605 Third Avenue
New York, NY 10158
(212) 850-6000
John Wiley & Sons, Inc. Bradford Wiley II
Chairman of the Board
August 9, 1996
TO OUR SHAREHOLDERS:
We cordially invite you to attend the 1996 Annual Meeting of Shareholders
to be held Thursday, September 19, 1996 at 10 o'clock in the morning, at the
Shelburne Murray Hill Hotel, Grand Ballroom, 303 Lexington Avenue at 37th
Street, New York, New York. The official Notice of Meeting, Proxy Statement, and
separate forms of proxy for Class A and Class B Shareholders are enclosed with
this letter. The matters listed in the Notice of Meeting are described in the
attached Proxy Statement.
The Board of Directors welcomes and appreciates the interest of all our
shareholders in the Company's affairs, and encourages those entitled to vote at
this annual meeting to take the time to do so. We hope you will attend the
meeting, but, whether or not you expect to be personally present, please sign,
date and promptly return the enclosed proxy card (or, if you own two classes of
shares, both proxy cards) in the accompanying post-paid envelope. This will
assure that your shares are represented at the meeting. Even though you execute
this proxy, you may revoke it at any time before it is voted. If you attend the
meeting you will be able to vote in person if you wish to do so, even if you
have previously returned your proxy card.
Your vote is important to us, and we appreciate your prompt attention to
this matter.
Sincerely,
/s/ Bradford Wiley II
---------------------
Chairman of the Board
John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158 (212) 850-6000
NOTICE OF ANNUAL MEETING
of Shareholders
to be held
September 19, 1996
To our Shareholders:
The Annual Meeting of Shareholders of John Wiley & Sons, Inc. (the
"Company") will be held at the Shelburne Murray Hill Hotel, Grand Ballroom, 303
Lexington Avenue at 37th Street, New York, New York, on Thursday, September 19,
1996 at 10:00 A.M., for the following purposes:
1. To elect a board of fifteen (15) directors, of whom five (5) are to be
elected by the holders of Class A Common Stock voting as a class and ten (10)
are to be elected by the holders of Class B Common Stock voting as a class.
2. To consider and act upon a proposal to amend the Company's 1991 Key
Employee Stock Plan to meet the requirements for deductibility under the
Internal Revenue Code, as described more fully in the attached Proxy Statement.
3. To ratify the appointment by the Board of Directors of the Company's
independent public accountants for the fiscal year ending April 30, 1997.
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Shareholders of record at the close of business on August 2, 1996 are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors
JOSEPHINE A. BACCHI
Secretary
August 9, 1996
New York, New York
Your vote is important to us. Whether or not you plan to be present at the
Annual Meeting, please mark, sign, date and return promptly the accompanying
proxy (OR PROXIES IF YOU ARE A HOLDER OF BOTH CLASSES OF COMMON STOCK) in the
enclosed envelope to which no postage need be affixed if mailed in the United
States. If you attend the Annual Meeting in person, you may withdraw your proxy
or proxies and vote your shares personally.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of John Wiley & Sons, Inc. (the "Company") of proxies to
be used at the Annual Meeting of Shareholders to be held on September 19, 1996
at the time and place set forth in the accompanying Notice of Meeting and at any
and all adjournments thereof. This Proxy Statement and accompanying forms of
proxy relating to each class of Common Stock, together with the Company's Annual
Report to Shareholders for the fiscal year ended April 30, 1996 ("fiscal 1996"),
are being first sent or given to shareholders on August 9, 1996.
The executive offices of the Company are at 605 Third Avenue, New York, New
York 10158.
Table of Contents
o Voting Securities, Record Date, Principal Holders, page 1
o Certain Information Concerning the Board, page 4
o Election of Directors, page 5
o Executive Compensation, page 10
o Proposal to Amend the 1991 Key Employee Stock Plan, page 17; see also
Exhibit A, page A-1
o Proposal to Ratify Appointment of Independent Public Accountants,
page 21
o Solicitation of Proxies, page 22
o Deadline for Submission of Shareholder Proposals, page 22
I. Voting Securities -- Record Date -- Principal Holders
Only shareholders of record at the close of business on August 2, 1996 are
entitled to vote at the Annual Meeting of Shareholders on the matters that may
come before the Annual Meeting.
At the close of business on August 2, 1996, there were approximately
12,951,558 shares of Class A Common Stock, par value $1.00 per share (the "Class
A Stock"), and 3,205,856 shares of Class B Common Stock, par value $1.00 per
share (the "Class B Stock"), issued and outstanding and entitled to vote, except
for 21,960 shares of Class A Stock which are restricted shares and may not be
voted until restrictions lapse (see Summary Compensation Table on page 14). In
addition, there were 3,494,485 shares of Class A Stock and 871,024 shares of
Class B Stock held as treasury shares which are neither voted nor counted as
outstanding. There were no shares of Preferred Stock issued and outstanding at
the close of business on August 2, 1996. All references in the Proxy Statement
to the number of shares issued, reserved for issuance pursuant to options, or
otherwise, and/or held in treasury have been adjusted to reflect the two-for-one
stock distribution declared by the Board of Directors on September 21, 1995 to
shareholders of record on October 5, 1995.
The holders of Class A Stock, voting as a class, are entitled to elect five
(5) directors, and the holders of Class B Stock, voting as a class, are entitled
to elect ten (10) directors. Each outstanding share of Class A and Class B Stock
is entitled to one vote for each Class A or Class B director, respectively. The
presence in person or by proxy of a majority of the outstanding shares of Class
A or Class B Stock entitled to vote for directors designated as Class A or Class
B directors, as the case may be, will constitute a quorum for the purpose of
voting to elect that class of directors. All elections shall be determined by a
plurality of the class of shares voting thereon. Only shares that are voted in
favor of a particular nominee will be counted toward such nominee's achievement
of a plurality. Shares present at the meeting that are not voted for a
particular nominee or shares present by proxy where the shareholder properly
withheld authority to vote for such nominee (including broker non-votes) will
not be counted toward such nominee's achievement of a plurality.
1
The holders of the Class A and Class B Stock vote together as a single
class on all other business that properly comes before the Annual Meeting, with
each outstanding share of Class A Stock entitled to one-tenth (1/10) of one vote
and each outstanding share of Class B Stock entitled to one vote. Abstentions
and broker non-votes are considered in determining the number of votes required
to attain a majority of the outstanding shares in connection with the proposal
to amend the 1991 Key Employee Stock Plan. Because abstentions and broker
non-votes are not affirmative votes for this proposal, they will have the same
effect as votes against it. Abstentions and broker non-votes are not counted in
determining the votes cast in connection with the ratification of auditors, but
do have the effect of reducing the number of affirmative votes required to
achieve a majority for such matters by reducing the total number of shares from
which the majority is calculated.
The following table and footnotes set forth, at the close of business on
August 2, 1996, information concerning each person owning of record, or known to
the Company to own beneficially, or who might be deemed to own, 5% or more of
its outstanding shares of Class A or Class B Stock. The table below was prepared
from the records of the Company and from information furnished to it.
- - ---------------------------------------------------------------------------------------------
Class of Common Stock Percent of
Name and Address Stock Owned Beneficially Class
- - ---------------------------------------------------------------------------------------------
Peter Booth Wiley B 1,060,156 33.1%
W. Bradford Wiley,
Bradford Wiley II and
Deborah E. Wiley as Trustees
under the Will of Edward P. Hamilton
605 Third Avenue
New York, New York(1)
W. Bradford Wiley A 27,420 0.2%
and Deborah E. Wiley as B 212,840 6.6%
Trustees under the
Elizabeth W. Hamilton Trust
605 Third Avenue
New York, New York(2)
W. Bradford Wiley A 653,228 5.1%
605 Third Avenue B 485,748 15.2%
NewYork, New York(3)(4)(5)(6)(7)(8)
Deborah E. Wiley A 127,680 1.0%
605 Third Avenue B 146,568 4.6%
New York, New York(4)(5)(8)(9)
Peter Booth Wiley A 114,304 0.9%
605 Third Avenue B 73,048 2.3%
New York, New York(6)
Bradford Wiley II A 109,708 0.8%
605 Third Avenue B 73,380 2.3%
New York, New York(7)
The Bass Management Trust A 1,405,932 10.9%
and Certain Other Persons B 400 --
and Entities
201 Main Street
Fort Worth, Texas(10)
- - ---------------------------------------------------------------------------------------------
(1) These shares are not included in the listings of shares separately owned by
Peter Booth Wiley, W. Bradford Wiley, Bradford Wiley II or Deborah E. Wiley.
(2) These shares are not included in the listings of shares separately owned
by W. Bradford Wiley or Deborah E. Wiley.
(3) Included in W. Bradford Wiley's totals are 201,280 shares of Class A Stock
and 134,188 shares of Class B Stock held by a trust for the benefit of W.
Bradford Wiley, of which Mr. Wiley and Morgan Guaranty Trust Company of
New York are co-trustees.
2
- - ------------------------------------------------------------------------------------------------
Class of Common Stock Percent of
Name and Address Stock Owned Beneficially Class
- - ------------------------------------------------------------------------------------------------
GeoCapital Corporation A 1,375,418 10.6%
New York, NY
Investment Manager(11)
Warburg Pincus Counsellors Inc. A 1,103,000 8.5%
New York, NY
Investment Manager(11)
United States Trust Company of A 1,043,650 8.1%
New York
New York, NY
Investment Manager(11)
Pioneering Management Corporation A 873,600 6.8%
Boston, MA
Investment Manager(11)
Theodore L. Cross and Certain A 602,676 4.7%
Other Persons and Entities B 312,788 9.8%
200 West 57th Street
New York, New York(12)
- - ------------------------------------------------------------------------------------------------
(4) W. Bradford Wiley and Deborah E. Wiley, as co-trustees, share voting and/or
investment power with respect to 109,380 shares of Class B Stock under the
Edward P. Hamilton Trust. For purposes of this table, each is shown as the
owner of one-half of such shares.
(5) W. Bradford Wiley and Deborah E. Wiley, as co-trustees, share voting and/or
investment power with respect to 218,784 shares of Class A Stock and
145,856 shares of Class B Stock under a trust for the benefit of Bradford
Wiley II. For purposes of this table, each is shown as the owner of
one-half of such shares.
(6) W. Bradford Wiley and Peter Booth Wiley, as co-trustees, share voting
and/or investment power with respect to 218,784 shares of Class A Stock and
145,856 shares of Class B Stock under a trust for the benefit of Deborah E.
Wiley. For purposes of this table, each is shown as the owner of one-half
of such shares.
(7) W. Bradford Wiley and Bradford Wiley II, as co-trustees, share voting
and/or investment power with respect to 218,784 shares of Class A Stock and
145,856 shares of Class B Stock under a trust for the benefit of Peter
Booth Wiley. For purposes of this table, each is shown as the owner of
one-half of such shares.
(8) W. Bradford Wiley and Deborah E. Wiley, as co-trustees, share voting and/or
investment power with respect to 13,768 shares of Class A Stock and 9,180
shares of Class B Stock under the Trust of Esther B. Wiley. For purposes of
this table, each is shown as the owner of one-half of such shares.
(9) Includes 452 shares of Class A Stock which Deborah E. Wiley has the option
to purchase under an option granted under the Company's 1987 Incentive
Stock Option and Performance Stock Plan.
(10) On the basis of filings with the Securities and Exchange Commission
pursuant to Rule 13-D of the Securities Exchange Act of 1934, includes The
Bass Management Trust, Perry R. Bass, Nancy L. Bass, Lee M. Bass, and
certain other persons.
(11) Based on filings with the Securities and Exchange Commission, including
filings pursuant to Rule 13f-1 of the Securities Exchange Act of 1934, and
other information deemed reliable by the Company.
(12) On the basis of filings with the Securities and Exchange Commission
pursuant to Rule 13-D of the Securities Exchange Act of 1934, includes
Theodore L. Cross, Mary S. Cross, Amanda B. Cross, Lisa W. Pownall-Gray,
and the Louisville Charitable Remainder Unit Trust.
- - --------------------------------------------------------------------------------
3
II. Certain Information Concerning the Board
The Board of Directors is currently composed of 14 members. Deborah E.
Wiley, Peter Booth Wiley and Bradford Wiley II are the children of W. Bradford
Wiley (see table on page 2).
The Board met seven times during fiscal 1996, and Board committees met a
total of 21 times during fiscal 1996. No director attended fewer than 75% of the
aggregate number of meetings of the Board and of the committees on which such
director sat, except for Mr. Herrington who attended 69% of the meetings.
The Board of Directors has appointed the following standing committees:
Executive and Policy Committee. The Executive and Policy Committee currently
consists of Mr. Thomas as Chairman, Messrs. Agnew, Fernandes, Macey, Sutherland,
and Taylor. Its functions include reviewing corporate objectives and the
strategies and policies developed by senior management to attain those
objectives; assisting management in developing and refining such objectives,
strategies, and policies; monitoring the implementation of strategies and
policies; evaluating the Chief Executive Officer's performance in connection
therewith; and reporting to the Board of Directors its recommendations and
observations with respect to the foregoing. It also exercises the powers of the
Board as appropriate in cases where immediate action is required, except as
limited by law. The committee met four times during fiscal 1996.
Audit Committee. The Audit Committee, which currently consists of Mr. Agnew as
Chairman, Messrs. Baker, Fernald, and Taylor, assists the Board of Directors in
fulfilling its fiduciary responsibilities with respect to the accounting
policies, internal controls and reporting practices of the Company and its
subsidiaries, and the sufficiency of auditing relative thereto. It recommends to
the Board the firm of independent public accountants which is to be engaged to
audit the books and records of the Company; reviews with management and the
outside auditors the Company's financial statements and the auditors' report
thereon; and reviews the scope of the audit examination and fees for audit and
non-audit services. The committee met three times during fiscal 1996.
