<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly
Period Ended March 31, 1996 Commission File Number 1-6714
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THE WASHINGTON POST COMPANY
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 53-0182885
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1150 15th Street, N.W. Washington, D.C. 20071
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(Address of principal executive offices) (Zip Code)
(202) 334-6000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
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Shares outstanding at May 3, 1996:
Class A Common Stock 1,804,250 Shares
Class B Common Stock 9,175,418 Shares
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THE WASHINGTON POST COMPANY
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
(Unaudited) for the Thirteen Weeks
Ended March 31, 1996 and April 2, 1995............... 3
Condensed Consolidated Balance Sheets (Unaudited)
at March 31, 1996 and December 31, 1995.............. 4
Condensed Consolidated Statements of Cash Flows
(Unaudited) for the Thirteen Weeks Ended
March 31, 1996 and April 2, 1995..................... 5
Notes to Condensed Consolidated Financial Statements
(Unaudited).......................................... 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition................... 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders........... 10
Item 6. Exhibits and Reports on Form 8-K.............................. 11
Signatures.................................................... 12
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 11
Exhibit 27 (Electronic Filing Only)
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Washington Post Company
Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------------------
March 31, April 2,
(In thousands, except per share amounts) 1996 1995
---------- ----------
<S> <C> <C>
Operating revenues
Advertising $ 252,807 $ 252,210
Circulation and subscriber 117,070 108,466
Other 46,742 40,875
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416,619 401,551
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Operating costs and expenses
Operating 242,482 221,158
Selling, general and administrative 100,792 98,013
Depreciation and amortization of
property, plant and equipment 16,160 16,374
Amortization of goodwill and other intangibles 6,985 7,673
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366,419 343,218
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Income from operations 50,200 58,333
Other income (expense)
Equity in earnings of affiliates 7,353 772
Interest income 1,224 2,334
Interest expense (1,083) (1,431)
Other 2,867 14,395
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Income before income taxes 60,561 74,403
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Provision for income taxes
Current 22,343 28,500
Deferred 1,276 2,005
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23,619 30,505
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Net income 36,942 43,898
Redeemable preferred stock dividends (202)
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Net income available for common stock $ 36,740 $ 43,898
======= =======
Earnings per share $ 3.34 $ 3.91
======= =======
Dividends declared per share $ 2.30 $ 2.20
======= =======
Average number of shares outstanding 11,011 11,220
</TABLE>
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The Washington Post Company
Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
(In thousands)
March 31, December 31,
Assets 1996 1995
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<S> <C> <C>
Current assets
Cash and cash equivalents $ 73,950 $ 146,901
Marketable securities -- 12,756
Accounts receivable, less estimated returns,
doubtful accounts and allowances 197,413 200,698
Inventories 30,601 26,766
Other current assets 27,784 19,449
--------- ---------
329,748 406,570
Investments in affiliates 192,196 189,053
Property, plant and equipment
Buildings 199,072 190,543
Machinery, equipment and fixtures 686,038 664,403
Leasehold improvements 34,074 33,805
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919,184 888,751
Less accumulated depreciation and amortization (550,799) (535,691)
--------- ---------
368,385 353,060
Land 32,518 32,513
Construction in progress 90,945 71,786
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491,848 457,359
Goodwill and other intangibles,
less accumulated amortization 502,890 472,291
Deferred charges and other assets 236,654 207,620
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$1,753,336 $1,732,893
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 177,675 $ 172,004
Federal and state income taxes 23,120 3,494
Deferred subscription revenue 86,680 82,457
Current portion of long-term debt -- 50,222
Dividends declared 12,836 --
--------- ---------
300,311 308,177
Other liabilities 212,731 205,869
Deferred income taxes 36,639 34,643
--------- ---------
549,681 548,689
Redeemable preferred stock 11,947 --
Common shareholders' equity
Common stock 20,000 20,000
Capital in excess of par value 25,097 24,941
Retained earnings 1,844,167 1,832,706
Unrealized gain on available-for-sale
securities 4,260 3,224
Cumulative foreign currency translation
adjustment 6,111 5,537
Cost of Class B common stock held in Treasury (707,927) (702,204)
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1,191,708 1,184,204
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$1,753,336 $1,732,893
========= =========
</TABLE>
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The Washington Post Company
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------------------
March 31, April 2,
(In thousands) 1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 36,942 $ 43,898
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property, plant
and equipment 16,160 16,374
Amortization of goodwill and other intangibles 6,985 7,673
Gain on disposition of businesses (3,112) (14,253)
Equity in earnings of affiliates, net
of distributions (2,569) (227)
Increase in income taxes payable 19,626 28,721
Provision for deferred income taxes 1,276 2,005
Change in assets and liabilities:
Decrease in accounts receivable, net 3,284 5,205
(Increase) in inventories (3,835) (5,288)
Increase (decrease) in accounts payable and accrued
liabilities 9,818 (22,158)
(Increase) in other assets and other
liabilities, net (16,700) (3,844)
Other 6,099 5,792
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Net cash provided by operating activities 73,974 63,898
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Cash flows from investing activities:
Net proceeds from sale of business 3,517 32,743
Purchases of property, plant and equipment (23,078) (16,259)
Purchases of marketable securities -- (43,116)
Proceeds from sales of marketable securities 12,821 -
Investments in certain businesses (83,638) -
Other 72 33
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Net cash (used) by investing activities (90,306) (26,599)
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Cash flows from financing activities:
Principal payments on debt (50,209) --
Issuance of redeemable preferred stock 11,947 --
Dividends paid (12,645) (12,443)
Common shares repurchased (5,712) (59,536)
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Net cash (used) by financing activities (56,619) (71,979)
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Net (decrease) in cash and cash equivalents (72,951) (34,680)
Beginning cash and cash equivalents 146,901 117,269
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Ending cash and cash equivalents $ 73,950 $ 82,589
======= =======
</TABLE>
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The Washington Post Company
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1: Results of operations, when examined on a quarterly basis, reflect the
seasonality of advertising that affects the newspaper, magazine and
broadcasting operations. Advertising revenues in the second and fourth quarters
are typically higher than first and third quarter revenues. All adjustments
reflected in the interim financial statements are of a normal recurring nature.
Certain prior year amounts have been reclassified to conform with current year
presentation.
