The New York Times Company
Material Provided to Certain Officers and Employees of the Company
in Connection with Certain Telephone Calls
to Stockholders Concerning Proposal Number 2*
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What? Amend the Company's 1991 Executive Stock Incentive Plan (the
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"1991 Plan") to authorize an additional 10,000,000 shares of
Class A Common Stock that may be issued thereunder pursuant to
the exercise of stock options (p. 23).
Why? 1. To provide incentives for officers and key employees of the
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Company and its subsidiaries through granting options under
the 1991 Plan, thereby stimulating their personal and
active interest in the Company's development and financial
success and inducing them to remain in the Company's employ
(p. 23).
2. Of the original 10,000,000 shares reserved under the 1991
Plan (as of 2/26/96**, p.23),
- 556,683 shares have been issued;
- 7,726,900 shares are reserved for issuance
pursuant to outstanding options;
- 1,716,327 shares remain available for future
option grants.
3. This increased authorization should provide sufficient
shares for option awards for several years and make
unlikely the need to request additional shares in the near
future (p. 23).
Who? 1995 grants were as follows (p. 26):
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Name and Position Number of Options(1)
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Arthur Ochs Sulzberger,
Chairman and Chief Executive Officer . 75,840
Lance R. Primis,
President and Chief Operating Officer . 48,827
Arthur Ochs Sulzberger, Jr.,
Publisher of The New York Times . . . . 40,057
William O. Taylor,
Publisher of The Boston Globe . . . . . 40,057
David L. Gorham,
Senior Vice President and Deputy Chief
Operating Officer . . . . . . . . . . . 34,514
All Executive Officers, as a group(2) . . 411,715
All Employees, as a group(3) . . . . . . 2,034,438
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* Page references are to proxy statement.
** Record Date
(1) The Options have an exercise price of $29.75. The Options have a
10-year term, but are subject to earlier cancellation in certain
circumstances where the optionholder is no longer employed by the
Company or one of its affiliates. The Options vest in accordance with
the following schedule: 25% on December 21, 1996; 25% on December 21,
1997; 25% on December 21, 1998; and 25% on December 21, 1999. The
optionholder must generally be employed for the Options to vest, except
that the Options will generally vest automatically upon the retirement,
death or disability of the optionholder.
(2) 18 people, including the five named executive officers.
(3) 331 people, including the 18 executive officers.
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Dilution: Can be calculated in many different ways. Relevant data are
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(pp.1 and F-25):
- Outstanding Shares (as of 2/26/96):
97,225,562
- December 31 1995 1994
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Retirement Units Outstanding 197,000 221,021
Stock Awards Available 965,686 973,844
Stock Options
Outstanding* 10,007,225 9,281,788
Available** 1,888,961 3,646,047
Employee Stock
Purchase Plan
Available 4,702,248 5,802,596
Voluntary Conversion of Class B
Common Stock
Available 568,919 570,121
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Total 18,330,039 20,495,417
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* Includes options outstanding under the 1991 Plan, a predecessor plan and the
non-employee directors' plan.
**Includes options available under the 1991 Plan and the non-employee directors'
plan.
Our Plan Does NOT Have the Following Objectionable Features:
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1. Our options must be priced at fair market value on the date of grant, i.e.,
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no discounted pricing of options.
2. Our plan does not permit repricing of underwater options.
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3. Our plan is not an evergreen plan, i.e., it does not authorize the award of
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a set amount (or percentage) of outstanding shares each year without an
expiration date.
4. We do not engage in "smurfing," i.e., asking for fewer shares than we will
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need for the remaining life of the option plan, so that the dilution looks
low to institutional holders. With smurfing, we would repeatedly and often
seek to add more shares to our plan. As noted on p. 23 of the proxy
statement, the Board believes this authorization will be sufficient for
several years and make unlikely the need to request additional shares in the
near future.
