MCCLATCHY CO, DEF 14A, 1998-03-30

MCCLATCHY CO
DEF 14A, 1998-03-30
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING

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SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)

Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/

Check the appropriate box:

/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by sule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

THE MCCLATCHY COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

1) Title of each class of securities to which transaction
applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the fee is calculated and state how it was
determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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/_/ Fee paid previously with preliminary materials.

/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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<PAGE>

THE MCCLATCHY COMPANY
2100 Q STREET
SACRAMENTO, CA 95816

March 31, 1998

To our Stockholders:

You are invited to attend the annual meeting of stockholders of The
McClatchy Company (the "Company") to be held at 9:00 a.m. on Thursday, May 21,
1998 in the Viscaya Pavilion, 2019 21st Street, Sacramento, California 95818.

The Company, a Delaware corporation, is a successor in interest to
McClatchy Newspapers, Inc., a Delaware corporation ("McClatchy Newspapers"), and
was created as a result of the Amended and Restated Agreement and Plan of Merger
and Reorganization (the "Merger Agreement"), dated as of February 13, 1998,
between (among others) McClatchy Newspapers and Cowles Media Company, a Delaware
corporation ("Cowles"). Pursuant to the Merger Agreement, McClatchy Newspapers
and Cowles each became separate wholly owned subsidiaries of the Company. Each
outstanding share of McClatchy Newspapers' Class A common stock, par value $0.01
per share, was converted into one share of the Company's Class A common stock,
par value $0.01 per share. Each outstanding share of McClatchy Newspapers' Class
B common stock, par value $0.01 per share, was converted into one share of the
Company's Class B common stock, par value $0.01 per share. Each outstanding
share of Cowles' common stock, par value $0.01 per share, was converted, at the
option of the stockholder, into either cash, shares of the Company's Class A
common stock (based upon an exchange ratio described in the Merger Agreement) or
a combination of cash and the Company's Class A common stock. All references to
the "Company" refer to both The McClatchy Company and its predecessor in
interest, McClatchy Newspapers, Inc.

At the annual meeting, you will be asked to (i) elect Directors for the
coming year, (ii) approve the Company's 1994 Amended and Restated Stock Option
Plan, (iii) approve the Company's 1998 Long-Term Incentive Plan; (iv) approve
the Company's Chief Executive Officer Bonus Plan; and (v) ratify the selection
of the firm of Deloitte & Touche LLP as independent auditors of the Company for
the 1998 fiscal year.

In addition, the Board of Directors will report on the Company's
affairs and a discussion period will be provided for questions and comments.

Whether or not you plan to attend the meeting, it is important that
your shares be represented. Accordingly, we ask that you sign, date and mail the
enclosed proxy in the envelope provided at your earliest convenience. By doing
so, your right to attend or vote at the meeting will in no way be limited.

Sincerely,

/s/ Gary Pruitt
Gary Pruitt
President and Chief Executive Officer

<PAGE>

THE MCCLATCHY COMPANY
2100 Q STREET
SACRAMENTO, CA 95816

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
THE McCLATCHY COMPANY
TO BE HELD MAY 21, 1998

To the Stockholders:

The annual meeting of stockholders of The McClatchy Company (the
"Company") will be held at the Viscaya Pavilion, 2019 21st Street, Sacramento,
California 95818, on Thursday, May 21, 1998, at 9:00 a.m. local time, for the
following purposes:

1. The election of Directors;

2. To approve the Company's Amended and Restated 1994 Stock Option
Plan;

3. To approve the Company's 1998 Long-Term Incentive Plan;

4. To approve the Company's Chief Executive Officer Bonus Plan;

5. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the 1998 fiscal year; and

6. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.

All of the above matters are more fully described in the accompanying
Proxy Statement. Stockholders of record on the books of the Company on March 27,
1998 are entitled to notice of and to vote at the meeting or any postponement or
adjournment thereof. A list of stockholders entitled to vote at the meeting will
be available for inspection at the Company's offices, 2100 Q Street, Sacramento,
California, at least 10 days before the meeting.

By Order of the Board of Directors

/s/ Karole Morgan-Prager
Karole Morgan-Prager, Corporate Secretary

March 31, 1998

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. THIS WILL
NOT LIMIT YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.

<PAGE>

THE MCCLATCHY COMPANY
2100 Q STREET
SACRAMENTO, CALIFORNIA 95816

--------------------
PROXY STATEMENT
--------------------

Your proxy in the form enclosed is solicited by the Board of Directors
of The McClatchy Company (the "Company") for use in voting at the annual meeting
(the "Annual Meeting") of stockholders to be held on Thursday, May 21, 1998, at
the Viscaya Pavilion, 2019 21st Street, Sacramento, California 95818. This Proxy
Statement and the accompanying form of proxy are being mailed to stockholders on
or about March 31, 1998.

The Company, a Delaware corporation, is a successor in interest to
McClatchy Newspapers, Inc., a Delaware corporation ("McClatchy Newspapers") and
was created as a result of the Amended and Restated Agreement and Plan of Merger
and Reorganization (the "Merger Agreement"), dated as of February 13, 1998,
between (among others) McClatchy Newspapers and Cowles Media Company, a Delaware
corporation ("Cowles"). Pursuant to the Merger Agreement, McClatchy Newspapers
and Cowles each became wholly owned subsidiaries of the Company. Each
outstanding share of McClatchy Newspapers' Class A common stock, par value $0.01
per share, was converted into one share of the Company's Class A common stock
(the "Class A Common Stock"), par value $0.01 per share. Each outstanding share
of McClatchy Newspapers' Class B common stock, par value $0.01 per share, was
converted into one share of the Company's Class B common stock (the "Class B
Common Stock"), par value $0.01 per share. Each outstanding share of Cowles'
common stock, par value $0.01 per share, was converted, at the option of the
stockholder, into either cash, shares of Class A Common Stock (based upon an
exchange ratio described in the Merger Agreement) or a combination of cash and
Class A Common Stock. All references to the "Company" refer to both The
McClatchy Company and its predecessor in interest, McClatchy Newspapers, Inc.

The shares represented by the proxies received, properly dated and
executed, and not revoked will be voted at the meeting. A proxy may be revoked
at any time before it is exercised by delivering to the Company a written notice
of revocation or a duly executed proxy bearing a later date, or by attending the
meeting and voting in person. Subject to any such revocation, all shares
represented by properly executed proxies will be voted in accordance with the
specifications on the enclosed proxy. If no such specifications are made, the
shares of Class A Common Stock will be voted FOR the election of the four
nominees to the Board of Directors of the Company (the "Board") standing for
election by the Class A Common Stock (the "Class A Directors") listed in this
Proxy Statement, FOR approval of the Company's Amended and Restated 1994 Stock
Option Plan (Proposal 2), FOR approval of the Company's Long-Term Incentive Plan
(Proposal 3), FOR approval of the Company's Chief Executive Officer Bonus Plan
(Proposal 4), and FOR the ratification of the appointment of Deloitte & Touche
LLP as the Company's independent auditors for the fiscal year 1998 (Proposal 5).
Similarly, if no specifications are made, the shares of Class B Common Stock
will be voted FOR the election of the nine nominees to the Board of Directors
standing for election by the Class B Common Stock (the "Class B Directors")
listed in this Proxy Statement, and FOR approval of Proposals 2, 3, 4 and 5.

The Company will bear the expense of preparing, printing and mailing
this Proxy Statement and the proxies solicited hereby and will reimburse
brokerage firms and nominees for their reasonable expenses in forwarding
solicitation materials to beneficial owners of shares held of record by such
brokerage firms and nominees. In addition to the solicitation of proxies by
mail, officers and regular employees of the Company may communicate with
stockholders either in person or by telephone or telegraph for the purpose of
soliciting such proxies; no additional compensation will be paid for such
solicitation.

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<PAGE>

OUTSTANDING SHARES AND VOTING RIGHTS

March 27, 1998 has been fixed as the record date for determining the
holders of Class A Common Stock and Class B Common Stock entitled to notice of
and to vote at the annual meeting. As of the close of business on such date, the
Company had outstanding 15,814,374 shares of Class A Common Stock, each of which
is entitled to one vote in the election of the four Class A Directors, no vote
in the election of the nine Class B Directors and one-tenth vote upon other
matters presented at the meeting, and 28,675,912 shares of Class B Common Stock,
each of which is entitled to no vote in the election of the four Class A
Directors, one vote in the election of the nine Class B Directors and one vote
upon other matters presented at the meeting. Election of the Class A and Class B
Directors will be by plurality of the votes cast by each respective class. The
affirmative vote of the holders of a majority of the aggregate voting power of
the shares of Class A Common Stock and Class B Common Stock present or
represented at the meeting is required for the approval of Proposals 2, 3, 4 and
5. Because abstentions will be counted as present for the purpose of determining
whether a quorum is present but will not be counted as votes cast in favor of
Proposals 2, 3, 4 and 5, abstentions have the same effect as negative votes.
Broker non-votes and shares as to which proxy authority has been withheld with
respect to any matter are not deemed to be present or represented for purposes
of determining whether stockholder approval of that matter has been obtained.
Proxies relating to "street name" shares that are voted by brokers will be
counted as shares present for purposes of determining the presence of a quorum
on all matters, but will not be treated as shares having voted at the Annual
Meeting as to any proposal as to which authority to vote is withheld by the
broker.

ELECTION OF DIRECTORS
(PROPOSAL 1 ON PROXY)

The Restated Certificate of Incorporation of the Company provides that
the holders of Class A Common Stock have the exclusive right as a class to elect
25% of the Company's directors, or the nearest larger whole number, but no vote
with respect to the election of the other directors. The holders of the Class B
Common Stock have the right to elect the remaining directors. At the meeting
four Class A Directors will be elected by the Class A Stockholders and nine
Class B Directors will be elected by the Class B Stockholders.

Unless you request on your proxy card that voting of your proxy be
withheld for any one or more of the following nominees for director, proxies of
Class A Common Stock will be voted for the election of the four nominees for
Class A Directors named below and proxies of Class B Common Stock will be voted
for the election of the nine nominees for Class B Directors named below, all to
serve until the next annual meeting of stockholders and until their successors
are elected or chosen or their earlier death, resignation or removal. In the
event any nominee is unable or declines to serve as a director at the time of
the meeting, the proxy will be voted for any nominee who shall be designated by
the present Board of Directors to fill such vacancy.

NOMINEES FOR CLASS A DIRECTORS

ELIZABETH BALLANTINE, 49, became a Director of the Company on March 19,
1998 as a result of the Merger Agreement between the Company and Cowles.(1) Ms.
Ballantine has been a director of Cowles since 1993. Ms. Ballantine has been an
attorney with Dickstein Shapiro Morin & Oshinsky LLP since November 1993. From
August 1990 until November 1993, she worked as a private consultant for
international business investments. Ms. Ballantine has also been an Adjunct
Professor of History with The George Washington University since August 1991.

LARRY JINKS, 69, has been a Director of the Company since July 1995. He
spent 37 years with Knight Newspapers and Knight-Ridder, Inc. and, during that
time, he served as managing editor of THE MIAMI HERALD from

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(1) Pursuant to the Merger Agreement, the directors of McClatchy Newspapers
immediately prior to the consummation of the merger, plus one member of the
Cowles Board, became the directors of the Company. Further, the Company agreed
to nominate such member of the Cowles Board for election by the holders of Class
A Common Stock as a Class A Director.

-2-

<PAGE>

1966 to 1972, as executive editor of THE MIAMI HERALD from 1972 to 1976, as
editor of the SAN JOSE MERCURY NEWS from 1977 to 1981, as a corporate officer of
Knight-Ridder from 1981 to 1989, and as publisher of the SAN JOSE MERCURY NEWS
from 1989 to 1994. He is a member of the executive committee of the Newspaper
Management Center at Northwestern University and is chairman of the Knight
Foundation's Journalism Advisory Committee.

S. DONLEY RITCHEY, 64, has been a Director of the Company since July
1985. He retired from Lucky Stores in 1986, where he was chief executive officer
and chairman of its board of directors. Currently, Mr. Ritchey is serving as
Chair of the Governing Board of the California Power Exchange. He is a director
of SBC Communications, De La Salle Institute, the Rosenberg Foundation and is
managing partner of Alpine Partners, a family investment general partnership. He
served as a council member of the town of Danville, California from 1987 to 1995
and has twice served as mayor of Danville.

