605 Third Avenue
New York, NY 10158
(212)850-6000
John Wiley & Sons, Inc.
Bradford Wiley II
Chairman of the Board
August 7, 1998
TO OUR SHAREHOLDERS:
We cordially invite you to attend the 1998 Annual Meeting of Shareholders
to be held Thursday, September 17, 1998 at 9:30 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 vote
your shares, either by signing, dating and promptly returning the enclosed proxy
card (or, if you own two classes of shares, both proxy cards)in the accompanying
post-paid envelope, or by telephone, using the toll-free telephone number
printed on the proxy card. This will assure that your shares are represented at
the meeting. Even though you execute this proxy or use the telephone voting
service, 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 or used the telephone voting service.
Your vote is important to us, and we appreciate your prompt attention to
this matter.
Sincerely,
/s/ BRADFORD WILEY
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 17, 1998
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 17,
1998 at 9:30 A.M., for the following purposes:
1. To elect a board of ten (10)directors, of whom three (3)are to be
elected by the holders of Class A Common Stock voting as a class and seven
(7)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 Restated
Certificate of Incorporation to authorize 90,000,000 shares of Class A Common
Stock and 36,000,000 shares of Class B Common Stock, 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, 1999.
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 July 31, 1998 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 7, 1998
New York, New York
Your vote is important to us. Whether or not you plan to be present at the
Annual Meeting, please vote your proxy, either by telephone, or by mail. If you
attend the Annual Meeting in person, you may withdraw your proxy 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 17, 1998
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, 1998 ("fiscal 1998"),
are being first sent or given to shareholders on August 7, 1998.
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 Restated Certificate of Incorporation, page 17
o Proposal to Ratify Appointment of Independent Public Accountants, page
17
o Manner and Expenses of Solicitation of Proxies, page 18
o Deadline for Submission of Shareholder Proposals, page 19
I. Voting Securities--Record Date--Principal Holders
Only shareholders of record at the close of business on July 31, 1998 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 July 31, 1998, there were approximately
[__________] shares of Class A Common Stock, par value $1.00 per share (the
"Class A Stock"), and [__________] 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 [__________] shares of Class A Stock which are restricted
shares and may not be voted until restrictions lapse (see Summary Compensation
Table on page 12). There were no shares of Preferred Stock issued and
outstanding at the close of business on July 31, 1998.
The holders of Class A Stock, voting as a class, are entitled to elect
three (3) directors, and the holders of Class B Stock, voting as a class, are
entitled to elect seven (7) 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 BStock 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 Restated Certificate of Incorporation. Because abstentions and
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,
which requires approval by a majority of votes cast, 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
July 31, 1998, 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
- - -----------------------------------------------------------------------------------------------------
Deborah E. Wiley A 349,522 [ ]%
605 Third Avenue B 694,417 [ ]%
New York, New York(1)(2)(4)(5)(6)(7)
Peter Booth Wiley A 344,914 [ ]%
605 Third Avenue B 679,684 [ ]%
New York, New York(1)(2)(3)(6)(7)
Bradford Wiley II A 338,885 [ ]%
605 Third Avenue B 679,695 [ ]%
New York, New York(1)(3)(4)(6)(7)
The Bass Management Trust A 1,524,097 [ ]%
and Certain Other Persons B 400
and Entities
201 Main Street
Fort Worth, Texas(8)
Warburg Pincus Counsellors Inc. A 1,255,640 [ ]%
New York, NY B 4,600
Investment Manager(9)
GeoCapital Corporation A 1,253,040 [ ]%
New York, NY
Investment Manager(9)
United States Trust Company of A 1,022,436 [ ]%
New York
New York, NY
Investment Manager(9)
Pioneering Management Corporation A 873,600 [ ]%
Boston, MA
Investment Manager(9)
Theodore L. Cross and Certain A 602,676 [ ]%
Other Persons and Entities B 312,988 [ ]%
200 West 57th Street
New York, New York(10)
- - -----------------------------------------------------------------------------------------------------
2
- - --------------------------------------------------------------------------------
(l) Includes 115,196 shares of Class A Stock and 505,522 shares of Class B
Stock inherited upon the death of W. Bradford Wiley. Included in these
totals are shares which were owned directly by W. Bradford Wiley, as well
as shares held previously under various trusts and that were distributed
equally to Deborah E. Wiley, Bradford Wiley II, and Peter Booth Wiley.
(2) Deborah E. 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 Bradford
Wiley II. For purposes of this table, each is shown as the owner of
one-half of such shares.
(3) Peter Booth 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 Deborah E.
Wiley. For purposes of this table, each is shown as the owner of one-half
of such shares.
(4) Bradford Wiley II 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 Peter
Booth Wiley. For purposes of this table, each is shown as the owner of
one-half of such shares.
(5) 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.
(6) Bradford Wiley II, Deborah E. Wiley and Peter Booth Wiley, as general
partners of a limited partnership, share voting and/or investment power
with respect to 74,420 shares of Class B Stock owned by the partnership.
For purposes of this table, each is shown as the owner of one-third of such
shares.
(7) Bradford Wiley II, Deborah E. Wiley and Peter Booth 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-third
of such shares.
(8) Based on 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, Portfolio I
Investors, L.P., and certain other persons.
(9) 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.
(l0) Based on 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 15 members. Bradford Wiley
II, Deborah E. Wiley, and Peter Booth Wiley are siblings.