Executive Compensation and Development Committee. The Executive Compensation and
Development Committee, which currently consists of Mr. Macey as Chairman,
Messrs. Franklin, Sutherland and P. Wiley, administers the executive
compensation program and monitors executive development practices. It oversees
compliance with governmental regulations and accounting standards with respect
to employee compensation and benefit programs; reviews the principles and
policies for compensation and benefit programs company-wide, and monitors the
implementation and administration of such programs. It also grants options and
makes awards under the Company's 1991 Key Employee Stock Plan. The committee
reports to the Board of Directors its recommendations and observations with
respect to the foregoing. The committee met three times during fiscal 1996.
Finance Committee. The Finance Committee, which currently consists of Mr.
Fernandes as Chairman, Ms. Wiley, Messrs. Baker and Franklin, reviews the
operating and capital spending plans and reviews proposed acquisitions,
investments, and divestitures within designated limits. It maintains financial
oversight of the Company's employees' retirement and other benefit plans, and
makes recommendations to the Board with respect to such matters, and with
respect to dividends on the Company's capital stock. The committee met five
times during fiscal 1996.
Committee on Directors. The Committee on Directors, which currently consists of
Mr. Sutherland as Chairman, Messrs. Fernald, Herrington and P. Wiley, makes
recommendations to the Board regarding the size and composition of the Board;
identifies appropriate general qualifications and criteria for directorships as
well as qualified candidates for election to the Board; assists the Chairman of
the Board in proposing committee assignments; assists the Board in evaluating,
maintaining and improving its own effectiveness; and evaluates director
compensation and benefits and recommends adjustments as appropriate. The
committee met six times during fiscal 1996.
Directors' Compensation
Directors who are not employees of the Company receive an annual retainer
of $12,000 and committee chairmen receive an additional annual retainer of
$2,000. Non-employee directors receive $1,000 per meeting for attendance at each
Board or committee meeting. Directors also receive $1,000 per diem for special
assignments performed at the request of the Company. Directors who are employees
do not receive an annual retainer or a fee for attendance at Board or committee
meetings.
4
Pursuant to the Company's 1990 Director Stock Plan (the "Director Plan"),
non-employee directors receive an automatic annual award of shares of Class A
Stock equal in value to 50 percent of the total cash compensation, excluding
expense reimbursement, received by such directors. The shares are valued at
their closing price on the date of the annual shareholders meeting or, if no
shares were traded on such date, on the next preceding date on which the shares
were so traded, and are issued as soon as practicable thereafter based on
compensation received for services rendered since the last annual meeting. The
total number of shares awarded in fiscal 1996 was 5,752 Class A shares at the
market value of $28.75. Under the Director Plan, eligible directors may also
elect to receive all or a portion of their cash compensation in the form of
Class A Common Stock. Seven directors currently have so elected.
The Company has a Deferred Compensation Plan for Directors' Fees ("Deferred
Plan"), in which directors who are not employees of the Company, or are not
otherwise eligible to receive director fees, are eligible to participate. The
purpose of the Deferred Plan is to provide eligible directors with flexibility
in their tax planning. Under the Deferred Plan, an eligible director may elect
on or before December 31 of any year to defer receipt of all fees or
compensation received as a member of the Board of Directors for services
rendered during the calendar year following such election and succeeding
calendar years, including fees paid for attendance at meetings of the Board of
Directors or its committees, but not including any stock awarded under the
Director Plan or any other stock plan which may hereafter be adopted. No
directors currently participate in this plan.
Other Transactions
On May 11, 1995, the Company entered into an agreement with EDS Management
Consulting Services, the consulting division of Electronic Data Systems, of
which Gary J. Fernandes, a director of the Company, was a senior officer and
Director, to provide professional services in connection with a productivity
review of certain of the Company's operations. The study was completed during
fiscal 1996, at a total cost of $263,610. The Company has entered into an
agreement with A. T. Kearney, Inc., of which Gary J. Fernandes is Chairman of
the Board, to provide professional services in connection with a review of
certain of the Company's operating units at a cost of approximately $410,000.
EDS Management Consulting Services and A. T. Kearney, Inc. were selected
pursuant to competitive bidding processes on overall terms no less favorable
than were obtainable from an unrelated third party.
Insurance with Respect to Indemnification of Directors and Officers
The By-Laws of the Company provide for indemnification of directors and
officers in connection with claims arising from service to the Company, to the
extent permitted under the New York State Business Corporation Law. The Company
carries insurance in the amount of $20,000,000 with Chubb Insurance Company and
the National Union Insurance Company at an annual premium of $198,000. The
current policy expires on November 14, 1996. No sums have been paid under this
policy.
III. Election of Directors
Fifteen (15) directors are to be elected to hold office until the next
Annual Meeting of Shareholders and until their successors are elected and
qualified. Unless contrary instructions are indicated or the proxy is previously
revoked, it is the intention of management to vote proxies received for the
election of the persons named below as directors. Directors of each class are
elected by a plurality of votes cast by that class. If you do not wish your
shares to be voted for particular nominees, please so indicate in the space
provided on the proxy card. THE HOLDERS OF CLASS A STOCK ARE ENTITLED TO ELECT
30% OF THE ENTIRE BOARD. AS A CONSEQUENCE, FIVE (5) DIRECTORS WILL BE ELECTED BY
CLASS VOTE OF THE HOLDERS OF CLASS A STOCK. THE HOLDERS OF CLASS B STOCK ARE
ENTITLED TO ELECT TEN (10) DIRECTORS.
All the nominees are currently directors of the Company, except for Henry
A. McKinnell who has been nominated by the Board as a Class A director. All
other directors were elected to their present terms of office at the Annual
Meeting of Shareholders held in September 1995. Except as otherwise indicated,
all of the nominees have been engaged in their present principal occupations or
in executive capacities with the same employers for more than the past five
years.
The persons named on the proxy cards (Bradford Wiley II, Charles R. Ellis
and Josephine A. Bacchi) have agreed to represent shareholders submitting
properly executed proxy cards and to vote for the election of the nominees
listed herein, unless otherwise directed by the authority granted or withheld on
the proxy cards. Although the Board of Directors has no reason to believe that
any of the persons named below as nominees will be unable or decline to serve,
if any such person is unable or declines to serve, the persons named in the
accompanying proxy card may vote for another person at their discretion.
5
Directors to be Elected by Class A Shareholders
- - --------------------------------------------------------------------------------
[PHOTO] Larry Franklin
Larry Franklin, a director since 1994, is President, Chief Executive Officer and
Director of Harte-Hanks Communications, Inc. He is a Member of the Board of
Governors of Newspaper Association of America; a Director of Associated Press;
Vice Chairman of the Board of Governors of San Antonio Economic Development
Foundation; and a Director of United Way of San Antonio and Bexar County. Age
54.
[PHOTO] John S. Herrington
John S. Herrington, a director since 1994, is a Businessman/Attorney. He was
Chairman of the Board of Harcourt Brace Jovanovich (a publishing company) from
1989 to 1991; former U.S. Secretary of Energy from 1985 to 1989; Chairman of the
California Republican Party; and is a Director of Mesa Petroleum Company. Age
57.
[PHOTO] Chester O. Macey
Chester O. Macey, a director since 1994, is a private consultant. He was
Executive Vice President and General Manager, Steering, Suspension & Engine
Group, TRW Inc. until his retirement in December 1995. He is past Chairman of
the Canadian Automotive Parts Manufacturers Association; a Director of Motor and
Equipment Manufacturers Association/Japan Automobile Manufacturers Association;
and a Member of Society of Automotive Engineers. Age 58.
[PHOTO] Henry A. McKinnell, Jr.
Henry A. McKinnell, Jr., a first-time nominee for director, has been Executive
Vice President, Pfizer, Inc. Pharmaceuticals, Worldwide Consumer, Finance, and
Strategic Planning and Public Policy Groups since July 1995. Previously, he
served as Executive Vice President and Chief Financial Officer of Pfizer, Inc.,
and President of Pfizer's Hospital Products Group from 1992 to 1995. He is a
Director of Aviall, Inc.; Chairman of the Health Industry Manufacturers
Association; Chairman-elect of the Food and Drug Law Institute; Vice Chairman of
the Committee for Economic Development; and a Trustee of the New York City
Police Foundation. Age 53.
[PHOTO] Thomas M. Taylor
Thomas M. Taylor, a director since 1994, has been President of Thomas M. Taylor
& Co. (an investment entity affiliated with the Bass Management Trust) since
1985. He is Chairman of the Board of La Quinta Inns, Inc.; a Director of TPI
Enterprises, Inc.; and a Director of Kirby Corp. Age 53.
6
Directors to be Elected by Class A Shareholders
- - --------------------------------------------------------------------------------
[PHOTO] Franklin E. Agnew
Franklin E. Agnew, a director since 1989, has been a Business Consultant since
1986. He was previously Trustee (in Bankruptcy), Sharon Steel from 1989 to 1990.
He is a Director of Bausch & Lomb, Inc.; a Director of Prudential Insurance
Company of America; a Director of Saint Margaret Hospital in Pittsburgh; and is
a Charter Trustee (emeritus) of Princeton University.
Age 62.
[PHOTO] Warren J. Baker
Warren J. Baker, a director since 1993, has been President, California
Polytechnic State University since 1979 and was a Member of the National Science
Board from 1985 to 1994. He is a Regent of the American Architectural
Foundation; a Fellow in the American Society of Civil Engineers; a Member of
California Council on Science and Technology; a Member of the California
Business-Higher Education Forum; and Vice Chair of the California State
University Institute.
Age 58.
[PHOTO] Charles R. Ellis
Charles R. Ellis, a director since 1990, has been President and Chief Executive
Officer of the Company since June 1990. He was previously Executive Vice
President and President of the Company's Publishing Group since June 1989, and
was previously Senior Vice President since February 1988. He was President of
Elsevier Science Publishing from 1981 to 1988. He is President of the Board of
Trustees of Princeton University Press; Vice President of the International
Publishers Association; and a Member of the Board of Directors of the
Association of American Publishers. Age 61.
[PHOTO] H. Allen Fernald
H. Allen Fernald, a director since 1979, is President and Chief Executive
Officer of Down East Enterprise, Inc. (magazine and book publisher). He is a
Director of Maine Community Foundation; a member and past Chair of the
University of Maine President's Council; a Director of United Publishing, Inc.;
a Director of Foreside Company, Inc.; and a Director of the University of Maine
Press. Age 64.
[PHOTO] Gary J. Fernandes
Gary J. Fernandes, a director since 1989, is Vice Chairman of EDS, and was
Senior Vice President and Director since 1981. He is a Director of Southland
Corporation; a Director of Amtech Corporation; Chairman of the Board of A.T.
Kearney, Inc.; a Trustee for The New School for Social Research; and a Member of
the Board of Governors of Boys & Girls Clubs of America.
Age 53.
7
Directors to be Elected by Class B Shareholders
- - --------------------------------------------------------------------------------
[PHOTO] William R. Sutherland
William R. Sutherland, a director since 1987, is Vice President, Sun
Microsystems, Inc. and has been the Director of Sun Microsystems Laboratories
since July 1993. He was previously Deputy Director since March 1991, and was
Vice President and Treasurer, Sutherland Sproull & Associates, Inc. (information
and technology consulting firm). He is a partner in Advanced Technology
Ventures, a venture capital firm, and a former Director of Newmarket Venture
Capital, PLC. Age 60.
[PHOTO] Leo J. Thomas
Leo J. Thomas, a director since 1988, was Executive Vice President of Eastman
Kodak Company since 1994 and a Director of Eastman Kodak Company from May 1992
until his retirement in May 1996. He was previously Group Vice President and
General Manager of Health Group from September 1989 to September 1991, and Group
Vice President, President of Imaging from September 1991 to August 1994. He is a
Director of Frontier Corporation and a member of the National Academy of
Engineering. Age 59.
[PHOTO] Bradford Wiley II
Bradford Wiley II, a director since 1979, has been Chairman of the Board since
January 1993, and Editor in the College Division since April 1989. He was
previously a newspaper journalist, viticulturist and winery manager. Age 55.
[PHOTO] Deborah E. Wiley
Deborah E. Wiley, a director since 1979, is a Senior Vice President, and
Director of Corporate Communications since July 1994. She was previously Vice
Chairman of the Board from 1986 to 1994. She is Chairman of the Board of Caedmon
School; a Trustee of Aloha Foundation; a Trustee Emerita of Colgate University;
a Trustee of Pine Manor College; and Chairman of the National Book Foundation.
Age 50.
[PHOTO] Peter Booth Wiley
Peter Booth Wiley, a director since 1984, is an author, journalist and owner of
Points West (newspaper articles). He is a Member of the Board of San Francisco
Bay Area Book Council; a Member of the Board of Synergy School; and a member of
The Friends of the San Francisco Public Library. Age 53.
8
Beneficial Ownership of Directors and Management
Set forth below are the shares of the Company's Class A and Class B Stock
beneficially owned by the directors, and also executive officers named in the
Summary Compensation Table on page 13 as of August 2, 1996.