FREDERICK R. RUIZ, 54, has been a Director of the Company since July
1993. He is chairman and chief executive officer of Ruiz Foods, Inc., a
privately held frozen food company. In 1992, Mr. Ruiz' company received the U.S.
Small Business Association's National Entrepreneurial Success Award and was
inducted into the SBA Hall of Fame in Washington, D.C. Mr. Ruiz has served on
the board of directors of Gottschalks, Inc. since 1992. Mr. Ruiz is a member of
the board of the American Frozen Food Institute. Mr. Ruiz also serves on the
board of the Hispanic College Fund and on the Business Advisory Council of
California State University. He is the former president of the Tulare King
Hispanic Chamber of Commerce.

NOMINEES FOR CLASS B DIRECTORS

WILLIAM K. COBLENTZ, 75, has been a Director of the Company since March
1979. He is a senior partner in the San Francisco law firm of Coblentz, Patch,
Duffy & Bass. He was a member of the board of directors of Pacific Telesis Group
from 1976 to 1992 and is a member of the boards of directors of the Koret
Foundation, The Central Valley Foundation and the Public Policy Institute of
California. From 1964 through 1980 Mr. Coblentz was a member of the University
of California Board of Regents and was its chairman for two years.

MOLLY MALONEY EVANGELISTI,(2) 45, has been a Director of the Company
since July 1995. She worked in various capacities for THE SACRAMENTO BEE from
October 1978 to December 1996, including the oversight of special projects for
THE SACRAMENTO BEE.

JOAN F. LANE, 69, has been a Director of the Company since March 1989.
From 1982 to 1992, Mrs. Lane served as Special Assistant to the Dean of the
School of Humanities and Sciences of Stanford University. She is currently a
Special Assistant to the Board of Trustees and the President of Stanford
University. She served on the board of directors of The Brown Group, Inc. from
1985 to 1996, and has served as a director of the James Irvine Foundation from
1990 to the present, and as a trustee of the San Francisco Foundation from 1984
to November 1991. She was a member of the board of trustees of Smith College
from 1978 to 1985, and chairman of that board from 1982 to 1985.

BETTY LOU MALONEY,(2) 77, has been a Director of the Company since July
1975 and Assistant Secretary of the Company since August 1980.

JAMES B. MCCLATCHY,(2) 77, is Publisher of McClatchy Newspapers, having
been elected to that position in July 1987. He served as the Chairman of the
Company's Board of Directors, from April 1989 to May 1995 and from August 1980
to July 1987. Mr. McClatchy was a Director of the Company from 1943 through
1965, was again elected a Director in March 1976 and has served in that capacity
since that time. He is a former owner and publisher of several weekly newspapers
in California and Nevada. He is a board member and past president of the
Inter-American Press Association, board chairman and director of the French
American International School, and a director and president of The Central
Valley Foundation.

- --------------

(2) James B. McClatchy and William Ellery McClatchy are brothers. Betty Lou
Maloney is their cousin by marriage. Molly Maloney Evangelisti is Betty Lou
Maloney's daughter.

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<PAGE>

WILLIAM ELLERY MCCLATCHY,(2) 74, has been a Director of the Company
since March 1976 and Assistant Secretary since August 1980.

ERWIN POTTS, 65, has been the Chairman of the Board of Directors of the
Company since May 1995. Mr. Potts served as Chief Executive Officer of the
Company from April 1989 to May 1996, as President from July 1987 to May 1995 and
as Chief Operating Officer from July 1987 to April 1989. He was the Company's
Executive Vice President from March 1985 to July 1987, and a Vice President from
March 1979 to March 1985. In addition, Mr. Potts has been a Director of the
Company since 1976. He currently serves on the boards of the Committee to
Protect Journalists and the Sacramento Regional Foundation, and on the
University of North Carolina School of Journalism Advisory Board. He is a former
member of the Newspaper Association of America board of governors, a former
director of the California Newspaper Publishers Association and a former member
of the California Business Roundtable.

GARY B. PRUITT, 40, has been Chief Executive Officer since May 1996 and
President since May 1995. He served as Chief Operating Officer of the Company
from May 1995 to May 1996. He has been a Director of the Company since July
1995. From May 1994 to May 1995 he served as Vice President, Operations and
Technology of the Company. Prior to that time he was Publisher of THE FRESNO BEE
from October 1991 to May 1994. He served the Company as Secretary and General
Counsel from 1987 to 1991 and Counsel from 1984 to 1987. Mr. Pruitt also held
the position of Assistant to the Vice President of Operations from March 1991 to
October 1991, and Assistant to the President of THE SACRAMENTO BEE from April
1990 to March 1991. He currently serves as a director of the American Press
Institute and the Crocker Art Museum Association. He is also a member of the
Chancellor's Committee for The University of California, Berkeley, the
California Business Roundtable and the Associated Press Auditing Committee.

WILLIAM M. ROTH, 81, has been a Director of the Company since September
1980. He was chief financial officer for Matson Navigation Company from 1952 to
1961, chairman of the board of Pacific Life Assurance Company from 1960 to 1963,
and U.S. Ambassador and Special Trade Representative from 1963 to 1969. He also
served as a member of the University of California Board of Regents for 16
years.

OTHER EXECUTIVE OFFICERS

PETER M. CAJACOB, 54, has been Vice President, Human Resources of the
Company since December 1993. He joined the Company as its Director of Human
Resources in February 1990. From 1989 to February 1990 he was director of human
resources for the GenCorp Automotive Group and prior to that time held
management positions in human resources with Aerojet General Corporation and
Whirlpool Corporation. Mr. CaJacob served on the board of directors of the
Industrial Relations Bureau of the California Newspaper Publishers Association
in 1990 and 1991.

GREGORY E. FAVRE, 62, has been Vice President, News of the Company
since January 1990 and Executive Editor of THE SACRAMENTO BEE since 1984. Prior
to that he was managing editor of the CHICAGO SUN TIMES and managing editor of
the CHICAGO DAILY NEWS. Mr. Favre is a past President and director of the
American Society of Newspaper Editors and is currently a board member and
membership chair of the Inter-American Press Association. He was the recipient
of the 1997 National Association of Minority Executives Catalyst award for
leadership in advocating and advancing diversity. He is a board member of the
Advisors of the Pacific Coast Center of the Freedom Forum and the Board of
Visitors for the University of California, Davis, Medical School and the
Foundation of American Communications. He was named California Newspaper
Executive of the Year by the California Newspaper Publishers Association in
1993. He served as President of the California Society of Newspaper Editors
during the 1988-1989 term.

KAROLE MORGAN-PRAGER, 35, has been General Counsel and Corporate
Secretary of the Company since July 1995. From May 1992 to July 1995 she was
Associate General Counsel of The Times Mirror Company. She was an associate with
the Morrison & Foerster law firm from October 1987 to May 1992.

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<PAGE>

JAMES P. SMITH, 60, is Vice President, Finance and Treasurer of the
Company. He was a Director of the Company from March 1982 until May 1998. He was
named Vice President, Finance in December 1985 and Treasurer in July 1980. Prior
to that time he had served as Assistant Treasurer. Mr. Smith served as Secretary
from July 1980 through January 1987. Mr. Smith has been the Company's chief
financial officer since 1980.

ROBERT J. WEIL, 47, is Vice President, Operations of the Company. In
this capacity, he oversees the Company's newspaper operations in the Northwest
and Minneapolis. He was named to this position in September 1997. From May 1994
to September 1997, he served as Publisher of THE FRESNO BEE. Prior to that time
he was President and Chief Operating Officer for Persis Media, a privately held
company with newspaper operations headquartered in Bellevue, Washington, from
September 1992 to May 1994. Mr. Weil held other senior management positions with
Persis and Gannett Newspapers from April 1973 to September 1992.

FRANK R. J. WHITTAKER, 48, is Vice President, Operations of the
Company. In this capacity, he oversees the Company's operations in California,
the Carolinas and the Company's two non-newspaper businesses, Nando.net and The
Newspaper Network. He was named to this position in September 1997. Mr.
Whittaker joined the Company as general manager of THE SACRAMENTO BEE in 1985.
From January 1990 to September 1997, he served as both President and General
Manager of THE SACRAMENTO BEE. For 13 years prior to that time, Mr. Whittaker
served THE TORONTO STAR in Canada in a variety of management positions,
including director of strategic planning and circulation director. Mr. Whittaker
is currently president of the California Newspaper Publishers Association and
serves on the board of the Audit Bureau of Circulations.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors held nine meetings and one organizational
meeting during 1997. The Board of Directors of the Company has the following
standing committees: Compensation Committee, Audit Committee, Pension and
Savings Plans Committee, and Committee on the Board. The Board of Directors has
no nominating committee.

Mr. Coblentz, Chairperson, Mr. Jinks, Mrs. Lane, and Mr. Ritchey are
the members of the Compensation Committee. The Compensation Committee adopts and
administers the following compensation plans for executive officers and certain
other employees of the Company: the Management By Objective Annual Bonus Plan,
the Executive Performance Plan, the Employee Stock Purchase Plan, the 1987 Stock
Option Plan and the 1994 Stock Option Plan. The Compensation Committee held six
meetings in 1997.

Mr. Ruiz, Chairperson, Mr. Coblentz, Mrs. Lane and Mr. Ritchey are the
members of the Audit Committee. The Audit Committee recommends selection of the
independent auditors for the Company to the Board of Directors (selection being
subject to ratification by the stockholders), reviews the scope and results of
the annual audit, approves the services to be performed by the independent
auditors, and reviews the independence of the auditors, the performance and fees
of the independent auditors, the effectiveness and adequacy of the systems of
financial reporting and internal accounting controls, and the scope and results
of internal auditing procedures. The Audit Committee held three meetings during
1997.

Mrs. Lane, Chairperson, Mr. Coblentz, Mr. Jinks, Mr. Ritchey, Mr. Roth,
and Mr. Ruiz are the members of the Committee on the Board. The Committee on the
Board develops criteria for Board membership and advises the Board of Directors
with respect to such other matters relating to directors as may be deemed
appropriate. The Committee on the Board held two meetings in 1997.

Mr. Ritchey, Chairperson, Mr. Coblentz and Mrs. Lane are the members of
the Pension and Savings Plans Committee. The Pension and Savings Plans Committee
reviews the Company's pension funding policy and objectives, monitors the
investment of the assets in the Plans, and recommends appropriate related action
to the Board of Directors. The Pension and Savings Plans Committee held three
meetings in 1997.

All Board and Committee members attended more than 75% of the meetings
of the Board of Directors and/or Committees on which he or she served, except
Bill Roth, who attended 66% of the meetings of the Board;

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<PAGE>

Betty Lou Maloney who attended 66% of the meetings of the Board; and Joan Lane,
who attended 66% of the meetings of the Compensation Committee.

STOCK OWNERSHIP

CLASS B COMMON STOCK

The following table sets forth certain information regarding the
beneficial ownership of the Class B Common Stock as of March 27, 1998 by (i)
certain of the Company's Directors and nominees for Director, (ii) all executive
officers and Directors of the Company as a group, and (iii) each person known by
the Company to own beneficially more than 5% of the outstanding shares of the
Class B Common Stock.