The Board met four times during fiscal 1998, and acted once by Written
Consent in Lieu of Meeting. Board committees met a total of 10 times during
fiscal 1998. No director attended fewer than 75% of the aggregate number of
meetings of the Board and of the committees on which such director sat. In
September 1997 the Board of Directors reorganized its committee structure to
improve effectiveness and efficiency. The Finance Committee was eliminated and
its responsibilities were apportioned between the full Board and the Audit
Committee. The Executive Compensation and Development Committee and the
Committee on Directors were merged to form the Governance and Compensation
Committee. The Executive and Policy Committee was eliminated, and its
responsibilities were transferred to the full Board or to the Governance and
Compensation Committee. Information regarding the current standing committees of
the Board is set forth below:
Executive Committee. The Executive Committee, which currently consists of
Dr. Thomas as Chairman, Dr. McKinnell, Jr., Messrs. Pesce and Taylor, and Ms.
Wiley, exercises the powers of the Board as appropriate in any case where
immediate action is required and the matter is such that an emergency meeting of
the full Board is not deemed necessary or possible. The Committee did not meet
during fiscal 1998.
Audit Committee. The Audit Committee, which currently consists of Dr. Baker
as Chairman, Messrs. Agnew, Fernandes, Franklin, Taylor, and Dr. Thomas, 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, and reviews with
management and the outside auditors the Company's financial statements and the
auditors' report thereon. The Committee also maintains financial oversight of
the Company's employees' retirement and other benefit plans (formerly the
responsibility of the Finance Committee), and makes recommendations to the Board
with respect to such matters. The Committee met twice during fiscal 1998.
Governance and Compensation Committee. The Governance and Compensation
Committee, which currently consists of Dr. Sutherland as Chairman, Messrs.
Fernald, Herrington, Macey, Dr. McKinnell, Jr., and Mr. P. Wiley, assists the
Board in the selection of Board members (formerly the responsibility of the
Committee on Directors), and in making the Board as effective as possible
through suggestions and periodic evaluations. The Committee evaluates the
performance of the chief executive officer (formerly the responsibility of the
Executive and Policy Committee), and reports its recommendations to the Board.
It reviews and approves the principles and policies for compensation and benefit
programs company-wide, and monitors the implementation and administration of
such programs; oversees compliance with governmental regulations and accounting
standards with respect to employee compensation and benefit programs; and
monitors executive development practices in order to insure succession
alternatives for the organization. The Committee also grants options and makes
awards under the 1991 Key Employee Stock Plan. The Committee met four times
during fiscal 1998.
Director's 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
$3,000. 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. The total number of shares awarded in fiscal 1998 was 4,171
Class A shares at the per share market value of $37.8125. 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 Stock. Eight directors currently have
made this election.
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. No directors currently participate in this plan.
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 $106,000. The
current policy expires on November 14, 2000. No sums have been paid under this
policy.
III. Election of Directors
During fiscal 1998, the Board of Directors reviewed its overall structure
and determined that a smaller-sized Board will enable it to act more efficiently
and to better serve the interests of its shareholders. The Board has decided to
reduce the number of directors of the Company to ten (10) directors, effective
upon the election of directors at the 1998 Annual Meeting of Shareholders until
the next Annual Meeting of Shareholders, and until their successors are elected
and qualified. As a result, Franklin E. Agnew, a director since 1989, John S.
Herrington, a director since 1994, Chester O. Macey, a director since 1994, Leo
J. Thomas, a director since 1988, and Deborah E. Wiley, a director since 1979,
are not standing for reelection. 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, or follow the directions given
by the telephone voting service. THE HOLDERS OF CLASS A STOCK ARE ENTITLED TO
ELECT 30% OF THE ENTIRE BOARD. AS A CONSEQUENCE, THREE (3) DIRECTORS WILL BE
ELECTED BY CLASS VOTE OF THE HOLDERS OF CLASS ASTOCK. THE HOLDERS OF CLASS B
STOCK ARE ENTITLED TO ELECT SEVEN (7) DIRECTORS.
All the nominees are currently directors of the Company, and were elected
to their present terms of office at the Annual Meeting of Shareholders held in
September 1997, except for William J. Pesce, who was elected by the Class B
directors to fill the vacancy created by the resignation of Charles R. Ellis on
May 1, 1998. 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.
Bradford Wiley II, William J. Pesce and Josephine A. Bacchi have agreed to
represent shareholders submitting properly executed proxy cards or using the
telephone voting service, and to vote for the election of the nominees listed
herein, unless otherwise directed by the authority granted or withheld on the
proxy cards or by telephone. 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 above may vote for another person at their discretion.
5
Directors to be Elected by Class A Shareholders
- - --------------------------------------------------------------------------------
[PHOTO]
Larry Franklin, a director since 1994, is President, Chief Executive Officer and
Director of Harte-Hanks, Inc. He is Vice Chairman of the Board of Governors of
San Antonio Economic Development Foundation; a Director of United Way of San
Antonio and Bexar County; and Southwest Foundation for Biomedical Research. Age
56.
[PHOTO]
Henry A. McKinnell, Jr., a director since 1996, has been President, Pfizer
Pharmaceuticals since January 1996. He has been Executive Vice President,
Pfizer, Inc. responsible for Pfizer's U.S. Pharmaceuticals, Consumer and
Strategic Planning and Public Policy Groups since July 1995. These groups
continue to report to him. 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.; Dun &
Bradstreet, Inc.; Vice Chairman of the Committee for Economic Development; a
Trustee of the New York City Police Foundation; and the New York Public Library.
Age 55.