- - -----------------------------------------------------------------------------------------------------------
Shares of
Class A and Additional
Class B Stock Shares Percent
Beneficially Beneficially of
Owned(1) Owned(2) Totals Class(1)
- - -----------------------------------------------------------------------------------------------------------
Franklin E. Agnew A 16,346 A 16,346 0.1%
B -- B -- --
Warren J. Baker A 1,246 A 1,246 --
B -- B -- B -- --
Charles R. Ellis(3)(4) A 117,072 A 79,324 A 196,396 1.5%
B -- B -- B -- --
H. Allen Fernald A 7,296 A 7,296 --
B 1,360 B 1,360 --
Gary J. Fernandes A 4,758 A 4,758 --
B -- B -- --
Larry Franklin A 1,721 A 1,721 --
B -- B -- --
John S. Herrington A 486 A 486 --
B -- B -- --
Stephen A. Kippur(3)(4) A 54,554 A 37,154 A 91,708 0.7%
B -- B -- B -- --
Chester O. Macey A 600 A 600 --
B -- B -- --
Henry A. McKinnell, Jr. A 500 A 500 --
B -- B -- --
William J. Pesce(3)(4) A 51,841 A 23,104 A 74,945 0.6%
B -- B -- B -- --
Richard S. Rudick(3) A 59,538 A 24,401 A 83,939 0.6%
B 14,144 B -- B 14,144 0.4%
William R. Sutherland A 4,574 A 4,574 --
B -- B -- --
Thomas M. Taylor(11) A 9,586 A 9,586 --
B -- B -- --
Leo J. Thomas A 11,045 A 11,045 0.1%
B 800 B 800 --
Robert D. Wilder(3)(4) A 53,201 A 56,152 A 109,353 0.8%
B 1,600 B -- B 1,600 --
Bradford Wiley II(5)(6)(9) A 109,392 A 109,392 0.8%
B 338,419 B 338,419 10.6%
Deborah E. Wiley(5)(6)(7)(10) A 140,938 A 452 A 141,390 1.1%
B 518,027 B -- B 518,027 16.2%
Peter Booth Wiley(5)(6)(8) A 114,930 A 114,930 1.0%
B 338,087 B 338,087 10.6%
(1) All directors, nominees and executive officers as a group (includes 23
persons) own 1,090,207 and 1,213,237 shares of Class A and B Stock,
including exercisable options and restricted shares awarded to certain
executive officers, (see Executive Employment Agreements, page 15). This
represents 14% of the Common Stock of the Company and 29.1% of the voting
power represented by all such shares, excluding restricted shares which may
not be voted until vested. In the table, percent of class was calculated on
the basis of shares beneficially owned (including exercisable options),
compared with shares issued and outstanding plus shares which might be
issued pursuant to the exercise of such options. This table is based on the
information provided by the individual nominees.
9
(2) Options exercisable under the Company's stock option plans which may be
acquired on or before October 1, 1996.
(3) Includes Class A shares of restricted stock subject to forfeiture awarded
under the Company's long term incentive plans (see Summary Compensation
Table, footnote (a), page 13) as follows: Mr. Ellis - 13,805 shares; Mr.
Kippur - 5,586 shares; Mr. Pesce - 4,683 shares; Mr. Wilder - 4,153 shares;
and Mr. Rudick - 3,253 shares.
(4) Includes restricted stock subject to forfeiture awarded under the terms of
the Executive Employment Agreements, described on page 15, as follows: Mr.
Ellis - 60,000 shares; Mr. Kippur - 40,000 shares; Mr. Pesce - 40,000
shares; and Mr. Wilder - 40,000 shares.
(5) The totals shown for Bradford Wiley II, Deborah E. Wiley and Peter Booth
Wiley do not include any shares in the table on page 2 as separately owned
by their father, W. Bradford Wiley (namely 653,228 Class A and 485,748
Class B shares), nor do they include (i) 201,280 shares of Class A Stock
and 134,188 shares of Class B Stock held by a trust for the benefit of W.
Bradford Wiley, of which Mr. Wiley and Morgan Guaranty Trust Company of New
York are co-trustees; (ii) 88,620 shares of Class B Stock which W. Bradford
Wiley or his designees have the right to acquire in exchange for shares of
Class A Stock from certain persons upon any proposed disposition of such
Class B Stock, upon their deaths or upon termination of trust; or (iii) the
shares not allocated to any of W. Bradford Wiley's children under the
trusts referred to in footnotes (4), (5), (6), (7) or (8) below.
(6) Peter Booth Wiley, Bradford Wiley II and Deborah E. Wiley, and their
father, W. Bradford Wiley, as co-trustees, share voting and/or investment
power with respect to 1,060,156 shares of Class B Stock under the Will of
Edward P. Hamilton. For purposes of this table, each of W. Bradford Wiley's
children is shown as the owner of one-fourth of such shares, namely,
265,039 Class B shares.
(7) Deborah E. Wiley and her father, W. Bradford Wiley, as co-trustees, share
voting and/or investment power with respect to 109,380 shares of Class B
Stock under the Edward P. Hamilton Trust, 27,420 shares of Class A Stock
and 212,840 shares of Class B Stock under the Elizabeth W. Hamilton Trust,
and 218,784 shares of Class A Stock and 145,856 shares of Class B Stock
under a trust for the benefit of Bradford Wiley II. For purposes of this
table, Deborah E. Wiley is shown as the owner of one-half of such shares,
namely, 123,102 Class A shares and 234,038 Class B shares.
(8) Peter Booth Wiley and his father, W. Bradford Wiley, as co-trustees, share
voting and/or investment power with respect to 218,784 shares of Class A
Stock and 145,856 shares of Class B Stock under a trust for the benefit of
Deborah E. Wiley. For purposes of this table, Peter Booth Wiley is shown as
the owner of one-half of such shares, namely, 109,380 Class A shares and
72,928 Class B shares.
(9) Bradford Wiley II and his father, W. Bradford Wiley, as co-trustees, share
voting and/or investment power with respect to 218,784 shares of Class A
Stock and 145,856 shares of Class B Stock under a trust for the benefit of
Peter Booth Wiley. For purposes of this table, Bradford Wiley II is shown
as the owner of one-half of such shares, namely, 109,380 Class A shares and
72,928 Class B shares.
(10) Deborah E. Wiley and her father, W. Bradford Wiley, as co-trustees, share
voting and/or investment power with respect to 13,768 shares of Class A
Stock and 9,180 shares of Class B Stock under the Trust of Esther B. Wiley.
For purposes of this table, Deborah E. Wiley is shown as the owner of
one-half of these shares, namely, 6,884 Class A shares and 4,590 Class B
shares.
(11) Solely in his capacity as President of Thomas M. Taylor & Co. with respect
to 9,100 shares of Class A Stock.
- - --------------------------------------------------------------------------------
IV. Executive Compensation
Executive Compensation Policies. The Company's executive compensation
program is administered by the Executive Compensation and Development
Committee of the Board of Directors (the "Committee") composed of four
independent directors. The objectives which guide the Committee in
formulating its recommendations are to:
Report of the Executive Compensation and Development Committee
o Attract and retain executives of the highest caliber by compensating
them at levels which are competitive in the market place.
o Motivate and reward such executives based on corporate, business unit
and individual performance through compensation systems and policies
which include variable incentives.
10
o Align executives' and shareholders' interests through awards of equity
components dependent upon the performance of the Company and the
operating divisions, as well as the individual performance of each
executive.
Annually the Committee reviews a compensation survey as a guidepost to
determine whether the Company's compensation levels and program are competitive
and meet the Committee's stated objectives. The most recent survey compiled by
Hay Management Consultants includes those publishing companies listed in the
peer group in the graph on page 13, regarded as comparable and for which
comparable data is available, as well as other companies more comparable in size
to the Company. The Committee recommends to the Board for its ultimate
determination the total targeted compensation and the proportion of the various
components of the compensation program including salary, and targeted annual and
long term incentives, based upon each executive's role in the Company and level
of responsibilities.
It is the Committee's policy to maximize the effectiveness, as well as the
tax efficiency, of the Company's executive compensation programs. With regard to
future executive compensation actions, the Committee's policy is to maintain
flexibility to take actions which it deems to be in the best interests of the
Company and its shareholders, but which may not qualify for tax deductibility
under Section 162(m) or other Sections of the Internal Revenue Code. Annual
Executive Compensation. Annual executive compensation is comprised of base
salary and, if earned, a variable cash incentive. The annual incentive is based
on the achievement of quantitative financial performance goals, as well as
individual non-quantitative objectives, which are respectively weighted 85% and
15%. Targeted annual incentives range from 70% of salary for Mr. Ellis and from
40% to 50% for other executives. At the beginning of each fiscal year, the
Committee recommends to the Board for approval the base salaries, the targeted
incentives, and the financial performance measures and goals on which incentives
may be earned, including the threshold or minimum level of performance below
which no incentives will be paid, as well as outstanding levels of performance.
Divisional performance measures and targets are also set for certain operating
executives with divisional as well as corporate responsibilities. At the end of
the fiscal year, the Committee evaluates performance against the financial goals
and individual objectives, and submits to the full Board for approval a
recommended annual payout, if any, for each executive. No incentive is payable,
regardless of whether individual objectives are met or exceeded, unless
aggregate performance against the financial measures equals or exceeds
threshold. Payouts, if any, can range from 50% to 150% of the targeted incentive
depending upon the level of the achievement of financial goals and individual
objectives between threshold and outstanding levels of performance. In fiscal
1996 on a weighted average basis, performance against financial goals was
between target and outstanding.
Long Term Executive Compensation. The long term component of the
compensation is comprised of (i) a targeted variable incentive payable in cash
and/or performance shares, and (ii) stock option grants of Class A Stock. At the
beginning of each year a new three fiscal-year cycle begins. The Committee
reviews and submits to the full Board for approval its recommendations for
participants in the long term plan, the number of stock options to be granted,
the targeted incentive, the financial performance measures and goals, and
threshold and outstanding levels of performance that must be achieved by the
Company and, where relevant, the division for which the participant is
responsible.
At the end of the three fiscal-year cycle, the Committee evaluates
performance against the goals and recommends to the full Board for approval the
appropriate payout for each executive and the portion to be paid in cash and/or
restricted performance shares. No long term incentive is payable if aggregate
performance is less than threshold. Payouts to individual executives can range
from 50% to 150% of the targeted incentive depending upon the level of aggregate
achievement between the threshold and outstanding levels of financial
performance.
Option grants are generally awarded on an annual basis, have terms of ten
years and generally vest as to 50% in the fourth year and 50% in the fifth year
from the date of grant. All employees' stock options have exercise prices which
are equal to the current market price of Class A Stock as of the grant date. The
ultimate value of the stock option grants is aligned with increases in
shareholder value and is dependent upon increases in the market price per share
over and above the grant price. In fiscal 1996, all executives, including Mr.
Ellis, received
11
approximately 40% of their targeted long term incentive in stockoption awards.
The Committee does not consider the amount and terms of prior option grants in
connection with the annual awards.
Chief Executive Officer Compensation. Based on the Executive and Policy
Committee's performance evaluation review of Mr. Ellis and the achievement of
the financial performance measures, the Executive Compensation and Development
Committee recommended and the Board approved a base salary change of 10%
($370,000 to $407,000) and an annual incentive award of $348,333, representing
46% of the total annual compensation component of Mr. Ellis' compensation,
exclusive of the long term incentive payout, which were based on aggregate
achievement above targeted goals of the Company's financial performance measures
including revenue, income and cash flow.
The Company registered a 10% growth in revenues and a 35% increase in its
net income compared with the prior year. In addition, the cash flow targets were
achieved and return on investment and equity hurdles exceeded. Individual
objectives accomplished during the year included continuing to extend the
application of new publishing technologies to the development of new electronic
products; expanding succession planning and executive development; initiating
continuous improvement programs; and continuing to strengthen the Company's
global presence, particularly in Europe and Asia.
Mr. Ellis also received a long term compensation payout of $206,123, of
which $137,484 was paid in cash and the remainder in 1,990 shares of restricted
performance shares with the restrictions lapsing as to 50% at the end of fiscal
1997 and 1998, respectively. This payout was based on the aggregate achievement
slightly below targeted goals of the Company's cumulative financial performance
measures for income, cash flow, return on investment, and return on equity for
the three years ended April 30, 1996.
During fiscal 1996, Mr. Ellis, as part of his long term compensation plan,
received a grant of options to purchase 28,328 shares of Class A Stock,
exercisable as to 14,164 shares on and after each April 30, 1999 and 2000,
respectively, at an option price of $28.25 per share, the market price at date
of grant.
Also in fiscal 1996, Mr. Ellis received (i) a restricted stock grant of
30,000 Class A shares issued under the Company's 1991 Key Employee Stock Plan,
pursuant to an employment agreement between the Company and Mr. Ellis (see
Executive Employment Agreements, page 15), vesting as to 10,000 shares each on
June 23, 1998, 1999 and 2000. This restricted stock grant was in addition to
regular annual compensation in order to assure the continued availability of Mr.
Ellis' services.
In approving the compensation reflected in the tables on page 13, the
Committee considered Mr. Ellis's performance in leading the Company's investment
in and enhancing of its core business on a global basis, and the shareholder
value created during the most recent three years of his tenure.
Executive Compensation and Development Committee
Chester O. Macey, Chairman William R. Sutherland
Larry Franklin Peter B. Wiley
12
Performance Graph
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL]
1991 1992 1993 1994 1995 1996
John Wiley & Sons, Inc. Class A $100.00 $115.28 $140.88 $ 56.89 $339.16 $422.64
Publishing Peer Group 100.00 109.62 125.38 134.52 164.42 189.79
S&P Mid-Cap Companies 100.00 120.05 137.30 150.49 165.21 210.70
The above graph provides an indicator of the cumulative total return to
shareholders of the Company's Class A common stock as compared with the
cumulative total return on the S&P Mid-Cap Companies Index and a peer group
index for the period from April 30, 1991 to April 30, 1996. The peer group
consists of the following five publicly traded companies with significant
publishing activities: Harcourt General, Inc.; Houghton Mifflin Company; McGraw
Hill Companies; Plenum Publishing Corporation; and Waverly, Inc. Peer group
returns have been weighted to reflect relative stock market capitalization of
each company at the beginning of each year. Cumulative total return assumes $100
invested on April 30, 1991 and reinvestment of dividends throughout the period.