Note 2: Summarized combined (unaudited) results of operations for the first
quarters of 1996 and 1995 for the company's affiliates are as follows (in
thousands):
<TABLE>
<CAPTION>
First Quarter
------------------------
1996 1995
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<S> <C> <C>
Operating revenues $235,473 $200,810
Operating income 37,403 15,414
Net income 27,373 7,770
</TABLE>
Note 3: In January 1995 the company sold substantially all of its 70
percent limited partnership interest in American Personal Communications (APC)
to its partner APC, Inc., and others, for approximately $33 million. The
proceeds approximate the amounts the company had invested in the partnership
since it was formed in August 1990. The company's 1995 first-quarter net
income includes $8.4 million ($0.75 per share) from the sale.
In the first quarter of 1996 the company purchased two businesses for
approximately $60 million, a cable system in Texarkana serving about 24,000
subscribers and a commercial printing operation located in the Maryland suburbs
of Washington, D.C. The company also acquired a cable system in Columbus,
Mississippi, serving about 15,700 subscribers for approximately $23 million
consisting of cash and non-convertible, redeemable preferred stock of the
company.
The redeemable preferred stock issued in conjunction with the Columbus
cable acquisition has a par value of $1.00 per share and a redemption price and
liquidation preference of $1,000 per share. Dividends are payable quarterly at
the rate of $20 per share. Shares of the redeemable preferred stock are
redeemable by the company at any time on or after October 1, 2015. In
addition, holders of such stock have a right to require the company to purchase
their shares at the redemption price during an annual 60-day election period,
with the first such period beginning on February 23, 2001.
Note 4: Effective January 1, 1996, the company adopted Statements of Financial
Accounting Standards No. 121 (FAS 121) "Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of," and No. 123 (FAS 123),
"Accounting for Stock-Based Compensation." In accordance with FAS 121 the
company periodically evaluates the realizability of long-lived assets,
including goodwill, based upon projected undiscounted cash flows and operating
income for each subsidiary.
In accordance with the provisions of FAS 123, the company has elected to
continue to measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
will provide pro forma disclosures of net income and earnings per share as if
the fair value-based method prescribed by FAS 123 had been applied in measuring
compensation expense. The adoption of these standards did not have a material
effect on the company's financial position or results of operations.
Note 5: During the first three months of 1996 the company repurchased 20,335
shares of its Class B common stock at a cost of approximately $5.7 million.
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
This analysis should be read in conjunction with the consolidated
financial statements and the notes thereto.
Revenues and expenses in the first and third quarters are customarily
lower than those in the second and fourth quarters because of significant
seasonal fluctuations in advertising volume. For that reason, the results of
operations for each quarter are compared with those of the corresponding
quarter in the preceding year.
RESULTS OF OPERATIONS
Net income for the first quarter of 1996 was $36.9 million ($3.34 per
share), compared with net income of $43.9 million ($3.91 per share) in the
first quarter last year. The company's 1995 first-quarter net income includes
$8.4 million ($0.75 per share) from the sale, at its original cost, of
substantially all of the company's investment in American PCS, L.P. Excluding
the effect of the sale, net income increased 4.1 percent in the first quarter
this year; earnings per share increased 5.7 percent with fewer weighted average
shares outstanding.
Revenues for the first three months of 1996 were $416.6 million, an
increase of 3.8 percent from $401.6 million in the first quarter of 1995.
Advertising revenues were essentially even with the prior year. Circulation
and subscriber revenues increased 7.9 percent, and other revenues increased
14.4 percent from 1995. The broadcast division, cable division, and other
businesses reported strong gains in revenue in the first quarter of 1996
compared to the same period last year.
Costs and expenses for the first quarter of 1996 increased 6.8 percent
to $366.4 million , from $343.2 million in the first quarter of 1995.
Operating expenses and selling, general and administrative expenses increased
9.6 percent and 2.8 percent, respectively, over the same period last year. A
29.7 percent increase in newsprint expense for the company had a significant
negative impact on operating results versus last year. The remainder of the
increase in expenses reflects normal growth in operating expenses and the
effect of certain acquisitions described below.
In the first quarter of 1996 operating income was $50.2 million
compared to $58.3 million in 1995. The decline resulted from weakness in the
company's print businesses, primarily due to increased newsprint expense,
offset by strong performances in the broadcast and cable divisions.
NEWSPAPER DIVISION. At the newspaper division, revenues were essentially even
with the first quarter of 1995. Advertising revenues for the division declined
1.1 percent. Retail lineage at The Post was
<PAGE> 8
down 16.2 percent; weak market conditions continue to affect the real estate
and other retail categories. Classified lineage declined 5.9 percent from the
first quarter of 1995 despite strong results for recruitment advertising.
General lineage improved 5.9 percent and preprint volume declined 1 percent.
Circulation revenues increased 1.3 percent for the division compared to the
first quarter of 1995. Daily and Sunday circulation at The Post were both down
1.7 percent compared to the first quarter of last year.
BROADCAST DIVISION. Revenues at the broadcast division increased 5.5 percent
over the first quarter of 1995. Local advertising revenues increased 8.1
percent and national advertising revenues rose 1.0 percent in the first quarter
of 1996 compared to the same period last year. Network compensation increased
9.9 percent in the first three months of 1996, resulting from the renegotiation
of certain network affiliation contracts.
MAGAZINE DIVISION. Newsweek revenues in the first quarter of 1996 declined 1.8
percent. Advertising revenues fell 4.8 percent due to lower advertising volume
at both the domestic and international divisions. Circulation revenues
increased 1.2 percent.
CABLE DIVISION. At the cable division, first quarter revenues were 17.4
percent higher than in the comparable period in 1995. Higher subscriber
levels, resulting mainly from recent acquisitions, as well as higher rates
accounted for the increase. At the end of the quarter, there were
approximately 560,000 basic subscribers.
OTHER BUSINESSES. In the first quarter of 1996, revenues from other
businesses, principally PASS Sports, Legi-Slate, Digital Ink, and MLJ (Moffet,
Larson & Johnson) increased 13.4 percent. The improvement was due mainly to
significant improvement at MLJ resulting from increased demand for engineering
services by the wireless communications industry.
EQUITY IN EARNINGS AND LOSSES OF AFFILIATES. The company's equity in earnings
of affiliates in the first three months was $7.4 million compared $0.8 million
in 1995. The improvement was due to better results at the company's affiliated
newsprint mills, which are benefiting from higher newsprint prices.
NON-OPERATING ITEMS. Interest income, net of interest expense, declined to
$0.1 million, compared with $0.9 million in the first quarter of 1995
reflecting lower invested balances.