[PHOTO]
Thomas M. Taylor, a director since 1994, has been President of Thomas M. Taylor
& Co. since 1985. He is a Director of Encal Energy Ltd.; Kirby Corp.; MacMillan
Bloedel Ltd.; Moore Corporation Limited; Aqrium, Inc.; and Meditrust
Corporation. Age 55.
Directors to be Elected by Class B Shareholders
- - --------------------------------------------------------------------------------
[PHOTO]
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 was a Regent of the American Architectural
Foundation from 1995 to 1998, and was Chair of the Board of Directors of the
ASCE Civil Engineering Research Foundation from 1989 to 1991. He is a Fellow in
the American Society of Civil Engineers; a Member of the Board of Directors of
the California Council on Science and Technology; and Co-Chair of the California
Joint Policy on Agriculture and Higher Education. Age 60.
[PHOTO]
H. Allen Fernald, a director since 1979, is President and Chief Executive
Officer of Down East Enterprise, Inc., a 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.;
Foreside Company, Inc.; and University of Maine Press. Age 66.
6
Directors to be Elected by Class B Shareholders
- - --------------------------------------------------------------------------------
[PHOTO]
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; Chairman of the Board of A.T. Kearney, Inc.; Chairman of the Board
of Unigraphics Solutions, Inc.; and a Member of the Board of Governors of Boys
& Girls Clubs of America. Age 55.
[PHOTO]
William J. Pesce has been President and Chief Executive Officer and a director,
since May 1, 1998. He was previously Chief Operating Officer since May 1997;
Executive Vice President-Educational and International Group since February
1996; and before that Vice President, Educational Publishing since September
1989. He is a Member of the Board of Overseers, The Stern School of Business at
New York University. Age 47.
[PHOTO]
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., an
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 62.
[PHOTO]
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 57.
[PHOTO]
Peter Booth Wiley, a director since 1984, is an author, journalist and owner of
Points West. He is a Member of the Board of the Friends of the San Francisco
Library; and a member of the Board of the Data Center, a social action research
library. Age 55.
7
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 current directors, and the executive officers named in
the Summary Compensation Table on page 12 as of July 31, 1998.
- - ----------------------------------------------------------------------------------------------------------------
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 17,183 A 17,183 [ ]%
B -- B -- --
Warren J. Baker A 2,420 A 2,420 --
B -- B -- --
Charles R. Ellis(3)(4) A 118,482 A 117,468 A 235,950 --
B -- B -- --
H. Allen Fernald A 8,486 A 8,486 --
B 1,360 B 1,360 --
Gary J. Fernandes A 6,185 A 6,185 --
B -- B -- --
Larry Franklin A 3,853 A 3,853 --
B -- B -- --
John S. Herrington A 1,106 A 1,106 --
B -- B -- --
Stephen A. Kippur(3)(4) A 50,643 A 37,340 A 87,983 [ ]%
B -- B -- B -- --
Chester O. Macey A 2,921 A 2,921 --
B -- B -- --
Henry A. McKinnell, Jr. A 831 A 831 --
B -- B -- --
William J. Pesce(3)(4) A 52,923 A 43,904 A 96,827 [ ]%
B -- B -- B -- --
Richard S. Rudick(3) A 65,116 A 26,128 A 91,244 [ ]%
B 14,144 B -- B 14,144 [ ]%
William R. Sutherland A 7,294 A 7,294 --
B -- B -- --
Thomas M. Taylor(12) A 118,200 A 118,200 --
B -- B -- --
Leo J. Thomas A 16,222 A 16,222 [ ]%
B 800 B 800 --
Robert D. Wilder(3)(4) A 47,344 A 27,352 A 74,696 [ ]%
B 1,600 B -- B 1,600 --
Bradford Wiley II(5)(6)(8)(9)(10)(11) A 338,885 A 338,885 [ ]%
B 679,695 B 679,695 [ ]%
Deborah E. Wiley(5)(6)(7)(9)(10)(11) A 349,522 A 452 A 349,974 [ ]%
B 694,417 B -- B 694,417 [ ]%
Peter Booth Wiley(5)(6)(7)(8)(10)(11) A 344,914 A 344,914 [ ]%
B 679,684 B 679,684 [ ]%
- - ----------------------------------------------------------------------------------------------------------------
8
(1) All directors, nominees and executive officers as a group (includes
[__________] persons) own [__________] and [__________] shares of Class A
and B Stock, including exercisable options and restricted shares awarded to
certain executive officers (see Executive Employment Agreements, page 14).
This represents [__________] of the Common Stock of the Company and
[__________] 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 or executives.
(2) Options exercisable under the Company's stock option plans which may be
acquired on or before October 1, 1998.
(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 12) as follows: Mr. Ellis - 17,485; Mr. Pesce -
14,154 shares; Mr. Kippur - 8,858; Mr. Wilder - 5,367 shares; and Mr.
Rudick - 3,565 shares.
(4) Includes restricted stock subject to forfeiture awarded under the terms of
the Executive Employment Agreements, described on page 14, as follows: Mr.
Ellis - 30,000 shares; Mr. Pesce - 19,998 shares; Mr. Kippur - 19,998
shares; and Mr. Wilder - 19,998 shares.
(5) Includes 115,196 shares of Class A Stock and 505,522 shares of Class B
Stock inherited upon the death of W. Bradford Wiley. Included in these
totals are shares which were owned directly by W. Bradford Wiley, as well
as shares held previously under various trusts and that were distributed
equally to Deborah E. Wiley, Bradford Wiley II, and Peter Booth Wiley.