<TABLE>
<CAPTION>
Certain Directors, Directors and Number of Shares
Executive Officers as a Group, of Class B
And 5% Stockholders(1) Common Stock Percent
- ----------------------------------------------------------------------- ---------------- -------

<S> <C> <C>
James B. McClatchy..................................................... 16,044,053(2) 55.9%
William K. Coblentz.................................................... 13,769,049(3) 48.0%
William Ellery McClatchy............................................... 13,000,000(4) 45.3%
Erwin Potts............................................................ 12,500,000(5) 43.6%
William M. Roth........................................................ 12,500,000(5) 43.6%
Molly Maloney Evangelisti.............................................. 3,812,500 13.3%
Brown McClatchy Maloney................................................ 3,730,748(6) 13.0%
Betty Lou Maloney...................................................... 1,850,000 6.6%
All executive officers and directors as a group (19 persons)........... 21,887,021 76.3%

</TABLE>

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(1) All addresses: c/o The McClatchy Company, P. O. Box 15779, Sacramento,
CA 95852-0779.
(2) Includes: (i) 12,500,000 shares held under five separate trusts with
2,500,000 shares and different income beneficiaries. James B.
McClatchy, William Ellery McClatchy, William K. Coblentz, William M.
Roth and Erwin Potts share joint voting and investment control with
respect to these trusts. James B. McClatchy disclaims beneficial
ownership of all but 2,500,000 shares in one such trust as to which he
has a present income interest; (ii) 598,581 shares over which James B.
McClatchy and William K. Coblentz share joint voting and investment
control as co-executors under the will of Charles K. McClatchy,
deceased. James B. McClatchy disclaims beneficial ownership of these
shares; and (iii) 500,000 shares over which James B. McClatchy, William
Ellery McClatchy and William K. Coblentz share joint voting and
investment control as co-trustees of certain trusts established under
the will of Charles K. McClatchy, deceased. James B. McClatchy
disclaims beneficial ownership of these shares.
(3) Includes: (i) 12,500,000 shares held under five separate trusts with
2,500,000 shares and different income beneficiaries. James B.
McClatchy, William Ellery McClatchy, William K. Coblentz, William M.
Roth and Erwin Potts share joint voting and investment control with
respect to these trusts. William K. Coblentz disclaims beneficial
ownership of these shares; (ii) 598,581 shares over which James B.
McClatchy and William K. Coblentz share joint voting and investment
control as co-executors under the will of Charles K. McClatchy,
deceased. William K. Coblentz disclaims beneficial ownership of these
shares; (iii) 500,000 shares over which James B. McClatchy, William
Ellery McClatchy and William K. Coblentz share joint voting and
investment control as co-trustees of certain trusts established under
the will of Charles K. McClatchy, deceased. William K. Coblentz
disclaims beneficial ownership of these shares; and (iv) 170,468 shares
with regard to which William K. Coblentz acts as a co-trustee under one
trust agreement with voting and investment control shared with other
trustees. William K. Coblentz and his co-trustees disclaim beneficial
ownership of these shares.
(4) Includes: (i) 12,500,000 shares held under five separate trusts with
2,500,000 shares and different income beneficiaries. James B.
McClatchy, William Ellery McClatchy, William K. Coblentz, William M.
Roth and Erwin Potts share joint voting and investment control with
respect to these trusts. William Ellery McClatchy disclaims beneficial
ownership of all but 2,500,000 shares in one such trust as to which he
has

-6-

<PAGE>

a present income interest; and (ii) 500,000 shares over which James B.
McClatchy, William Ellery McClatchy and William K. Coblentz share joint
voting and investment control as co-trustees of certain trusts
established under the will of Charles K. McClatchy, deceased. William
Ellery McClatchy disclaims beneficial ownership of these shares.
(5) These shares are held under five separate trusts each with 2,500,000
shares and different income beneficiaries. James B. McClatchy, William
Ellery McClatchy, William K. Coblentz, William M. Roth and Erwin Potts
share joint voting and investment control with respect to these trusts.
Both Erwin Potts and William M. Roth disclaim beneficial ownership of
these shares.
(6) Includes 126,440 shares held in four trusts for the benefit of each of
his four children, each containing 31,610 shares. Brown McClatchy
Maloney has sole voting and investment control with respect to these
trusts. Brown McClatchy Maloney disclaims beneficial ownership of these
shares.

CLASS A COMMON STOCK

The following table sets forth certain information regarding the
beneficial ownership of the Class A Common Stock as of March 27, 1998 by (i)
each of the Company's Directors and nominees for Director, (ii) each of the
Company's executive officers, (iii) all executive officers and Directors of the
Company as a group, and (iv) each person known by the Company to own
beneficially more than 5% of the outstanding shares of the Class A Common Stock.
In addition, holders are deemed to beneficially own shares of Class A Common
Stock subject to stock options which are currently exercisable or exercisable
within sixty days of the record date. A holder of Class B Common Stock is deemed
to be the beneficial owner of the same number of shares of Class A Common Stock
under Rule 13d-3 under the Securities Exchange Act of 1934, as amended, on the
basis that he or she has the right, subject to the terms of the Stockholders
Agreement discussed later in this Proxy Statement, to acquire beneficial
ownership of Class A Common Stock by converting Class B Common Stock into Class
A Common Stock. In calculating the percentage of outstanding shares of Class A
Common Stock beneficially owned by each stockholder, the shares of Class A
Common Stock which each stockholder is deemed to own because of such
stockholder's ownership of Class B Common Stock are considered outstanding only
with respect to such stockholder. Consequently, the column which presents the
percentage of deemed beneficial ownership of Class A Common Stock does not
reflect the beneficial ownership of Class A Common Stock which is actually
outstanding as of March 27, 1998.

<TABLE>
<CAPTION>
Deemed Beneficial Ownership
Beneficial Ownership of of Class A Common Stock
Directors, Executive Officers, Outstanding Shares of ---------------------------
Directors and Executive Class A Common Stock Number of Shares
Officers as a Group, (including Shares of Class A
and 5% Stockholders(1) held by spouse) Common Stock Percent
- ---------------------------------------------- ----------------------- ---------------- -------

<S> <C> <C> <C>
James B. McClatchy............................ 2,500 16,046,553 50.4%
William K. Coblentz........................... 15,439(2) 13,784,488 46.6%
William Ellery McClatchy...................... 4,814(3) 13,004,814 45.1%
Erwin Potts................................... 51,861 12,551,861 44.3%
William M. Roth............................... 18,689(4) 12,518,689 44.2%
Molly Maloney Evangelisti..................... 12,771(5) 3,825,271 19.5%
Brown McClatchy Maloney....................... -- 3,730,748 19.1%
Betty Lou Maloney............................. 12,189(4) 1,862,189 10.5%
Sue Maloney Stiles............................ 2,850 1,266,307 7.4%
Gary B. Pruitt................................ 72,104(6) 72,104 (7)
James P. Smith................................ 64,963(8) 64,963 (7)
Gregory E. Favre.............................. 13,396(9) 13,396 (7)
Robert J. Weil................................ 5,841(10) 5,841 (7)
Frank R. J. Whittaker......................... 72,098(11) 72,098 (7)
S. Donley Ritchey............................. 14,689(4) 14,689 (7)

</TABLE>

-7-

<PAGE>

Joan F. Lane.................................. 13,439(4) 13,439 (7)
Frederick R. Ruiz............................. 8,939(3) 8,939 (7)
Larry Jinks................................... 2,032(12) 2,032 (7)
Elizabeth Ballantine.......................... 519,456(13) 519,456 3.3%
Private Capital Management, Inc............... 1,112,749 1,112,749 7.0%
All executive officers and directors as a
group (19 persons as Beneficial
Owners)(14)................................ 934,687 22,811,708 59.1%

</TABLE>

- --------------

(1) All addresses are c/o The McClatchy Company, P.O. Box 15779, Sacramento, CA
95852-0779, except as follows:

Private Capital Management, Inc.
3003 Tamiami Trail N.
Naples, FL 34103

(2) Includes 8,439 shares subject to stock options which are currently
exercisable.
(3) Includes 4,689 shares subject to stock options which are currently
exercisable.
(4) Includes 12,189 shares subject to stock options which are currently
exercisable.
(5) Includes 469 shares subject to stock options which are currently
exercisable.
(6) Includes 63,125 shares subject to stock options which are currently
exercisable.
(7) Percentage is less than 1%.
(8) Includes 50,125 shares subject to stock options which are currently
exercisable.
(9) Includes 12,187 shares subject to stock options which are currently
exercisable.
(10) Includes 5,625 shares subject to stock options which are currently
exercisable.
(11) Includes 71,875 shares subject to stock options which are currently
exercisable.
(12) Includes 1,407 shares subject to stock options which are currently
exercisable.
(13) Includes 500,568 shares held under a trust pursuant to which Ms. Ballentine
is one of the trustees.
(14) Includes 293,827 shares subject to stock options which are currently
exercisable.

AGREEMENT AMONG CLASS B STOCKHOLDERS

The owners of all outstanding shares of Class B Common Stock are
parties to an agreement which will terminate September 17, 2047 (unless
terminated earlier in accordance with its terms), in which they have agreed, for
themselves, their successors and assigns, that subject to certain exceptions no
one of them may make any transfer of any shares of Class B Common Stock (unless
such shares are, as generally permitted by the agreement, first converted into
Class A Common Stock) except to one or more "Permitted Transferees." For
purposes of the agreement, a Permitted Transferee is any current holder of Class
B Common Stock of the Company; any lineal descendant of Charles K. McClatchy
(1858 - 1936); or a trust for the exclusive benefit of, or in which all of the
remainder beneficial interests are owned by, one or more of such lineal
descendants.

In the event that a party to the agreement attempts to transfer any
shares of Class B Common Stock or any interest therein in violation of the
agreement, or upon the happening of certain other events enumerated in the
agreement as "Option Events," the remaining parties will acquire options to
purchase the Class B Common Stock of the party attempting to transfer the same
or otherwise affected by the particular Option Event. Such options to purchase
will entitle each remaining party to purchase that number of shares of Class B
Common Stock which is proportionate to that party's respective holdings of Class
B Common Stock prior to such purchase. If all such shares are not purchased by
the remaining parties, the Company will have the option to purchase the
remaining shares. In general, any shares not so purchased pursuant to this
procedure may thereafter be converted into shares

-8-

<PAGE>

of Class A Common Stock and then transferred freely (unless following such
conversion the outstanding shares of Class B Common Stock would constitute less
than 25% of the total number of all outstanding shares of common stock of the
Company). The intent of the foregoing agreement is to preserve family control of
the Company. Such agreement may be terminated by the vote of the holders of 80%
of the outstanding shares of Class B Common Stock who are subject to such
agreement.

COMPENSATION

DIRECTORS' COMPENSATION

Nonemployee Directors, except for Erwin Potts and including for this
purpose Betty Lou Maloney, Molly Maloney Evangelisti and William Ellery
McClatchy, are currently compensated at the rate of $28,000 per year plus $1,200
per day for meetings of the Board of Directors and $750 per day for in-person
attendance at Committee meetings; attendance at Board meetings by teleconference
is compensated at one-half the rate for in-person Board meetings. Attendance at
Committee meetings by teleconference is compensated at the rate of $500 for the
first meeting and $250 for the second meeting on any day. Erwin Potts, as
Chairman of the Board, receives $50,000 per year for services plus the meeting
fees provided in the previous sentence. Compensation for attendance at meetings
is subject to a limitation of two meetings in any one day, whether Committee or
Board and Committee and whether by teleconference or in-person attendance.

Pursuant to the 1990 Directors' Stock Option Plan as amended, each
nonemployee Director receives on the date of each annual meeting of stockholders
at which he or she is elected an automatic grant of an option for 2,500 shares
of Class A Common Stock. The stock options are granted at fair market value,
have a ten-year term and vest equally over four years commencing on March 1
following the date of award.

-9-

<PAGE>

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee is composed entirely of Directors who are
not employees of the Company. The Committee sets the salary and annual cash
bonus of the Chairman of the Board and the Chief Executive Officer and, after
review, acting on the recommendation of the CEO, approves the annual cash
compensation of other named executive officers. The Committee also administers
the Company's employee stock option plans and the Executive Performance Plan,
and in so doing, designates all persons who will receive awards and sets the
amount, form and other conditions of the awards.

The principal elements of the Company's executive compensation program
are (i) annual base salary, (ii) annual cash bonus based on assessment of
success in meeting performance objectives on an individual, unit and/or
Company-wide basis, (iii) cash compensation under the Executive Performance Plan
based upon growth in earnings per share of the Company's common stock and
year-over-year improvement in pretax income, and (iv) stock option awards under
the stock option plans providing equity compensation, the value of which will
ultimately be determined by growth over time in the market price of the
Company's common stock. In 1997 the Committee undertook a review of the
company's executive compensation program. As a result of that review, the
Committee recommended, and the Board of Directors approved, a new Long-Term
Incentive Plan. This plan, which is described in more detail under "Approval of
the Company's 1998 Long-Term Incentive Plan" below, will replace the Executive
Performance Plan. Stockholders are being asked to approve the Long-Term
Incentive Plan at the Annual Meeting. The Long-Term Incentive Plan, together
with the annual base salary and cash bonus, constitute an integrated
compensation program which focuses on both short-term and long-term performance
utilizing a combination of cash and equity incentives. The program is designed
to reward and create incentives for excellence in individual achievement as well
as Company performance.

In evaluating Company performance, the Committee considers improvement
in revenue and earnings, growth in circulation, product excellence and market
acceptance, sound strategic planning, development of new products and services,
and community involvement and good corporate citizenship. In evaluating
individual performance of key executives, the Committee also reviews leadership
and individual achievement.

The Committee believes the Company's established compensation program
is vital to the achievement of Company objectives, in that it will:

o Enable the Company to attract and retain key executives
essential to the long-term success of the Company;

o Motivate and reward senior executives for development and
achievement of sound strategic business objectives; and

o Provide opportunity to selected executives to acquire a
proprietary interest in the success of the Company through
stock ownership under the Company's stock option plans and
employee stock purchase plan.