Other income in the first quarter of 1996 was $2.9 million compared
with $14.4 million in the same period last year. The 1995 amount includes the
gain resulting from the sale of substantially all of the company's interest in
American PCS, L.P. in January 1995.
INCOME TAXES. The effective tax rate in 1996 decreased to 39 percent, from 41
percent in 1995.
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FINANCIAL CONDITION: CAPITAL RESOURCES AND LIQUIDITY
During the first quarter 1996 the company purchased two businesses for
approximately $60 million, a cable system in Texarkana serving about 24,000
subscribers and a commercial printing operation located in the Maryland suburbs
of Washington, D.C. The company also acquired a cable system in Columbus,
Mississippi, serving about 15,700 subscribers for approximately $23 million
consisting of cash and shares of non-convertible, redeemable preferred stock of
the company. The company has also reached agreements in principle to purchase
cable systems serving 41,000 subscribers in two states for approximately $70
million, and to exchange the assets of certain cable systems with
Tele-Communications, Inc. (TCI). According to the terms of the TCI agreement,
the exchange will result in an aggregate increase of about 23,000 subscribers
for the company. These transactions are expected to be completed before the
end of 1996.
In January 1996 the company established a five-year, $300 million
revolving credit facility with a group of banks to provide for general
corporate purposes and support the issuance of short-term promissory notes. In
March 1996, the company retired its European Currency Notes for $50.2 million.
As of the end of 1995, the company had repurchased approximately
235,000 shares of the one million Class B shares authorized for repurchase by
the Board of Directors in January 1995. In the first quarter of 1996, the
company repurchased 20,335 shares of its Class B common stock for approximately
$5.7 million. Approximately 745,000 Class B common shares remain to be
repurchased under the January 1995 authorization.
The company has experienced no other significant changes in its
financial condition since the end of 1995.
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's May 9, 1996, Annual Meeting of Stockholders, the
stockholders elected each of the nominees to its Board of Directors named in
the Company's proxy statement dated March 29, 1996. The voting results are set
forth below:
Class A Directors
<TABLE>
<CAPTION>
Votes Votes Broker
Nominee For Withheld Non-Votes
------- ----- -------- ---------
<S> <C> <C> <C>
Warren E. Buffett 1,804,250 -0- -0-
Martin Cohen 1,804,250 -0- -0-
George J. Gillespie III 1,804,250 -0- -0-
Donald E. Graham 1,804,250 -0- -0-
Katharine Graham 1,804,250 -0- -0-
William J. Ruane 1,804,250 -0- -0-
Richard D. Simmons 1,804,250 -0- -0-
Alan G. Spoon 1,804,250 -0- -0-
George W. Wilson 1,804,250 -0- -0-
</TABLE>
Class B Directors
<TABLE>
<CAPTION>
Votes Votes Broker
Nominee For Withheld Non-Votes
------- ----- -------- ---------
<S> <C> <C> <C>
Daniel B. Burke 7,920,730 95,439 -0-
James E. Burke 7,921,202 94,967 -0-
Ralph E. Gomory 7,920,902 95,267 -0-
Donald R. Keough 7,920,830 95,339 -0-
Barbara Scott Preiskel 7,920,329 95,840 -0-
</TABLE>
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following documents are filed as exhibits to this report:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
10.1 The Washington Post Company Annual
Incentive Compensation Plan as amended
and restated effective June 30, 1995.
10.2 The Washington Post Company Long-Term
Incentive Compensation Plan as amended
and restated effective June 30, 1995.
10.3 The Washington Post Company Stock Option
Plan as amended and restated through
June 29, 1995.
11 Calculation of Earnings per Share of Common
Stock.
27 Financial Data Schedule (Electronic Filing Only).
</TABLE>
(b) No reports on Form 8-K were filed during the period covered by
this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE WASHINGTON POST COMPANY
(Registrant)
Date: May 15, 1996 /s/ Donald E. Graham
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Donald E. Graham, Chairman &
Chief Executive Officer
(Principal Executive Officer)
Date: May 15, 1996 /s/ John B. Morse, Jr.
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John B. Morse, Jr., Vice President-Finance
(Principal Financial Officer)
<PAGE> 1
EXHIBIT 10.1
THE WASHINGTON POST COMPANY
ANNUAL INCENTIVE COMPENSATION PLAN
Amended and Restated
Effective June 30, 1995*
1. Purposes
The purposes of this Annual Incentive Compensation Plan
(hereinafter called the Plan) of The Washington Post Company, a Delaware
corporation (hereinafter called the Company), are (a) to provide greater
incentives to key employees to increase the profitability of the Company and
its subsidiaries and (b) to strengthen the ability of the Company and its
subsidiaries to attract, motivate and retain persons of merit and competence
upon which, in large measure, continued growth and profitability depend.
2. Administration of the Plan
This Plan shall be administered by a Committee which shall be
constituted as determined from time to time by the Board of Directors of the
Company and which shall be chosen by the Board from among its members. No
member of the Board of Directors shall be disqualified from serving on the
Committee or from voting on any action taken by the Committee by virtue
<PAGE> 2
2
of the fact that he is eligible to participate in the Plan, except that no
member of the Committee shall vote upon the
- - ---------------
* Plan adopted by Board of Directors on January 9, 1974, and approved by
Class A stockholders on February 13, 1974. Amendments effective
January 4, 1982, adopted by Board of Directors on November 6, 1981,
and approved by Class A stockholders on December 11, 1981. Further
amendments adopted by the Board of Directors on May 11, 1995 and
approved by Class A stockholders on June 30,1995.
<PAGE> 3
3
making of an incentive award to himself. The Committee shall have full power
and authority to interpret and administer the Plan, to adopt rules and
regulations and to establish terms and conditions, not inconsistent with the
provisions of the Plan, for the administration of its business and the
implementation of the Plan.
3. Participation
(a) Participation in the Plan shall be extended to senior
executives, key managers and other key employees of the Company and its
subsidiaries who, in the opinion of the Committee, are mainly responsible for
the management of the operations or departments of the Company or its
subsidiaries or who are otherwise in a position to make substantial
contributions to the success of the business of the Company or its
subsidiaries.
(b) Directors as such shall not participate in the Plan, but
the fact that an employee is also a Director of the Company or a subsidiary
shall not prevent his participation. Awards for any year may be made to an
employee of the Company who dies or is granted a leave of absence during such
year.