(6) The totals shown for Bradford Wiley II, Deborah E. Wiley and Peter Booth
Wiley do not include 88,620 shares of Class B Stock which they have the
right to acquire in exchange for Class A Stock from certain persons upon
any proposed disposition of such Class B Stock, upon the deaths of such
persons or upon termination of a trust.
(7) Deborah E. 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 Bradford
Wiley II. For purposes of this table, each is shown as the owner of
one-half of such shares.
(8) Peter Booth Wiley and Bradford Wiley II, as co-trustees, share voting
and/or investment power with respect to 218,784 shares of Class AStock and
145,856 shares of Class BStock 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.
(9) Bradford Wiley II and Deborah E. Wiley, as co-trustees, share voting and/or
investment power with respect to 218,784 shares of Class AStock and 145,856
shares of Class B Stock under a trust for the benefit of Peter Booth Wiley.
For purposes of this table, eachis shown as the owner of one-half of such
shares.
(10) Deborah E. Wiley, Bradford Wiley II and Peter Booth 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-third
of these shares.
(11) Bradford Wiley II, Deborah E. Wiley and Peter B. Wiley, as general partners
of a limited partnership, share voting and/or investment power with respect
to 74,420 shares of Class B Stock owned by the partnership. For purposes of
this table, each is shown as the owner of one-third of such shares.
(12) Portfolio I Investors, L.P. ("Portfolio I") is a direct beneficial owner of
107,800 shares of Class A Stock reported herein, and Thomas M. Taylor & Co.
("Taylor & Co.") is the beneficial owner of 9,100 shares of Class A stock
reported herein. Mr. Taylor may be deemed to be the beneficial owner of the
shares owned by Portfolio I because of his position as the President and
sole stockholder of Trinity Capital Management, Inc., which is the sole
general partner of Trinity I Fund, L.P., which is the sole stockholder of
Portfolio Associates, Inc., which in turn is the sole general partner of
Portfolio I. Mr. Taylor may be deemed to be the beneficial owner of the
shares owned by Taylor & Co. because he is the President and a controlling
person of Taylor & Co.
- - --------------------------------------------------------------------------------
9
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, or written
representations from certain reporting persons that no Forms 5 were required for
those persons, the Company believes that during fiscal 1998, all filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with, except that one report covering one
transaction for 400 Class B shares was filed late by Peter Booth Wiley, and one
transaction for 400 Class B shares was filed late by Deborah E. Wiley.
IV. Executive Compensation
Report of the Governance and Compensation Committee
Executive Compensation Policies. The Company's executive compensation program is
administered by the Governance and Compensation Committee of the Board of
Directors (the "Committee") composed of six independent directors. The
objectives which guide the Committee in formulating its recommendations are to:
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.
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 programs are competitive
and meet the Committee's stated objectives. The most recent survey compiled by
Towers Perrin includes those publishing companies listed in the peer group in
the graph on page 12, regarded as comparable and for which comparable data are
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 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. Targeted annual incentives for fiscal
1998 range from 70% of salary for Mr. Ellis and from 40% to 65% for other
executives. At the beginning of each fiscal year, the Committee recommends to
the Board for approval the base salaries, the targeted incentives, 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. Divisional performance measures and targets are also set for certain
operating executives with divisional as well as corporate responsibilities.
10
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 threshold is reached on at least one financial measure. Payouts, if any,
can range from 25% to 175% 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 1998 on a weighted average
basis, performance against financial goals was slightly above target.
Long-Term Executive Compensation. The long-term component of the compensation is
comprised of (i) a targeted variable incentive payable in cash and/or restricted
performance shares, and (ii) stock option grants of Class A Stock. At the
beginning of each fiscal year a new three-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 unless
threshold is reached on at least one financial measure. Payouts, if any, to
individual executives can range from 25% to 200% 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 1998, all executives, including Mr.
Ellis, received approximately 70% of their targeted long term incentive in stock
option awards. Chief Executive Officer Compensation. Based on the Governance and
Compensation Committee's performance evaluation review of Mr. Ellis, the
Committee recommended and the Board approved a base salary increase for fiscal
1998 of 7% ($450,000 to $480,000) and an annual incentive award of $388,554,
representing 45% of the total annual compensation.
The performance review reflected the achievement of financial, as well as
certain strategic goals, and Mr. Ellis' contribution to those achievements.
Mr. Ellis also received a long term compensation payout of $638,649, of
which $129,642 was paid in cash and the remainder in 9,192 shares of restricted
performance shares with the restrictions lapsing as to 50% at the end of fiscal
1999 and 2000, respectively. This payout was based on performance against net
income and cash flow goals.
During fiscal 1998, Mr. Ellis, as part of his long-term compensation plan,
received a grant of options to purchase 37,400 shares of Class A Stock,
exercisable as to 18,700 shares on and after April 30, 2001, and 18,700 on and
after April 30, 2002, at an option price of $34.50 per share, the market price
at date of grant.
In approving the compensation reflected in the tables on page 12, the
Committee considered the Company's financial performance during fiscal 1998 and
Mr. Ellis's achievement of strategic objectives approved by the Board
Governance and Compensation Committee
William R. Sutherland, Chairman
H. Allen Fernald Chester O. Macey
John S. Herrington Peter B. Wiley
Henry A. McKinnell, Jr.
11
Performance Graph
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Plot Points to Come.