In 1994, the Company submitted for a vote of the stockholders its 1994
Stock Option Plan to maximize the tax deductibility of such awards upon exercise
under Section 162(m) of the Internal Revenue Code, as amended. Although the
Company has not in the past qualified under Section 162(m) salary and cash bonus
compensation paid to its executive officers, historically such compensation has
not exceeded more than $1 million in any tax year for any of the Company's five
highest paid executive officers. In the future, the Company may determine to
qualify such compensation, to the extent it exceeds or is expected to exceed the
$1 million threshold. The Company has determined to adopt the Chief Executive
Officer Bonus Plan, effective January 1, 1998, which plan will qualify under
Section 162(m), subject to the approval of stockholders at the Annual Meeting.
See "Approval of the Company's Chief Executive Officer Bonus Plan." The Company
may also determine to pay compensation to the executive officers, including the
Chief Executive Officer, that may not be deductible.

-10-

<PAGE>

COMPENSATION OF EXECUTIVE OFFICERS, 1997

Salary and incentive levels of the Company's executive officers for
fiscal year 1997 were reviewed by the Compensation Committee in late 1996, and,
in the case of Messrs. Weil and Whittaker, in September 1997. Bonuses were
subsequently determined and paid based on a year-end assessment of results
versus predetermined objectives.

SALARIES. In determining salaries, the Committee reviews publicly
available information on compensation at each company included in the Peer
Group, with particular emphasis on salary levels on Peer Group companies with
market capitalization comparable to the Company. The Peer Group consists of
those companies included in the Company's Five-Year Performance Graph below. The
Committee also considers internal pay equity factors, general economic
conditions, financial performance of the Company (growth in revenues, ability to
control operating costs, improvement in operating cash flow and operating
income, and improvement in net income), and individual responsibility,
experience and job performance. No specific weight is assigned to any particular
factor.

Based on the foregoing, the Committee granted 1997 salary increases to
executive officers ranging from 3.44% to 33.12% over prior year salary. The
Committee considers these increases to be consistent with salary and wage
increases granted throughout the Company, and believes that base salaries for
the Company's executive officers are at or below the median base salaries for
the Peer Group.

BONUS AWARDS. It is the goal of the Committee to establish bonus
opportunities that are meaningful in relation to the total compensation of a
participant. The bonus opportunity is also related to the participant's level of
responsibility. In general, in evaluating performance, the higher the level of
responsibility, the greater the proportion of the executive's total compensation
that is at risk. Awards under the Management by Objective Annual Bonus Plan,
which applies to each executive officer other than the CEO, were based on full
or partial achievement of preestablished performance goals. The performance
objectives applicable to Mr. Favre are the achievement of (i) Company-wide
financial performance levels against annual budgets, (iii) predetermined
functional operating goals, and (iii) product and management improvement
objectives. Also, because of Mr. Favre's position as Executive Editor of THE
SACRAMENTO BEE, as well as Vice President, News of the Company, in determining
Mr. Favre's 1997 bonus, the financial performance of THE SACRAMENTO BEE together
with continued improvement in the quality of news content consistent with
achievement of the Company's financial objectives were considered.

Each performance objective was weighted to reflect its relative
performance to specific short-term and long-term financial, strategic and/or
management practices goals applicable to the individual. To determine the bonus
to which a participant is entitled, a certain number of points up to 100 were
awarded to each executive officer based upon his performance during the year. A
certain percentage of total points possible, typically not exceeding 10%, is
reserved for subjective evaluation. Points are applied as a percentage, to an
amount equal to a predetermined percent, varying from 25% to 40% (depending on
the particular participant) of his or her base salary during the year.

STOCK OPTION AWARDS. Stock option awards are usually granted each year
to selected management personnel, including all executive officers permitted by
the terms of the employee stock option plans to participate. In fixing stock
option grants, the Committee through subjective evaluation processes determines
the award for the CEO, and as to the four remaining named executive officers
participating in the stock option plans, considers the recommendation of the
CEO. Elements given weight by the Committee in considering the number of options
to be awarded are individual responsibility and accountability, anticipated
contributions, and long-term value of the participant to the Company. The
process employed by the Committee in determining individual awards under the
Company's employee stock option plans, including those of executive officers,
relates primarily to levels of responsibility but also includes subjective
factors not subject to predetermined specific criteria.

EXECUTIVE PERFORMANCE INCENTIVE AWARDS. Awards for 1997 under the
Company's Executive Performance Plan ("EPP") were made in late 1996. These
awards are comprised of EPS Units and Performance Units. An EPS Unit represents
a contingent right to receive cash in an amount equal to the earnings (as
defined in the Plan)

-11-

<PAGE>

attributable to one share of the Company's stock. An Improvement Unit represents
a contingent right to receive cash in an amount equal to $1 times the number of
percentage points not in excess of 25 by which pretax earnings for the year of
grant exceed the pretax earnings for the prior year. The award vests over a
period of four years, commencing March 1 of the year following the year for
which the grant is made. A total of $475,024 was awarded to the Company's
executive officers for 1997 under this Plan. Moreover, the Committee considered
the Company's continuing efforts to focus its strategy on operating mid-sized
papers in growth markets and the successful sale in connection with this
strategy of certain of the Company's non-core businesses, including four
community newspapers in California and Legi-Tech, the Company's legislative
online information operation.

While EPP compensation is tied to the Company's stock and financial
performance, executives selected as participants and the number of EPS Units and
Improvement Units awarded is set after review, acting on the recommendation of
the CEO. EPP awards contribute to keeping participating executives sharply
focused upon maintenance of strong stockholder value even in challenging
economic environments. The selection of participants and determination of award
units relates primarily to levels of responsibility, but also includes
subjective factors not subject to specific criteria. As noted above, the Company
intends to replace the EPP awards in 1998 and in future years with awards under
the Long-Term Incentive Plan that the stockholders are being asked to approve at
the Annual Meeting.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER, 1997

Mr. Pruitt's 1997 salary was considered in late 1996 and was set at
that time at $550,000, a 22.22% increase over his 1996 salary. In determining
Mr. Pruitt's 1997 bonus award, the Committee subjectively assessed overall
performance, including the Company's financial performance. His bonus for 1997,
awarded in January 1998, was not based on specific predetermined financial
targets but was based upon a year-end review of the Company's overall results,
taking into account the level of his responsibility and accountability, and his
individual performance as the Company's Chief Executive Officer. The $350,000
bonus awarded to Mr. Pruitt by the Compensation Committee reflected the
Company's record financial and operational results for 1997, as described below.
The Committee also considered the Company's agreement, under Mr. Pruitt's
leadership, to acquire Cowles, publisher of the STAR TRIBUNE in the Twin Cities
of Minneapolis/St. Paul. The acquisition, expected to close in March 1998, is
the largest in the Company's history, and positions the Company as one of the
top ten newspaper companies in the nation based on daily and Sunday circulation.

The Company posted record revenues and earnings in 1997. Earnings for
1997 were $68.8 million, up 54.6% over 1996 earnings of $44.5 million, with a
resulting increase in earnings per share from $1.18 in 1996 to $1.80. Earnings
from ongoing operations, excluding the gains on the sales of the community
newspapers and certain other businesses and non-strategic assets in 1997 and
1996, were $63.3 million, or $1.66 per share, versus $42.9 million, or $1.14 per
share, in 1996. Revenues were up $17.7 million, or 2.8% to $641.9 million, but
were up $26 million excluding the sold community newspapers. Advertising
revenues at ongoing operations increased 5.6%. Circulation revenues were up
nominally. Average paid circulation of the Company's daily newspapers grew in
1997 by 0.8 daily, 0.1% Sunday, despite the continued national trend of
declining circulation. The Company's financial results produced an accrual under
the fixed formula of the EPP of cash compensation for 1997 of $120,473 for Mr.
Pruitt.(3)

In connection with the Committee's review of the Company's Compensation
program in 1997, the Committee has recommended and the Board of Directors of the
Company has approved a new Chief Executive Officer Bonus Plan under which Mr.
Pruitt's bonus in future years will be calculated. Stockholders are being asked
to approve the new Chief Executive Officer Bonus Plan at the Annual Meeting. See
"Approval of the Company's

- --------------

(3) This sum is not immediately available to Mr. Pruitt, but vests at the rate
of 25% annually over a four-year period commencing March 1, 1998. However, under
the Company's Executive Performance Plan, the amounts awarded vest by an
additional 25% upon a participant's early retirement under the Company's
Restated Retirement Plan. Upon normal retirement under the Company's Restated
Retirement Plan, 100% of the amounts awarded vest immediately.

-12-

<PAGE>

Chief Executive Officer Bonus Plan." The Committee may also determine to pay a
bonus to Mr. Pruitt in addition to amounts paid under the Chief Executive
Officer Bonus Plan.

The Committee, in setting salary and bonus levels for Mr. Pruitt, and
in fixing the number of stock option awards granted to Mr. Pruitt under the
Company's employee stock option plans, and EPS and Improvement Units awarded him
under the EPP, does not assign relative weight to the indicated factors. The
process is primarily subjective in nature. Each committee member may well accord
a different weight to the various factors considered.

The tables which follow, and accompanying narrative, reflect the
decisions covered by the above discussion.

WILLIAM K. COBLENTZ, CHAIRMAN
LARRY JINKS
JOAN F. LANE
S. DONLEY RITCHEY

-13-

<PAGE>

EXECUTIVE COMPENSATION

The following tables set forth the annual compensation paid or accrued
by the Company to or on behalf of the Chief Executive Officer and each of the
four other most highly compensated executive officers (the "Named Executive
Officers") of the Company for the fiscal years December 31, 1995, 1996 and 1997.

<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#)(2) ($)(3)
- ----------------------------- ---- --------- --------- -------------- ------------- ------------

Pruitt, Gary B.(4).......... 1997 $ 550,000 $ 350,000 $ 120,473 0 $ 7,441
President and CEO 1996 429,167 225,000 96,214 62,500 7,047
1995 305,778 125,000 11,760 25,000 6,645

Whittaker, Frank R. J.(5)... 1997 276,255 96,000 58,675 20,000 7,386

Weil, Robert J.(5).......... 1997 271,580 96,000 114,256(6) 20,000 7,299

Smith, James P.............. 1997 290,000 67,425 69,288 15,000 9,516
Vice President, Finance 1996 280,020 57,754 62,410 12,500 8,795
and CFO 1995 273,494 47,861 11,760 12,500 8,238

Favre, Gregory E............ 1997 252,789 61,579 58,675 12,500 10,023
Vice President, News 1996 232,024 50,175 52,780 12,500 9,224
1995 225,004 48,376 10,080 12,500 8,712
</TABLE>

- --------------

(1) Represents earnings accrued under the Company's Executive Performance Plan.
These earnings are vested and paid out in four equal annual installments of
25% each commencing March 1 following the year for which the award is made;
no portion of the amount earned in 1997 was paid to the participants in
1997. However, under the Company's Executive Performance Plan, the earnings
vest by an additional 25% upon a participant's early retirement under the
Company's Restated Retirement Plan. Upon normal retirement under the
Company's Restated Retirement Plan, 100% of the earnings vest immediately.
(2) Stock option awards have been adjusted to reflect the Company's five for
four stock split, paid in the form of a stock dividend on shares of its
Class A and Class B Common Stock on January 2, 1997, to stockholders of
record on December 16, 1996.
(3) This sum includes (i) Company contributions to the Company's 401(k) Plan on
behalf of each of the named executive officers to match pre-tax elective
deferral contributions (included under Salary) made by each to such Plan,
and (ii) premium payments to continue life insurance coverage under the
Group Executive Life Insurance Plan at a level not otherwise available under
the Company's standard life insurance coverage. The amount of the
contribution to the Company's 401(k) Plan for each named executive officer
for 1997 was $6,333.00.
(4) With respect to Mr. Pruitt's 1996 salary, from January 1, 1996 through May
31, 1996 his salary was $400,000. On June 1, 1996, his salary was increased
to $450,000. In addition, Mr. Pruitt was granted an option on January 13,
1998 to purchase 50,000 shares of Class A Common Stock at an exercise price
of $26.1875 per share.
(5) Messrs. Weil and Whittaker became executive officers in September 1997.
(6) This amount also includes certain perquisites, including $42,626 paid to Mr.
Weil as reimbursement of relocation expenses.