(c) As used in the Plan, the terms "Company" shall mean The
Washington Post Company and any subsidiary the earnings of which are included
in the Consolidated Statement of Income of the Company.
<PAGE> 4
4
(d) The Plan shall not be deemed to preclude other
compensation, incentive or bonus plans which may be in effect from time to
time.
4. Annual Incentive Provision
(a) For each fiscal year the Committee may make incentive
awards in an aggregate amount not exceeding the Maximum Incentive Credit (as
hereinafter defined) for such year.
(b) The terms "Maximum Incentive Credit," as used herein,
shall mean for any year an amount determined as follows: (i) There shall first
be calculated an amount equal to 12 per cent of Stockholders' Equity
(hereinafter called the "Basic Return on Equity"). (ii) There shall then be
deducted from Consolidated Profit Before Income Taxes an amount equal to the
Basic Return on Equity, the excess (if any) being hereinafter called "Incentive
Profit". (iii) The Maximum Incentive Credit shall be 10 per cent of Incentive
Profit.
(c) The term "Consolidated Profit Before Income Taxes," as
used herein, shall mean for any year the sum of (i) the profit before income
taxes (exclusive of special credits and charges and extraordinary items)
included in the Consolidated Statement of Income of the Company for such year
and (ii) the amount of incentive compensation provided for in computing such
profit before income taxes.
<PAGE> 5
5
(d) The term "Stockholders' Equity," as used herein, shall
mean for any year the amount reported as stockholders' equity (or the
comparable item, however designated) at the end of the preceding year as
included in the Consolidated Balance Sheet of the Company for such preceding
year, with appropriate pro retie adjustments, as approved by the Committee, for
any change during the year arising from any increase or decrease in outstanding
capital stock.
(e) During the last month of each fiscal year the Vice
President-Finance of the Company shall advise the Committee of the estimated
Maximum Incentive Credit for such fiscal year and the Committee shall determine
the employees who are to receive awards for such fiscal year and the amount of
each such award.
(f) As soon as practicable after the close of each fiscal
year the Company's independent public accountants shall calculate and certify
to the Committee the Maximum Incentive Credit for such fiscal year.
(g) The amount determined and reported by the Company's
independent auditors as the Maximum Incentive Credit for any fiscal year shall
be final, conclusive and binding upon all parties, including the Company, its
stockholders and employees, notwithstanding any subsequent special item or
surplus charge or credit that may be considered applicable in
<PAGE> 6
6
whole or in part to such fiscal year; provided that if the amount actually
awarded for any fiscal year should later be determined by a court of competent
jurisdiction to have exceeded the Maximum Incentive Credit for such fiscal
year, the Maximum Incentive Credit for the fiscal year next succeeding such
determination shall be reduced by the amount of such excess. Any such excess
shall thus be corrected exclusively by adjustments of the amounts subsequently
available for awards and not be recourse to the Company, the Board of
Directors, the Committee, any participant or any other person.
5. Determination of Incentive Awards
The Committee shall determine the participants to receive
incentive awards for each fiscal year, the amount and form of each award (which
shall not exceed in value the lesser of 200% of a participant's base earnings
or $1 million), and the other terms and conditions applicable thereto.
Specifically, the Committee shall establish performance goals related to
operating income, cash flow, earnings per share, return on assets, return on
equity, operating margins, economic value added (EVA), cash flow margins,
shareholder return, cost control and/or revenue growth measurements, which may
be in respect of the Company, as a whole, or any business unit thereof, before
the commencement of the services to which an incentive award relates and in no
event later than March 31
<PAGE> 7
7
of the year to which the award relates or such other date as may be permitted
under the Internal Revenue Code.
6. Method of Payment of Awards
All incentive awards shall be made in cash.
7. Time of Payment of Awards
(a) Awards may be paid in a lump sum, in annual installments,
or otherwise, or deferred until after retirement as hereinafter provided.
(b) When payments or distributions are not to be made in a
lump sum in the year of the award, the Committee shall fix the time or times of
payments or distributions, and may impose such terms and conditions with
respect to the making of payments or distributions and forfeitures thereof, as
in its judgment will best serve the interests of the Company and the purposes
of the Plan.
(c) The Committee may also in its sole discretion establish
terms and conditions under which a participant may elect to defer the payment
of an award in whole or in part to a period following retirement or other
termination of employment, provided that any election by an employee to defer
payment shall be irrevocably made by him at such time prior to the end of the
year for which such award shall be made as the Committee shall determine.
(d) The Committee may also in its sole discretion establish
arrangements, terms and conditions under which
<PAGE> 8
8
portions of awards payable in the future may be invested in securities or other
suitable or appropriate property. The amounts of such future payments, whether
made in installments or deferred until after retirement or other termination of
employment, shall be subject to increase or decrease to reflect income earned
on, and gains or losses of principal of, the funds so invested.
8. Expenses
The expenses of administering this Plan shall be borne by the
Company.
9. Amendment or Discontinuance
The Board of Directors may amend, suspend or discontinue this
Plan, but may not, without the approval of the stockholders of the Company
having unlimited voting power, make any amendment which would permit the
incentive provision of any year provided in paragraph 4 hereof to exceed the
limitations set forth in said paragraph.
<PAGE> 1
EXHIBIT 10.2
THE WASHINGTON POST COMPANY
LONG-TERM INCENTIVE COMPENSATION PLAN
Amended and Restated
Effective June 30, 1995
1. Purposes
The purposes of this Long-Term Incentive Compensation Plan
(hereinafter called the Plan) of The Washington Post Company, a Delaware
corporation (hereinafter called the Company), are (a) to provide greater
incentives to key employees to increase the profitability of the Company and
its subsidiaries and (b) to strengthen the ability of the Company and its
subsidiaries to attract, motivate and retain persons of merit and competence
upon which, in large measure, continued growth and profitability depend.
2. Administration of the Plan
The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Company (hereinafter called the Committee) as
constituted from time to time by the Board of Directors. No member of the
Committee shall be eligible to participate in the Plan. The Committee shall
have full power and authority to make all decisions and determinations with
respect to the Plan, including without limitation the power and authority to
interpret and adminis-
<PAGE> 2
2
ter the Plan, adopt rules and regulations and establish terms and conditions,
not contrary to the provisions of the Plan, for the administration of its
business and the implementation of the Plan.
3. Participation
(a) Participation in the Plan shall be extended to senior
executives, key managers and key personnel of the Company and its subsidiaries
who, in the opinion of the Committee, are mainly responsible for the management
of the operations of the Company and its subsidiaries or who are otherwise in a
position to make substantial contributions to the management, growth and
success of the business of the Company.
(b) Directors as such shall not participate in the Plan, but
the fact that an employee is also a Director of the Company or a subsidiary
shall not prevent his participation.
(c) As used in the Plan, the term "Company" shall mean The
Washington Post Company and any subsidiary thereof.
(d) The Plan shall not be deemed to preclude the making of
any award pursuant to any other compensation, incentive, bonus or stock option
plan which may be in effect from time to time.
<PAGE> 3
3
4. Duration of Plan; Award Cycles; Awards
(a) The Plan shall remain in effect until terminated by the
Board of Directors; provided, however, that the termination of the Plan shall
not affect the delivery or payment of any award made prior to the termination
of the Plan.
(b) During the term of the Plan the Committee shall from time
to time establish Award Cycles, each of which shall commence on the first day
of a fiscal year of the Company and shall consist of not less than three nor
more than four fiscal years of the Company. At least two such fiscal years
shall elapse between the beginning of consecutive Award Cycles, except that
Award Cycles may begin on the first days of the Company's fiscal years 1982 and
1983.
(c) For each Award Cycle the Committee shall
(i) designate the participants who are to receive awards of
Restricted Stock for such Award Cycle and, subject to paragraph 5(a),
the number of shares of Restricted Stock awarded to each such
participant,
(ii) designate, subject to paragraph 6(a), the participants
who are to receive awards of Performance Units for such Award Cycle
and the number of Performance Units awarded to each such participant,
and
(iii) establish, subject to paragraph 6(b), the method for
determining at the end of such Award
<PAGE> 4
4
Cycle the value of a Performance Unit awarded at the beginning of such
Award Cycle.
5. Restricted Stock
(a) To each participant designated to receive an award of
Restricted Stock for an Award Cycle there shall be issued (subject to
subparagraph (b) below) a stock certificate, registered in the name of such
participant, representing such number of restricted shares of Class B Common
Stock of the Company (hereinafter called Common Stock) as the Committee shall
determine (hereinafter called Restricted Stock); provided, however, that such
number of shares shall not exceed the lesser of (A) the number (rounded to the
nearest whole share) determined by dividing (i) 25% of the mid-point of such
participant's salary grade at the beginning of such Award Cycle by (ii) the
market value of the Common Stock or (B) 10,000. For purposes of the preceding
clause (ii), the "market value" of Common Stock to be awarded as Restricted
Stock shall mean the closing price of the Common Stock on the principal
securities exchange on which the Common Stock is traded on the last trading day
preceding the date on which the Committee makes such award.
(b) Within 20 days after the effective date of a Restricted
Stock award, each recipient of such an award shall deliver to the Company (i)
an executed copy of a Restricted Stock Agreement containing the terms and
provisions set forth in subparagraph (c) below and (ii) a stock power exe-
<PAGE> 5
5
cuted in blank. Upon receipt of such agreement and stock power executed by the
participant, the Company shall cause the stock certificate referred to in
subparagraph (a) to be issued in the name of the participant and delivered to
the Secretary of the Company in custody for such participant. The failure of a
participant to return such agreement and stock power within such 20-day period
without cause shall result in cancellation of the Restricted Stock Award to
such participant, and no stock certificate therefor shall be issued in his
name.
(c) Each Restricted Stock Agreement accompanying an award of
Restricted Stock made for an Award Cycle shall contain the following
provisions, together with such other provisions as the Committee shall
determine:
(i) Except as hereinafter provided, none of the shares of
Restricted Stock subject thereto may be sold, transferred, assigned,
pledged or otherwise disposed of before the day following the end of
such Award Cycle (hereinafter called the Vesting Date).
(ii) If the participant is continuously employed by the
Company until the end of the Award Cycle, the restriction set forth in
subparagraph (c)(i) above shall terminate on the Vesting Date as to
all the shares of Restricted Stock. Notwithstanding the foregoing, in
the case of a participant who is an officer of the Company at the time
of the award, the Committee shall, prior to the beginning of each
Award Cycle, establish a formula based on cash flow,
<PAGE> 6
6
operating income, earnings per share, economic value added (EVA),
return on assets, total return on equity of the Company, operating
margins, cash flow margins, shareholder return, cost control and/or
revenue growth measurements over the period of the Award Cycle, which
will have to be achieved if the restriction set forth in subparagraph
(c)(i) above is to terminate as provided in this subparagraph (c)(ii).
(iii) If the participant's employment by the Company
terminates before the Vesting Date, the restriction set forth in
paragraph (c)(i) shall terminate on the date his employment terminates
(or, if termination is by reason of death or disability, on such later
date as the Committee shall determine but not later than the Vesting
Date) as to a percentage of the number of shares of Restricted Stock
originally awarded (rounded to the nearest whole share) determined as
set forth below (and ownership of all shares of Restricted Stock as to
which such restriction shall not so terminate shall forthwith revert
to the Company):
(A) if termination is by reason of death, disability
or retirement at Normal Retirement Age (as defined in the
Company's Retirement Plan), the percentage determined by
dividing (i) the number of full months elapsed from the
effective
<PAGE> 7
7
date of the award to the date of such termination by (ii) the
number of full months from such effective date to the end of
the Award Cycle (such percentage being hereinafter called the
Pro-Rated Percentage);
(B) if termination is by reason of retirement prior
to Normal Retirement Age (as defined in the Company's
Retirement Plan), such percentage (not greater than the
Pro-Rated Percentage) as the Committee may in its sole
discretion determine;
(C) if termination occurs for any other reason
(voluntary or involuntary) more than two years from the
effective date of the award, such percentage (not greater than
the Pro-Rated Percentage) as the Committee may in its sole
discretion determine; and
(D) if termination occurs for any other reason
(voluntary or involuntary) within two years from the effective
date of the award, ownership of all the shares of Restricted
Stock shall revert to the Company.
(iv) Promptly after the restriction set forth in subparagraph
(c)(i) shall terminate as to any
<PAGE> 8
8
shares of Restricted Stock, the participant to whom such shares were
awarded (or his estate) shall pay to the Company the amount of all
Federal, state and local withholding taxes payable on the compensation
represented by such shares, and upon receipt of such payment the
Company shall deliver to the participant a stock certificate or
certificates for such shares.
