxy Statement to all shareholders. The Annual Report is
not a part of the proxy soliciting material.
OTHER MATTERS
Insofar as any of the information in this Proxy Statement may rest 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.
-15-
<PAGE>
[PROXY CARD FOR CLASS A COMMON SHARES]
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 24, 1997
The undersigned appoints Eugene S. Pulliam, Frank E. Russell and Louis A. Weil,
III, or any 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 24, 1997, at 10:00
a.m., Phoenix time, and at any adjournment thereof, on the following matters:
1. ELECTION OF DIRECTORS
FOR all seven nominees listed WITHHOLDING AUTHORITY to vote
below (except as as marked to the for all nominees listed below
contrary below) [ ] [ ]
WILLIAM A. FRANKE, L. BEN LYTLE, EUGENE S. PULLIAM,
DAN QUAYLE, FRANK E. RUSSELL, RICHARD SNELL, 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 Price Waterhouse LLP as auditors for Central Newspapers,
Inc. for the fiscal year ending December 28, 1997
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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>
(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: _________________________, 1997
--------------------------------------
(Signature)
--------------------------------------
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
[PROXY CARD FOR CLASS B COMMON SHARES]
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 24, 1997
The undersigned appoints Eugene S. Pulliam, Frank E. Russell and Louis A. Weil,
III, or any 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 24, 1997, at 10:00
a.m., Phoenix time, and at any adjournment thereof, on the following matters:
1. ELECTION OF DIRECTORS
FOR all seven nominees listed WITHHOLDING AUTHORITY to vote
below (except as as marked to the for all nominees listed below
contrary below) [ ] [ ]
WILLIAM A. FRANKE, L. BEN LYTLE, EUGENE S. PULLIAM,
DAN QUAYLE, FRANK E. RUSSELL, RICHARD SNELL, 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 Price Waterhouse LLP as auditors for Central Newspapers,
Inc. for the fiscal year ending December 28, 1997
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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>
(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: _________________________, 1997
--------------------------------------
(Signature)
--------------------------------------
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.