-14-

<PAGE>

STOCK OPTION AWARDS

The following table contains information concerning stock option awards
to the Named Executive Officers during the year ended December 31, 1997. Annual
stock option grants consist of stock options granted based upon assessment by
the Compensation Committee of the individual's past performance, level of
responsibility and accountability, anticipated future contributions and
long-term value to the Company. Stock options are granted at fair market value,
have a ten-year term and vest equally over four years commencing on March 1
following the date of award.

<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE GRANT DATE
OPTIONS TO EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE VALUE($)(1)
- ------------------------------ ------------------ --------------------- --------------- -------------- -------------

<S> <C> <C> <C> <C> <C>
Pruitt, Gary B.(2)............ 0 0.00% $ 0 N/A $ 0
Weil, Robert J................ 20,000 9.80% 28.1875 12/16/2007 179,727
Whittaker, Frank R. J......... 20,000 9.80% 28.1875 12/16/2007 179,727
Smith, James P................ 15,000 7.35% 28.1875 12/16/2007 134,796
Favre, Gregory E.............. 12,500 6.13% 28.1875 12/16/2007 112,330

</TABLE>

- --------------

(1) Options vest in increments of 25% over four years. These values are
determined using the Black-Scholes Option Pricing Model. The Black-Scholes
Option Pricing Model is one of the methods permitted by the Securities and
Exchange Commission for estimating the present value of options. The
Black-Scholes Option Pricing Model is based on assumptions as to certain
variables as described below, and is not intended to estimate, and has no
direct correlation to, the amount that an individual will actually realize
upon exercise of options. The actual value of the stock options that an
executive officer may realize, if any, will depend on the excess of the
market price on the date of exercise over the exercise price. The values
listed above were based on the following assumptions: volatility (measured
as the annualized standard deviation of the sample, as determined from the
daily closing prices over the past seven years, ending with December 31,
1997) of .2838; risk free rates of return for such period of 5.7% to 5.8%;
dividend yields for such period of 1.2% to 1.4%; and time of exercise
ranging from 5 to 7 years as the options vest.
(2) Mr. Pruitt was granted an option on January 13, 1998 to purchase 50,000
shares of Class A Common Stock at an exercise price of $26.1875 per share.

OPTION EXERCISES AND HOLDINGS

The following table shows the number of shares of Class A Common Stock
represented by outstanding stock options held by each of the Named Executive
Officers as of December 31, 1997, and the value of such options based on the
closing price of the Company's Class A Common Stock on December 31, 1997.

-15-

<PAGE>

<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<CAPTION>

SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
NAME ON EXERCISE REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------- ----------- ----------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C> <C>
Pruitt, Gary B.............. 30,625 $343,244 34,375/91,875 $348,383/$409,039
Smith, James P.............. 31,875 370,353 37,750/46,125 372,678/203,161
Favre, Gregory E............ 26,251 293,419 0/43,437 0/201,452
Weil, Robert J.............. 5,625 70,852 0/36,875 0/105,539
Whittaker, Frank R. J....... 7,500 113,812 59,688/50,937 711,415/201,452

</TABLE>

-16-

<PAGE>

FIVE-YEAR PERFORMANCE GRAPH

The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing cumulative, five-year stockholder returns on
an indexed basis with (i) a broad equity market index and (ii) an industry index
or peer group. Set forth below is a line graph comparing the percentage change
in the cumulative total stockholder return on the Company's common stock against
the cumulative total return of the S&P Midcap 400 Index and a Peer Group Index
for a period of five fiscal years ended December 31, 1997.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE MCCLATCHY COMPANY,
THE S&P MIDCAP 400 INDEX, AND A PEER GROUP INDEX

[LINE GRAPH]

<TABLE>
<CAPTION>
Cumulative Total Return
12/92 12/93 12/94 12/95 12/96 12/97
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
McClatchy Newspapers MNI 100.00 125.90 116.20 125.72 195.47 192.39
Inc.
PEER GROUP PPEER1 100.00 116.62 110.48 134.03 162.85 250.22

S & P MIDCAP 400 IMID 100.00 113.95 109.87 143.86 171.48 226.79

- --------------

</TABLE>

* $100 INVESTED ON 12/31/92 IN STOCK OR INDEX--INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.

The Peer Group Index is comprised of the following publicly traded
newspaper publishing companies, and is weighted according to market
capitalization as of the beginning of each year: (1) A. H. Belo Corporation, (2)
Central Newspapers, Inc., (3) Dow Jones & Company, (4) E. W. Scripps Company,
(5) Gannett Co., Inc., (6) Harte-Hanks Communications, Inc., (7) Knight Ridder,
Inc., (8) Lee Enterprises, Inc., (9) The McClatchy Company, (10) Media General,
Inc., (11) The New York Times Company, (12) Pulitzer Publishing Company, (13)
Times Mirror Company, (14) Tribune Company and (15) Washington Post Company.

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<PAGE>

PENSION PLANS

The following table shows the estimated annual pension benefits payable
to the named executive officers at normal retirement age (age 65) under the
Company's qualified defined benefit pension plan, as well as its nonqualified
supplemental pension plan that provides benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on qualified
plan benefits, based on remuneration that is covered under the plans and years
of service with the Company:

<TABLE>
PENSION PLAN TABLE

<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
- ------------- --------- --------- --------- --------- --------- --------- ---------

<C> <C> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 15,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000 $ 105,000
350,000 26,250 52,500 78,750 105,000 131,250 157,500 183,750
500,000 37,500 75,000 112,500 150,000 187,500 225,000 262,500
650,000 48,750 97,500 146,250 195,000 243,750 292,500 341,250
800,000 60,000 120,000 180,000 240,000 300,000 360,000 420,000
950,000 71,250 142,500 213,750 285,000 356,250 427,500 498,750
1,100,000 82,500 165,000 247,500 330,000 412,500 495,000 577,500

</TABLE>

Benefits under the qualified defined pension plan are computed using
basic compensation exclusive of overtime and other compensation; benefits under
the supplemental plan are calculated using basic salary plus any annual cash
bonus awarded. The benefits shown in the foregoing table are not subject to any
deduction for social security or other offset amounts. For single persons,
benefits are computed as straight life annuity amounts. Married persons may
chose between straight life or joint and survivor annuity amounts. Covered
compensation for the named executive officers would consist of the salary and
bonus set forth in the Summary Compensation Table above, and for the named
executive officers as of the end of the last calendar year is: Gary B. Pruitt,
$775,000; Frank R. J. Whittaker, $357,128; Robert J. Weil, $350,116; James P.
Smith, $347,754; and Gregory E. Favre, $325,175.

The estimated credited years of service at December 31, 1997, for each
named executive is as follows: Gary B. Pruitt, 12.67; James P. Smith 23.0;
Gregory E. Favre, 13.17; Frank R. J. Whittaker, 12.75; and Robert J. Weil, 3.58.

EMPLOYMENT AGREEMENT

The Company has an Employment Agreement (the "Agreement") with its
Chief Executive Officer, Gary Pruitt. The Agreement expires on June 1, 2000, or
such later date to which the term of the Agreement is extended pursuant thereto.
The term of the Agreement extends automatically for one year effective June 1,
1998 (so that effective on that date the term of employment is extended from
June 1, 2000 to June 1, 2001), and on each succeeding June 1 (so that effective
on each such day, the remaining term of employment is a full three-year period).
The Agreement provides for a base salary of not less than $450,000 per year. If
during the term of the Agreement Mr. Pruitt's employment is involuntarily
terminated for any reason other than "cause," "mental incompetence" or
"disability," or if he resigns for "good reason" (as these terms are defined in
the Agreement), he would be entitled to a supplemental severance payment for the
balance of his term equal to 200% of his base salary, at the rate then in
effect, if the termination occurs prior to June 1, 1998; or 300% of his base
salary, at the rate then in effect, if the termination occurs on or after June
1, 1998. The severance payment may be made in a lump sum or, at Mr. Pruitt's
election (subject to the approval of the Board of Directors) in five equal
annual installments. In addition, if a severance payment is made, Mr. Pruitt's
group insurance coverage would be continued until the third anniversary of the
effective date of the termination of employment or until he and his dependents
become eligible for comparable coverage as a result of his reemployment,
whichever is earlier. If

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<PAGE>

during the term of the Agreement Mr. Pruitt's employment is terminated because
of his disability, he would be entitled to a supplemental disability benefit in
an amount equal to 60% of his base salary at the rate then in effect, reduced by
all other disability benefits that are payable to him under the Company's group
insurance plan and all federal or state insurance programs. The supplemental
disability benefit would be payable until the third anniversary of the effective
date of the termination of employment or until disability benefits under the
Company's group insurance plan are discontinued, whichever is earlier. In
addition, Mr. Pruitt's group insurance benefits would be continued as long as
any disability benefit is payable.

APPROVAL OF THE COMPANY'S AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(PROPOSAL 2 ON PROXY)

SUMMARY OF THE 1994 STOCK OPTION PLAN

The 1994 Stock Option Plan, which was approved by the stockholders on
May 18, 1994 and amended and restated on August 15, 1996, provides for the
issuance of stock options to those employees (including officers and directors
who are employees) that are selected by the Compensation Committee (the
"Committee") appointed by the Board of Directors. The fair market value of the
Company's Common Stock subject to such awards on March 26, 1998 was $29.75 per
share.

The shares of Common Stock subject to options authorized to be granted
to individuals consist of 812,500 shares of Class A Common Stock. The 1994 Stock
Option Plan provides for the grant of both incentive stock options ("ISOs") and
nonstatutory stock options ("NSOs"). As of March 27, 1998, approximately 79,186
shares of Class A Common Stock remained available for grant under the 1994 Stock
Plan.

AMENDMENT AND RESTATEMENT OF PLAN

The Board of Directors amended and restated the 1994 Stock Option Plan,
subject to stockholder approval, to increase the amount of shares of Class A
Common Stock available for issuance under the plan so that the plan can continue
to provide appropriate incentives. Under the proposed amendment, effective
January 1, 1998, an additional 1,000,000 shares of Class A Common Stock will be
added to the shares of Class A Common Stock currently authorized under the 1994
Stock Option Plan. The text of the amended and restated 1994 Stock Option Plan
is set forth as Exhibit A to this Proxy Statement. The following is intended to
be a summary of the material terms of the amended and restated 1994 Stock Option
Plan and is not a complete statement of such plan's terms.

The 1994 Stock Option Plan, as amended and restated, also permits
nonemployee directors to participate in the 1994 Stock Option Plan. The full
Board of Directors of the Company shall act as the "Committee" for purposes of
determining, on a discretionary basis, the terms and conditions of stock options
granted to nonemployee directors. Finally, as amended and restated, the 1994
Stock Option Plan permits the Board of Directors to amend the 1994 Stock Option
Plan without stockholder approval except as may be required by applicable law,
rule or regulation. Prior to the amendment and restatement, the 1994 Stock
Option Plan provided that stockholder approval was required for any amendment
which increased the number of shares of Class A Common Stock available for
issuance under the 1994 Stock Option Plan or which materially changed the class
of persons eligible for the grant of ISOs. Except as described above, the
amended and restated 1994 Stock Option Plan has not been changed from the
version previously approved by the stockholders.

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<PAGE>

TERMS AND CONDITIONS

The exercise price for all options granted under the plan is 100% of
the fair market value of Class A Common Stock on the date of grant. With respect
to any optionee who owns shares possessing more than 10% of the voting rights of
the Company's outstanding capital stock, the exercise price for any ISO must be
equal to at least 110% of the fair market value of the Class A Common Stock on
the date of grant. The term of an option cannot exceed 10 years. Unless a longer
period is specified in the option agreement, options expire not later than 30
days following a termination of employment other than by death, disability or
retirement, 90 days following retirement or 12 months following the optionee's
permanent disability or death. In addition, no optionee may be granted options
in any calendar year to purchase shares of Class A Common Stock in excess of
187,500 shares. However, the Compensation Committee may agree to alternative
expiration periods in any stock option agreement.

A Committee consisting of two or more members of the Board of
Directors, who satisfy the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and Section 162(m) of the Internal Revenue
Code, administers the 1994 Stock Option Plan, except for grants to nonemployee
directors, which are administered by the full Board of Directors. The committee
selects the optionees, determines the number of shares to be made subject to
each grant, and prescribes the other terms and conditions of each award,
including, but not limited to, the exercisability or vesting of options. An
option agreement may provide that the exercise price may be paid in cash, by
surrendering shares of Class A Common Stock held by the optionee for at least 12
months, or by a combination of these methods. The Committee, in its sole
discretion, may cancel options which are exercisable and pay the optionee cash
and/or stock in settlement of the canceled options.