(v) As long as shares of Restricted Stock remain registered
in the name of a participant he shall be entitled to all the
attributes of ownership of such shares (subject to the restriction on
transfer referred to above), including the right to vote such shares
and to receive all dividends declared and paid on such shares.
(d) All shares of Common Stock issued to recipients of
Restricted Stock awards shall be issued from previously issued and outstanding
shares held in the Treasury of the Company.
(e) The total number of shares of Common Stock that may be
awarded as Restricted Stock under the Plan shall not exceed 275,000 shares;
provided, however, that effective November 1, 1991, shares which revert to the
Company in accordance with paragraph 5(c)(iii) shall be deemed to have been
awarded as Restricted Stock for purposes of determining the number of shares of
Restricted Stock remaining available to be awarded hereunder.
<PAGE> 9
9
6. Performance Units
(a) To each participant designated to receive an award of
Performance Units for an Award Cycle there shall be issued a Performance Unit
Certificate representing such number of Performance Units with a nominal value
of $100 each as the Committee shall determine; provided, however, that the
total nominal value of Performance Units awarded to a participant for any Award
Cycle shall not exceed 150% of the mid-point of such participant's salary grade
at the date of such award.
(b) Prior to the beginning of each Award Cycle the Committee
shall establish a method for determining the earned value of a Performance Unit
at the end of such Award Cycle (hereinafter called the Payout Value) based on
performance goals over the period of the Award Cycle related to operating
income, cash flow, shareholder return, return on assets, return on equity,
operating margins, cost control, economic value added (EVA) and/or revenue
growth measurements, which may be in respect of the Company, as a whole, or any
business unit thereof; provided, however, that such method shall provide that
(i) no Payout Value may exceed $200 and (ii) the payment of an award of
Performance Units to any participant at the end of an Award Cycle shall be the
lesser of $4 million or the amount determined by multiplying the Payout Value
times the number of Performance Units granted to such participant.
<PAGE> 10
10
(c) If a participant's employment by the Company terminates
before the end of an Award Cycle for which he was granted Performance Units,
after the end of such Award Cycle he shall be entitled to a percentage of the
Payout Value of said Performance Units determined as set forth below:
(A) if termination is by reason of death, disability
or retirement at Normal Retirement Age (as defined in the Company's
Retirement Plan), the Pro-Rated Percentage;
(B) if termination is by reason of retirement prior
to Normal Retirement Age (as defined in the Company's Retirement
Plan), such percentage (not greater than the Pro-Rated Percentage) as
the Committee may in its sole discretion determine;
(C) if termination occurs for any other reason
(voluntary or involuntary) more than two years after the effective
date of the award, such percentage (not greater than the Pro-Rated
Percentage) as the Committee may in its sole discretion determine; and
(D) if termination occurs for any other reason
(voluntary or involuntary) within two years from the effective date of
the award, no percentage of the Payout Value shall be paid.
(d) As promptly as practicable after the end of each Award
Cycle the Payout Value of a Performance Unit awarded at the beginning of such
Award Cycle shall be calcu-
<PAGE> 11
11
lated and paid in cash to the recipients awarded such Performance Units after
deduction of all Federal, state and local withholding taxes payable on the
compensation represented thereby.
(e) At the end of each Award Cycle the Committee may, in its
sole discretion, award to those senior executives of the Company and its
subsidiaries who are not officers of the Company and whose performance during
such Award Cycle the Committee believes merits special recognition cash bonuses
in an aggregate amount not to exceed 10% of the aggregate Payout Value of all
Performance Units awarded with respect to such Award Cycle.
7. Expenses
The expenses of administering this Plan shall be borne by the
Company.
8. Adjustments in Class B Common Stock
In the event of any change or changes in the outstanding
shares of Common Stock by reason of any stock dividend, split-up,
recapitalization, combination or exchange of shares, merger, consolidation,
separation, reorganization, liquidation or the like, the class and aggregate
number of shares that may be awarded as Restricted Stock under the Plan after
any such change shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
9. Amendment
The Board of Directors of the Company shall have complete
power and authority to amend the Plan, provided,
<PAGE> 12
12
however, that the Board of Directors shall not, without the approval of the
holders of a majority of the voting stock of the Company entitled to vote
thereon, increase either (i) the maximum number of shares of Restricted Stock
that may be awarded under the Plan, (ii) the maximum number of shares of
Restricted Stock or Performance Units that may be awarded to a participant,
(iii) the maximum Payout Value of a Performance Unit, or (iv) the percentage
ceiling on the aggregate amount of bonuses which may be awarded pursuant to
paragraph 6(e).
<PAGE> 1
EXHIBIT 10.3
THE WASHINGTON POST COMPANY
STOCK OPTION PLAN
(As Amended and Restated through June 29, 1995)
1. Purpose of the Plan
The purpose of this Stock Option Plan (hereinafter called the
Plan) of The Washington Post Company, a Delaware corporation (hereinafter
called the Company), is to secure for the Company and its stockholders the
benefits of incentive inherent in the ownership of Class B Common Stock of the
Company by employees of the Company and its subsidiaries who will be
responsible for its future growth and continued success. It is generally
recognized that stock option plans aid in retaining and encouraging key
employees of ability and in attracting other able employees.
2. Stock Subject to the Plan
There are hereby authorized and reserved for issuance upon the
exercise of options to be granted from time to time under the Plan an aggregate
of 1,900,000 shares* of the Company's Class B Common Stock, which shares may be
in whole or in part, as the Board of Directors shall from time to time
determine, issued shares which shall have been reacquired by the Company or
authorized but unissued shares, whether now or hereafter authorized. If any
option granted under the Plan shall expire, terminate or be canceled for any
reason without having been exercised in full, the corresponding number of
unpurchased shares which were reserved for issuance upon exercise thereof shall
again be available for the purposes of the Plan. To the extent that options
provide that the exercise of one shall reduce the number of shares purchasable
under the other, then, for purposes of the Plan, the Company shall be deemed to
have awarded options only for the aggre-
- - ---------------------
* Adjusted to give effect to stock splits in 1971, 1976 and 1978.
<PAGE> 2
2
gate number of shares which in fact may be purchased under such options (and
not for the number of shares covered by both such options).
3. Administration of the Plan
The Plan shall be administered by the Committee referred to in
paragraph 4 (hereinafter called the Committee). Subject to the express
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, options shall be granted and the number of shares to be subject to each
option; provided, however, that the aggregate fair market value of the shares
(determined as of the time the option is granted) for which incentive stock
options (as defined in Section 422 of the Internal Revenue Code of 1986, as it
may be amended from time to time) granted to an employee, under all plans of
the Company and its subsidiaries providing for the grant of incentive stock
options, may first become exercisable in any calendar year after 1986 shall not
exceed $100,000. In making such determinations, the Committee may take into
account the nature of the services rendered or expected to be rendered by the
respective employees, their present and potential contributions to the
Company's success, the anticipated number of years of effective service
remaining and such other factors as the Committee in its discretion shall deem
relevant. Subject to the express provisions of the Plan, the Committee shall
also have plenary authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, to determine the terms and
provisions of the respective options (which terms and provisions need not be
the same in each case), and to make all other determinations deemed necessary
or advisable in administering the Plan. The determinations of the Committee on
the matters referred to in this paragraph 3 shall be conclusive.
4. The Committee
The Committee shall consist of not less than three members of
the Board of Directors, each of whom shall be a "disinterested" person within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(or any successor rule or regulation). No member of the Committee shall be
eligible to receive an option under the Plan. The Committee shall be appointed
by the Board of Directors, which may from time to time appoint members to the
Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee; the Board of
Directors shall also designate one of the members of the Committee as its
Chairman. The Committee
<PAGE> 3
3
shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the members shall be fully
as effective as if it had been made by a majority vote at a meeting duly called
and held. The Committee may appoint a secretary (who need not be a member of
the Committee) and may make such rules and regulations for the conduct of its
business as it shall deem advisable. No member of the Committee shall be
liable, in the absence of bad faith, for any act or omission with respect to
his service on the Committee. Service on the Committee shall constitute
service as a Director of the Company so that the members of the Committee shall
be entitled to indemnification and reimbursement as Directors of the Company
pursuant to its Certificate of Incorporation.
5. Time of Granting of Options
Nothing contained in the Plan or in any resolution adopted or
to be adopted by the Board of Directors or by the stockholders of the Company
shall constitute the granting of any option hereunder. The action of the
Committee with respect to the granting of an option shall take place on such
date as a majority of the members of the Committee at a meeting shall make a
determination with respect to the granting of an option or, in the absence of a
meeting, on such date as a written Designation covering such option shall have
been executed by all the members of the Committee. The effective date of the
grant of an option (hereinafter called the Granting Date) shall be the date
specified by the Committee in its determination or Designation relating to the
award of such option.
6. Eligibility
Options may be granted only to key employees (which term shall
be deemed to include officers) who on the Granting Date are in the employ of
the Company or one of its present or future subsidiary corporations, as defined
in Section 424 of the Internal Revenue Code of 1986, as the same shall be
amended from time to time (hereinafter called Subsidiaries). A Director of the
Company or of a Subsidiary who is not also such an employee of the Company or
one of its Subsidiaries shall not be eligible to receive an option. During the
life of the Plan options may be granted to eligible employees whether or not
they hold or have held options under the Plan or other options previously
granted by the Company.
<PAGE> 4
4
7. Option Prices
The purchase price of the Class B Common Stock under each
option shall be determined by the Committee, but shall not be less than 100% of
the fair market value of the Class B Common Stock on the Granting Date of such
option, as determined by the Committee. The purchase price of shares purchased
upon the exercise of an option is to be paid in full upon the issuance of such
shares, either in cash or by the surrender of whole shares of Class B Common
Stock having a fair market value, as determined by the Committee, equal to such
purchase price, or by a combination of cash and whole shares. If paid in cash,
the purchase price paid for stock upon the exercise of options shall be added
to the general funds of the Company and used for corporate purposes. If paid
in whole or in part in shares, the shares surrendered shall be held as Treasury
shares.
8. Option Types, Terms and Conditions
Options granted under the Plan shall be in the form of (a)
incentive stock options (as defined in Section 422 of the Internal Revenue Code
of 1986, as it may be amended from time to time) and/or (b) non-qualified stock
options. To the extent that any option that is intended to be an incentive
stock option exceeds the $100,000 limitation set forth in paragraph 3 above, it
shall be deemed to be a non-qualified option.
The term of each option shall be for such period as the
Committee shall determine, but not more than ten years from the Granting Date
in the case of incentive stock options and non-qualified options, subject to
earlier termination as the Committee may determine and as provided in
paragraphs 10 and 11 hereof.
The Committee shall, in its discretion, prescribe the terms
and conditions upon which options may be exercised, which terms and provisions
need not be the same in each case. Except as provided in paragraphs 10 and 11
below, no option may be exercised at any time unless the holder thereof is then
an employee of the Company or of a Subsidiary. An employee shall have none of
the rights of a stockholder with respect to any of the shares subject to option
until such shares shall be issued to him upon the exercise of his option.
The Committee may grant to holders of outstanding options, in
exchange for the surrender and cancellation of such options, new options (which
may be incentive stock
<PAGE> 5
5
options and/or non-qualified stock options) having purchase prices lower than
the purchase prices provided in the options so surrendered and canceled and
containing such other terms and conditions as the Committee may prescribe in
accordance with the provisions of the Plan; provided that such new options
shall provide for the purchase of not more than 90% of the number of shares
covered by the options so surrendered and canceled and that the purchase price
under such new options shall be determined in accordance with paragraph 7
hereof.
The maximum number of shares subject to options which may be granted
under this Plan to any individual employee during the life of this Plan shall
not exceed 250,000 in the aggregate.
9. Non-Transferability of Options
No option granted under the Plan shall be transferable
otherwise than by will or the laws of descent and distribution and an option
may be exercised, during the lifetime of the holder thereof, only by him.
10. Termination of Employment
In the event that the employment of an employee to whom an
option has been granted under the Plan shall be terminated (otherwise than by
reason of death), such option may, subject to the provisions of paragraphs 8
and 12, be exercised (only to the extent that the employee was entitled to do
so at the termination of his employment) at any time within three months after
such termination, but in no event after the expiration of the term of the
option. Notwithstanding the foregoing, the Committee may permit any option
granted to an employee whose employment is being terminated (otherwise than by
reason of death) to remain exercisable for such period as the Committee shall
determine, but in no event beyond the expiration of the term of the option. In
the event the Committee so extends the exercise period of an option held by a
terminating employee and such option is exercisable as to additional shares in
installments, such installments shall continue to accrue after the termination
of employment unless the Committee determines that the exercise period shall be
extended only with respect to the number of shares purchasable at the date of
the termination of employment. Options granted under the Plan shall not be
affected by any change of employment so long as the holder continues to be an
employee of the Company or of a Subsidiary. Retirement pursuant to any
retirement plan of the Company or any Subsidiary shall be deemed to be a
termination of employment
<PAGE> 6
6
for the purposes of this paragraph. The Committee may specify in the original
terms of an option, or if not so specified shall determine, whether any
authorized leave of absence or absence on military or governmental service or
for any other reason shall constitute a termination of employment for purposes
of this paragraph. Nothing in the Plan or in any option granted pursuant to
the Plan (in the absence of an express provision to the contrary) shall confer
on any individual any right to continue in the employ of the Company or any of
its Subsidiaries or interfere in any way with the right of the Company or any
of its Subsidiaries to terminate his employment at any time.
11. Death of Holder of Option
Upon the death of the holder of an option granted under the
Plan, such option may be exercised (unless the option otherwise provides) for
the following specified number of shares by a legatee or legatees of such
option under the holder's last will, or by the holder's personal
representatives or distributees, at any time within one year after the holder's
death, but in no event after the expiration of the term of the option: (i) if
death occurs while the holder is employed by the Company or a subsidiary, to
the extent of (a) the shares purchasable by such holder at the date of his
death plus (b) the additional shares covered by the next installment, if any,
of such option, or (ii) if death occurs within three months after the
termination of the holder's employment or during any extension of the
post-termination exercise period permitted by the Committee pursuant to
paragraph 10 hereof, to the extent of the shares purchasable by such holder at
the date of his death.
12. Employee's Agreement to Serve
The recipient of any option exercisable by the optionee within
twelve months of the Granting Date shall agree to serve in the employ of the
Company or, at the election of the Company from time to time, one of its
Subsidiaries, for such period as the Committee shall determine, which shall not
be less than twelve months following the Granting Date. The Committee shall be
authorized in its discretion to grant options not exercisable by the optionee
within twelve months of the Granting Date, in which case the recipient of such
option need not (unless otherwise determined by the Committee) agree to serve
in the employ of the Company or its Subsidiaries.
<PAGE> 7
7
13. Adjustments in Class B Common Stock
Notwithstanding any other provision of the Plan, each option
may contain such provisions as the Committee shall determine to be appropriate
for the adjustment of the number and class of shares subject to such option,
the option price and the number of shares as to which the option shall be
exercisable at any time in the event of changes in the outstanding Class B
Common Stock by reason of any stock dividend, split-up, recapitalization,
combination or exchange of shares, merger, consolidation, separation,
reorganization, liquidation and the like. In the event of any such change in
the outstanding Class B Common Stock, the class and aggregate number of shares
available under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive.
14. Amendment and Termination
Incentive stock options may not be granted after March 11,
2003; and unless the Plan shall theretofore have been terminated as hereinafter
provided, the Plan shall terminate on, and no non-qualified option shall be
granted thereunder after, December 31, 2003, provided that the Board of
Directors may at any time prior to that date terminate the Plan. The Board of
Directors shall have complete power and authority to amend the Plan, provided,
however, that the Board of Directors shall not, without the affirmative vote of
the holders of a majority of the voting stock of the Company entitled to vote
thereon, (i) increase the maximum number of shares for which options may be
granted under the Plan, (ii) change the formula as to minimum option prices,
(iii) extend the period during which options may be granted or exercised or
(iv) change the class of employees to whom options may be granted. No
termination or amendment of the Plan may, without the consent of the individual
to whom any option shall theretofore have been granted, adversely affect the
rights of such individual under such option.
15. Government and Other Regulations
The obligation of the Company to sell and deliver shares under
options granted under the Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by any governmental agencies as may be
required, including, but not by way of limitation, the effectiveness of a
Registration Statement under the Securities Act of 1933, as amended, as deemed
necessary or appropriate by counsel for the Company.
<PAGE> 8
8
16. Other Actions
Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers,
including, but not by way of limitation, the right of the Company (i) to grant
options for proper corporate purposes otherwise than under the Plan to any
employee or other person, firm, corporation or association or (ii) to grant
options to, or assume the option of, any person in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business and assets (in whole or in part) of any person, firm, corporation or
association.
<PAGE> 1
Exhibit 11
CALCULATION OF EARNINGS
PER SHARE OF COMMON STOCK
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------------------
March 31, April 2,
1996 1995
-------- ---------
<S> <C> <C>
Number of shares of
Class A and Class B
stock outstanding
at beginning of
period 11,005 11,345
Issuance of shares of
Class B common stock
(weighted), net of
forfeiture of re-
stricted stock awards 1 18
Repurchase of Class B
common stock (weighted) (9) (149)
Unexercised stock option
equivalent shares com-
puted under the "treasury
stock method" 14 6
------ ------
Shares used in
the computation of
primary earnings per share 11,011 11,220
Adjustment to reflect fully
diluted computation (1) - -
------ ------
11,011 11,220
------ ------
Net income available for
common stock $36,740 $43,898
------- -------
Primary earnings per share $ 3.34 $ 3.91
------- -------
Fully diluted earnings per share (1) $ 3.34 $ 3.91
------- -------
</TABLE>
(1) This computation is submitted although it is not required by Accounting
Principles Board Opinion No. 15 since it results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Income for the thirteen weeks ended March 31, 1996 and
the Consolidated Balance Sheet as of March 31, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> MAR-31-1996
<CASH> 73,950
<SECURITIES> 0
<RECEIVABLES> 238,309
<ALLOWANCES> 40,896
<INVENTORY> 30,601
<CURRENT-ASSETS> 329,748
<PP&E> 1,042,647
<DEPRECIATION> 550,799
<TOTAL-ASSETS> 1,753,336
<CURRENT-LIABILITIES> 300,311
<BONDS> 0
11,947
0
<COMMON> 20,000
<OTHER-SE> 1,171,708
<TOTAL-LIABILITY-AND-EQUITY> 1,753,336
<SALES> 0
<TOTAL-REVENUES> 416,619
<CGS> 0
<TOTAL-COSTS> 242,482
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 12,390
<INTEREST-EXPENSE> 1,083
<INCOME-PRETAX> 60,561
<INCOME-TAX> 23,619
<INCOME-CONTINUING> 36,942
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,942
<EPS-PRIMARY> 3.34
<EPS-DILUTED> 3.34
</TABLE>