Summary Compensation Table
Long Term Compensation
----------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------- ---------------------------- -------
Other Annual Securities All Other
Name and Compen- Restricted Stock Underlying LTIP Compen-
Principal Position Year Salary Bonus sation Awards(a) Option/SARs Payouts(b) sation(c)
- - ------------------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 1996 $401,312 $348,333 0 $916,139 28,328 $137,484 $4,884
President, Chief Executive 1995 362,314 $300,518 0 702,579 55,000 149,132 5,019
Officer and Director 1994 318,468 237,152 0 81,140 14,144 162,524 8,812
Stephen A. Kippur 1996 264,004 129,977 0 592,810 11,126 55,704 4,668
Executive Vice President, 1995 239,539 146,574 0 452,099 7,000 66,797 4,712
Professional, Reference 1994 220,539 126,509 0 34,803 5,304 69,711 6,616
and Trade Group
William J. Pesce 1996 251,082 131,052 0 581,648 29,052 33,345 4,877
Executive Vice President, 1995 229,692 80,347 0 441,093 7,000 44,754 4,620
Educational and 1994 212,231 123,787 0 21,700 4,716 43,464 6,367
International Group
Robert D. Wilder 1996 221,308 120,435 0 589,024 8,376 48,119 4,614
Executive Vice President 1995 210,154 106,400 0 445,176 6,600 52,931 4,625
and Chief Financial Officer 1994 196,615 97,613 0 23,604 4,952 47,280 5,206
Richard S. Rudick 1996 168,462 81,100 0 12,910 4,314 25,858 4,604
Senior Vice President 1995 159,154 70,899 0 15,074 3,600 30,194 4,557
and General Counsel 1994 153,808 64,359 0 10,885 2,660 21,802 4,614
The above table sets forth, for the fiscal years indicated, the compensation of
the CEO and the four other most highly compensated executive officers of the
Company.
(a) When awards of restricted stock are made pursuant to the Company's
long-term incentive plans, the Committee may establish a period during
which the Class A shares of restricted stock shall be subject to forfeiture
in whole or in part if specified objectives or considerations are not met.
Restricted stock awards were made for achievement of financial performance
objectives for the respective three-year periods ended April 30, 1996,
April 30, 1995 and April 30, 1994. Stock issued pursuant thereto is
non-voting and not eligible for dividends until restrictions lapse.
Restrictions lapse as to 50% at the end of the first and second fiscal
year, respectively, after the fiscal year in which awarded. Restricted
stock awards reflect the market value as of the fiscal year-end indicated.
In addition to the
13
aforementioned stock awards, this amount includes the value at date of
issuance of restricted stock, which have voting rights and are eligible to
receive dividends, issued pursuant to certain Employment Agreements in
fiscal year 1996 (see page 15) as follows: Mr. Ellis-30,000 shares valued
at $847,500; Mr. Kippur-20,000 shares valued at $565,000; Mr. Pesce-20,000
shares valued at $565,000; and Mr. Wilder-20,000 shares valued at $565,000.
Similar awards were granted under the Employment Agreements in fiscal year
1995 as follows: Mr. Ellis-30,000 shares valued at $628,125; Mr.
Kippur-20,000 shares valued at $418,750; Mr. Pesce-20,000 shares valued at
$418,750; and Mr. Wilder-20,000 shares valued $418,750. Aggregate
restricted stock holdings as of April 30, 1996 were as follows: Mr. Ellis -
68,208 shares valued at $2,353,176; Mr. Kippur - 43,298 shares valued at
$1,493,781; Mr. Pesce-42,596 shares valued at $1,469,562; Mr. Wilder-42,506
shares valued at $1,466,457; and Mr. Rudick-1,316 shares valued at $45,402.
(b) Under the Company's long term incentive plans, cash awards were made for
the achievement of financial performance objectives for the respective
three year periods ended April 30, 1996, 1995 and 1994 as described under
the heading Long Term Compensation in the report of the Executive
Compensation and Development Committee on page 11.
(c) Represents matching Company contributions to the Employee Savings Plan.
Option/SAR Grants in Last Fiscal Year
- - --------------------------------------------------------------------------------
Individual Grants (a)
- - --------------------------------------------------------------------------------
% of Total Potential Realizable
Number of Options/SARs Value at Assumed
Securities Granted to Annual Rates of Stock Price
Underlying Options/ Employees Exercise or Expiration Appreciation for Option Term
----------------------------
Name SARs Granted in Fiscal Year Base Price Date (b) 5% 10%
- - ------------------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 28,328 36.9% $28.250 June 14, 2005 $503,283 $1,275,418
Stephen A. Kippur 11,126 14.5% 28.250 June 14, 2005 197,668 500,928
William J. Pesce 9,052 11.8% 28.250 June 14, 2005 160,820 407,550
20,000 26.1% 31.625 February 11, 2006 397,776 1,008,042
Robert D. Wilder 8,376 10.9% 28.250 June 14, 2005 148,810 377,115
Richard S. Rudick 4,314 5.6% 28.250 June 14, 2005 76,643 194,231
The above table shows potential realizable value at assumed annual stock
appreciation rates of 5% and 10% over the ten-year term of the options. The
rates of appreciation are as required to be stated by the Securities and
Exchange Commission and are not intended to forecast possible future actual
appreciation, if any, in the Company's stock price. Future gains, if any, will
depend on actual future appreciation in the market price.
(a) The Company has in effect three shareholder approved plans, each of which
relates to Class A shares: the 1982 Incentive Stock Option and Performance
Stock Plan, the 1987 Incentive Stock Option and Performance Stock Plan, and
the 1991 Key Employee Stock Plan. The exercise price of all stock options
is determined by the Committee and may not be less than 100 percent of the
fair market value of the stock on the date of grant of the options. The
Committee also determines at the time of grant the period and conditions
for vesting of stock options. In the event of a change of control, as
defined on page 19, all outstanding options shall become immediately
exercisable up to the full number of shares covered by the option. No
option grants have SARs associated with the grants, and no SARs were
granted during fiscal 1996.
(b) Options are subject upon earlier termination in certain events relating to
termination of employment.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
- - --------------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at Fiscal Year-End at Fiscal Year-End (b)
Shares Acquired Value ------------------------------- --------------------------
Name on Exercise Realized (a) Exercisable Unexercisable Exercisable Unexercisable
- - --------------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 30,000 $ 817,500 79,324 89,752 $1,736,075 $1,109,461
Stephen A. Kippur 0 0 49,154 26,812 1,222,602 370,807
William J. Pesce 0 0 23,104 43,352 575,376 382,167
Robert D. Wilder 0 0 56,162 22,866 1,372,111 329,070
Richard S. Rudick 43,591 1,019,015 24,401 12,250 603,011 178,788
- - ------------------------------------------------------------------------------------------------------------------------------------
The above table provides information as to options exercised by each of the
named executive officers during fiscal 1996 and the value of the remaining
options held by each executive officer at year end, measured using the closing
price of $34.50 for the Company's Class A Common Stock on April 30, 1996.
(a) Market value of underlying shares at exercise minus the option price.
(b) Market value of underlying shares at fiscal year-end minus the option
price. These values are presented pursuant to SEC rules. The actual amount,
if any, realized upon exercise will depend upon the market price of the
Class A shares relative to the exercise price per share of the stock
options at the time of exercise.
14
Long-Term Incentive Plans-Awards in Last Fiscal Year
Estimated Future Payouts
under Non-Stock Priced-Based Plans (a)(b)
Number of Performance or -----------------------------------------
Shares, Units or Other Periods Until Threshold Target Maximum
Name Other Rights (#) Maturation or Payout (# or $) (# or $) (# or $)
- - ------------------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 6,878 May 1, 1995 to April 30, 1998 3,439 6,878 10,317
$ 48,580 $ 97,160 $ 145,740
Stephen A. Kippur 2,702 May 1, 1995 to April 30, 1998 1,351 2,702 4,053
$ 19,080 $ 38,160 $ 57,240
William J. Pesce 2,198 May 1, 1995 to April 30, 1998 1,099 2,198 3,297
$ 15,525 $ 31,050 $ 46,575
Robert D. Wilder 2,034 May 1, 1995 to April 30, 1998 1,017 2,034 3,051
$ 14,365 $ 28,730 $ 43,095
Richard S. Rudick 1,048 May 1, 1995 to April 30, 1998 524 $ 1,048 $ 1,572
$ 7,400 $ 14,800 $ 22,200
- - ------------------------------------------------------------------------------------------------------------------------------------
Estimated future payments assuming financial performance targets are achieved
under the 1996 long-term incentive compensation plan for the named executives
are as indicated above:
(a) Financial performance targets and relative weighting of each target, as
well as the threshold, target and outstanding levels of performance, are
set at the beginning of the three-year plan cycle and include cumulative
income and cumulative cash flow, as defined, for the three-year period. For
the fiscal 1996 long-term plan, amounts will be earned based on the
achievement of the overall weighted targets. If the threshold level is not
attained, no payout will be made.
(b) These awards consist partly of cash and partly of restricted performance
shares. At April 30, 1998, the Committee may, in its discretion, modify the
relative proportion of cash and restricted performance shares. The
restricted shares would vest as to 50% on April 30, 1999 and the remaining
50% on April 30, 2000. The above restricted shares are eligible for
dividends and voting rights during the three-year plan cycle, as well as
the subsequent restricted period.
Executive Employment Agreements
In July 1994, the Company entered into employment agreements with Charles
R. Ellis, President and Chief Executive Officer, and three senior vice
presidents, Messrs. Kippur, Pesce, and Wilder (collectively the "Executives").
The contracts provide for base salaries (reflected in the Summary Compensation
Table on page 13), which may be increased by the Board, and for benefits and
incentive compensation as provided for senior officers generally, and as
described in the Committee's report above. Each of the contracts with the senior
vice presidents expires on April 30, 1998, and is renewable for successive
two-year terms in the absence of notice by either party to the contrary. If any
such contract is terminated by the Company other than for cause, as defined, or
if the Company decides not to renew for a subsequent term, the Executive will be
entitled to 24 months severance, which includes salary, benefits, pro-rated cash
incentive payments at target levels, and long term incentives for plan cycles
ending within one year after termination. The contract with Mr. Ellis, as
amended in March 1995, is for an initial term expiring on July 20, 1998,
renewable for an additional two-year term. If it is terminated by the Company
other than for cause or it is not renewed by the Company for the additional
term, severance is payable until July 20, 2000.
Except in the case of termination by the Company other than for cause, the
Executive is restricted from working for a competitor for twelve months after
termination in the case of the senior vice presidents. The restriction continues
until July 20, 2000, whether or not termination is for cause in the case of the
Chief Executive Officer. However, if any of the Executives resigns for "good
reason" within 18 months following a "change of control," both as defined in the
1989 Supplemental Executive Retirement Plan (see page 16), the restriction does
not apply.
In connection with these agreements, the above named executives received
certain restricted stock awards which vest one-third at the end of each of the
third, fourth and fifth years after the date of grant. A second award of the
same number of shares and on the same terms was made to each of these Executives
on June 15, 1995 (see Report of the Executive Compensation and Development
Committee, page 12). In addition, the Executive is required to retain ownership
of the shares for an additional two years after vesting except, in Mr. Ellis'
case, upon retirement with the Board's approval. If the Executive is terminated
by the Company other than for cause, or the contract is not renewed by the
Company, or if there is a "change of control" as defined in the 1991 Key
Employee Stock Plan (see Stock Options, Performance Stock and Restricted Stock,
page 17), all remaining unvested shares will vest, and any remaining
restrictions on transfer of the shares will lapse.
15
Retirement Plan
The following table shows the estimated annual retirement benefits payable at
normal retirement age to a covered participant who has attained the earnings and
years of service classifications indicated under the Company's tax-qualified,
non-contributory defined benefit retirement plan (the "Retirement Plan") and
non-qualified supplemental retirement plan (the "Supplemental Retirement Plan"):
- - --------------------------------------------------------------------------------
Average Years of Service
Final --------------------------------------
Compensation 10 20 30 35
- - --------------------------------------------------------------------------------
$100,000 $ 15,338 $ 30,676 $ 46,014 $ 53,683
200,000 32,038 64,076 96,114 112,133
300,000 48,738 97,476 146,214 170,583
400,000 65,438 130,876 196,314 229,033
500,000 82,138 164,276 246,414 287,483
600,000 98,838 197,676 296,514 345,933
700,000 115,538 231,076 346,614 404,383
800,000 132,238 264,476 396,714 462,833
- - --------------------------------------------------------------------------------
Benefits shown above are computed as a single life annuity beginning at age
65 and are not subject to any deduction for offset amounts. The Retirement Plan
provides for annual normal retirement benefits equal to 1.17% of average final
compensation, not in excess of covered compensation, plus 1.67% of average final
compensation in excess of covered compensation, times years of service not to
exceed 35.
Average final compensation is the participant's average annual compensation
(taking into account 100% of the base pay plus 50% of incentive compensation and
overtime pay, but not including any other compensation included in the Summary
Compensation Table) during the highest three consecutive years ending December
31, 1993 (subject to certain limitations on compensation under the Internal
Revenue Code with respect to tax-qualified plans). The Company may, but is not
required to, update from time to time the three-year period used to determine
average final compensation.
Covered compensation under the Retirement Plan is the average of the
taxable wage base in effect under the Social Security Act over the 35 year
period ending with the year the employee reaches his or her social security
retirement age (but excluding any increases in the taxable wage base after
1993). The Supplemental Retirement Plan provides benefits that would otherwise
be denied participants by reason of certain Internal Revenue Code limitations on
tax-qualified plan benefits. Average final compensation and covered compensation
are determined under the Supplemental Retirement Plan in the same manner as
under the Retirement Plan, except that a participant's compensation is not
subject to the limitations under the Internal Revenue Code. Years of service
under the Retirement Plan and Supplemental Retirement Plan are the number of
years and months, limited to 35 years, worked for the Company and its
subsidiaries after attaining age 21.
The years of service for Messrs. Ellis, Kippur, Pesce, Wilder and Rudick
under the Retirement Plan and Supplemental Retirement Plan as of April 30, 1996
(rounded to the nearest year), are 8, 17, 7, 17, and 18, respectively. Average
final compensation for Messrs. Ellis, Kippur, Pesce, Wilder and Rudick as of
April 30, 1996 was $403,027, $247,608, $224,195, $213,904, and $176,098,
respectively.
1989 Supplemental Executive Retirement Plan
The participants under the 1989 Supplemental Executive Retirement Plan
("SERP") are executives of the Company or its affiliates listed on a schedule to
the plan, as amended from time to time.
The basic SERP benefit (the "primary benefit") consists of ten annual
payments commencing on retirement (at or after age 65) determined by multiplying
the participant's base salary rate at retirement by 2.5, reducing the result by
$50,000 and dividing the remainder by five. The plan also provides for an
alternative early retirement benefit for participants who retire after age 55
with five years of service, a reduced payment for participants whose employment
is terminated
16
prior to age 65 other than on account of death (and who do not qualify for early
retirement), and a survivor benefit for the beneficiaries of a participant who
dies prior to age 65 while employed by the Company or an affiliate.
The estimated annual benefits under SERP payable over ten years upon
retirement at age 65 for Messrs. Ellis, Kippur, Pesce, Wilder and Rudick are
$522,800, $402,539, $574,722, $300,472, and $122,492, respectively.
SERP provides the participants with a guaranteed total annual retirement
benefit beginning at age 65 for ten years (taking into account retirement
benefits under the Company's Retirement Plan, referred to above, the
Supplemental Retirement Plan and the primary benefit under SERP) of 50% to 65%
(depending on the executive's position with the Company) of average compensation
over the executive's highest three consecutive years. Under certain circum-
stances, if a participant works for a competitor within 24 months following
termination of employment, no further payments would be made to the participant
under SERP.
SERP also provides that following a change of control (defined in the same
manner as under the Company's stock option plans discussed below) and the
termination of the participant's employment without cause as defined, or a
termination by the participant for good reason as defined, the participant is
entitled to a lump sum payment of the then present value of his benefits under
SERP computed as if the participant had attained age 65 on the date of his
termination.
Stock Options,Performance Stock, and Restricted Stock
Under the 1991 Key Employee Stock Plan (the "Plan"), qualified employees
are eligible to receive awards that may include stock options, performance stock
awards and restricted stock awards as described in footnote (a) of the Summary
Compensation Table. This plan is described in connection with the proposal to
amend the Plan.
V. Proposal to Amend the 1991 Key Employee Stock Plan
The Board of Directors recommends approval of an amendment to the Plan
which would limit to 150,000 the maximum number of shares of Class A Common
Stock of the Company for which, in the aggregate, options, performance stock
awards, and restricted stock awards can be granted to any one individual in any
calendar year.
The purpose of the amendment is to permit awards under the Plan generally
to qualify as "performance based" compensation under Section 162(m) of the
Internal Revenue Code. This section provides that compensation in excess of $1
million per year, which does not qualify as performance based compensation, paid
to an executive officer whose compensation is required to be disclosed in the
proxy statement, is not deductible. The Board of Directors believes that unless
a maximum limit is established for grants to any one person in any year, future
awards, if any, in excess of $1 million will not qualify.
The proposed amendment has been approved by the Board, subject to
shareholder approval, which is required under regulations relating to Section
162(m) made final in December 1995. The Board of Directors believes it is
desirable to take steps to maximize the availability of tax deductions, and
recommends that shareholders vote for the amendment. If the amendment is not
approved by the shareholders, it will not become effective, and the Company may,
in the future, be unable to deduct certain compensation based on the Plan paid
to one or more executive officer.
The following is a summary of the principal provisions of the 1991 Plan, as
it is proposed to be amended (the "Amended Plan"), and adjusted for stock splits
which have occurred between the time the Plan was adopted and the date of this
Proxy Statement. The amendment is referred to in italics. Such summary is
qualified in its entirety by reference to the text of the 1991 Plan (Exhibit A).
1. The aggregate number of shares of stock available for grants of options or
grants of awards under the Plan in each fiscal year during which the Plan
is in effect shall be three percent of the total number of shares of Class
A Common Stock of the Company outstanding as of the first day of each such
fiscal year. No more than 2,000,000 shares of Common Stock may be issued
over the life of the Amended Plan, no more than 150,000
17
shares of Common Stock may be issued in any one calendar year to any one
individual, and no stock option may be granted after December 31, 2000.
Shares subject to unexercised portions of terminated or expired options, or
shares reserved for issuance as Performance Shares or Restricted Stock
which are forfeited, may again be made subject to an option or reserved for
issuance as Performance Shares or Restricted Stock. The Company presently
has outstanding 12,951,558 shares of Class A Common Stock and has available
13,553,957 shares of authorized but unissued Class A Common Stock. As of
June 30, 1996, approximately 150 employees (of whom 32 are corporate or
division officers) were eligible to participate in the Amended Plan.
2. The Board of Directors has designated the Executive Compensation and
Development Committee (the "Committee") to administer the Amended Plan (see
"CERTAIN INFORMATION CONCERNING THE BOARD" for additional information
concerning the Committee). None of the members of the Committee is eligible
for awards under the Amended Plan. Subject to the terms and conditions of
the Amended Plan, the Committee will have the authority to select the
employees of the Company who will be granted options or awarded Performance
Shares or Restricted Stock, determine the number of shares covered by each
such grant or award, and interpret, construe and implement the provisions
of the Amended Plan.
3. The option price for all options granted under the Amended Plan shall be
determined by the Committee and shall not be less than 100 percent of the
fair market value of the stock on the date of the grant of such option.
Shares must be paid for in full (a) in cash at the time of exercise, (b) by
the delivery to the Company of shares of Common Stock valued at fair market
value on the date of exercise, or (c) by a combination of cash and delivery
of shares of Common Stock. However, an option may provide, if the Committee
so determines, that the option may be exercised in whole or in part without
any payment, in which event the optionee would receive (in shares of Common
Stock, in cash, or partly in both) an amount equal to the excess of the
fair market value of the shares covered by the option over the total option
price of such shares.
4. No option granted under the Amended Plan will be exercisable after the
expiration of ten years from the date of its grant, except in the case of
an employee's death, in which case an extension of up to one year may, in
certain circumstances, be granted. An option will be exercisable only while
an optionee is regularly employed by the Company or, except in the case of
termination for cause, within three months of termination of employment,
except in the case of retirement at age 55 or later, disability or death.
However, the Committee may increase the number of shares subject to
exercise up to the full number covered by the option and may permit the
exercise of the option for such period after termination of employment as
it may specify provided such period does not extend beyond the expiration
date of the option.
5. When awards of Performance Shares are made under the Amended Plan, the
Committee will establish a schedule of award period objectives applicable
to awards granted in that year. The number of shares of Common Stock, if
any, which will be issued pursuant to an award of Performance Shares, will
depend on the extent to which award period objectives are attained. Award
period objectives may include the achievement of specified earnings, cash
flow, return on investment or other financial targets as well as specified
business objectives of a non-financial nature. All awards of Performance
Shares under the Amended Plan will have a plan cycle of not less than two
fiscal years nor more than five fiscal years. (The first fiscal year will
be the year in which the award is made.) During the plan cycle and until
shares of Common Stock, if any, are issued pursuant to the terms of the
shares awarded, the grantee shall have no dividend or voting rights with
respect to Performance Shares which have been reserved with respect
thereto. The Committee may, in its discretion, provide in the terms of an
award that the grantee of Performance Shares may elect to receive cash in
lieu of and in an amount equal in value to, all or part of the shares of
Common Stock which would otherwise be issued to the grantee.
18
6. When awards of Restricted Stock are made under the Amended Plan, the
Committee may establish a period (the "Restricted Period") during which the
shares of Restricted Stock shall be subject to forfeiture in whole or part
if specified award period objectives are not met. The grantee of Restricted
Stock shall be entitled to vote his or her shares and shall be entitled to
all dividends paid thereon, except that dividends paid in Common Stock or
other property other than cash shall be subject to the same restrictions as
the Restricted Stock.
7. If the employment of an employee to whom an award of Performance Shares or
Restricted Stock is made is terminated for any reason during the plan
cycle, the Performance Shares or Restricted Stock will be forfeited.
However, the Committee, in its sole discretion, may determine in any such
case that a lesser number of shares, or no shares, will be forfeited. The
Committee may also, in its sole discretion, at any time amend any award to
provide that all shares of Common Stock which have been earned under the
terms of the Performance Shares award or Restricted Stock award shall vest,
notwithstanding any subsequent termination of employment without cause, and
may further provide that such shares earned pursuant to a Performance
Shares Award may be issued prior to the end of the plan cycle.
8. Shares issued pursuant to the exercise of options, or as Performance Shares
will be treasury shares or authorized but unissued shares. Shares issued as
Restricted Stock will be treasury shares.
9. The Committee may, in its discretion, include in any option agreement a
provision which would require the grantee to forfeit gains on options
exercised within six months prior to the termination of the grantee's
employment in the event the grantee voluntarily terminates his or her
employment or is terminated for cause, and within one year after such
termination engages in any activity or business which competes with any
business or activity of the Company in which he or she was engaged at the
time of his or her termination.
10. Upon a change of control, as defined, all outstanding options shall become
immediately exercisable up to the full number of shares covered by the
option. The Committee shall specify in a performance stock award whether,
and to what effect, in the event of a change of control, an employee shall
be issued shares of common stock with regard to performance stock awards
held by such employee. Following a change of control, all shares of
restricted stock which would otherwise remain subject to restrictions shall
be free of such restrictions. A change of control is defined as having
occurred if either (a) any person hereafter becomes the beneficial owner,
directly or indirectly, of 25% or more of the Company's then outstanding
shares of Class B Stock (and such person did not have such 25% or more
beneficial ownership on January 1, 1989) and the number of shares of Class
B Stock so owned is equal to or greater than the number of shares of Class
B Stock then owned by any other person, or (b) individuals who constitute
the Board of Directors on January 1, 1989 (the "incumbent board") cease for
any reason to constitute at least 64% of the full board, provided that any
person becoming a director subsequent to such date whose election or
nomination for election by the Company's shareholders was approved by a
vote of at least 64% of the directors comprising the incumbent board shall
be considered as though such person was a member of the incumbent board.
The term "person" includes any individual, corporation, partnership, group,
or association other than the Company, an affiliate of the Company, or any
ESOP or other employee benefit plan sponsored or maintained by the Company
or any affiliate. The Class B shareholders, voting as a class, are entitled
to elect a minimum of 64% of the directors comprising the full board.
11. The Amended Plan may be terminated or amended by the Board of Directors,
except that the number of shares available for grants or the definition of
persons eligible to receive grants, may not be changed without shareholder
approval.
19
The following is a brief description of the federal income tax
consequences, under existing law, of the Amended Plan:
Incentive Stock Options:
(a) Neither the grant nor the exercise (while the employee is employed or
within three months after termination of employment) of an incentive stock
option under the Amended Plan will be treated as the receipt of taxable
income by the employee or a deductible item by the Company. The amount by
which the fair market value of the shares issued upon exercise exceeds the
option price will constitute an item of "tax preference" to the employee
upon exercise of an option for purposes of the minimum tax on tax
preference income.
(b) If the employee holds shares acquired upon the exercise of an option for
the two-year period from the date of grant of the option and the one-year
period beginning on the day after such exercise, and if he or she has been
an employee of the Company or its subsidiaries at all times from the date
of grant to the day three months before exercise, then any gain realized by
the employee on a later sale or exchange of such shares will be a long-term
capital gain and any loss sustained will be a long-term capital loss. The
Company will realize no tax deduction with respect to any such sale or
exchange of option shares.
(c) If the employee disposes of any shares acquired upon the exercise of an
option during the two-year period from the date of grant of the option or
the one-year period beginning on the day after such exercise, the employee
will generally be obligated to report as ordinary income for the year in
which the disposition occurred the amount (if any) by which the fair market
value of such shares on the date of the exercise of the option (or, as
noted in clause (d) below, in the case of certain sales or exchanges of
such shares for less than such fair market value, the amount realized upon
such sale or exchange) exceeds the option price, and the Company will be
entitled to a deduction equal to the amount of such ordinary income. Any
such ordinary income will increase the employee's tax "basis" for the
purpose of determining gain or loss.
(d) If an option holder who has acquired stock upon the exercise of an
incentive stock option makes a disposition within the two-year period
described above, and the disposition is a sale or exchange with respect to
which a loss (if sustained) would be recognized to the option holder, then
the amount includable in the option holder's gross income, and the amount
deductible by the Company, will not exceed the excess (if any) of the
amount realized on the sale or exchange over the adjusted basis of the
stock.
Non-Qualified Stock Options:
In the case of an option granted under the Amended Plan that is not an
incentive option, the option holder recognizes ordinary taxable income at the
time the option is exercised in the amount by which the fair market value of the
shares acquired exceeds the option price. The Company is entitled to a
corresponding ordinary income deduction at that time. The option holder's tax
basis for purposes of determining gain or loss on a subsequent sale of the
shares is the fair market value of the shares at the date of exercise of the
option, and any gain or loss thereafter realized will be short- or long-term
depending upon whether the shares are held more or less than one year from the
date of exercise.
Performance Shares:
A grantee will not realize any taxable income upon the award of Performance
Shares. The right to elect under Section 83(b) of the Internal Revenue Code to
have the fair market value of the underlying shares (determined without regard
to the possibility of forfeiture and other restrictions imposed upon the shares
during the plan cycle) included in his or her gross income and in the year the
Performance Shares are awarded is not available to the grantee. The grantee will
realize ordinary income during his or her taxable year in which the shares of
Common Stock are issued pursuant to the award of Performance Shares in an amount
equal to the fair market value of the shares of Common Stock at the date of
issue. Such income, and any cash paid in lieu of the issuance of Common Stock,
will constitute ordinary income. If the grantee thereafter
20
disposes of such shares of Common Stock, any amount received in excess of the
market value of the shares on the date of issue will be treated as long- or
short-term capital gain depending upon the holding period of the shares.
Restricted Stock:
A grantee will not realize any taxable income upon the award of Restricted
Stock unless the grantee elects under Section 83(b) of the Internal Revenue Code
to have the fair market value of the Stock (determined without regard to the
possibility of forfeiture) included in his or her gross income in the year the
Restricted Stock is issued. In the absence of such an election, the grantee will
realize ordinary income during his or her taxable year in which the possibility
of forfeiture lapses. If the grantee thereafter disposes of the stock, any
amount received in excess of the fair market value of the shares on the date the
possibility of forfeiture lapsed will be treated as long- or short-term gain
depending upon the holding period (measured from the date the possibility of
forfeiture lapsed) of the shares.
Company Deductions:
The Company will be entitled to an ordinary deduction in the same amount as
the grantee is considered to have realized ordinary income. Generally, the
deduction will be allowed for the Company's fiscal year ending after the close
of the calendar year in which the grantee is considered to have realized
ordinary income.
Unless contrary instructions are noted thereon, the proxy will be voted in
favor of the following resolution which shall be submitted at the meeting:
"Resolved, that the Amended 1991 Key Employee Stock Plan of the Company as
set forth in Exhibit A to the Company's Proxy Statement dated August 9,
1996 be, and it hereby is, authorized and approved."
Approval of the Amended Plan requires the affirmative vote of the shares
representing a majority of the votes accorded to all outstanding shares of the
Company present in person or by proxy at the meeting (each share of Class A
Stock being accorded one-tenth of one vote and each share of Class B Stock being
accorded one vote).
The Board of Directors recommends that you vote "FOR" the adoption of the
Amended 1991 Key Employee Stock Plan.
VI. Proposal to Ratify Appointment of Independent Public Accountants
There will be presented to the meeting a proposal to ratify the appointment
by the Board of Directors, on the recommendation of its Audit Committee, of
Arthur Andersen LLP ("Arthur Andersen") as independent public accountants for
the Company for the fiscal year ending April 30, 1997. Although it is not
required to do so, the Board of Directors is submitting the selection of that
firm for ratification by the shareholders to ascertain their views on such
selection. Arthur Andersen has audited the Company's accounts since 1967. Arthur
Andersen has advised the Company that during such period neither that firm nor
any of its members has or has had any direct or any materially indirect
financial interest in the Company or any of its subsidiaries. A representative
of Arthur Andersen is expected to be present at the Annual Meeting with the
opportunity to make a statement if he desires to do so, and such representative
is expected to be available to respond to appropriate questions.
Unless contrary instructions are noted thereon, the proxies will be voted
in favor of the following resolution, which will be submitted at the meeting:
"Resolved, that the appointment by the Board of Directors of Arthur
Andersen LLP as independent public accountants for the Company for the
fiscal year ending April 30, 1997, be and it hereby is ratified, confirmed
and approved."
The affirmative vote of the shares representing a majority of the number of
votes accorded to all outstanding shares of the Company (each share of Class A
Stock being accorded one-tenth of one vote and each share of Class B Stock being
accorded one vote) present in person or by proxy at the meeting and voting on
the proposal is necessary for the adoption of the proposal. In the event that
the foregoing proposal is defeated, the adverse vote will be considered as a
direction to the Board of Directors to select other auditors for the following
year. However, because of the difficulty and expense of making any substitution
of auditors so long after the
21
beginning of the current fiscal year, it is contemplated that the appointment
for the fiscal year ending April 30, 1997 will be permitted to stand unless the
Board of Directors finds other good reason for making a change.
The Board of Directors recommends that you vote "FOR" the ratification of
the appointment of independent public accountants.
VII. Manner and Expenses of Solicitation
Since many of our shareholders are unable to attend the Annual Meeting, the
Board of Directors solicits proxies so that each shareholder has the opportunity
to vote on the proposals to be considered at the Annual Meeting. When a proxy
card is returned properly signed and dated, the shares represented thereby will
be voted in accordance with the instructions on the proxy card. Shareholders are
urged to mark the boxes on the proxy card to indicate how their shares are to be
voted. If no choices are specified, the shares represented by that proxy card
will be voted as recommended by the Board of Directors. However, if a
shareholder does not return a signed proxy card, his or her shares will not be
voted by the proxies. The proxy card, if properly executed and returned, also
confers discretionary authority on the proxies to vote the shares represented by
the proxy on any other matter that is properly presented for action at the
Annual Meeting. Any shareholder giving a proxy has the right to revoke it at any
time before it is exercised by giving notice in writing to the Secretary of the
Company, by delivering a duly executed proxy bearing a later date to the
Secretary prior to the Annual Meeting of Shareholders, or by attending the
Annual Meeting and voting in person. Attendance at the annual meeting will not
in and of itself constitute revocation of a proxy.
The Company will bear the costs of soliciting proxies. In addition to the
solicitation of proxies by use of the mails, some of the officers, directors and
other employees of the Company may also solicit proxies personally or by mail,
telephone or telegraph, but they will not receive additional compensation for
such services. Brokerage firms, custodians, banks, trustees, nominees or other
fiduciaries holding shares of Common Stock in their names will be reimbursed for
their reasonable out-of-pocket expenses in forwarding proxy material to their
principals.
VIII. Deadline for Submission of Shareholder Proposals or Board Nominations
The By-Laws provide that if a shareholder intends to nominate a candidate
for election as a director, or bring other business before the Annual Meeting,
the shareholder must deliver written notice of his or her intention to the
Secretary of the Company (or if notice is mailed, it must be received by the
Secretary) not less than 120 calendar days in advance of the date in the then
current year corresponding to the date the Company's Proxy Statement was
released to shareholders in connection with the previous year's annual meeting.
If the date of the annual meeting has been changed by more than 30 days, the
notice must be received a reasonable time before such new date. The notice must
state the shareholder's name, address, and number of Class A or Class B shares
held, and fully describe the business to be brought before the meeting. In
addition, if requested by the Company, the notice must also include all other
information that would be required to be filed with the Securities and Exchange
Commission, if with respect to the proposed business, the shareholder was a
participant in a solicitation subject to Section 14 of the Securities Exchange
Act of 1934. If the notice pertains to the nomination of a candidate for
election as a director, it must include the consent of the nominee to serve as a
director of the Company if elected.
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Secretary of the Company (at the address listed
at the beginning of this Statement) no later than April 11, 1997.
IX. Other Matters
At the date of this Proxy Statement, the Board of Directors does not know
of any other matter to come before the meeting other than the matters set forth
in the Notice of Meeting. However, if any other matter, not now known, properly
comes before the meeting, the persons named in the enclosed proxies will vote
said proxies in accordance with their best judgment on such matter. Shares
represented by any proxy will be voted with respect to the proposal outlined
above in accordance with the choice specified therein or in favor of any
proposal as to which no choice is specified.
The Annual Report to shareholders was mailed together with this Proxy
Statement to shareholders beginning August 9, 1996.
22
The Company will provide, without charge, a copy of its Report to the
Securities and Exchange Commission on Form 10-K for fiscal 1996, including the
financial statements and the schedules thereto. All such requests should be
directed to Josephine A. Bacchi, Secretary, John Wiley & Sons, Inc., 605 Third
Avenue, New York, New York 10158.
It is important that the accompanying proxies be returned promptly.
Therefore, whether or not you plan to attend the Annual Meeting in person, you
are requested to date, sign and return your proxies in the enclosed envelope to
which no postage need be affixed if mailed in the United States. The proxies may
be revoked at any time by you before they are exercised. If you attend the
meeting in person, you may withdraw any proxy and vote your own shares.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPHINE A. BACCHI
Secretary
New York, New York
August 9, 1996
23
EXHIBIT A
JOHN WILEY & SONS, INC.
1991 KEY EMPLOYEE STOCK PLAN
Amended and Restated as of June 20, 1996
1. Name, Purpose and Overview. This Amended Plan shall be known as the
"1991 Key Employee Stock Plan" (the "Plan"). The Plan is intended to provide the
officers and other key employees of John Wiley & Sons, Inc. (the "Company") and
of it subsidiaries, affiliates and certain joint venture companies, upon whose
judgment, initiative and efforts the Company depends for its growth and for the
profitable conduct of its business, with additional incentive to promote the
success of the Company, and to that end to encourage such employees to acquire
or increase their proprietary interest in the Company. The Plan provides for the
grant of options to purchase shares of the Company's stock, for the grant of
"Performance Stock Awards" which are contingent rights to receive shares of the
Company's stock, and for the direct grant of shares of the Company's stock,
("Restricted Stock"). Performance Stock Awards shall be subject to forfeiture,
in whole or in part, if the objectives established in the award are not met, or
if employment is terminated during the "Plan Cycle." Restricted Stock shall be
subject to forfeiture, in whole or in part, if employment is terminated during
the "Restricted Period" and may also be made subject to forfeiture in whole or
in part if objectives established in the award are not met.
2. Shares of Stock. Subject to adjustment as provided in Paragraph 11, the
aggregate number of shares of stock available for grants of options or awards
under the Plan in each fiscal year (including partial years) during which the
Plan is in effect shall be equal to three percent (3%) of the total number of
shares of Common Stock of the Company outstanding as of the first day of each
such year for which the Plan is in effect; provided that any shares available
for grant in a particular fiscal year (or partial fiscal year) which are not, in
fact, granted in such year shall not be added to the shares available for grant
in any subsequent fiscal year. In addition to the limitation set forth above
with respect to the number of shares available for grant in any single fiscal
year, no more than 2,000,000 shares of Common Stock shall be cumulatively
available for grants of options or awards over the life of the Plan, no more
than 150,000 shares of Common Stock may be issued in any one calendar year to
any one individual, and no incentive stock option may be granted after December
31, 2000. Shares subject to unexercised portions of terminated or expired stock
options granted under the Plan, shares of Restricted Stock which have been
forfeited, or shares included in Performance Stock Awards which have been
forfeited or otherwise not earned shall again be available for grant under the
Plan. Shares issued pursuant to the exercise of options, or pursuant to
Performance Stock Awards may be treasury shares or authorized but unissued
shares. Shares issued as Restricted Stock shall be treasury shares. The holder
of an option or the recipient of a Performance Stock Award shall not have any of
the rights of a shareholder with respect to the shares covered by his or her
option or award until a certificate for such shares shall be issued upon the due
exercise of the option or pursuant to the terms of the Performance Stock Award,
as the case may be.
3. Common Stock. The term "Common Stock" as used in this Plan shall refer
solely to the Class A Common Stock (par value of $1 per share) and not the Class
B Common Stock.
4. Eligibility. All officers and other key employees of the Company, its
Subsidiaries, Affiliates or Joint Venture Companies, including members of the
Company's Board of Directors (the "Board") who are employees of the Company or
its Subsidiaries, Affiliates or Joint Venture Companies, except members of the
Committee (referred to in Paragraph 5), are eligible to receive stock options
(except that only employees of the Company and its Subsidiaries are eligible to
receive incentive stock options), and awards of Performance Stock Awards or
Restricted Stock. The term "Subsidiary(ies)" as used in this Plan means a
company in which the Company and its Subsidiaries hold 50% or more of the total
combined voting power, the term "Affiliate(s)" means any company in which the
Company and its Subsidiaries hold 10% or more (but less than 50%)of the total
combined voting power, and the term "Joint Venture Company(ies)" means any
partnership or joint venture in which the Company has a 10% or more interest.
5. Administration of the Plan. The Executive Compensation and Development
Committee, or such other standing committee of not less than three directors as
the Board may appoint (the "Committee"), shall administer and interpret the
Plan. No individual shall be appointed to the
A-1
Committee who is or within one year before his or her appointment was eligible
to receive options or awards of Company stock under the Plan or any other
discretionary plan of the Company. With respect to the administration of the
Plan, in addition to the authority specifically granted to the Committee herein,
and subject to the rules provided in the By-Laws and such rules as the Board of
Directors may prescribe, the Committee shall have authority to adopt, amend and
rescind such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan and to construe and interpret the Plan, the rules and
regulations which it may promulgate and the instruments evidencing options and
awards granted under the Plan, and to make all other determinations deemed
necessary or advisable in the administration of the Plan. The Committee's
interpretation of the Plan and of any options issued or awards granted under it
shall be final and binding upon all persons.
6. STOCK OPTIONS
(a) Grant of Options. Subject to the provisions of the Plan, including but
not limited to the provisions of Subparagraphs (b), (c) and (d) of this
Paragraph 6, the Committee shall have full and final authority in its discretion
(i) to determine the employees to be granted options, (ii) to determine the
number of shares of Common Stock subject to each option, (iii) to determine the
time or times at which options will be granted, (iv) to determine the option
price of the shares subject to each option, (v) to determine the time or times
when or any conditions upon which each option becomes exercisable and the
duration of the exercise period, (vi) to determine whether the option shall be
an "incentive stock option" as defined in Section 422A(b) of the Internal
Revenue Code of 1986 (the "Code") or an option not intended to qualify as an
incentive stock option (a "non-qualified stock option"), and (vii) to prescribe
the form or forms of the instruments evidencing any options granted under the
Plan (which forms shall be consistent with this Plan but need not be identical),
except that each option shall be clearly identified as an incentive stock option
or a non-qualified stock option. The date of an option shall be the date of the
authorization of such grant by the Committee or such later date as may be fixed
for that purpose by the Committee at the time of the authorization of such
grant. An individual may hold more than one option.
(b) Terms of all Options. All options granted under the Plan (including
non-qualified options) shall be subject to the following provisions:
(i) Purchase Price. The purchase price of shares under each such
option shall be fixed by the Committee at not less than 100% of the fair
market value of the shares on the date of grant of such option.
(ii) Payment. Shares shall be paid in full at the time the option is
exercised and no shares shall be issued until such payment has been
received. Payment may be made (a) in cash, (b) by the delivery to the
Company of shares of the Company's Common Stock or Class B Common Stock
(duly endorsed for transfer) valued at fair market value on the date of
exercise, or (c) by a combination of cash and delivery of shares of the
Company's Common Stock or Class B Common Stock valued as herein provided.
The Committee may, from time to time, restrict or impose limits and
conditions on the use of the Company's Common Stock or Class B Common Stock
for payment.
(iii) Stock Appreciation Rights. Notwithstanding the foregoing
subparagraph (ii), any option granted under the Plan may provide the right
to exercise such option in whole or in part without any payment of the
option price. If an option is exercised without a payment of the option
price, the optionee shall be entitled to receive a payment equal to the
excess of the fair market value, on the date of exercise, of the shares
covered by the option over the total option price of such shares. Such
payment shall be in whole shares of Common Stock, in cash, or partly in
such shares and partly in cash as determined by the Committee. The number
of shares with respect to which any option is exercised under this
Subparagraph (iii) shall reduce the number of shares thereafter available
for exercise under the option and such shares may not again be optioned
under the Plan.
(iv) Ten Year Maximum Term. Notwithstanding any other provision in
this Paragraph 6, no option granted under the Plan shall be exercisable
either by the optionee, or in the event of the optionee's death, by his or
her estate or by any other person, after the expiration of ten years from
the date of its grant, except as provided in Subparagraphs (b)(vi) or
(vii).
A-2
(v) Termination of Employment Other Than by Death or Retirement at or
after Age 55. Except as otherwise expressly provided in the Plan, each
option may be exercised only while the optionee is regularly employed by
the Company, a Subsidiary, an Affiliate or Joint Venture Company, or within
three months after the optionee's employment has been terminated, whether
such termination was by the Company (unless such termination was for cause)
or by the optionee for any reason. If the optionee's employment is
terminated for cause (as determined by the Committee), the option may not
be exercised after the optionee's employment has been terminated. An
optionee's employment shall not be deemed to have terminated for purposes
of this subparagraph as long as the optionee is employed by the Company, or
any Subsidiary, Affiliate or Joint Venture Company. Employment shall mean
continuous employment (either full or part time), except that leaves of
absence for such periods and purposes as may be approved by the Company or
the Subsidiary, Affiliate or Joint Venture Company shall not be deemed to
terminate employment. If an optionee is permanently disabled as of the date
of termination of employment, the option may be exercised within three
years after such date. The Committee may require evidence of permanent
disability, including medical examinations by physicians selected by it.
Notwithstanding the foregoing, the Committee, in its discretion, may permit
the exercise of the option for such period after such termination of
employment as the Committee may specify and may also increase the number of
shares subject to exercise up to the full number of shares covered by the
option. In no event (except as hereinafter provided in the case of the
death of an optionee) may an option be exercised after the expiration date
of the option.
(vi) Retirement at or after Age 55. If an optionee shall retire after
attaining 55 years of age, the option shall terminate three years after the
date of the optionee's retirement (but no later than the expiration date of
the option). If the optionee shall die within such three year (or shorter)
period, the optionee's estate or any person who acquires the right to
exercise such option by bequest, inheritance or by reason of the death of
the optionee shall have the right to exercise the option during such
period, or during the period ending one year after the optionee's death, if
longer, to the same extent as the optionee would have had if he or she had
survived.
(vii) Termination of Employment by Death. If an optionee shall die
while in the employ of the Company or a Subsidiary, Affiliate or Joint
Venture Company the optionee's estate or any person who acquires the right
to exercise such option by bequest, inheritance or by reason of the death
of the optionee shall have the right to exercise the option within three
years from the date of the optionee's death (but not later than the
expiration date of the option or one year after the optionee's death,
whichever is later), without regard to whether the right to exercise such
option shall have otherwise accrued.
(viii) Non-Transferability. No stock option shall be transferable
other than by last will and testament, or by the laws of descent and
distribution. During the optionee's lifetime, the option shall be
exercisable only by the optionee.
(c) Incentive Stock Options. An option which is designated as an "incentive
stock option" is intended to qualify as an incentive stock option as defined in
subsection (b) of Section 422A of the Code and the provisions of this Plan and
the terms of any such option shall be interpreted accordingly. An incentive
stock option may only be issued to employees of the Company or its Subsidiaries,
and notwithstanding the provisions of Subparagraph 6(b), the purchase price of
shares under each such option shall be no less than the fair market value of the
stock, as determined by the Committee, on the date of grant of such option and
the option shall expire in all events after the expiration of ten years from the
date of its grant.
7. PERFORMANCE STOCK AWARDS
(a) Grants. Subject to the provisions of the Plan, including but not
limited to the provisions of Subparagraphs (b), (c) and (d) of this Paragraph 7
of the Plan, the Committee shall have full and final authority in its discretion
(a) to determine the employees to be awarded Performance Stock Awards, (b) to
determine the number of shares of Common Stock which may be issued pursuant to
each Award, (c) to determine the time or times at which the Awards will be
granted, (d) to determine the Plan Cycle and Award Period Objectives, as such
terms are hereinafter defined, with respect to each Award, and (e) to prescribe
the form or forms of the instruments evidencing the awards under the Plan (which
forms shall be consistent with the Plan but need not be identical).
A-3
(b) Term of Awards. All Awards granted under the Plan shall be subject to
the following provisions:
(i) General. The Committee may award "Performance Stock Awards" which
will entitle the employee to whom the award is made to be issued shares of
Common Stock upon the expiration of the Plan Cycle if the Award Period
Objectives with respect to such Performance Stock Awards specified in the
award are attained.
(ii) Award Period Objectives. Each fiscal year that awards are made
under the Plan, the Committee shall establish a schedule of Award Period
Objectives applicable to Awards granted in that year. A separate schedule
of Award Period Objectives may be established for Awards to (a) a defined
group of employees, such as the employees of a Subsidiary, Affiliate, Joint
Venture Company or division or group within the Company or (b) an
individual employee. Award Period Objectives may include, but are not
limited to, the achievement of appropriate objectives with respect to
earnings, cash flow and return on investment as well as specific business
objectives of a nonfinancial nature. Each Award shall also specify the
number of shares of Common Stock which will be issued to the grantee under
the schedule of Award Period Objectives. Award Period Objectives may be
stated in terms of cumulative results during the entire Plan Cycle, in
terms of results during each fiscal year within the Plan Cycle, or both.
The attainment of any Award Period Objectives established by the Committee
shall be determined by the Committee and its determination shall be
conclusive and binding on the employee, any beneficiary of the employee and
the Company. In making such determination the Committee may refer to and
rely upon the certified financial statements contained in the Company's
annual report filed with the Securities and Exchange Commission, other
financial statements of the Company, relevant economic or financial
indices, reports prepared by the Company's independent public accountants
or, with respect to business objectives not stated in financial terms, upon
reports or statements of officers of the Company. The Committee may make
whatever adjustments to reported financial results it determines necessary
and appropriate to carry out the intent and purposes of the Award. The
Award Period Objectives and Plan Cycle may be changed if the Committee
determines that such change is necessary and appropriate to take account of
major changes in the tax law or accounting rules, acquisitions,
divestitures and the like, or to carry out the intent and purposes of the
Award in the light of changed circumstances or experience.
(iii) New Employees or Promotions. Notwithstanding the provisions of
the preceding subparagraph, an Award may be made in a subsequent fiscal
year to a new employee or to an employee who has received a promotion
relating to the Award Period Objectives of a prior fiscal year. This Award
shall be subject to the Award Period Objectives (and the Plan Cycle) of
Awards made in a prior fiscal year to the same extent as if the Award had
been made in such prior fiscal year or with such adjustments as the
Committee shall specify.
(iv) Termination of Employment. If the employment of any employee to
whom a Performance Stock Award is made (the "grantee") shall be terminated
by the Company, Subsidiary, an Affiliate or a Joint Venture Company, as the
case may be, with or without cause, or by the grantee for any reason during
the performance period, or as result of death, the Performance Stock Award
and the right to receive shares of Common Stock which may have been earned
under the Award shall be forfeited. Notwithstanding the foregoing, the
Committee, in its discretion, may waive such forfeiture, or may determine
that only a portion of the Performance Stock Award shall be forfeited
pursuant to the foregoing provisions of this subparagraph. The Committee
may also, in its discretion, at any time amend any Award to provide that
all shares of Common Stock which have been earned under the terms of the
Award shall vest notwithstanding any subsequent termination of employment
without cause or as a result of death and may further provide that such
shares may be issued prior to the end of the Plan Cycle. Employment shall
mean continuous employment, except that leaves of absence for such periods
and purposes as may be approved by the employer shall not be deemed to
terminate employment. Performance Stock Awards which are not forfeited
pursuant to the provisions of this subparagraph shall remain subject to
forfeiture pursuant to the terms of the Award.
A-4
(v) Plan Cycle. All Performance Stock Awards under the Plan shall have
a Plan Cycle of not less than two fiscal years nor more than five fiscal
years. The first fiscal year shall be the year in which the award is made
or the year following.
(c) Rights under Performance Stock Awards. Until shares of Common Stock are
issued pursuant to a Performance Stock Award, the grantee shall have no right to
receive dividends or other distributions with respect to such shares or to vote
such shares. The grantee's rights with respect to a Performance Stock Award
shall not be transferable other than by last will and testament, or by the laws
of descent and distribution. In the event of the death of the grantee, his or
her estate or any person who acquires his or her interest in the Performance
Stock Award by bequest or inheritance or by reason of the death of the grantee,
shall only have such rights, if any, with respect to the decedent's Performance
Stock Award as the Committee, pursuant to Subparagraph 7(b)(iv) may determine.
(d) Alternative Cash Awards. The Committee may provide in the terms of the
Award that a grantee of Performance Stock Awards may elect, at such time as the
Committee may specify, to receive cash in lieu of, and in an amount equal in
value to, all or part of the shares of Common Stock which would otherwise be
issued to the grantee.
8. RESTRICTED STOCK
(a) Awards. Subject to the provisions of the Plan, the Committee shall have
full and final authority in its discretion (a) to determine the employees to be
awarded shares of Common Stock as "Restricted Stock" (shares subject to
forfeiture), (b) to determine the number of shares of Common Stock which shall
be issued pursuant to each award, (c) to determine the time or times at which
the awards will be granted, (d) to determine the period (the "Restricted
Period") during which the shares of Restricted Stock shall be subject to
forfeiture in whole or part, (e) to provide or not to provide for forfeiture of
Restricted Stock in whole or in part (in addition to forfeiture on account of
termination of employment as provided in Subparagraph 8(d)) if specified Award
Period Objectives (of the kind described in Paragraph 7(b)(ii)) are not met
during the Restricted Period, and (f) to prescribe the form or forms of the
instruments evidencing the awards of Restricted Stock under the Plan (which
forms shall be consistent with the Plan but need not be identical).
(b) Restricted Period. During the Restricted Period the grantee shall not
be permitted to sell, transfer, pledge or assign the shares of Restricted Stock,
except that such shares may be used, if the award permits, to pay the option
price of any option granted under the Plan (or any prior stock option plan of
the Company), provided an equal number of shares delivered to the optionee shall
carry the same restrictions and be subject to the same provisions regarding
forfeiture as the shares so used.
(c) Death or Permanent Disability. Shares of Restricted Stock shall not be
forfeited as a result of the grantee's death or his or her termination of
employment by reason of permanent disability, as determined by the Committee.
The Committee may require medical evidence of permanent disability, including
medical examinations by physicians selected by it. Such shares shall remain
subject to forfeiture if the Award Period Objectives, if any, specified in the
award are not met.
(d) Termination of Employment. Shares of Restricted Stock shall be
forfeited and revert to the Company upon the grantee's termination of employment
during the Restricted Period for any reason other than death or permanent
disability, except to the extent the Committee, in its discretion, determines
that a lesser number of shares of Restricted Stock or no shares of Restricted
Stock shall be forfeited pursuant to the foregoing provisions of this
subparagraph (d).
(e) Stock Certificates. Stock certificates for Restricted Stock shall be
registered in the name of the grantee but shall be appropriately legended and
returned to the Company by the grantee, together with a stock power, endorsed in
blank by the grantee. The grantee shall be entitled to vote shares of Restricted
Stock and shall be entitled to all dividends paid thereon, except that dividends
paid in Common Stock or other property (other than cash) shall also be subject
to the same restrictions.
(f) Lapse of Restrictions. Restricted Stock shall become free of the
foregoing restrictions upon expiration of the applicable Restricted Period and
the Company shall deliver new certificates with the restrictive legend deleted
evidencing such stock.
A-5
9. CHANGE OF CONTROL
(a) Definitions:
(i) A "Change of Control" shall be deemed to have occurred if (a) any
"Person" (as hereinafter defined) hereafter becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of 25 or more of the
Company's then outstanding shares of Class B Common Stock and the number of
shares of Class B Common Stock so owned is equal to or greater than the
number of shares of Class B Common Stock then owned by any other Person, or
(b) individuals who constitute the Board on January 1, 1991 (the "Incumbent
Board") cease for any reason to constitute at least 64 of the full Board,
provided that any person becoming a director subsequent to such date whose
election or nomination for election by the Company's shareholders was
approved by a vote of at least 64 of the directors comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director,
without objection to such nomination) shall, for purposes of this clause
(b), be considered as though such person were a member of the Incumbent
Board.
(ii) The term "Person" shall mean and include any individual,
corporation, partnership, group, association or other "person," as such
term is used in Section 14(d) of the Exchange Act, other than the Company,
an affiliate of the Company, any employee stock ownership plan ("ESOP") or
other employee benefit plan(s) sponsored or maintained by the Company or
any affiliate, except that for purposes of clause (a) of Subparagraph
9(a)(i), a Person shall not be deemed to be a new or different Person by
reason of a change or changes in the composition of the "persons"
constituting a Person unless a majority of the Incumbent Board (at a
meeting of the directors or by written action signed by such majority)
determines that a Change of Control has occurred.
(b) Effect on Stock Options. Notwithstanding any other provision to the
contrary, upon a Change of Control (as hereinabove defined), all options granted
under the Plan shall become immediately exercisable up to the full number of
shares covered by the option. In addition, following a Change of Control, the
optionee may elect to surrender such option (in whole or in part) and to receive
in exchange for the option (or the part thereof) surrendered within five days
after such surrender, an amount in cash equal to the number of shares covered by
the option (or the part thereof) surrendered multiplied by the excess of (a) the
higher of (x) the closing price for the shares covered by the option (or the
part thereof) surrendered as reported by the New York Stock Exchange (or any
exchange on which the shares may be listed) on the date of such surrender or, if
no shares were traded on that date, on the next preceding date on which the
shares were traded, or (y) the highest per share price for shares of the same
class actually paid in connection with any such Change of Control, over (b) the
exercise price of the shares covered by the option (or the part thereof)
surrendered. The optionee must exercise the election granted herein within 60
days after such Change of Control occurs or within seven months after the date
of the option, whichever period expires later.
(c) Effect on Performance Stock Awards. The Committee shall specify in the
award whether, and to what extent, in the event of a Change of Control, an
employee shall be issued shares of Common Stock with regard to Performance Stock
Awards held by such employee.
(d) Effect on Restricted Stock. Following a Change of Control, all shares
of Restricted Stock which would otherwise remain subject to the restrictions
provided for in the Award shall be free of such restrictions.
10. Legal Requirements. The exercise of an option, payment by delivery of
the Company's Common Stock or Class B Common Stock, the issuance of shares
pursuant to such exercise or pursuant to a Performance Stock Award, and the
subsequent transfer of such shares or the transfer of shares of Restricted Stock
shall be conditioned upon compliance with the listing requirements of any
securities exchange upon which the Common Stock or Class B Common Stock of the
Company may be listed, the requirements of the Securities Act of 1933 and the
Securities and Exchange Act of 1934, and the requirements of applicable state
laws relating to authorization, issuance or sale of securities, and the
Committee may take such measures as it deems desirable to secure compliance with
the foregoing.
A-6
11. Change in Capital Stock. The total number of shares for which options
may be granted under the Plan, the number of shares of Common Stock which may be
awarded under the Plan generally or to any individual (directly or pursuant to
Performance Stock Awards), the number of shares covered and the option price of
any option granted under the Plan, the number of shares covered by a Performance
Stock Award or the number of shares of Restricted Stock which are subject to
forfeiture, and the Award Period Objectives shall be appropriately adjusted for
any change in the outstanding shares of Common Stock of the Company through
recapitalization, stock split, stock dividend or other change in the corporate
structure or through merger or consolidation in which the Company is the
surviving Corporation. Such adjustments and the manner of application thereof
shall be determined by the Committee in its discretion. Any such adjustment may
provide for the elimination of any fractional share which might otherwise become
subject to an option or to be issued pursuant to a Performance Stock Award or
Restricted Stock.
12. Dissolution, Liquidation or Merger. In the event of a dissolution or
liquidation of the Company, or a merger or consolidation in which the Company is
not the surviving Corporation, any outstanding options hereunder shall
terminate, provided that each optionee shall, in such event, have the right upon
the adoption by the Board of Directors or shareholders of the Company of a plan
or resolutions approving or authorizing such dissolution, liquidation, or merger
or consolidation in which the Company is not the surviving Corporation, to
exercise his or her option in whole or in part, without regard to whether the
right to exercise such option shall have otherwise accrued. The Committee may
specify in each Performance Stock Award, or may thereafter determine whether,
and to what extent, the employee shall be issued shares of Common Stock with
respect to such Award in the event such plan or resolutions are adopted. In the
event such plan or resolutions are adopted, all shares of Restricted Stock shall
fully vest and no longer be subject to forfeiture.
13. Right to Terminate Employment; Benefits under Other Plans. The right of
the Company or any of its Subsidiaries, Affiliates or Joint Venture Companies to
terminate or change the employment of any employee at any time with or without
cause shall not be restricted by this Plan or the grant of an option or the
grant of Performance Stock Awards or Restricted Stock hereunder. No employee
shall be deemed to receive compensation or realize earnings for purpose of
determining benefits under any pension, profit sharing, life insurance, salary
continuation or other employee benefit plan as a result of receiving or
exercising an option pursuant to the Plan or as a result of receiving or
retaining a Performance Stock Award, Restricted Stock or cash in lieu thereof.
14. Competition With The Company. (a) The Committee, in its discretion, may
include as a term of any employee's option agreement a provision that, if the
employee voluntarily terminates his or her employment with the Company or is
terminated for cause (as determined by the Committee), and within a period of
one year after such termination shall, directly or indirectly, engage in a
competing activity (as hereinafter defined), the employee shall be required to
remit to the Company, with respect to the exercise of any option by the employee
on or after the date six months prior to such termination an amount equal to the
excess of:
(i) the fair market value per share of the Company's Common Stock on
the date of exercise of such option multiplied by the number of shares with
respect to which the option is exercised, over
(ii) the aggregate option price for such number of shares. (b) The
Committee may, in its discretion, as a condition of any award to an
employee of a Performance Stock Award or Restricted Stock, provide that, if
the employee voluntarily terminates his or her employment with the Company
or is terminated for cause (as determined by the Committee), and within a
period of one year after such termination shall, directly or indirectly,
engage in a competing activity (as hereinafter defined), the employee shall
be required to remit to the Company, with respect to any shares of Common
Stock issued or if issued subject to any
A-7
conditions, with respect to any shares which became fully vested on or
after the date six months prior to such termination, the fair market value
of such shares on the date of issuance or vesting, as applicable.
(c) Any remittance to the Company required by Subparagraphs (b) or (c)
shall be payable in cash or by delivery of shares of Common Stock of the Company
duly assigned to the Company or by a combination of the foregoing. Any such
shares so delivered shall be deemed to have a value per share equal to the fair
market value of the shares on such date of issuance or vesting.
(d) Neither of the foregoing provisions of the Paragraph 14 shall apply in
the event of a Change of Control as defined in Subparagraph 9(a) or in the event
of a dissolution, liquidation, merger or consolidation referred to in Paragraph
12.
(e) For purposes of this Paragraph 14 (except as otherwise defined in the
option agreement or award), an employee is deemed to be "engaged in a competing
activity" if he or she owns, manages, operates, controls, is employed by, or
otherwise engages in or assists another to engage in any activity or business
which competes with any business or activity of the Company in which the
employee was engaged or involved, at the time of the employee's termination.
15. Withholding Tax. The Committee may adopt and apply rules that will
ensure that the Company will be able to comply with applicable provisions of any
federal, state or local law relating to the withholding of tax on amounts
includible in the employee's income, including but not limited to the amount, if
any, includible in income on the exercise of an option or the expiration of the
Plan Cycle or the Restricted Period. A grantee of a Performance Stock Award or
Restricted Stock shall be required to pay withholding taxes to the Company in
the case of Restricted Stock upon the expiration of the Restricted Period or
such earlier date as may be required by an election pursuant to Section 83 of
the Code and in the case of a Performance Stock Award upon issuance of the
Common Stock. The grantee of a non-qualified option shall be required to pay
withholding taxes to the Company upon the exercise of the option. The Committee
shall have the right in its discretion, with the consent of the grantee, and
subject to compliance with any applicable rules and regulations of the
Securities and Exchange Commission, to satisfy the withholding tax liability
arising from the exercise of a non-qualified option, the issuance of stock
arising from a Performance Stock Award, or the release of Restricted Stock, by
retaining shares of Common Stock otherwise deliverable to the grantee pursuant
to procedures approved by the Committee.
16. Modification and Termination of Plan. The Board of Directors may at any
time terminate, in whole or in part, or from time to time modify the Plan.
Notwithstanding the foregoing, the Board of Directors shall not, without the
approval of the shareholders:
(a) increase the number of shares of stock available for grants of
options or grants of awards under the Plan;
(b) change the definition of persons eligible to receive options or
awards under the Plan.
Notwithstanding any such modification of the Plan, any option or award
theretofore granted to an employee under the Plan shall not be affected except
pursuant to Paragraph 17, below.
17. Modification of Options and Awards. Subject to all of the provisions of
the Plan governing the grant of options and awards of Performance Stock or
Restricted Stock, the Committee may at any time and from time to time, with the
consent of the optionee or grantee, amend any stock options or awards
theretofore granted under the Plan provided that the option or award as amended,
together with any other consideration provided, is reasonably deemed to be of
equivalent economic value to the option or award prior to such amendment.
18. Effective and Termination Dates. The Plan shall be effective as of the
date it is adopted by the Board of Directors, but shall be subject to the
approval of the shareholders of the Company. The Plan shall be submitted for
approval of the shareholders at the first annual meeting of shareholders held
subsequent to the adoption of the Plan. If at said meeting or adjournment
thereof the shareholders do not approve the Plan, the Plan shall terminate, any
options granted hereunder shall terminate and any Performance Stock Awards or
Restricted Stock shall be forfeited.
A-8
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE JOHN WILEY & SONS, INC.
For With- For All
1. The election as directors of all nomi- hold Except
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF nees listed below, except as marked [ ] [ ] [ ]
JOHN WILEY & SONS, INC. to the contrary:
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 19. 1996
C Larry Franklin, John S. Herrington, Chester O. Macey, Henry A.
The undersigned hereby appoints Bradford Wiley II, L McKinnel, Jr., and Thoams M. Taylor
Charles R. Ellis and Josephine A. Bacchi, as the proxies A
of the undersigned, with power of substitution S INSTRUCTION: To withhold your vote for any nominee(s) mark "For all
of each of them to vote the Class A Common Stock, which S "Except" and write that nominee's name on the line below.
the undersigned is entitled to vote at the Annual Meeting -------------------------------------------------------------------
of Shareholders of John A. Wiley & Sons, Inc., and any A For Against Abstain
and all adjournments thereof, to be held at the 2. Proposal to amend the 1991 Key [ ] [ ] [ ]
Shelburne Murray Hill Hotel, Grand Ballroom, 303 Employee Stock Plan
Lexington Avenue at 37th Street, New York, New York on S
September 19, 1996, 10:00 A.M., Eastern Daylight H
Saving Time. A 3. Proposal to ratify the appointment of [ ] [ ] [ ]
R Arthur Andersen LLP as independant
E accountants.
S
The Board of Directores recommends a Vote FOR all Nominees and FOR
Proposals 2 and 3.
The proxies are directed to vote as specfied, and in their discretion
on all other matters which may properly come before the meeting or
any adjournments therof. If not direction is given, this proxy will
be voted FOR the Election of Directors and FOR Proposals 2 and 3.
-----------------------------
PLEASE BE SURE TO SIGN AND DATE | Date |
THIS PROXY IN THE BOX BELOW. | |
- - ------------------------------------------------------------
| |
| |
| |
- - ----Shareholder sign above---Co-holder (if any) sign above--|
[arrow] DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. [arrow]
JOHN WILEY & SONS, INC.
- - ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are hold jointly, each holder should sign
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- - ------------------------------------------------------------------------------------------------------------------------------------
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE JOHN WILEY & SONS, INC.
For With- For All
1. The election as directors of all nomi- hold Except
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF nees listed below, except as marked [ ] [ ] [ ]
JOHN WILEY & SONS, INC. to the contrary:
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 19. 1996
C Franklin E. Agnew, J.Baker, Charles R. Ellis, H. Allen Fernald,.
The undersigned hereby appoints Bradford Wiley II, L Gary J. Fernandes, William R. Sutherland, Leo J. Thomas, Bradford
Charles R. Ellis and Josephine A. Bacchi, as the proxies A Wiley II, Deborah Wiley, and Peter Booth Wiley
of the undersigned, with power of substitution
of each of them to vote the Class B Common Stock, which S INSTRUCTION: To withhold your vote for any nominee(s) mark "For all
the undersigned is entitled to vote at the Annual Meeting S Except" and write that nominee's name on the line below.
of Shareholders of John A. Wiley & Sons, Inc., and any -------------------------------------------------------------------
and all adjournments thereof, to be held at the For Against Abstain
Shelburne Murray Hill Hotel, Grand Ballroom, 303 B 2. Proposal to amend the 1991 Key [ ] [ ] [ ]
Lexington Avenue at 37th Street, New York, New York on Employee Stock Plan
September 19, 1996, 10:00 A.M., Eastern Daylight S
Saving Time. H
A 3. Proposal to ratify the appointment of [ ] [ ] [ ]
R Arthur Andersen LLP as independant
E accountants.
S
The Board of Directores recommends a Vote FOR all Nominees and FOR
Proposals 2 and 3.
The proxies are directed to vote as specfied, and in their discretion
on all other matters which may properly come before the meeting or
any adjournments therof. If not direction is given, this proxy will
be voted FOR the Election of Directors and FOR Proposals 2 and 3.
-----------------------------
PLEASE BE SURE TO SIGN AND DATE | Date |
THIS PROXY IN THE BOX BELOW. | |
- - ------------------------------------------------------------
| |
| |
| |
- - ----Shareholder sign above---Co-holder (if any) sign above--|
[arrow] DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. [arrow]
JOHN WILEY & SONS, INC.
- - ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are hold jointly, each holder should sign
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- - ------------------------------------------------------------------------------------------------------------------------------------