FEDERAL INCOME TAX CONSEQUENCES

The following discussion of the federal income tax consequences of the
ISOs and NSOs under the 1994 Stock Option Plan is intended to be a summary of
applicable federal law. State and local tax consequences may differ. Because the
federal income tax rules governing options and related payments are complex and
subject to frequent change, optionees are advised to consult their tax advisors
prior to exercise of options or dispositions of stock acquired pursuant to
option exercise.

ISOs and NSOs are treated differently for federal income tax purposes.
ISOs are intended to comply with the requirements of section 422 of the IRC.
NSOs need not comply with such requirements.

An optionee is not taxed on the grant or exercise of an ISO. The
difference between the exercise price and the fair market value of the shares on
the exercise date will, however, be a preference item for purposes of the
alternative minimum tax. If an optionee holds the shares acquired upon exercise
of an ISO for at least two years following grant and at least one year following
exercise, the optionee's gain, if any, upon a subsequent disposition of such
shares is long-term capital gain. The measure of the gain is the difference
between the proceeds received on disposition and the optionee's basis in the
shares (which generally equals the exercise price). If an optionee disposes of
stock acquired pursuant to exercise of an ISO before satisfying the one and two
year holding periods described above, the optionee will recognize both ordinary
income and capital gain in the year of disposition. The amount of the ordinary
income will be the lesser of (i) the amount realized on disposition less the
optionee's adjusted basis in the stock (usually the option price) or (ii) the
difference between the fair market value of the stock on the exercise date and
the option price. The balance of the consideration received on such a
disposition will be long-term capital gain if the stock had been held for at
least one year following exercise of the ISO. The Company is not entitled to an
income tax deduction on the grant or exercise of an ISO or on the optionee's
disposition of the shares after satisfying the holding period requirement
described above. If the holding periods are not satisfied, the Company will be
entitled to a deduction in the year the optionee disposes of the shares, in an
amount equal to the ordinary income recognized by the optionee.

An optionee is not taxed on the grant of a NSO. On exercise, however,
the optionee recognizes ordinary income equal to the difference between the
option price and the fair market value of the shares on the date of exercise.
The Company is entitled to an income tax deduction in the year of exercise in
the amount recognized by the optionee as ordinary income. Any gain on subsequent
disposition of the shares is long-term capital gain

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<PAGE>

if the shares are held for at least one year following exercise. The Company
does not receive a deduction for this gain.

AMENDED PLAN BENEFITS

The Committee has full discretion to determine the number and amount of
options to be granted to employees under the 1994 Stock Option Plan. Similarly,
the Board of Directors has such discretion with respect to nonemployee director
grants. Therefore, the benefits and amounts that will be received by each of the
Named Officers, the executive officers as a group and all other key employees
and directors under the amended and restated 1994 Stock Option Plan are not
presently determinable. Details on awards of stock options granted during the
last three years to the Named Officers are presented in the table entitled
"Summary Compensation Table."

REQUIRED APPROVAL

An affirmative vote of a majority of the aggregate voting power of the
shares of Class A and Class B Common Stock present or represented at the meeting
is required to approve this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE
CERTAIN AMENDMENTS TO THE COMPANY'S 1994 STOCK OPTION PLAN.

APPROVAL OF THE COMPANY'S 1998 LONG-TERM INCENTIVE PLAN
(PROPOSAL 3 ON PROXY)

On January 21, 1998, the Board of Directors adopted The McClatchy
Company Long-Term Incentive Plan (the "LTIP") which is intended to qualify the
cash bonuses payable pursuant to the LTIP as performance based compensation
eligible for deductibility under section 162(m) of the Internal Revenue Code.
The purpose of the LTIP is to pay long-term incentive compensation to eligible
executives who contribute materially to the success of the Company. The text of
the LTIP is set forth as Exhibit B to this Proxy Statement. The following is
intended to be a summary of the material terms of the LTIP and is not a complete
statement of the LTIP's terms.

ELIGIBLE EXECUTIVES

Individuals eligible under the LTIP include any executives or key
employees of the Company, or a subsidiary of the Company, as determined by the
Compensation Committee of the Board of Directors which administers the LTIP.

MAXIMUM BONUS AND PAYOUT CRITERIA

The amount of any bonus payable to any participating executive pursuant
to the LTIP shall be determined based on the number of "Long-Term Incentive
Units" ("Units") awarded to the executive by the Compensation Committee prior to
the beginning of a designated "Performance Period." A Performance Period
consists of three consecutive years. The amount payable after the end of the
Performance Period shall be equal to $1 times the number of the executive's
Units times the number of percentage points (including fractions but not to
exceed 100) by which the Company's Pre-Tax Earnings increase from Performance
Period to Performance Period. "Pre-Tax Earnings" means the Company's
consolidated financial statements, adjusted to exclude the gain or loss on the
sale of a major asset of the Company. The maximum amount payable to any
executive with respect to a Performance Period may not exceed $1 million.

REQUIRED APPROVAL

An affirmative vote of a majority of the aggregate voting power of the
shares of Class A and Class B Common Stock present or represented at the meeting
is required to approve this proposal.

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<PAGE>

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE
THE COMPANY'S 1998 LONG-TERM INCENTIVE PLAN.

APPROVAL OF THE COMPANY'S CHIEF EXECUTIVE OFFICER BONUS PLAN
(PROPOSAL 4 ON PROXY)

On January 21, 1998, the Board of Directors adopted The McClatchy
Company Chief Executive Officer Bonus Plan (the "CEO Bonus Plan") which is
intended to qualify the bonuses payable pursuant to the CEO Bonus Plan as
performance based compensation eligible for deductibility under section 162(m)
of the Internal Revenue Code. The purpose of the CEO Bonus Plan is to motivate
and reward the Company's CEO for exceptional performance by making a portion of
the CEO's cash compensation directly dependent on the growth of objective
Company business criteria. The text of the CEO Bonus Plan is set forth as
Exhibit C. The following is intended to be a summary of the material terms of
the CEO Bonus Plan and is not a complete statement of the CEO Bonus Plan's
terms.

ELIGIBLE INDIVIDUAL

The individual eligible for a cash bonus under the CEO Bonus Plan is
the Company's CEO.

MAXIMUM BONUS AND PAYOUT CRITERIA

The CEO Bonus Plan shall be administered by a Committee (the
"Committee") of at least two outside directors of the Company that satisfy the
requirements of 162(m) of the Internal Revenue Code. The bonus payment for the
CEO shall be determined based on an objective formula(e) established by the
Committee in writing with respect to each performance period no later than the
latest time permitted by the Internal Revenue Code. The formula(e) shall
incorporate one or more of the following objective business criteria based on
growth in Company: Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA"), EBITDA as a percentage of Revenue, Revenue, Operating
Income, Operating Income as a percentage of Revenue, Pretax Income, Pretax
Income as a percentage of Revenue, Net Income, Net Income as a percentage of
Revenue and/or Newspaper Circulation of the Company. The term "performance
period" shall mean the service period for which the bonuses are payable. The
maximum aggregate bonus payable to the CEO for any performance period shall not
exceed $2,000,000. The Committee may also, in its sole discretion, reduce any
bonus payable to the CEO for any reason.

REQUIRED APPROVAL

The affirmative vote of the holders of a majority of Common Stock
represented and voting at the Annual Meeting is required to approve the CEO
Bonus Plan. Unless marked to the contrary, proxies received will be voted "FOR"
approval of the CEO Bonus Plan.

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR APPROVAL OF
THE COMPANY'S CEO BONUS PLAN.

An affirmative vote of a majority of the aggregate voting power of the
shares of Class A and Class B Common Stock present or represented at the meeting
is required to approve this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
APPROVE THE COMPANY'S CEO BONUS PLAN.

RATIFICATION OF INDEPENDENT AUDITORS
(PROPOSAL 5 ON PROXY)

The Board of Directors has appointed, subject to ratification by the
stockholders, Deloitte & Touche LLP as independent auditors for the current
fiscal year ending December 31, 1998. Representatives of Deloitte &

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<PAGE>

Touche LLP are expected to be present at the annual meeting with the opportunity
to make a statement if they desire to do so and to be available to respond to
appropriate questions.

An affirmative vote of a majority of the aggregate voting power of the
shares of Class A and Class B Common Stock present or represented at the meeting
is required for ratification.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF DELOITTE
& TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to SEC regulations, the Company is required to identify the
names of persons who failed to file or filed late a report required under
Section 16 of the Securities Exchange Act of 1934. Generally, the reporting
regulations under Section 16 require directors, executive officers and greater
than 10% stockholders to report changes in ownership of Company securities. Sue
Maloney Stiles, a holder of more than 10% of the Company's Class A Common Stock
filed a Form 4, Statement of Changes in Beneficial Ownership, reporting sales of
stock, seven days late.

OTHER MATTERS

The Board of Directors does not know of any business to be presented at
the annual meeting other than the matters set forth above, but if other matters
properly come before the meeting it is the intention of the persons named in the
proxies to vote in accordance with their best judgment on such matters.

Proposals of stockholders intended to be presented at the Company's
1999 annual meeting of stockholders must be received at the corporate
Secretary's office, 2100 Q Street, Sacramento, California 95816, no later than
December 1, 1998 to be considered for inclusion in the proxy statement and form
of proxy for that meeting.

By Order of the Board of Directors

/s/ Karole Morgan-Prager
Karole Morgan-Prager, Corporate Secretary

March 31, 1998

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<PAGE>

EXHIBIT A

THE McCLATCHY COMPANY
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(effective February 1, 1998)

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was established in 1994 to offer selected employees of the
Company or of a Subsidiary an opportunity to acquire a proprietary interest in
the success of the Company, or to increase such interest, by purchasing Shares
of the Company's Class A Common Stock. The Plan provides for the grant of
Options to purchase Shares, which may include Nonstatutory Options as wells as
ISOs intended to qualify under section 422 of the Code. Effective as of February
1, 1998, the Plan is amended and restated as set forth herein.

SECTION 2. DEFINITIONS.

(a) "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(c) "Committee" shall mean a committee appointed by the Board, as
described in Section 3(a); provided, however, grants of Options to Employees who
are nonemployee Directors shall be made by the full Board which shall act as the
Committee for that purpose.

(d) "Company" shall mean The McClatchy Company, a Delaware corporation.

(e) "Employee" shall mean (i) any individual who is an employee (within
the meaning of section 3401(c) of the Code and the regulations thereunder) of
the Company or a Subsidiary and (ii) directors of the Company, including
nonemployee directors.

(f) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

(g) "Fair Market Value" shall mean the market price of a Share,
determined by the Committee as follows:

(i) If the Share was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite-transactions report for such
date;

(ii) If the Share was traded over-the-counter on the date in
question and was traded on the Nasdaq system or the Nasdaq National
Market, then the Fair Market Value shall be equal to the
last-transaction price quoted for such date by the Nasdaq system or the
Nasdaq National Market;

(iii) If the Share was traded over-the-counter on the date in
question but was not traded on the Nasdaq system or the Nasdaq National
Market, then the Fair Market Value shall be equal to the mean between
the last reported representative bid and asked prices quoted for such
date by the principal automated inter-dealer quotation system on which
Stock is quoted or, if the Stock is not quoted on any such system, by
the "Pink Sheets" published by the National Quotation Bureau, Inc.; and

(iv) If none of the foregoing provisions is applicable, then
the Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.

A-1

<PAGE>

(h) "ISO" shall mean an employee incentive stock option described in
section 422(b) of the Code.

(i) "Nonstatutory Option" shall mean a stock option not described in
sections 422 or 423 of the Code.

(j) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.

(k) "Optionee" shall mean an individual who holds an Option.

(l) "Plan" shall mean this The McClatchy Company Amended and Restated
1994 Stock Option Plan, as it may be amended.

(m) "Service" shall mean service as an Employee.

(n) "Share" shall mean one share of Stock, as adjusted in accordance
with Section 8 (if applicable).

(o) "Stock" shall mean the Class A Common Stock of the Company.

(p) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.

(q) "Subsidiary" shall mean any corporation, if the Company and/or one
or more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

(r) "Total and Permanent Disability" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which has lasted, or can be expected
to last, for a continuous period of not less than twelve months or which can be
expected to result in death.

SECTION 3. ADMINISTRATION.

(a) COMMITTEE MEMBERSHIP. The Plan shall be administered by the
Committee which shall consist of not less than two directors appointed by the
Board each of whom shall satisfy the requirements of Rule 16b-3, as amended of
the Securities Exchange Act of 1934, as amended and (b) such requirements as the
Internal Revenue service may establish for outside directors acting under plans
intended to qualify for exemption under section 162(m)(4)(C) of the Code.