- - --------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
--------------------------------------------------------------------
John Wiley &Sons, Inc. Class A $100.00 $182.35 $240.74 $300.00 $265.54 $493.17
Publishing Peer Group 100.00 106.95 131.12 150.81 171.05 237.61
Russell 2000 100.00 114.82 123.11 163.88 163.96 233.34
S&PMid-Cap Companies 100.00 109.61 120.33 153.47 169.01 249.99
- - --------------------------------------------------------------------------------------------------------
The above graph provides an indicator of the cumulative total return to
shareholders of the Company's Class ACommon Stock as compared with the
cumulative total return on the Russell 2000, S&P Mid-Cap Companies and a peer
group index for the period from April 30, 1993 to April 30, 1998. The Company
has elected to use the Russell 2000 index in the future in place of the S&P
Mid-Cap index as the Company's stock is included in the Russell 2000 index. 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, 1993 and reinvestment of dividends
throughout the period.
Summary Compensation Table
- - -------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
--------------------------------------- ------------------------ ---------
Other Annual Restricted Securities All Other
Name and Compen- Stock Underlying LTIP Compen-
Principal Position Year Salary Bonus sation Awards(a) Option/SARs Payouts(b) sation(c)
- - -------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 1998 $475,384 $388,554 $0 $509,007 37,400 $129,642 $13,908
President, Chief Executive 1997 443,388 398,494 0 87,922 36,223 176,109 13,301
Officer and Director(d) 1996 401,312 348,333 0 916,139 28,328 137,484 12,039
William J. Pesce 1998 359,308 270,600 0 138,604 22,191 35,301 5,423
Chief Operating Officer(e) 1997 296,928 244,253 0 17,838 15,806 35,731 7,689
1996 251,082 131,052 0 581,648 29,052 33,345 7,262
Stephen A. Kippur 1998 298,460 188,303 0 150,565 14,337 38,354 7,854
Executive Vice President 1997 286,004 107,366 0 27,164 14,884 54,411 7,540
and Group President, 1996 264,004 129,977 0 592,810 11,126 55,704 7,243
Professional, Reference
and Trade Group
Robert D. Wilder 1998 246,923 138,927 0 150,509 9,973 38,335 7,408
Executive Vice President 1997 228,923 140,654 0 25,263 9,549 50,803 6,868
and Chief Financial and 1996 221,308 120,435 0 589,024 8,376 48,119 6,639
Support Operations Officer
Richard S. Rudick 1998 188,154 83,327 0 77,525 5,859 19,748 4,925
Senior Vice President 1997 176,769 83,541 0 14,243 5,650 28,528 4,583
and General Counsel 1996 168,462 81,100 0 12,910 4,314 25,858 4,604
- - -------------------------------------------------------------------------------------------------------------------------
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
12
three-year periods ended April 30, 1998, April 30, 1997 and April 30, 1996.
Other than stock issued for the period ended April 30, 1998, the stock 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 aforementioned stock awards, this amount includes the
value at the date of issuance of restricted stock, which have voting rights
and are eligible to receive dividends, issued pursuant to certain
Employment Agreements in fiscal 1996 as follows: Mr. Ellis-30,000 shares
valued at $847,500; Mr. Pesce-20,000 shares valued at $565,000; Mr.
Kippur-20,000 shares valued at $565,000; and Mr. Wilder-20,000 shares
valued at $565,000. Aggregate restricted stock holdings as of April 30,
1998 were as follows: Mr. Ellis - 67,485 shares valued at $3,736,982; Mr.
Pesce - 40,686 shares valued at $2,252,987; Mr. Kippur-40,090 shares valued
at $2,219,984; Mr. Wilder-38,216 shares valued at $2,116,211; and Mr.
Rudick-2,715 shares valued at $150,343.
(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, 1998, 1997 and 1996, as described in the
report of the Governance and Compensation Committee under the heading Long
Term Executive Compensation on page 11.
(c) Represents matching Company contributions to the Employee Savings Plan and
the Deferred Compensation Plan.
(d) President, Chief Executive Officer and Director until April 30, 1998;
Senior Advisor from May 1, 1998.
(e) President, Chief Executive Officer and Director effective May 1, 1998;
Executive Vice-President-Educational and International Group until April
30, 1997.
Options/SAR Grants in Last Fiscal Year
- - ------------------------------------------------------------------------------------------------------------------------
Individual Grants(a)
- - ------------------------------------------------------------------------------------------------------------------------
Potential Realizable
% of Total Value at Assumed
Number of Options/SARs Annual Rates of Stock Price
Securities Granted to Appreciation for Option Term
Underlying Options/ Employees Exercise or Expiration ----------------------------
Name SARs Granted in Fiscal Year Base Price Date (b) 5% 10%
- - ------------------------------------------------------------------------------------------------------------------------
Charles R. Ellis 37,400 25.0% $34.50 June 18, 2007 $811,463 $2,056,406
William J. Pesce 22,191 14.8% 34.50 June 18, 2007 481,475 1,220,152
Stephen A. Kippur 14,337 9.6% 34.50 June 18, 2007 311,068 788,307
Robert D. Wilder 9,973 6.7% 34.50 June 18, 2007 216,383 548,357
Richard S. Rudick 5,859 3.9% 34.50 June 18, 2007 127,122 322,152
- - ------------------------------------------------------------------------------------------------------------------------
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 two shareholder approved plans, each of which
relates to Class Ashares: 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 16, 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 1998.
(b) Options are subject to 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 7,780 $206,143 117,468 117,451 $4,735,141 $2,947,853
William J. Pesce 0 0 43,904 60,549 1,740,370 1,462,829
Stephen A. Kippur 0 0 37,340 43,847 1,662,500 1,094,584
Robert D. Wilder 0 0 27,352 31,195 1,209,223 788,504
Richard S. Rudick 4,409 100,994 26,128 17,623 1,169,029 443,011
- - ----------------------------------------------------------------------------------------------------------------------------
The above table provides information as to options exercised by each of the
named executive officers during fiscal 1998 and the value of the remaining
options held by each executive officer at year end, measured using the closing
price of $55.375 for the Company's Class A Stock on April 30, 1998.
(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 SECrules. The actual amount,
if any, realized upon exercise will depend upon the market price of the
Class Ashares relative to the exercise price per share of the stock options
at the time of exercise.
13
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 5,541 May 1, 1997 to April 30, 2000 1,385 5,541 11,082
William J. Pesce 3,286 May 1, 1997 to April 30, 2000 822 3,286 6,572
Stephen A, Kippur 2,123 May 1, 1997 to April 30, 2000 531 2,123 4,246
Robert D. Wilder 1,478 May 1, 1997 to April 30, 2000 370 1,478 2,956
Richard S. Rudick 868 May 1, 1997 to April 30, 2000 217 868 1,736
- - --------------------------------------------------------------------------------------------------------------
Estimated future payments assuming financial performance targets are achieved
under the 1998 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 earnings per
share, income and cash flow targets, as defined, for the end of the
three-year period. For the fiscal 1998 long-term plan, the amount of shares
earned will be based on financial targets established for fiscal 2000. If
the threshold level is not attained, no payout will be made.
(b) These awards consist of restricted performance shares. The Committee may,
in its discretion, direct that the payout be made wholly or partly in cash.
The restricted shares would vest as to 50% on April 30, 2001 and the
remaining 50% on April 30, 2002.
Executive Employment Agreements
In July 1994, the Company entered into employment agreements with Charles
R. Ellis, President and Chief Executive Officer, and three senior officers,
Messrs. Pesce, Kippur, and Wilder (collectively the "Executives"). Mr. Pesce's
contract was amended when he became President and Chief Executive Officer on May
1, 1998. The contracts provide for base salaries (reflected in the Summary
Compensation Table on page 12), 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. Mr. Pesce's contract expires
on May 1, 2001 and is renewable for successive three-year terms in the absence
of notice by either party. The contracts with Messrs. Kippur and Wilder expire
on April 30, 2000, and are 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 36
months severance in the case of Mr. Pesce, and 24 months in the case of the
other Executives. Severance includes salary, benefits, pro-rated cash incentive
payments at target levels, and long-term incentives for plan cycles ending
within one year after termination. Mr. Ellis, pursuant to the provisions of his
contract, requested a change in his employment status to that of a senior
advisor, effective May 1, 1998. Under the contract, he is entitled to base
salary and coverage under employee benefit plans until May 1, 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. 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 ("SERP") (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. 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 16), all remaining unvested shares will vest,
and any remaining restrictions on transfer of the shares will lapse.
14
In January 1997, the Company entered into agreements with certain senior
vice presidents (the "Participants"), which provide for continuation of base
salary for a period of between 12 and 18 months in the event of termination by
the Company other than for cause. In the event of a "change of control," as
defined in SERP, under certain circumstances the Participants may be entitled to
cash incentive payments at target level for the severance period. Except in the
case of termination by the Company other than for cause, or termination for
"good reason," as defined in SERP, following a "change of control," the
Participants are restricted from working for a competitor for a period of four
to six months after termination.
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
Highest -----------------------------------------------------------
Compensation 10 20 30 35
- - --------------------------------------------------------------------------------
$100,000 $ 15,166 $ 30,332 $ 45,497 $ 53,080
200,000 31,866 63,732 95,597 111,530
300,000 48,566 97,132 145,697 169,980
400,000 65,266 130,532 195,797 228,430
500,000 81,966 163,932 245,897 286,880
600,000 98,666 197,332 295,997 345,330
700,000 115,366 230,732 346,097 403,780
800,000 132,066 264,132 396,197 462,230
- - --------------------------------------------------------------------------------
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, 1994 (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
1994). 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, Pesce, Kippur, Wilder and Rudick
under the Retirement Plan and Supplemental Retirement Plan as of April 30, 1998
(rounded to the nearest year), are 10, 9, 19, 19, and 20, respectively. Average
final compensation under the Retirement Plan for Messrs. Ellis, Pesce, Kippur,
Wilder and Rudick as of April 30, 1998 was $426,644, $250,309, $269,840,
$231,089, and $181,017, respectively.
15
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 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, Pesce, Kippur, Wilder and Rudick are
$435,900, $947,300, $346,500, $278,500, and $118,900, 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. The number of shares available for stock options or stock
awards is limited to three percent of the total number of shares of Class A
Stock of the Company outstanding as of the first day of each fiscal year during
which the Plan is in effect. No more than 2,000,000 shares may be issued over
the life of the Plan, and no incentive stock option may be granted after
December 31, 2000.
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.
16
V. Proposal to Amend the Restated Certificate of Incorporation to Increase the
Number of Authorized Shares of Capital Stock
Subject to shareholder approval, the Board of Directors of the Company
approved an amendment to Article THIRD of the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") to increase the total number
of authorized shares of capital stock of the Company from 44 million to 128
million, to increase the number of shares of Class A Stock from 30 million to 90
million, and to increase the number of authorized shares of Class B Stock from
12 million to 36 million. The Company is also authorized by the Certificate of
Incorporation to issue 2,000,000 shares of Preferred Stock on such terms as the
directors may from time to time approve. If the proposed amendment to the
Certificate of Incorporation is adopted, the number of authorized shares of
Class A Stock and Class B Stock will be increased as described above, and the
authorized number of shares of Preferred Stock will be unchanged.
The Board of Directors believes it is in the best interests of the Company
and its shareholders to have the flexibility to issue more Class A Stock and
Class B Stock than the Certificate of Incorporation currently authorizes without
incurring the expense or delay incident to calling a special meeting of the
shareholders or waiting until the next annual meeting. The additional shares to
be authorized are not subject to preemptive rights. If such shares are issued
other than pro rata to all existing shareholders, the voting and ownership
interest of existing shareholders to whom such shares are not issued will be
diluted. The Board of Directors may determine to utilize such additional
authorized shares for general corporate purposes, such as stock dividends or
splits, future financial transactions, acquisitions, employee benefit plans, or
the issuance of Class A Stock upon the conversion of Class B Stock. The Board of
Directors has not, at this time, determined to use such shares for any specific
purpose.
As of July 31, 1998, the Company had issued and outstanding [__________]
shares of Class A Stock and [__________] shares of Class B Stock, and
[__________] shares of Class A Stock and [__________] shares of Class B Stock
held in treasury. An additional [__________] shares of Class A Stock have been
reserved for issuance in connection with the Company's 1991 Key Employee Stock
Plan and the conversion rights of the Class B Stock.
Upon adoption of the proposed amendment, the Board of Directors would be
authorized to reserve and issue additional shares of Class A Stock or Class B
Stock at such time or times, to such persons, for such consideration as it may
determine, and without any further shareholder approval, except as otherwise may
be required by law or any stock exchange on which the Company's stock may be
listed
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 Amendment to Article THIRD of the Restated Certificate
of Incorporation to increase the number of authorized shares of Capital
Stock, set forth in the Company's Proxy Statement dated August 7, 1998, be,
and it hereby is, approved."
The affirmative vote of the shares representing a majority of the number of
votes accorded to all outstanding common 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) is necessary for the adoption of the proposal.
The Board of Directors recommends a vote "FOR" approval of the proposed
amendment of the Company's Certificate of Incorporation.
VI. Proposal to Ratify Appointment of Independent Public Accountants
A proposal will be presented at the meeting 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, 1999. 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.
17
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, 1999, 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 beginning of the current fiscal year, it is
contemplated that the appointment for the fiscal year ending April 30, 1999 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.
This year, shareholders of record can vote and save the Company expense by
calling 1-888-426-7022. Telephone voting instructions are provided on the proxy
card. A Control Number, located in the lower right hand corner of the proxy
card, will identify shareholders and allow them to vote their shares and confirm
that their voting instructions have been properly recorded.
If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive from such record holder. The availability
of telephone voting will depend on their voting procedures.
If you do vote by telephone, it will not be necessary to return your proxy
card. If you do not choose to vote by telephone, you may return your proxy card,
properly signed, and the shares will be voted in accordance with your
directions. 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,
vote by telephone or attend the Annual Meeting and vote in person, his or her
shares will not be voted. 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 (including one
given by telephone) 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 (or by
subsequently completing a telephonic proxy)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.
18
VIII. Deadline for Submission of Shareholders Proposals
The By-Laws provide that if a shareholder intends to nominate a candidate
for election as a director, to submit a proposal for inclusion in the Company's
proxy statement, or to 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. The notice must
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 1999 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 8, 1999.
IX. Other Matters
The Company has not received notice from any shareholder of its intention
to bring a matter before the Annual Meeting. 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 on the enclosed proxy will vote said proxy in accordance with
their best judgment on such matter. Shares represented by any proxy will be
voted with respect to the proposals outlined above in accordance with the
choices 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 7, 1998.
The Company will provide, without charge, a copy of its Report to the
Securities and Exchange Commission on Form 10-K for fiscal 1998, 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 your proxy be returned promptly, whether by mail or
telephone. Therefore, whether or not you plan to attend the Annual Meeting in
person, you are requested to return your proxy by dating, signing and mailing it
in the enclosed envelope to which no postage need be affixed if mailed in the
United States, or by using the toll-free telephone number. The proxy may be
revoked at any time by you before it is exercised. If you attend the meeting in
person, you may withdraw any proxy (including a telephonic proxy)and vote your
own shares.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPHINE A. BACCHI
Secretary
New York, New York
August 7, 1998
19
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JOHN WILEY & SONS, INC.
PROXY/VOTING INSTRUCTION CARD
The signee hereby appoints Bradford Wiley II, William J. Pesce and
Josephine A. Bacchi, as the proxies of the signee, with full power of
substitution to each of them, to vote the Class A Common Stock, which the signee
is entitiled to vote at the Annual Meeting of Shareholders of John Wiley & Sons,
Inc. and any and all adjournments thereof, to be held at the Shelburne Murray
Hill Hotel, Grand Ballroom, 303 Lexington Avenue at 37th Street, New York, New
York, on September 17, 1998, 9:30 A.M., Eastern Daylight Savings Time.
CLASS A SHARES
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
- - --------------------------------------------------------------------------------
JOHN WILEY & SONS, INC. -- ANNUAL MEETING, SEPTEMBER 17, 1998
YOUR VOTE IS IMPORTANT!
You can vote in one of two ways:
1. Call toll free 1-888-426-7022 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
--
2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
[LOGO] Printed on recycled paper
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" all nominees and "FOR"
Proposals 2 and 3.
- - --------------------------------------------------------------------------------
Please mark your votes as indicated in this example |X|
1. The election as directors of all
nominees listed below, exept as marked
to the contrary.
With- For All
For hold Except
|_| |_| |_|
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except"and write that nominee's name in the space provided below.
(01) Larry Franklin
(02) Henry A. McKinnell, Jr.
(03) Thomas M. Taylor
2. Proposal to amend the Company's Restated
Certificate of Incorporation.
For Against Abstain
|_| |_| |_|
3. Proposal to ratify the appointment of
Arthur Andersen LLP as independent
accountants.
For Against Abstain
|_| |_| |_|
- - --------------------------------------------------------------------------------
CLASS A SHARES
-------------------------------
Will attend Annual Meeting |_|
-------------------------------
The Proxies are directed to vote as specified, and in their discretion on
all other matters which may come before the meeting or any adjournments thereof.
If no direction is given, this proxy will be voted for the Election of Directors
and "FOR" Proposals 2 and 3.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS CARD. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
-----------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- - --------------------------------------------------------------------------------
- - ---Shareholder sign above-----------------Co-holder (if any) sign above---------
----------------------------------------------------------------------------
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW ***
----------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
----------------------------------------------
VOTE BY TELEPHONE
QUICK * * * EASY * * * IMMEDIATE
----------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
Please have this card handy when you call. You'll need it in front of you in
order to complete the voting process.
You will be asked to enter the Control Number (look below at right).
OPTION A: To vote as the Board of Directors recommends on ALL proposals,
press 1. Your vote will be confirmed.
OPTION B: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL
NOMINEE, PRESS 0 and listen to the instructions.
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0. The instructions are the same for all remaining
proposals to be voted. When asked, you must confirm
your vote by pressing 1.
If you vote by telephone, DO NOT mail back your proxy.
THANK YOU FOR VOTING
FOR TELEPHONE VOTING:
Call * * * Toll Free * * * On a Touch Tone Telephone CONTROL NUMBER
1-888-426-7022 - ANYTIME =====================
There is NOCHARGE to you for this call
=====================
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JOHN WILEY & SONS, INC.
PROXY/VOTING INSTRUCTION CARD
The signee hereby appoints Bradford Wiley II, William J. Pesce and
Josephine A. Bacchi, as the proxies of the signee, with full power of
substitution to each of them, to vote the Class A Common Stock, which the signee
is entitiled to vote at the Annual Meeting of Shareholders of John Wiley & Sons,
Inc. and any and all adjournments thereof, to be held at the Shelburne Murray
Hill Hotel, Grand Ballroom, 303 Lexington Avenue at 37th Street, New York, New
York, on September 17, 1998, 9:30 A.M., Eastern Daylight Savings Time.
CLASS B SHARES
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
- - --------------------------------------------------------------------------------
JOHN WILEY & SONS, INC. -- ANNUAL MEETING, SEPTEMBER 17, 1998
YOUR VOTE IS IMPORTANT!
You can vote in one of two ways:
1. Call toll free 1-888-426-7022 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
or
--
2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
[LOGO] Printed on recycled paper
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" all nominees and "FOR"
Proposals 2 and 3.
- - --------------------------------------------------------------------------------
Please mark your votes as indicated in this example |X|
1. The election as directors of all
nominees listed below, exept as marked
to the contrary.
With- For All
For hold Except
|_| |_| |_|
(01) Warren J. Baker, (02) H. Allen Fernald,
(03) Gary J. Fernandes, (04) William J. Pesce,
(04) William R. Sutherland, (05) Bradford Wiley II and
(06) Peter Booth Wiley
2. Proposal to amend the Company's Restated
Certificate of Incorporation.
For Against Abstain
|_| |_| |_|
3. Proposal to ratify the appointment of
Arthur Andersen LLP as independent
accountants.
For Against Abstain
|_| |_| |_|
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except"and write that nominee's name in the space provided below.
- - --------------------------------------------------------------------------------
CLASS B SHARES
-------------------------------
Will attend Annual Meeting |_|
-------------------------------
The Proxies are directed to vote as specified, and in their discretion on
all other matters which may come before the meeting or any adjournments thereof.
If no direction is given, this proxy will be voted for the Election of Directors
and "FOR" Proposals 2 and 3.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS CARD. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
-----------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- - --------------------------------------------------------------------------------
- - ---Shareholder sign above-----------------Co-holder (if any) sign above---------
----------------------------------------------------------------------------
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW ***
----------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
----------------------------------------------
VOTE BY TELEPHONE
QUICK * * * EASY * * * IMMEDIATE
----------------------------------------------
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
Please have this card handy when you call. You'll need it in front of you in
order to complete the voting process.
You will be asked to enter the Control Number (look below at right).
OPTION A: To vote as the Board of Directors recommends on ALL proposals,
press 1. Your vote will be confirmed.
OPTION B: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL
NOMINEE, PRESS 0 and listen to the instructions.
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0. The instructions are the same for all remaining
proposals to be voted. When asked, you must confirm
your vote by pressing 1.
If you vote by telephone, DO NOT mail back your proxy.
THANK YOU FOR VOTING
FOR TELEPHONE VOTING:
Call * * * Toll Free * * * On a Touch Tone Telephone CONTROL NUMBER
1-888-426-7022 - ANYTIME =====================
There is NOCHARGE to you for this call
=====================