(b) COMMITTEE PROCEDURES. The Board shall designate one of the members
of the Committee as chairman. The Committee may hold meetings at such times and
places as it shall determine. The acts of a majority of the Committee members
present at meetings at which a quorum exists, or acts reduced to or approved in
writing by all Committee members, shall be valid acts of the Committee.

(c) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the
Plan, the Committee shall have full authority and discretion to take the
following actions:

(i) To interpret the Plan and to apply its provisions;

(ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan;

(iii) To authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the Plan;

A-2

<PAGE>

(iv) To determine when Options are to be granted under the
Plan;

(v) To select the Optionees;

(vi) To determine the number of Shares to be made subject to
each Option;

(vii) To prescribe the terms and conditions of each Option,
including (without limitation) the Exercise Price, to determine whether
such Option is to be classified as an ISO or as a Nonstatutory Option,
to specify the provisions of the Stock Option Agreement relating to
such Option, and to determine whether an Option should be settled under
Section 7(c) and the form of settlement;

(viii) To amend any outstanding Stock Option Agreement,
subject to applicable legal restrictions and to the consent of the
Optionee who entered into such agreement; and

(ix) To take any other actions deemed necessary or advisable
for the administration of the Plan.

All decisions, interpretations and other actions of the Committee shall be final
and binding on all Optionees and all persons deriving their rights from an
Optionee. No member of the Committee shall be liable for any action that he or
she has taken or has failed to take in good faith with respect to the Plan or
any Option.

SECTION 4. ELIGIBILITY.

(a) GENERAL RULE. Only Employees shall be eligible for designation as
Optionees by the Committee.

(b) TEN-PERCENT SHAREHOLDERS. An Employee who owns more than 10 percent
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless (i) the Exercise Price under such ISO is at least 110 percent of the Fair
Market Value of a Share on the date of grant and (ii) such ISO by its terms is
not exercisable after the expiration of five years from the date of grant.

(c) ATTRIBUTION RULES. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for his brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.

(d) OUTSTANDING STOCK. For purposes of Subsection (b) above,
"outstanding stock" shall include all stock actually issued and outstanding at
the time of the grant of the ISO to the Optionee. "Outstanding stock" shall not
include treasury shares or shares authorized for issuance under outstanding
options held by the Optionee or by any other person.

SECTION 5. STOCK SUBJECT TO PLAN.

(a) BASIC LIMITATION. Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares which may
be issued under the Plan shall not exceed 1,812,500 Shares, subject to
adjustment pursuant to Section 8. The number of Shares which are subject to
Options at any time under the Plan shall not exceed the number of Shares which
then remain available for issuance under the Plan. The Company, during the term
of the Plan, shall at all times reserve and keep available sufficient Shares to
satisfy the requirements of the Plan.

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<PAGE>

(b) ADDITIONAL SHARES. In the event that any outstanding Option for any
reason expires or is canceled or otherwise terminated (except as provided in
Section 7 (c)), the Shares allocable to the unexercised portion of such Option
shall again be available for the purposes of the Plan.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.

(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8. Options granted to any
Optionee in a single calendar year shall in no event cover more than 187,500
Shares, subject to adjustment in accordance with Section 8. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.

(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an Option shall not be less than 100
percent of the Fair Market Value of a Share on the date of grant, except as
otherwise provided in Section 4(b). Subject to the preceding sentence, the
Exercise Price under any Option shall be determined by the Committee at its sole
discretion. The Exercise Price shall be payable in accordance with Section 7.

(d) EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option. The term shall
not exceed 10 years from the date of grant, except as otherwise provided in
Section 4(b). Subject to the preceding sentence, the Committee at its sole
discretion shall determine when all or any part of an Option is to become
exercisable and when such Option is to expire.

(e) NONTRANSFERABILITY. During an Optionee's lifetime, and unless his
or her Stock Option Agreement otherwise provides, his or her Option(s) shall be
exercisable only by him or her and shall not be transferable. In the event of an
Optionee's death, his or her nontransferable Option(s) shall not be transferable
other than by beneficiary designation, will or by the laws of descent and
distribution.

(f) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's Service
terminates for any reason other than death, then his or her Option(s) shall
expire on the earliest of the following occasions:

(i) The expiration date determined pursuant to Subsection (d)
above;

(ii) The date 90 days after the termination of the Optionee's
Service, if the termination occurs on or after the earliest date when
he or she is eligible for early or normal retirement under the Restated
Retirement Plan for Employees of The McClatchy Company;

(iii) The date one year after the termination of the
Optionee's Service, if the termination occurs because of his or her
Total and Permanent Disability; or

(iv) The date 30 days after the termination of the Optionee's
Service, if the termination is not described in Paragraphs (ii) or
(iii) above.

Notwithstanding the above, the Committee may agree to alternative expiration
periods in any applicable Stock Option Agreement, so long as such alternative
periods do not exceed 10 years from the date of grant as set forth in Subsection
(d) above. The Optionee may exercise all or part of his or her Option(s) at any
time before the expiration of such Option(s) under the preceding sentence, but
only to the extent that such Option(s) had become

A-4

<PAGE>

exercisable before his or her service terminated or became exercisable as a
result of the termination. The balance of such Option(s) shall lapse when the
Optionee's Service terminates. In the event that the Optionee dies after the
termination of his or her Service but before the expiration of his or her
Option(s), all or part of such Option(s) may be exercised (prior to expiration)
by the executors or administrators of the Optionee's estate or by any person who
has acquired such Option(s) directly from him or her by bequest or inheritance,
but only to the extent that such Option(s) had become exercisable before his or
her Service terminated or became exercisable as a result of the termination.

(g) LEAVES OF ABSENCE. For purposes of Subsection (f) above, Service
shall be deemed to continue while the Optionee is on military leave, sick leave
or other bona fide leave of absence (as determined by the Committee). The
foregoing notwithstanding, in the case of an ISO granted under the Plan, Service
shall not be deemed to continue beyond the first 90 days of such leave, unless
the Optionee's reemployment rights are guaranteed by statute or by contract.

(h) DEATH OF OPTIONEE. If an Optionee dies while he or she is in
service, then his or her Option(s) shall expire on the earlier of the following
dates:

(i) The expiration date determined pursuant to Subsection (d)
above; or

(ii) The date 12 months after his or her death.

All or part of the Optionee's Option(s) may be exercised at any time before the
expiration of such Option(s) under the preceding sentence by the executors or
administrators of his or her estate or by any person who has acquired such
Option(s) directly from him or her by bequest or inheritance.

(i) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made except as provided in
Section 8.

(j) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) for the granting of new Options in substitution therefor.
The foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, impair his or her rights or increase his or her
obligations under such Option.

(k) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise
of an Option shall be subject to such special rights of repurchase, rights of
first refusal and other transfer restrictions as the Committee may determine.
Such restrictions shall be set forth in the applicable Stock Option Agreement
and shall apply in addition to any general restrictions that may apply to all
holders of Shares.

SECTION 7. PAYMENT FOR SHARES.

(a) GENERAL RULE. The entire Exercise Price of Shares issued under the
Plan shall be payable in cash at the time when such Shares are purchased, except
as follows:

(b) SURRENDER OF STOCK. To the extent that the Stock Option Agreement
so provides, payment may be made with Shares which have already been owned by
the Optionee for more than 12 months and which are surrendered to the Company in
good form for transfer. Such Shares shall be valued at their Fair Market Value
on the date when the new Shares are purchased under the Plan.

(c) SETTLEMENT IN CASH AND/OR SHARES. To the extent that the Stock
Option Agreement so provides, the Committee shall have the authority, in its
sole discretion, to settle all or any part of an exercisable Option or
installment of any Option by offering payment in Shares or in cash, or in any
combination of Shares and cash, in exchange for the surrender of that Option,
installment or partial installment of the Option by the Optionee. The

A-5

<PAGE>

amount offered by the Committee shall not exceed the difference between the
Exercise Price of the Option and the Fair Market Value of the Shares on the date
of the offer. In no event shall Options be settled under this Subsection (c) if
the Fair Market Value of the Shares subject to the cancelled Options does not
exceed the Exercise Price of such Options. Options shall not be settled for cash
under this Subsection (c) unless they have been outstanding for not less than
six months. Shares as to which Options have been settled shall not be available
for further Option grants under the Plan.

(d) CASHLESS EXERCISES. Payment may be made all or in part by delivery
(on a form prescribed by the Committee) of an irrevocable direction to a
securities broker to sell Shares and to deliver all or part of the sale proceeds
to the Company in payment of the aggregate Exercise Price.

SECTION 8. ADJUSTMENT OF SHARES.

(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in cash in an amount that has a material effect on the price of Shares, a
combination or consolidation of the outstanding Stock (by reclassification or
otherwise) into a lesser number of Shares, a spinoff or a similar occurrence,
the Committee shall make appropriate adjustments in one or more of (i) the
number of Options available for future grants under Section 5, (ii) the number
of Shares covered by each outstanding Option or (iii) the Exercise Price under
each outstanding Option.

(b) REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the surviving
corporation or its parent, for their continuation by the Company (if the Company
is a surviving corporation) or for settlement in cash.

(c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Shares
subject to an Option. The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

SECTION 9. LEGAL REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.

SECTION 10. NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any Option granted under the Plan, shall be
construed as giving any person the right to become or to be treated as an
Employee or to remain an Employee. The Company and its Subsidiaries reserve the
right to terminate any person's Service at any time and for any reason.

SECTION 11. DURATION AND AMENDMENTS.

(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on February 1, 1998, subject to approval of the Company's
shareholders. In the event that the Company's shareholders fail to approve the
Plan before February 1, 1999, any Option grants from the increased number of
available Shares made prior to such date shall be null and void, and no such
additional Option grants shall be made after such date. The Plan shall terminate
automatically on January 25, 2004, and may be terminated on any earlier date
pursuant to Subsection (b) below.

A-6

<PAGE>

(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board may amend, suspend
or terminate the Plan at any time and for any reason. Shareholder approval shall
not be required for any amendment of the Plan, except as may be required by
applicable law or regulation.

(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Option previously granted under the
Plan.

SECTION 12. WITHHOLDING TAXES.

To the extent required by applicable federal, state, local or foreign
law, the recipient of any payment or distribution under the Plan shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise by reason of such payment or distribution. The
Company shall not be required to make such payment or distribution until such
obligations are satisfied.

SECTION 13. EXECUTION.

To record the adoption of the Plan by the Board on January 21, 1998, as
amended and restated effective February 1, 1998, the Company has caused its
authorized officer to execute the same.

THE McCLATCHY COMPANY

By /s Karole Morgan-Prager
------------------------------------
Karole Morgan-Prager
Corporate Secretary

A-7

<PAGE>

EXHIBIT B

THE McCLATCHY COMPANY
LONG-TERM INCENTIVE PLAN
(Adopted Effective as of January 1, 1998)

SECTION 1. PURPOSE.

This Plan is intended to provide a means to pay long-term incentive
compensation to Executives who contribute materially to the success of the
Company. The Awards will be based on the growth of the Pre-Tax Earnings of the
Company. It is expected that the Plan will assist the Company in attracting and
retaining Executives of outstanding achievement and ability and will encourage
Executives to use their best efforts on behalf of the Company. The Plan was
adopted effective as of January 1, 1998; provided, however, that no Award shall
be paid hereunder unless and until the stockholders of the Company approve the
material terms of the Plan. The Plan is designed to ensure that Awards paid
hereunder to Participants are deductible under Section 162(m) of the Internal
Revenue Code as amended, and the regulations and interpretations promulgated
thereunder (the "Code").

SECTION 2. DEFINITIONS.

(a) "Award" means a Long-Term Incentive Award.

(b) "Beneficiary" means the person or persons designated by the
Participant in writing pursuant to Section 6 to receive payment of an Award of
the Participant in the event of his or her death.

(d) "Committee" means the Compensation Committee of the Board, that
shall satisfy the requirements of Code Section 162(m).

(e) "Company" means McClatchy Newspapers, Inc., a Delaware corporation.

(f) "Early Retirement" means a Participant's early retirement under the
terms of the Restated Retirement Plan for Employees of McClatchy Newspapers,
Inc.

(g) "Executive" means an executive or key employee of the Company, or a
subsidiary of the Company, who is determined by the Committee to be eligible to
receive Units under Section 3(a).

(h) "Long-Term Incentive Award" means incentive compensation which is
based on Long-Term Incentive Units.

(i) "Long-Term Incentive Unit" means a contingent right to receive $1
times the number of percentage points by which Pre-Tax Earnings increase from
Performance Period to Performance Period. Each grant of Long-Term Incentive
Units shall specify the Performance Period for which such grant is made.

(j) "Normal Retirement" means a Participant's normal retirement under
the terms of the Restated Retirement Plan for Employees of McClatchy Newspapers,
Inc.

(k) "Participant" means an Executive who is granted Units that have not
been fully distributed, forfeited or otherwise terminated or satisfied under
this Plan.

(l) "Performance Period" shall be a period consisting of three (3)
calendar years.

B-1

<PAGE>

(m) "Plan" means this McClatchy Newspapers, Inc. Long-Term Incentive
Plan, as amended from time to time.

(n) "Pre-Tax Earnings" means the Company's consolidated earnings before
taxes, as reported in the Company's audited financial statements but adjusted to
exclude the gain or loss on the sale of a major asset of the Company.

(o) "Total and Permanent Disability" means that the Executive is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which has lasted, or can be expected
to last, for a continuous period of not less than six months or which can be
expected to result in death.

(p) "Unit" means a Long-Term Incentive Unit.

SECTION 3. ELIGIBILITY FOR, GRANT AND CONVERSION OF UNITS.

(a) ELIGIBILITY AND GRANT OF UNITS. The Committee, acting on the advice
of the Chief Executive Officer of the Company or on its own motion, shall from
time to time designate the Executives who will be granted Units. The Committee
shall also determine the number of Units that will be granted to each of such
Executives. The Performance Period will be determined and the Units will be
granted by the Committee no later than the time prescribed by applicable law for
the Awards to qualify under Section 162(m) of the Internal Revenue Code.

(b) CONVERSION OF UNITS. The Units granted to an Executive for a
Performance Period shall be converted into his or her Award as of the March 1
next following the close of such Performance Period. The Award shall be equal to
the number of the Executive's Units times $1 times the number of percentage
points (including fractions but not to exceed 100) by which the Pre-Tax Earnings
increase from Performance Period to Performance Period.
In no event shall an Award exceed $1 million for any Performance Period.

If a Participant separates from the employ of the Company and its
subsidiaries prior to the end of a calendar year in a Performance Period by
reason of Normal Retirement, Early Retirement, Death or Total and Permanent
Disability, Units shall be converted into an Award and paid as soon as
practicable. The Award shall be valued based on 100% of the increase in Pre-Tax
Earnings for the calendar year immediately prior to the calendar year in which
the separation occurs.

SECTION 4. FORFEITURE OF AWARDS.

A Participant shall forfeit to the Company any Award for a Performance
Period if he or she separates from employment with the Company and its
subsidiaries prior to the end of the Performance Period for any reason other
than Normal Retirement, Early Retirement, death or Total and Permanent
Disability.

SECTION 5. FORM AND TIME OF PAYMENT OF AWARDS.

Except as provided in Section 3(b), Awards for each Performance Period
shall be paid in cash in a lump sum by the March 15 following the end of the
Performance Period.

SECTION 6. EFFECT OF DEATH OF PARTICIPANT.

(a) DISTRIBUTION AND BENEFICIARY DESIGNATION. On the death of a
Participant, the Award the Participant shall be distributed to the Beneficiary
designated by the Participant in writing on the form prescribed by, and filed
with, the Company. If no Beneficiary designation has been made, payment shall be
made to the Participant's estate. If a designated Beneficiary does not survive
the Participant or dies before receiving payment of an Account, payment shall be
made to the estate of the last to die of the Participant or the designated
Beneficiary.

B-2

<PAGE>

(b) CHANGE OF BENEFICIARY. A Participant may elect to change his or her
beneficiary designation at any time. Any such change shall be in writing on the
prescribed form and shall be effective on receipt by the Company prior to the
death of the Participant.

SECTION 7. PARTICIPANT'S RIGHTS UNSECURED.

A Participant's interest under the Plan and the right to receive a
distribution of his or her Award shall be an unsecured claim against the
Company's general assets. The Awards shall be bookkeeping entries only, and no
Participant shall have an interest in or claim against any specific asset of the
Company pursuant to the Plan.

SECTION 8. NONASSIGNABILITY OF INTERESTS.

The interest and property rights of any Participant under the Plan
shall not be subject to option nor be assignable either by voluntary or
involuntary assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor's process, and any act in
violation of this Section 8 shall be void.

SECTION 9. LIMITATION OF RIGHTS.

(a) UNITS. Nothing in the Plan shall be construed to give any Executive
any right to be granted Units.

(b) EMPLOYMENT. The Plan, the grant or deferral of Units, or any other
action taken pursuant to the Plan shall not constitute or be evidence of any
agreement or understanding, express or implied, that the Company will employ a
Participant for any particular period of time, in any particular position or at
any particular rate of compensation. The Plan shall not limit the Company's
right to terminate a Participant's employment at any time or for any reason.

SECTION 10. ADMINISTRATION.

The Plan shall be administered by the Committee. The Committee shall
have full discretionary power and authority to administer and interpret the
Plan, to establish procedures for administering the Plan and to take any and all
necessary actions in connection therewith, all in accordance with Code Section
162(m). The Committee's interpretation and construction of the Plan shall be
conclusive and binding on all persons.

SECTION 11. AMENDMENT OR TERMINATION.

The Board may amend, suspend or terminate the Plan at any time and for
any reason, without the consent of any person. In the event of a termination,
the Awards of a Participant shall be paid at such time and in such form as shall
be determined pursuant to Section 5, unless the Board prescribes an earlier time
or different form for payment of such Accounts.

SECTION 12. CHOICE OF LAW.

The validity, interpretation, construction and performance of the Plan
shall be governed by the laws of the State of California.

B-3

<PAGE>

SECTION 13. EXECUTION.

To record the adoption of the Plan the Company has caused its duly
authorized officer to affix the corporate name hereto.

McCLATCHY NEWSPAPERS, INC.

By /s/ Karole Morgan-Prager
---------------------------------------
Karole Morgan-Prager
Corporate Secretary

B-4

<PAGE>

EXHIBIT C

THE McCLATCHY COMPANY
CHIEF EXECUTIVE OFFICER BONUS PLAN
(As adopted and effective January 1, 1998)

PURPOSE. The purpose of The McClatchy Company's Chief Executive Officer
Bonus Plan (the "Plan") is to motivate and reward the chief executive officer
("CEO") for exceptional performance by making a portion of his cash compensation
directly dependent on The McClatchy Company's ("McClatchy") growth in Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA as a
percentage of Revenue, Revenue, Operating Income, Operating Income as a
percentage of Revenue, Pretax Income, Pretax Income as a percentage of Revenue,
Net Income, Net Income as a percentage of Revenue and/or Circulation. The Plan
is designed to ensure that the bonus paid hereunder to the CEO of McClatchy is
deductible under Section 162(m) of the Internal Revenue Code of 1986, as
amended, and the regulations and interpretations promulgated thereunder (the
"Code"). The material terms of this Plan are subject to stockholder approval.

COVERED INDIVIDUALS. The individual entitled to bonus payments
hereunder shall be the CEO of McClatchy.

THE COMMITTEE. The Committee shall consist of at least two outside
directors of McClatchy that satisfy the requirements of Code Section 162(m). The
Committee shall have the sole discretion and authority to administer and
interpret the Plan in accordance with Code Section 162(m).

AMOUNT OF BONUS. The bonus payment for the CEO shall be determined
based on an objective formula(e) established by the Committee in writing with
respect to each performance period no later than the latest time permitted by
the Code. The formula(e) shall incorporate one or more of the objective business
criteria identified in the Purpose paragraph above, and the objective financial
business criteria shall be determined by the Committee in accordance with
generally accepted accounting principles. The term "performance period" shall
mean the service period for which the bonuses are payable. The maximum aggregate
bonus payable to the CEO for any performance period shall not exceed $2,000,000.
The Committee may also, in its sole discretion, reduce any bonus payable to the
CEO for any reason.

PAYMENT OF BONUS. Annual bonus payments are made in cash. Each annual
bonus is not considered earned until the last business day of the performance
period, and payment of a given year's bonus requires that the CEO be on
McClatchy's payroll as of such date. The Committee may make exceptions to these
requirements in the case of retirement, death or disability, as determined by
the Committee in its sole discretion. No bonus shall be paid unless and until
the Committee makes a certification in writing required by Code Section 162(m).

AMENDMENT AND TERMINATION. McClatchy reserves the right to amend or
terminate this Plan at any time. Plan amendments will require stockholder
approval only to the extent required by applicable law.

C-1

<PAGE>
APPENDIX A

THE McCLATCHY COMPANY

CLASS A COMMON PROXY

PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 1998.

The undersigned hereby appoints Gary Pruitt and Karole Morgan-Prager, or either
of them, as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated herein, all shares of
the Class A Common Stock of The McClatchy Company that the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on May 21,
1998, or any postponement or adjournment thereof.

This proxy when properly executed will be voted as directed by the undersigned
stockholder. If no such directions are made, this proxy will be voted FOR the
election of directors, FOR proposal 2, FOR proposal 3, FOR proposal 4 and FOR
proposal 5.

- ----------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK
COMMENT/ADDRESS CHANGE ON REVERSE SIDE
(Continued and to be dated and signed,
on the other side)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

<PAGE>

Please mark
your votes as [X]
indicated in
this example

<TABLE>
<C> <C> <C>
1. To elect directors to serve until the 2. Approval of the 3. Approval of the
next Annual Meeting of Stockholders and Company's Amended Company's 1998 Long-
until their successors are elected or and Restated 1994 Term Incentive Plan.
chosen. Stock Option Plan.

FOR all nominees WITHHOLD Nominees: Elizabeth Ballantine, Larry FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
listed to the AUTHORITY Jinks, S. Donley Ritchey, Frederick R.
right (except as (to vote for all Ruiz [ ] [ ] [ ] [ ] [ ] [ ]
marked to the nominees listed
contrary) at right) (INSTRUCTION: To withhold authority to
vote for any individual nominee write
[ ] [ ] the nominee's name below.)

--------------------------------------

4. Approval of the Company's Chief 5. Ratification of the appointment 6. In their discretion,
Executive Officer Bonus Plan. of Deloitte & Touche as the the proxies are
Company's independent auditors authorized to vote I PLAN TO ATTEND MEETING [ ]
for 1998. upon such other
business as may COMMENTS/ADDRESS CHANGE
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN properly come Please mark the box if [ ]
before the meeting. you have written comment/
[ ] [ ] [ ] [ ] [ ] [ ] address change on the
reverse side.

Please sign exactly as name appears on your stock
certificate. When shares are held by joint tenants,
both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please
sign in full corporate name by President or other
authorized officer. If a partnership, please sign in
partnership name by authorized person.

Dated: ______________________________________, 1998

___________________________________________________
Signature

___________________________________________________
Signature if held jointly
PLEASER MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

THE McCLATCHY COMPANY

YOUR VOTE IS IMPORTANT TO THE COMPANY

PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THIS SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE

<PAGE>
APPENDIX B

THE McCLATCHY COMPANY

CLASS B COMMON PROXY

PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 1998.

The undersigned hereby appoints Gary Pruitt and Karole Morgan-Prager, or either
of them, as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated herein, all shares of
the Class B Common Stock of The McClatchy Company that the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on May 21,
1998, or any postponement or adjournment thereof.

- ----------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK
COMMENT/ADDRESS CHANGE ON REVERSE SIDE
(Continued and to be dated and signed,
on the other side)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

<PAGE>

Please mark
your votes as [X]
indicated in
this example

FOR all nominees WITHHOLD Nominees: William K. Coblentz, Molly FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
listed to the AUTHORITY Maloney Evangelisti, Joan F. Lane, Betty
right (except as (to vote for all Lou Maloney, James B. McClatchy, William [ ] [ ] [ ] [ ] [ ] [ ]
marked to the nominees listed Ellery McClatchy, Erwin Potts, Gary B.
contrary) at right) Pruitt, William M. Roth

[ ] [ ] (INSTRUCTION: To withhold authority to
vote for any individual nominee write
the nominee's name below.)

--------------------------------------

Dated: ______________________________________, 1998

___________________________________________________
Signature

___________________________________________________
Signature if held jointly
PLEASER MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

THE McCLATCHY COMPANY

YOUR VOTE IS IMPORTANT TO THE COMPANY

PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THIS SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE