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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 1-5837
The New York Times Company
(Exact name of registrant as specified in its charter)
New York 13-1102020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
229 West 43d Street, New York, N. Y. 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 556-1234
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
Class A Common Stock of $.10 par value American Stock Exchange
Securities registered pursuant to Section 12(g) Of The Act:
Not Applicable
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes. [X] No.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of Class A Common Stock held by non-affiliates as
of February 26, 1996, was approximately $2.04 billion. As of such date,
non-affiliates held 52,272 shares of Class B Common Stock. There is no active
market for such stock.
The number of outstanding shares of each class of the registrant's common
stock as of February 26, 1996, was as follows: 97,225,562 shares of Class A
Common Stock and 428,916 shares of Class B Common Stock.
DOCUMENT INCORPORATED BY REFERENCE PART
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Proxy Statement for the 1996 Annual Meeting of Stockholders ............ III
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<PAGE>
INDEX TO THE NEW YORK TIMES COMPANY
1995 FORM 10-K
-------------------
PART I
ITEM NO. PAGE
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1. Business......................................................... 1
Introduction.................................................. 1
Summary of Segment Information.............................. 1
Newspapers.................................................... 1
The New York Times.......................................... 2
Circulation............................................... 2
Advertising............................................... 2
Production and Distribution............................... 3
The Boston Globe............................................ 4
Circulation............................................... 4
Advertising............................................... 4
Production................................................ 5
Regional Newspapers......................................... 5
International Herald Tribune................................ 6
Information Services........................................ 6
New Ventures................................................ 6
Magazines..................................................... 7
New Ventures................................................ 7
Broadcasting.................................................. 8
Forest Products Companies..................................... 8
Competition................................................... 9
Employees..................................................... 10
2. Properties....................................................... 10
3. Legal Proceedings................................................ 11
4. Submission of Matters to a Vote of Security Holders.............. 11
Executive Officers of the Registrant.......................... 11
PART II
5. Market for the Registrant's Common Equity and Related Stockholder
Matters........................................................ 13
6. Selected Financial Data.......................................... 13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 13
8. Financial Statements and Supplementary Data...................... 13
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................... 13
PART III
10. Directors and Executive Officers of the Registrant.............. 13
11. Executive Compensation.......................................... 13
12. Security Ownership of Certain Beneficial Owners and Management.. 13
13. Certain Relationships and Related Transactions.................. 13
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.......................................................... 14
<PAGE>
PART I
ITEM 1. BUSINESS.
INTRODUCTION
The New York Times Company (the "Company") was incorporated on August 26,
1896, under the laws of the State of New York. The Company is engaged in
diversified activities in the communications field. The Company also has
substantial equity interests in a Canadian newsprint company and a Maine
supercalendered paper manufacturing partnership.
The Company currently classifies its businesses into the following segments:
Newspapers: The New York Times ("The Times"); The Boston Globe, a daily
newspaper, and the Boston Sunday Globe (both editions, "The Globe"); 18
other daily and three non-daily newspapers in Alabama, California, Florida,
Louisiana, North Carolina and South Carolina ("Regional Newspapers");
newspaper distributors in the New York City and Boston metropolitan areas; a
one-half interest in the International Herald Tribune; news, photo and
graphics services and news and features syndication; TimesFax; The New York
Times Index; and licensing of electronic data bases and microform, CD-ROM
products and the trademarks and copyrights of The Times.
Magazines: Golf Digest, Golf World, Golf Shop Operations, Tennis, Tennis
Buyer's Guide, Cruising World, Sailing World, Snow Country and Snow Country
Business.
Broadcasting: television stations WTKR-TV in Norfolk, Virginia; WREG-TV
in Memphis, Tennessee; WNEP-TV in Wilkes-Barre/Scranton, Pennsylvania;
WHNT-TV in Huntsville, Alabama; WQAD-TV in Moline, Illinois; and KFSM-TV in
Fort Smith, Arkansas; radio stations WQXR (FM) and WQEW (AM) in New York
City; and NYT Video Productions.
SUMMARY OF SEGMENT INFORMATION
In 1995 the Company's consolidated revenues increased to $2,409,403,000 from
$2,357,563,000 in 1994 due principally to strong revenues at the Company's
newspaper and broadcast properties. The Company's net income in 1995 was
$135,860,000, or $1.40 per share, compared with $213,349,000, or $2.05 per
share, in 1994. Exclusive of special factors set forth on page F-3 on this Form
10-K, annual earnings from ongoing operations would have been $1.41 per share in
1995, compared with $1.06 per share in 1994. A summary of segment information
for the three years ended December 31, 1995, is set forth on pages F-2 and F-3
of this Form 10-K. Also see "Management's Discussion and Analysis" on pages F-4
through F-8 of this Form 10-K.
The Company's largest source of revenues is advertising, which influences
the pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that in the first quarter. Advertising volume tends to be lower in
the third quarter primarily because of the summer slow-down in many areas of
economic activity. National and local economic conditions influence the level of
retail, national and classified advertising revenue generated in the markets
served by the Company's business segments. Circulation revenue is affected by
competition from other forms of media available in the Company's respective
markets.
NEWSPAPERS
The Newspaper Group had revenues of $2,161,356,000 in 1995, compared with
$2,006,184,000 in 1994, and an operating profit of $208,465,000 in 1995,
compared with $207,489,000 in 1994. (These amounts include certain special items
for 1995 which are discussed in more detail in "Management's Discussion and
Analysis" on page F-4 of this Form 10-K.) Improvements in operating profit
occurred despite a significant increase in newsprint prices, as increased
advertising and circulation rates and cost controls enabled the Newspaper Group
to overcome a $76.2 million increase for the year in newsprint costs (net of
conservation programs).
<PAGE>
The Newspaper Group segment consists of two categories: Newspapers
(consisting of The New York Times, The Boston Globe, 21 Regional Newspapers,
newspaper distributors, a 50 percent interest in the International Herald
Tribune and Information Services) and New Ventures (consisting of projects
developed in electronic media by The Times and The Globe, as well as various new
media investments such as NYT Video News International, Inc. and The Popcorn
Channel, L.P.). The Newspapers category had revenues of $2,160,399,000 in 1995
and an operating profit of $221,566,000 in 1995, while the New Ventures category
had revenues of $957,000 and an operating loss of $13,101,000.
THE NEW YORK TIMES
Circulation
The Times, a standard-size weekday and Sunday newspaper which commenced
publication in 1851, is circulated in each of the 50 states, the District of
Columbia and worldwide. Approximately 62% of the weekday (Monday through Friday)
circulation is sold in the 31 counties that make up the greater New York City
area, which includes New York City, Westchester and parts of upstate New York,
Connecticut and New Jersey; 38% is sold elsewhere. On Sundays, approximately 60%
of the circulation is sold in the greater New York City area and 40% elsewhere.
According to reports of the Audit Bureau of Circulations ("ABC"), an independent
agency that audits the circulation of most U.S. newspapers and magazines on an
annual basis, for the semi-annual period ended September 30, 1995, of all seven-
day United States newspapers, The Times's weekday and Sunday circulations were
the largest.
The Times's average weekday and Sunday circulations for the five 12-month
periods ended September 30, 1995, as audited by ABC (except as indicated), are
shown in the table below:
Weekday Sunday
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(Thousands of copies)
1995 (unaudited).................................... 1,124.5 1,720.5
1994................................................ 1,148.8 1,742.2
1993................................................ 1,183.1 1,783.9
1992................................................ 1,166.9 1,753.9
1991................................................ 1,153.6 1,728.3
During the year ended December 31, 1995, the average weekday circulation of
The Times decreased by approximately 22,100 copies to 1,120,700 copies and the
average Sunday circulation of The Times decreased by approximately 31,300 copies
to 1,712,600 copies. Approximately 55% of the weekday circulation and 47% of the
larger Sunday circulation were sold through home and office delivery; the
remainder was sold primarily on newsstands.
The weekly rate charged to subscribers for home-delivered copies of The
Times in the New York City metropolitan area is $6.70. The suggested newsstand
price of The Times within the New York City metropolitan area is $.60 on
weekdays and $2.50 on Sundays. The suggested newsstand price in the New
England-Middle Atlantic states outside the New York City metropolitan area is
$1.00 on weekdays and $2.50 on Sundays. The suggested newsstand price of the
National Edition, distributed throughout the rest of the country, is $1.00 on
weekdays and $4.00 on Sundays.
Advertising
The Times published 3,831,200 inches of advertising in 1995, compared with
3,733,600 inches in 1994. Both figures include part-run volume, which totaled
1,061,200 inches in 1995, compared with 925,600 inches in 1994.
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Total volume in The Times for the three years ended December 31, 1995, as
measured by The Times, is shown in the table below. The "National" heading in
the table below includes such categories as entertainment, financial, magazine
and general advertising.
Full Run
---------------------------------- Preprint
Retail National Classified Zoned Total* Copies
Inches Inches Inches Inches Inches Distributed
------ -------- ---------- ------- ------- -----------
(Inches and Preprints in Thousands)
1995 667.3 1,181.6 921.1 1,061.2 3,831.2 306,505
1994 693.3 1,166.6 948.1 925.6 3,733.6 294,985
1993 701.2 1,142.5 910.6 854.6 3,608.9 294,906
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* All totals exclude preprint inches.
The table includes volume for The New York Times Magazine, which published 2,809
pages of advertising in 1995, compared with 2,781 pages in 1994.
Advertising rates for The Times increased an average of 5% in January 1995,
4% in May 1995 and 9.5% in January 1996.
Production And Distribution
The Times is processed through electronic editing terminals and sent
electronically to high-resolution image setters. The Times initiated a
pagination program in the first quarter of 1994, which enables editors to
electronically design a newspaper page, including news text, graphics and ads,
thereby avoiding all or part of the manual paste-up of the various elements on a
page. By the end of 1995, seven sections of the Sunday newspaper and over 50% of
the weekday newspaper were paginated. The Times's goal is to paginate the entire
newspaper by the end of 1996.
Generally, The Times is printed at its New York City production facility and
at its production and distribution facility in Edison, New Jersey.
The Edison facility prints all the advance sections of the Sunday newspaper
(except The New York Times Magazine and the Television section) and
approximately one-third of the weekday New York edition. The Edison facility
houses six 10-unit Goss Colorliner presses as well as modern, automated
packaging and distribution equipment. The Times prints four of its advance
Sunday sections at Edison in color.
The Times has agreements with two commercial printing companies to print The
New York Times Magazine and its Television section.
The National Edition of The Times is distributed from eight printing sites
with which it has contract printing agreements: in the Midwest from printing
sites in Chicago, Illinois, and Warren, Ohio; in the West from printing sites in
Torrance and Walnut Creek, California, and Tacoma, Washington; in the Southwest
from a printing site in Austin, Texas; and in the Southeast from printing sites
in Atlanta, Georgia, and Ft. Lauderdale, Florida. Satellite transmission of page
images to the National Edition printing sites permits early-morning delivery to
homes and newsstands in many major markets.
The Company owns a wholesale newspaper distribution business that
distributes The Times and other newspapers and periodicals in New York City and
central and northern New Jersey. This wholesaler operates under the name of City
& Suburban Delivery Systems. Approximately 49% of The Times's single-copy daily
circulation and 38% of its single-copy Sunday circulation in the New York City
metropolitan area are delivered to retail outlets through this wholesale
operation.
In 1995 The Times used approximately 276,000 metric tons of newsprint,
compared to 295,200 metric tons in 1994. This newsprint was purchased primarily
under long-term contracts from both related (see "Forest Products Companies")
and unrelated suppliers. In 1995 The New York Times Magazine used approximately
20,000 metric tons of supercalendered paper, an intermediate grade of magazine
quality paper, compared to 21,000 metric tons in 1994. This supercalendered
paper was
3
<PAGE>
purchased under long-term contracts from both related (see "Forest Products
Companies") and unrelated suppliers. The Times and The New York Times Magazine
are not dependent on any one supplier.
THE BOSTON GLOBE
The Company acquired The Globe on October 1, 1993, pursuant to a merger of a
wholly owned subsidiary of the Company into Affiliated Publications, Inc.
("API"). The Globe is owned and published by an API subsidiary, Globe Newspaper
Company (as used herein, "The Globe" may also be used to refer to Globe
Newspaper Company).
Circulation
The Globe is distributed throughout New England, although its circulation is
concentrated in the Boston metropolitan area. According to ABC reports, as of
September 24, 1995, the weekday circulation of The Globe was the 13th largest of
any weekday newspaper, and circulation of the Sunday edition was the ninth
largest of any Sunday newspaper published in the United States; and its weekday
and Sunday circulation was the largest of all newspapers published in either
Boston or New England.
The following table shows the average weekday and Sunday paid circulation of
The Globe for the editions and the periods indicated, as audited by ABC.
Period Weekday Sunday
------ --------- -------
26 Weeks ended September 24, 1995....................... 498,853 793,672
52 Weeks ended March 26, 1995........................... 503,651 798,508
During the year ended December 31, 1995, the average weekday circulation of
The Globe was down 6,800 copies below 1994 to 497,700 copies and the average
Sunday circulation decreased by 15,500 copies below 1994 to 789,300 copies.
Approximately 70% of The Globe's total weekday circulation and 57% of The
Globe's total Sunday circulation were sold through home or office delivery; the
remainder was sold primarily on newsstands. Virtually all of The Globe's
home-delivered circulation is delivered through The Globe's distribution
subsidiary, Community Newsdealers, Inc.
The weekly rate charged to subscribers for home-delivered copies of The
Globe is $4.50 within the 30-mile radius of Boston and $5.00 outside of the
30-mile radius. The suggested newsstand price of The Globe within the 30-mile
radius is $.50 on weekdays and $1.75 on Sundays. The suggested newsstand price
outside the 30-mile radius is $.50 on weekdays and $2.00 on Sundays.
Advertising
The Globe's total advertising volume by category of advertising for the two
years ended December 31, 1995, for all editions, as measured by The Globe, is
set forth below:
Full Run
---------------------------------- Preprint
Retail National Classified Zoned Total* Copies
Inches Inches Inches Inches Inches Distributed
------ -------- ---------- ------ ------- -----------
(Inches and Preprints in Thousands)
1995 812.9 573.9 1,252.4 307.7 2,946.9 730,944
1994 830.7 562.4 1,217.5 273.6 2,884.2 702,757
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* All totals exclude preprint inches.
Advertising rates in each category of advertising, except for classified
real estate, were adjusted in 1995. The latest increase in retail advertising
rates occurred on September 1, 1995. Increases in classified and national
advertising rates occurred effective April 1, 1995, and July 1, 1995,
respectively. These rate increases ranged from 5% to 8%.
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Production
The Globe's pagination project, which started in 1989, continued according
to plan as full-page output increased in 1995 to approximately 900 pages per
week, or almost 70% of The Globe's pages produced weekly. The Globe plans to
paginate most of the remaining portions of the newspaper by mid-1996.
All editions of The Globe are printed and prepared for delivery at its main
Boston plant or its Billerica, Massachusetts, satellite plant. Both of the
plants use Goss Metroliner offset presses. The Globe also owns a Sunday
pre-print storage, inserting and packaging plant in Westwood, Massachusetts.
In 1995 The Globe used approximately 136,000 metric tons of newsprint, which
is approximately the same amount it used in 1994. The major portion was
purchased under long-term contracts with related (see "Forest Product
Companies") and unrelated suppliers. The Globe is not dependent on any one
supplier.
REGIONAL NEWSPAPERS
The Company currently owns 18 daily and three non-daily smaller-city
newspapers.
<TABLE><CAPTION>
Daily Newspapers Non-Daily Newspapers
<S> <C> <C>
Sarasota Herald-Tribune Times Daily The News-Sun (Sebring/
(Fla.) (Florence, Ala.) Avon Park, Fla.)
The Press Democrat (Santa The Tuscaloosa News (Ala.) Marco Island Eagle
Rosa, Cal.) The Gadsden Times (Ala.) (Fla.)
The Ledger (Lakeland, Fla.) The Courier (Houma, La.) News-Leader
The Gainesville Sun (Fla.) Times-News (Fernandina Beach, Fla.)
Santa Barbara (Hendersonville, N.C.)
News-Press (Cal.) Daily World (Opelousas, La.)
Spartanburg The Dispatch (Lexington, N.C.)
Herald-Journal (S.C.) Daily Comet (Thibodaux, La.)
Wilmington Morning Star Palatka Daily News (Fla.)
(N.C.) Lake City Reporter (Fla.)
Star-Banner (Ocala, Fla.)
</TABLE>
The regional daily newspapers' weekday circulation for the year ended
December 31, 1995, decreased 18,000 copies to 753,700 copies, and Sunday
circulation decreased 13,000 copies to 803,900 copies; the circulation of the
non-dailies decreased 600 copies to 36,000 copies. Advertising volume, stated on
the basis of six columns per page, was 15,525,000 inches in 1995, compared with
15,359,700 inches in 1994. These figures exclude the circulation numbers and
advertising volume of five daily newspapers, The Daily Corinthian (Corinth,
Mississippi), State Gazette (Dyersburg, Tennessee), Daily Commercial (Leesburg,
Florida), Lenoir News-Topic (Lenoir, North Carolina) and The Messenger
(Madisonville, Kentucky), as well as two weekly newspapers, The
Banner-Independent (Booneville, Mississippi) and York County Coast Star
(Kennebunk, Maine), which were sold in 1995. (See Note 2 of Notes to
Consolidated Financial Statements.) Preprints distributed in 1995 were
913,922,000, compared with 904,434,000 in 1994 (in each case, not including
preprints distributed by the seven Regional Newspapers sold in 1995).
All of the Regional Newspapers are produced by photocomposition and offset
printing. In 1995 the Regional Newspapers used approximately 94,000 metric tons
of newsprint (not including 2,000 metric tons of newsprint used by the seven
Regional Newspapers sold in 1995), which was purchased under long-term contracts
from both related (see "Forest Products Companies") and unrelated suppliers. The
Regional Newspapers are not dependent on any one supplier.
INTERNATIONAL HERALD TRIBUNE
The Company owns a one-half interest in the International Herald Tribune
S.A., which publishes the International Herald Tribune. The newspaper is edited
in Paris and printed simultaneously in
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Frankfurt, Hong Kong, London, Marseille, New York, Paris, Rome, Singapore, The
Hague, Tokyo and Zurich. The other one-half interest is owned by The Washington
Post Company.
INFORMATION SERVICES
The New York Times Syndication Sales Corporation ("Syndication Sales")
operates The New York Times News Service, The New York Times Syndicate and the
licensing and reprint permission operations of The Times. The News Service
transmits articles, graphics and photographs from The Times to approximately 650
newspapers and magazines in the United States and in more than 50 countries
worldwide. The New York Times Syndicate markets other supplemental news services
and feature material, graphics and photographs from The Times and other leading
news sources to newspapers and magazines around the world. In 1995, Syndication
Sales introduced two sites on the World Wide Web with news about computers and
health.
NYT Business Information Services, through the group's Index department and
Times On-Line Services, Inc., produces The New York Times Index, a print
publication. The Company licenses LEXIS/NEXIS, Dow Jones Business Information
Services, UMI, Knight-Ridder Information, Inc., and DataTimes to store, market
and distribute its on-line computer data bases. The Company also licenses UMI to
produce and sell The New York Times Index and The Times on microform and CD-ROM.
In 1995 the Company continued to expand its distribution of TimesFax, a six-
to eight-page synopsis of The Times delivered to customers' facsimile machines
or personal computers in markets where The Times is not easily available, and
created an Internet edition of TimesFax. In addition to distribution by
satellite to cruise ships and U.S. Navy vessels, TimesFax is distributed to
hotels, governments and corporations in over 50 countries and territories. In
1995 the Company launched a specialized fax product for the legal profession.
NYT Custom Publishing designs, writes, edits, produces, sells and markets
magazines for clients under contract, including IBM, USAir Group, Inc. and Four
Seasons Hotels Limited.
Information Services also develops and markets new services, including
CD-ROM disks, database marketing and multimedia education services.
NEW VENTURES
In 1994, the Company created and introduced @times, an on-line service which
carries information from The Times on America Online and is one of its most
frequently accessed services. In the fall of 1995, a new subsidiary of The
Globe, Boston Globe Electronic Publishing, Inc., launched its Internet site
located at "boston.com." Its goal is to become the principal information
provider for Internet users interested in New England. By the end of 1995, the
site had begun generating some revenue. The New York Times's website, The New
York Times(sm) on the Web, is located at "nytimes.com." and went on-line in
January 1996. According to Netscape, the Internet software company, The New York
Times on the Web had one of the most successful launches to date of any of its
customers. Additionally, several Regional Newspapers have created on-line
services tailored to their local market interests and needs.
In April 1995 the Company acquired a majority interest in Video News
International ("VNI"), a worldwide video newsgathering operation specializing in
low-cost, high-quality footage for sale globally to major television and cable
networks. VNI offers its customers a variety of products and services, including
global news coverage and production, spot news, long-form programming and
videojournalism training.
The Company owns 40% of Popcorn Channel, L.P., through the Company's
wholly-owned subsidiary NYT Broadcast Holdings, Inc. The Popcorn Channel, a new
basic cable network which launched in November 1995, provides viewers with
localized movie theater listings along with previews of the top motion pictures
in current release.
In September 1995, the Company also invested in OVATION, a visual and
performing arts cable television network which is scheduled to launch in 1996.
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<PAGE>
MAGAZINES
The Company's Magazine Group had revenues of $162,941,000 in 1995, compared
with $280,061,000 in 1994, and operating profit of $28,741,000 in 1995, compared
with $19,204,000 in 1994. The decrease in revenues is primarily due to the
revenues attributable to the Women's Magazines Division and certain U.K. golf
publications, which were sold in the third quarter of 1994.
The Magazine Group segment consists of two categories: Magazines (including
those publications set forth in the table below) and New Ventures (including
computerized systems for golf tee time reservations, on-line magazine services
and related activities in the sports/leisure field). The Magazines category had
revenues of $152,819,000 in 1995 and an operating profit of $19,971,000 in 1995,
while the New Ventures category had revenues of $122,000 and an operating loss
of $1,230,000 in 1995. The Magazine Group's revenues for 1995 also include $10
million relating to the non-competition agreement entered into in connection
with the sale of the Women's Magazines Division (described below).
On July 26, 1994, the Company sold its Women's Magazines Division to
Gruner+Jahr Printing and Publishing Co. On August 12, 1994, the Company sold
Golf World (U.K.), Golf Illustrated Weekly and Golf Industry News to EMAP plc.
The net after-tax proceeds to the Company from these sales, inclusive of a
four-year $40,000,000 non-competition agreement entered into in connection with
the Women's Magazines sale, were approximately $160,000,000. (See Note 2 of
Notes to Consolidated Financial Statements.)
All of the Company's magazines are printed under long-term contracts with
unrelated printers. In 1995 the magazines used approximately 16,100 metric tons
of coated paper, all of which was purchased from unrelated suppliers under
long-term contracts. The Magazine Group is not dependent on any one supplier.
As of December 31, 1995, the Company published the magazines listed in the
chart below:
<TABLE>
<CAPTION>
PERCENTAGE
INCREASE
(DECREASE) IN
AVERAGE
PUBLICATION AVERAGE CIRCULATION ADVERTISING
MAGAZINE CYCLE SUBJECT/AUDIENCE RATE BASE CIRCULATION(1) OVER 1994 PAGES(2)
- ------------------- ------------------- --------------------- --------- -------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Golf Digest........ Monthly Golf 1,500,000 1,507,900 2.8 1,304
Tennis............. Monthly Tennis 800,000 804,800 0.2 717
Snow Country....... 8 issues per year Skiing/mountain 475,000 479,500 1.8 814
lifestyle
Cruising World..... Monthly Recreational sailors 146,000 150,900 2.0 1,365
Golf World......... 46 issues per year Golf 145,000 146,300 2.3 1,682
Sailing World...... Monthly Racing sailors 65,000 68,500 (2.1) 583
Golf Shop
Operations....... 10 issues per year Golf trade 22,600(3) 17,100 0.6 1,383
Snow Country
Business......... 6 issues per year Ski trade 20,371(3) 15,800 12.9 271
Tennis Buyer's
Guide............ 6 issues per year Tennis trade 12,975(3) 10,800 (1.8) 216
<CAPTION>
PERCENTAGE
INCREASE
(DECREASE) IN
ADVERTISING
PAGES
MAGAZINE OVER 1994
- ------------------- -------------
<S> <<C>
Golf Digest........ (1.3)
Tennis............. (12.9)
Snow Country....... (0.5)
Cruising World..... 3.4
Golf World......... (5.5)
Sailing World...... 0.7
Golf Shop
Operations....... (4.6)
Snow Country
Business......... (21.0)
Tennis Buyer's
Guide............ (17.9)
</TABLE>
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1 As reported by the publisher to ABC or the Business Publications Association.
2 As reported by the publisher to Publisher's Information Bureau ("PIB"); or, in
the case of trade publications, as calculated by the publisher using the same
methodology as for PIB.
3 For these trade publications, the average print order is disclosed as the
applicable measure for advertisers.
NEW VENTURES
In October 1995, the Company acquired the business of PAR Business Systems,
Inc., which provides computerized systems for golf tee time reservations and
automated pro shop business systems for the golf industry. The new business is
being operated by Golf Digest Information Systems, Inc., an indirect subsidiary
of the Company. The Magazine Group has entered into a contract to purchase 450
acres of property in Palm Beach Gardens, Florida, and intends to build and
operate a daily fee 36-hole golf course and teaching facility, which will become
the home of the Golf Digest Golf School. The Magazine Group also offers various
golf and travel information and excerpts from its publications on the World Wide
Web and the Microsoft Network.
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BROADCASTING
The Broadcasting Group had revenues of $85,106,000 in 1995, up from
$71,318,000 in 1994, and an operating profit of $18,943,000 in 1995, compared
with $13,626,000 in 1994. The Company acquired WTKR-TV, the CBS affiliate which
serves the Norfolk-Portsmouth-Newport News television market in Virginia, in
June 1995. (See Note 2 of Notes to Consolidated Financial Statements.) Higher
local advertising revenues and network compensation at the Company's television
stations, as well as the acquisition of WTKR, accounted for the improved
results.
The Company's television and radio stations are operated under licenses from
the Federal Communications Commission ("FCC") and are subject to FCC
regulations. Each television station's license is for a five-year term. The
license for WTKR-TV will expire in October 1996. The licenses for WREG-TV
(Memphis, Tenn.), WHNT-TV (Huntsville, Ala.), WQAD-TV (Moline, Ill.) and KFSM-TV
(Fort Smith, Ark.) will expire in 1997. The license for WNEP-TV
(Wilkes-Barre/Scranton, Pa.) will expire in 1999.
All of the television stations have three principal sources of revenue:
local advertising sold to advertisers in the immediate geographic areas of the
stations, national spot advertising and compensation paid by the networks for
carrying commercial network programs. WTKR-TV, WREG-TV, WHNT-TV and KFSM-TV are
affiliated with the CBS Television Network, and WNEP-TV and WQAD-TV are
affiliated with the ABC Television Network.
WTKR-TV, WREG-TV, WQAD-TV and KFSM-TV are in the VHF band; WNEP-TV and
WHNT-TV are in the UHF band, as are all other stations in their markets.
According to A. C. Nielsen Company, Norfolk is the 40th largest television
market in the United States, Memphis is the 42nd largest, Wilkes-Barre/Scranton
is the 49th largest, Huntsville is the 86th largest, Moline is part of the Quad
Cities market, the 88th largest, and Fort Smith is the 118th largest market.
The Broadcasting Group produces high quality commercial video and television
programming through NYT Video Productions.
The Company's two radio stations serve the New York City metropolitan area.
WQXR (FM) is currently the only commercial classical music station serving this
market. WQEW (AM) is the only station covering the total New York City region
that offers a format of American popular standards for the market. The licenses
of WQEW(AM) and WQXR(FM) were renewed during 1994 and will expire on February 1,
1998.
FOREST PRODUCTS COMPANIES
The primary raw material used by the Company is newsprint. In 1995, the
Company consumed approximately 508,000 metric tons of newsprint purchased from
various suppliers, including those in which it holds an equity interest. The
Company believes it has an adequate supply of newsprint available through
contracts at market prices from its various suppliers.
The Company has equity interests in a Canadian newsprint company, Donohue
Malbaie Inc. ("Malbaie"), and in a partnership operating a supercalendered paper
mill in Maine, Madison Paper Industries ("Madison") (collectively, the "Forest
Products Companies"). Neither of these companies' debt is guaranteed by the
Company. The Company's equity in operations (an after-tax amount) of these
businesses in 1995 was a profit of $14,051,000, up from $3,264,000 in 1994. The
improved year over year results are due principally to higher selling prices.
Newsprint prices as of December 31, 1995, were significantly higher than 1994
year-end prices. During 1995, notwithstanding the decline in domestic
consumption, the newsprint market remained tight due to the lack of capacity
growth and strong overseas demand.
8
<PAGE>
The Company has a 49% equity interest in Malbaie. The other 51% is owned by
Donohue, Inc. ("Donohue"), a publicly-traded Canadian company whose voting
shares are controlled by Quebecor, a Canadian publishing company. Malbaie
purchases pulp from Donohue and manufactures newsprint from this raw material on
the paper machine it owns within the Donohue paper mill at Clermont, Quebec.
Malbaie is wholly dependent upon Donohue for its pulp. In 1995 Malbaie produced
192,000 metric tons of newsprint, 88,000 tons of which were sold to the Company,
with the balance sold to Donohue for resale.
Madison is a partnership between Northern SC Paper Corporation ("Northern")
and a subsidiary of Myllykoski Oy, a Finnish papermaking company. The Company
owns 80% of Northern, and Myllykoski Oy, through a subsidiary, owns the
remaining 20%. Through Northern, the Company's share of Madison's profits and
losses is 40%. Madison produces supercalendered paper at its facility in
Madison, Maine. Madison purchases all its wood from local suppliers, mostly
under long-term contracts. In 1995 Madison produced 180,000 metric tons, 10,000
tons of which were sold to the Company. In 1996 Madison's five largest customers
(of which the smallest is the Company) are expected to purchase approximately
39% of Madison's budgeted production.
The Forest Products Companies are subject to comprehensive environmental
protection laws, regulations and orders of provincial, federal, state and local
authorities of Canada or the United States (the "Environmental Laws"). The
Environmental Laws impose effluent and emission limitations and require the
Forest Products Companies to obtain, and operate in compliance with the
conditions of, permits and other governmental authorizations ("Governmental
Authorizations"). The Forest Products Companies follow policies and operate
monitoring programs to ensure compliance with applicable Environmental Laws and
Governmental Authorizations and to minimize exposure to environmental
liabilities. Various regulatory authorities periodically review the status of
the operations of the Forest Products Companies. Based on the foregoing, the
Company believes that the Forest Products Companies are in substantial
compliance with such Environmental Laws and Governmental Authorizations.
COMPETITION
The Times competes with newspapers of general circulation in New York City
and its suburbs. The Times also competes in varying degrees with national
publications such as The Wall Street Journal and USA Today and with magazines,
television, radio and other media. Based on a specially prepared report by
Competitive Media Reporting, Inc., an independent agency that measures
advertising revenue, and The Times's internal analysis, The Times believes that
it ranks first by a substantial margin in advertising revenue in the general
weekday and Sunday newspaper field in the New York City metropolitan area. The
Regional Newspapers and the International Herald Tribune compete with a variety
of other advertising media in their respective markets.
The Globe competes with other newspapers distributed in Boston and its
neighboring suburbs, including The Boston Herald (daily and Sunday). The Globe
also competes with other communications media, such as direct mail, magazines,
radio, television (including cable television), and weekly, suburban and
nationally distributed newspapers. Based on information supplied by major daily
newspapers published in New England and assembled by the New England Newspaper
Association, Inc., for the 12-month period ending December 31, 1995, The Globe
ranked first in advertising inches among all newspapers published in Boston and
New England.
All the magazines published by the Company compete directly with comparable
publications as well as with general interest magazines and other media, such as
newspapers and broadcasting.
All of the Company's television stations compete directly with other
television stations in their respective markets and with other video services,
such as cable network programming carried on local cable systems. WQXR (FM)
competes for listeners with WNYC (FM) (a non-commercial station) for
9
<PAGE>
the classical music audience, and it and WQEW (AM) compete for listeners and
revenues with many adult-audience commercial radio stations and other media in
New York City and surrounding suburbs.
Syndication Sales's operations compete with several other syndicated
features and supplemental news services.
The Forest Products Companies are in a highly-competitive industry.
EMPLOYEES
As of December 31, 1995, the Company had approximately 12,300 full-time
equivalent employees.
Approximately 3,600 full-time equivalent employees of The Times and City &
Suburban Delivery Systems, which operates its wholesaler business, are
represented by 16 unions. The Times has collective bargaining agreements
effective through March 30, 2000, with all of its six production unions and with
six of its non-production unions. The Times's contracts with the International
Brotherhood of Electricians (covering approximately 30 non-production employees)
and the International Union of Operating Engineers (covering approximately 20
non-production employees) will expire in the first half of 1996. Negotiations
regarding new contracts with both of these unions will be initiated in the first
quarter of 1996. In early 1996, both The Times and City & Suburban Delivery
Systems will initiate negotiations with 13 unions representing their respective
production and non-production employees (approximately 3,500) regarding a wage
package covering the period beginning March 31, 1996, and ending March 30, 2000.
In the event the parties are unable to reach agreement, the matter will be
submitted to binding arbitration.
API and its subsidiaries, including The Globe, employ approximately 3,100
full-time equivalent employees. Of these, approximately 2,100 are represented by
12 unions. As of December 31, 1995, labor agreements with three of its 11
mechanical unions expired. Negotiations have commenced and The Globe expects
them to be successfully completed in 1996. Seven other mechanical unions have
contracts which continue to be in effect with expiration dates ranging from
December 31, 1996, to December 31, 2001. As of December 31, 1995, three of those
contracts are subject to renegotiation of wage provisions only. Negotiations
continue with one mechanical union whose contract expired on December 31, 1992.
The Globe expects to conclude this negotiation successfully in 1996 as well.
After its agreement with The Boston Globe Employees Association ("BGEA"), an
affiliate of The Newspaper Guild, expired on December 31, 1994, The Globe
reached an impasse in its negotiations with the BGEA in July 1995. Thereafter,
The Globe implemented the terms of its final offer to the BGEA, although
negotiations are continuing.
Three other entities owned by the Company (The Press Democrat, WQXR and
WQEW) also have collective bargaining agreements covering certain of their
employees.
ITEM 2. Properties.
The Times: The Company owns its headquarters at 229 West 43d Street, New
York, New York. The building has 15 stories and approximately 714,000 square
feet of floor space and serves as a publishing facility for The Times. During
late 1995, a renovation of The Times's newsroom commenced. The renovation is
expected to be complete by 1999 and to cost approximately $30,000,000. The
renovation is timed to give The Times the space and electrical infrastructure to
fully paginate the newspaper by the end of 1996.
The other publishing facility is located in Edison, New Jersey. This
1,300,000 square foot facility is occupied pursuant to a long-term lease with
renewal and purchase options. The Edison production and distribution facility
began producing newspapers in 1992, and produces all of the advance Sunday
sections of The Times (except The New York Times Magazine and the Television
section) and
10
<PAGE>
approximately one-third of the weekday and Sunday New York edition. (See Notes 8
and 14 of Notes to Consolidated Financial Statements.)
The Edison facility replaced an older production facility in Carlstadt, New
Jersey. The Company completed removal of equipment from the facility and has
commenced marketing of the Carlstadt facility for lease or sale.
The Edison facility is the first step in a plan to modernize the production
facilities of The Times. To complete its modernization plan, the Company expects
to replace the production facility housed in the basement at its 43d Street
facility in 1997. The Company is constructing a 515,000 square foot printing and
distribution plant in College Point, Queens, to be operational in the second
half of 1997. The Company is leasing a 31-acre site in College Point and has the
option to purchase the property at any time prior to the end of the lease in
2019. Together with the Edison plant, the College Point facility will provide a
number of benefits, including later deadlines, increased color in the daily
paper, increased flexibility in paging and sectioning the paper and daily
advertising inserts. (See Notes 8 and 14 of Notes to Consolidated Financial
Statements.)
The Globe owns its printing plants in Boston (652,000 square feet) and
Billerica (290,000 square feet), Massachusetts, as well as its Sunday pre-print
storage, inserting and packaging plant in Westwood, Massachusetts (115,000
square feet). The Globe and its subsidiaries own or lease office and other
facilities that are suitable and adequate for their current activities.
The Regional Newspapers own their printing facilities. The Company's
Regional Newspapers, magazines, broadcast stations and information businesses
own or lease office facilities that are suitable and adequate for their current
activities. A new 180,000 square foot color printing facility is under
construction at The Ledger in Lakeland, Florida, for an expected cost of
approximately $70,000,000 and completion is expected by the end of 1996.
ITEM 3. Legal Proceedings.
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that may be required to be
made. It is the opinion of management after reviewing such actions with legal
counsel to the Company that the ultimate liability which might result from such
actions will not have a material adverse effect on the consolidated financial
position or results of operations of the Company.
ITEM 4. Submission Of Matters To A Vote Of Security Holders.
Not applicable.
Executive Officers Of The Registrant
<TABLE><CAPTION>
Employed
By
Registrant Position(s) As Of
Name Age Since March 11, 1996(1)
- ---- --- ---------- -----------------
<S> <C> <C> <C>
CORPORATE OFFICERS
Arthur Ochs Sulzberger....... 70 1951 Chairman (since 1973); Chief Executive Officer;
Director; Publisher of The New York Times
("The Times") (1963 to 1992)
Lance R. Primis.............. 49 1969 President and Chief Operating Officer (since
1992); President and General Manager of The
Times (1988 to 1992)
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Employed
By
Registrant Position(s) As Of
Name Age Since March 11, 1996(1)
- ----------------------------- --- ---------- -----------------------------------------------
<S> <C> <C> <C>
Diane P. Baker............... 41 1995 Senior Vice President and Chief Financial
Officer (since 1995); Group Senior Vice
President--Chief Financial Officer of R.H.
Macy & Co., Inc. ("Macy's") (1993 to 1995);
Senior Vice President--Finance and Chief
Financial Officer of Macy's (1990 to 1993)
Katharine P. Darrow.......... 52 1970 Senior Vice President (since 1993),
Broadcasting, Corporate Development and Human
Resources; Vice President (1988 to 1993),
Broadcasting/Information Services and
Corporate Development
Michael Golden............... 46 1984 Vice President, Operations Development (since
1996); Executive Vice President and Publisher
of Tennis (1994 to 1995); Executive Vice
President and General Manager of Women's
Magazines (1991 to 1994); Publisher of McCall's
(1990-1991)
David L. Gorham.............. 63 1974 Senior Vice President (since 1980) and Deputy
Chief Operating Officer (since 1995); Chief
Financial Officer (1980 to 1995); Treasurer
(1988 to 1992)
Leslie A. Mardenborough...... 46 1981 Vice President, Human Resources (since 1990)
Thomas H. Nied............... 53 1977 Vice President, Taxation (since 1990)
Stuart Stoller............... 40 1996 Vice President and Corporate Controller (since
1996); Controller of Coopers and Lybrand
L.L.P. (1995); Senior Vice President--Control
and Accounting of Macy's (1993 to 1995); Group
Vice President--Control and Accounting of
Macy's (1991 to 1993); Vice President--Corporate
Accounting of Macy's (1989 to 1991)
Solomon B. Watson IV......... 51 1974 Vice President (since 1990); General Counsel
(since 1989)
Laura J. Corwin.............. 50 1980 Secretary (since 1989) and Corporate Counsel
(since 1993)
Richard G. Thomas............ 47 1977 Treasurer (since 1992); Assistant Treasurer
(1983 to 1992)
OPERATING UNIT EXECUTIVES
James W. FitzGerald.......... 57 1968 President, The New York Times Company Magazine
Group, Inc. (since 1985)
Stephen Golden............... 49 1974 Vice President, Forest Products, Health, Safety
and Environmental Affairs (since 1992);
President and General Manager of the
Company's Forest Products Group (since 1994);
Vice President, Forest Products (1990 to
1992)
C. Frank Roberts............. 52 1970 Vice President, Broadcasting (since 1986)
Arthur O. Sulzberger, Jr..... 44 1978 Publisher of The Times (since 1992); Deputy
Publisher of The Times (1988 to 1992)
William O. Taylor............ 63 1993 Publisher of The Boston Globe (since 1978) and
Chairman and Chief Executive Officer of Globe
Newspaper Company (since 1982)
James C. Weeks............... 53 1971 President, Regional Newspaper Group of the
Company (since 1993); Senior Vice President,
Operations, Regional Newspaper Group (1988 to
1993)
</TABLE>
- ------------
(1) During the past five years, all of the executive officers listed above have
held positions which were the same or substantially similar to those they
currently hold except as indicated above.
12
<PAGE>
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
The information required by this item appears at page F-27 of this Form
10-K.
ITEM 6. Selected Financial Data.
The information required by this item appears at page F-1 of this Form 10-K.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The information required by this item appears at pages F-4 to F-8 of this
Form 10-K.
ITEM 8. Financial Statements and Supplementary Data.
The information required by this item appears at pages F-2, F-3, pages F-9
to F-26 and page F-28 of this Form 10-K.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
In addition to the information set forth under the caption "Executive
Officers of the Registrant" in Part I of this Form 10-K, the information
required by this item is incorporated by reference to the paragraph immediately
following footnote 10 on page 6, pages 8 to 13 and the top of page 14, but only
up to and not including the section entitled "Certain Information about the
Board of Directors," of the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders.
ITEM 11. Executive Compensation.
The information required by this item is incorporated by reference to pages
13 to 19 and the section on page 23 entitled "Compensation Committee Interlocks
and Insider Participation" of the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to pages
1 to 8, but only up to and not including the section entitled "Proposal Number
1- Election of Directors," of the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders.
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated by reference to page
13 and pages 16 to 19 of the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders.
13
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.
(A) Documents Filed As Part Of This Report
(1) Financial Statements And Supplemental Schedules
(a) The consolidated financial statements of the Company are filed as
part of this Form 10-K and are set forth on pages F-2, F-3 and F-9 to
F-26. The report of Deloitte & Touche LLP, Independent Public
Accountants, dated February 7, 1996, is set forth on page F-27 of this
Form 10-K.
(b) The following additional consolidated financial information is
filed as part of this Form 10-K and should be read in conjunction with
the consolidated financial statements set forth on pages F-2, F-3 and F-9
to F-26. Schedules not included with this additional consolidated
financial information have been omitted either because they are not
applicable or because the required information is shown in the
consolidated financial statements at the aforementioned pages.
Page
----
Independent Auditors' Consent............................... Exhibit 23
Consolidated Schedules for the Three Years Ended December
31, 1995:
II--Valuation and Qualifying Accounts.................. S-1
Separate financial statements and supplemental schedules of
associated companies accounted for by the equity method are omitted in
accordance with the provisions of Rule 3-09 of Regulation S-X.
(2) Exhibits
(2.1) Agreement and Plan of Merger dated as of June 11, 1993, as
amended by the First Amendment dated as of August 12, 1993, by and among
the Company, Sphere, Inc. and Affiliated Publications, Inc. (filed as
Exhibit 2 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex I to the Joint Proxy
Statement/Prospectus included in such Registration Statement (schedules
omitted--the Company agrees to furnish a copy of any schedule to the
Commission upon request), and incorporated by reference herein).
(2.2) Stockholders Agreement dated as of June 11, 1993, by and
between the Company and the other parties signatory thereto (filed as
Exhibit 2.1 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex II to the Joint Proxy
Statement/Prospectus included in such Registration Statement, and
incorporated by reference herein).
(3.1) Certificate of Incorporation as amended by the Class A and
Class B stockholders and as restated on September 29, 1993 (filed as an
Exhibit to the Company's Form 10-K dated March 21, 1994, and incorporated
by reference herein).
(3.2) By-laws as amended through February 16, 1995 (filed as an
Exhibit to the Company's Form 10-Q dated May 11, 1995, and incorporated
by reference herein).
(4) The Company agrees to furnish to the Commission upon request a
copy of any instrument with respect to long-term debt of the Company and
any subsidiary for which consolidated or unconsolidated financial
statements are required to be filed, and for which the amount of
securities authorized thereunder does not exceed 10% of the total assets
of the Company and its subsidiaries on a consolidated basis.
14
<PAGE>
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993, as
amended effective October 1, 1995.
(10.1) The Company's Executive Incentive Compensation Plan as amended
through December 20, 1990 (filed as an Exhibit to the Company's Form 10-K
dated March 1, 1991, and incorporated by reference herein).
(10.2) The Company's 1991 Executive Stock Incentive Plan, as amended
through April 18, 1995.
(10.3) The Company's 1991 Executive Cash Bonus Plan, as amended
through April 18, 1995.
(10.4) The Company's Non-Employee Directors' Stock Option Plan,
adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy
Statement dated March 1, 1991, and incorporated by reference herein).
(10.5) The Company's Supplemental Executive Retirement Plan, as
amended and restated through January 1, 1993.
(10.6) Lease (short form) between the Company and Z Edison Limited
Partnership dated April 8, 1987 (filed as an Exhibit to the Company's
Form 10-K dated March 27, 1988, and incorporated by reference herein).
(10.7) Agreement of Lease, dated as of December 15, 1993, between The
City of New York, Landlord, and the Company, Tenant (as successor to New
York City Economic Development Corporation (the "EDC"), pursuant to an
Assignment and Assumption of Lease With Consent, made as of December 15,
1993, between the EDC, as Assignor, to the Company, as Assignee) (filed
as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
(10.8) Funding Agreement #1, dated as of December 15, 1993, between
the EDC and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.9) Funding Agreement #2, dated as of December 15, 1993, between
the EDC and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.10) Funding Agreement #3, dated as of December 15, 1993, between
the EDC and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.11) Funding Agreement #4, dated as of December 15, 1993, between
the EDC and the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.12) New York City Public Utility Service Power Service Agreement,
made as of May 3, 1993, between The City of New York, acting by and
through its Public Utility Service, and The New York Times Newspaper
Division of the Company (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.13) Employment Agreement, dated May 19, 1993, between API, Globe
Newspaper Company and William O. Taylor (filed as an Exhibit to the
Company's Form 10-K dated March 21, 1994, and incorporated by reference
herein).
(10.14) API's 1989 Stock Option Plan (filed as Annex F-1 to API's
Proxy Statement-Joint Prospectus, dated as of April 28, 1989, contained
in API's Registration Statement on Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
15
<PAGE>
(10.15) API's Supplemental Executive Retirement Plan, as amended
effective September 15, 1993 (filed as an Exhibit to the Company's Form
10-K dated March 21, 1994, and incorporated by reference herein).
(10.16) API's 1990 Stock Option Plan (Restated 1991) (filed as
Exhibit 1 to API's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1991 (Commission File No. 1-10251), and incorporated by
reference herein).
(10.17) Form of Substituted Stock Option Agreement/Incentive 86 among
API, its predecessor company and certain employees (filed as Exhibit
10.27 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.18) Form of Substituted Stock Option Agreement/Incentive 87 among
API, its predecessor company and certain employees (filed as Exhibit
10.29 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.19) Form of Substituted Stock Option Agreement/Incentive 88 among
API, its predecessor company and certain employees (filed as Exhibit
10.31 to Post-Effective Amendment No. 1 filed August 11, 1989, to API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.20) The Company's Deferred Executive Compensation Plan, adopted
on May 19, 1994.
(21) Subsidiaries of the Company.
(23) Consent of Deloitte & Touche LLP.
(27) Financial Data Schedule.
(B) REPORTS ON FORM 8-K
On December 26, 1995, the Company filed a report on Form 8-K dated
December 26, 1995, relating to the change in its fiscal year end from December
31 to the last Sunday in December, beginning with the fiscal year ending
December 29, 1996.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: March 11, 1996
(Registrant)
THE NEW YORK TIMES COMPANY
By: /s/ LAURA J. CORWIN
.................................
Laura J. Corwin, Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
ARTHUR OCHS SULZBERGER Chairman (Chief March 11, 1996
Executive Officer),
Director
JOHN F. AKERS Director March 11, 1996
DIANE P. BAKER Senior Vice President and March 11, 1996
Chief Financial Officer
(Principal Financial Officer)
RICHARD L. GELB Director March 11, 1996
LOUIS V. GERSTNER, JR. Director March 11, 1996
MARIAN S. HEISKELL Director March 11, 1996
A. LEON HIGGINBOTHAM, JR. Director March 11, 1996
RUTH S. HOLMBERG Director March 11, 1996
ROBERT A. LAWRENCE Director March 11, 1996
GEORGE B. MUNROE Director March 11, 1996
CHARLES H. PRICE II Director March 11, 1996
LANCE R. PRIMIS President (Chief Operating March 11, 1996
Officer)
GEORGE L. SHINN Director March 11, 1996
DONALD M. STEWART Director March 11, 1996
STUART STOLLER Vice President, March 11, 1996
Corporate Controller
(Principal Accounting
Officer)
JUDITH P. SULZBERGER Director March 11, 1996
WILLIAM O. TAYLOR Director March 11, 1996
CYRUS R. VANCE Director March 11, 1996
17
<PAGE>
Appendix
1995 Financial Report
<PAGE>
THE NEW YORK TIMES COMPANY
1995 Consolidated Financial Statements
- -------------------------------------------------------------------------------
Contents Page
- -------------------------------------------------------------------------------
Financial Highlights F-1
Segment Information F-2
Management's Discussion and Analysis F-4
Consolidated Statements of Income F-9
Consolidated Balance Sheets F-10
Consolidated Statements of Cash Flows F-12
Consolidated Statements of Stockholders' Equity F-14
Notes to Consolidated Financial Statements F-15
Independent Auditors' Report F-27
Management's Responsibilities Report F-27
Market Information F-27
Quarterly Information F-28
Ten-Year Supplemental Financial Data F-29
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands except per share data Year Ended December 31
1995 1994 1993 1992 1991
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES AND INCOME
Revenues $ 2,409,403 $ 2,357,563 $ 2,019,654 $ 1,773,535 $ 1,703,101
Operating profit 228,580 211,242 126,581 88,408 93,639
Income before income taxes and equity in operations
of forest products group 214,641 383,953 101,206 8,525 63,053
Income (Loss) before equity
in operations of forest products group 121,809 210,085 57,975 (2,554) 41,293
Equity in operations of forest products group 14,051 3,264 (51,852) (8,718) 5,700
Income (Loss) before net cumulative effect
of accounting changes 135,860 213,349 6,123 (11,272) 46,993
Net cumulative effect of accounting changes -- -- -- (33,437) --
Net income (loss) 135,860 213,349 6,123 (44,709) 46,993
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net 1,276,066 1,158,751 1,112,024 902,755 966,593
Total assets 3,376,730 3,137,631 3,215,204 1,994,974 2,127,981
Long-term debt and capital lease obligations 637,873 523,196 460,063 206,911 213,487
Common stockholders' equity 1,610,349 1,543,539 1,598,883 999,630 1,073,442
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Income (Loss) before net cumulative
effect of accounting changes 1.40 2.05 .07 (.14) .61
Net cumulative effect of accounting changes -- -- -- (.43) --
Net income (loss) 1.40 2.05 .07 (.57) .61
Dividends .56 .56 .56 .56 .56
Common stockholders' equity (end of year) 16.50 15.71 14.96 12.54 13.70
- ------------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 9% 9% 6% 5% 5%
Income before equity in operations
of forest products group to revenues 5% 5% 3% 2% 2%
Return on average stockholders' equity 8% 7% -- 2% 4%
Return on average total assets 4% 3% -- 1% 2%
Long-term debt and capital lease obligations
to total capitalization 28% 25% 22% 17% 17%
Current assets to current liabilities .89 .91 .89 1.08 .89
- ------------------------------------------------------------------------------------------------------------------------------------
EMPLOYEES 12,300 12,800 13,000 10,100 10,100
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In 1995, the Company sold small regional newspapers (see Note 2). The sales
resulted in a pre-tax gain of approximately $11.3 million ($5.0 million after
taxes or $.05 per share). These transactions are not reflected in the 1995
income amounts used in the applicable key ratio calculations presented above.
In 1994, the Company sold its Women's Magazines Division and U.K. golf
publications, and divested a minority interest in a Canadian paper mill
("Gaspesia") (see Note 2). As a result of these transactions, the Company
recorded a net pre-tax gain of approximately $200.9 million ($103.3 million
after taxes or $.99 per share). These transactions are not reflected in the 1994
income amounts used in the applicable key ratio calculations presented above.
Amounts for 1995 through 1993 include The Boston Globe since its acquisition on
October 1, 1993 (see Note 2).
For 1993, return on average stockholders' equity and return on average total
assets are less than 1 percent due to several factors which lowered net income
for the year (see Management's Discussion and Analysis on page F-6).
In 1992, the Company closed The Gwinnett (Ga.) Daily News and sold the residual
assets. The closing and related sale resulted in a pre-tax loss of $53.8 million
($37.1 million after taxes or $.47 per share). Net cumulative effect of
accounting changes reflects the 1992 adoption of the change in methods of
accounting for income taxes, postretirement benefits other than pensions and
postemployment benefits. The net cumulative effect and the Gwinnett transaction
are not reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
F-1
<PAGE>
SEGMENT INFORMATION
- --------------------------------------------------------------------------------
The Company has classified its business into the following segments and equity
interests:
NEWSPAPERS: The New York Times ("The Times"), The Boston Globe ("The Globe"), 21
regional newspapers, newspaper distributors, a one-half interest in the
International Herald Tribune S.A., a news service, a features syndicate,
TimesFax, licensing operations of The New York Times databases/microfilm and New
Ventures. New Ventures include projects developed in electronic media by The
Times and The Globe as well as various new media investments.
MAGAZINES: Numerous publications and New Ventures such as computerized systems
for golf tee time reservations and on-line magazine services, and related
activities in the sports/leisure field.
BROADCASTING: Six network-affiliated television stations and two radio stations.
FOREST PRODUCTS: Equity interests in a newsprint company and a partnership in a
supercalendered paper mill that together supply a portion of the Newspaper
Group's annual paper requirements.
<TABLE><CAPTION>
- -----------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1995 1994 1993
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Newspapers $ 2,161,356 $ 2,006,184 $ 1,563,281
Magazines 162,941 280,061 394,463
Broadcasting 85,106 71,318 61,910
- -----------------------------------------------------------------------------------------
Total $ 2,409,403 $ 2,357,563 $ 2,019,654
- -----------------------------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 208,465 $ 207,489 $ 125,597
Magazines 28,741 19,204 12,330
Broadcasting 18,943 13,626 8,138
Unallocated corporate expenses (27,569) (29,077) (19,484)
- -----------------------------------------------------------------------------------------
Total 228,580 211,242 126,581
Interest expense, net of interest income 25,230 28,162 25,375
Net gain on dispositions 11,291 200,873 --
- -----------------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 214,641 383,953 101,206
Income taxes 92,832 173,868 43,231
- -----------------------------------------------------------------------------------------
Income before equity in
operations of forest products group 121,809 210,085 57,975
Equity in operations of forest products group 14,051 3,264 (51,852)
- -----------------------------------------------------------------------------------------
NET INCOME $ 135,860 $ 213,349 $ 6,123
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
F-2
<PAGE>
SEGMENT INFORMATION
- -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1995 1994 1993
- -------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspapers $ 133,264 $ 135,767 $ 98,963
Magazines (7,000) 3,426 18,616
Broadcasting 11,519 10,113 10,725
Corporate 1,151 784 528
- -------------------------------------------------------------------------------
Total $ 138,934 $ 150,090 $ 128,832
- -------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspapers $ 196,096 $ 188,222 $ 71,780
Magazines 736 906 3,059
Broadcasting 4,093 3,013 3,289
Corporate 11,130 794 1,491
- -------------------------------------------------------------------------------
Total $ 212,055 $ 192,935 $ 79,619
- -------------------------------------------------------------------------------
IDENTIFIABLE ASSETS AT DECEMBER 31
Newspapers $ 2,832,297 $ 2,732,953 $ 2,685,611
Magazines 99,525 91,797 247,723
Broadcasting 174,363 100,874 104,843
Corporate 168,576 126,574 101,007
Investment in forest products group 101,969 85,433 76,020
- -------------------------------------------------------------------------------
Total $ 3,376,730 $ 3,137,631 $ 3,215,204
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
Newspaper Group operating profit for 1995 and 1993 includes charges of $8.5
million and $35.4 million, respectively, for costs related to staff reductions.
Unallocated corporate expenses for 1995 includes a charge of $1.6 million for
similar staff reductions.
Magazine Group amounts for 1994 have been affected by the dispositions of the
Women's Magazines Division and the U.K. golf publications (see Note 2). The 1995
and 1994 amortization amounts include $10.0 million and $4.2 million,
respectively, of the income relating to a $40.0 million non-compete agreement,
associated with the disposition of the Women's Magazines Division, which is
being recognized straight-line over four years.
Newspaper Group amounts for 1995 and 1994 have been affected by the inclusion of
The Globe's operations for the entire year, while the 1993 amounts only include
its operations from the October 1, 1993 acquisition date (see Note 2).
Equity in operations of Forest Products Group and investment in Forest Products
Group for 1993 reflect an after-tax noncash charge of $47.0 million to write
down the Company's investment in Gaspesia.
F-3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
- -------------------------------------------------------------------------------
Advertising and circulation revenues accounted for approximately 69 percent and
23 percent of the Company's revenues in 1995. National and local economic
conditions influence the level of retail, national and classified advertising
generated in the markets served by the Company's business segments. Circulation
revenue is affected by competition from other forms of media available in the
Company's respective markets.
The cost of raw materials for the Company and the entire publishing industry
was adversely affected by the significant increases in newsprint and magazine
paper prices throughout 1995. The unfavorable impact of these increases is
expected to continue during 1996. However, it its unclear whether paper prices
will continue to rise in 1996.
Per share amounts in the following Management's Discussion and Analysis are
computed on an after-tax basis.
RESULTS OF OPERATIONS: 1995 Compared with 1994
In 1995, the Company reported net income of $135.9 million, or $1.40 per share,
compared with net income of $213.3 million, or $2.05 per share, in 1994.
Exclusive of special factors as described below, annual earnings from
ongoing operations would have been $1.41 per share in 1995, compared with $1.06
per share in 1994, an increase of 33 percent. The improvement in ongoing
operations in 1995's annual earnings was primarily due to higher revenues from
the Company's newspaper and broadcast properties and higher earnings from its
Forest Products Group.
Consolidated revenues for 1995 increased to $2.41 billion from $2.36 billion
in 1994. Excluding the revenues attributable to the operations divested during
1995 and 1994, annual revenues on a comparable basis were up 8 percent over
1994. The growth in revenues for the year was driven by strong revenues at the
newspaper and broadcast properties.
The Company's costs and expenses, excluding special factors, increased to
$2.17 billion from $2.15 billion in 1994. Excluding the costs and expenses
associated with the 1995 and 1994 divestitures, costs increased approximately 9
percent. The increase was primarily due to higher newsprint and magazine paper
prices and higher wages and benefits costs throughout the Company.
The Company's earnings for the year before interest, income taxes,
depreciation and amortization ("EBITDA"), excluding the net gains from the 1995
and 1994 divestitures, rose to $367.5 million from $361.3 million in the
comparable 1994 period.
Earnings for 1995 were affected by the following special factors:
- $10.1 million pre-tax charge ($.06 per share) for severance and
related costs resulting from work force reductions ("buyouts").
- $11.3 million pre-tax gain ($.05 per share) on the sales of small
regional newspapers.
Earnings for 1994 were affected by the following special factor:
- $200.9 million net pre-tax gain ($.99 per share) relating to the
divestitures of the Women's Magazines Division, U.K. golf publications
and a minority interest in Gaspesia Pulp & Paper Company Ltd.
("Gaspesia"), a Canadian newsprint mill.
Annual per share amounts were affected by the repurchase of the Company's
Class A Common Stock throughout 1994 and 1995. During 1995, $46.3 million was
expended to repurchase approximately 2.1 million shares. In 1994, approximately
$235.2 million was expended to repurchase 10.0 million shares.
Interest expense, net of interest income, declined to $25.2 million from
$28.2 million in 1994. The 1995 decline was due to higher levels of capitalized
interest in connection with new construction and a lower rate of interest on the
Company's outstanding debt, offset by higher debt balances.
Exclusive of taxes related to the 1995 and the 1994 divestitures, the annual
effective income tax rate for 1995 was 42.5 percent compared with 41.7 percent
in 1994. The 1995 tax rate includes the effects of a 1995 favorable state tax
ruling. The 1994 rate includes the utilization of capital loss carryforwards.
The following discussion provides additional information with respect to the
Company's traditional operations and new ventures.
<PAGE>
- --------------------------------------------------------------------------------
NEWSPAPER GROUP: The table below shows the Newspaper Group's revenues, EBITDA
and operating profit split between newspapers/related businesses and new
ventures. The Newspapers category consists of: The New York Times ("The Times"),
The Boston Globe ("The Globe"), 21 Regional Newspapers, newspaper distributors,
a 50 percent interest in the International Herald Tribune, and Information
Services (previously included in the Broadcasting Group) which includes a news
service, a features syndicate, TimesFax and licensing operations of The New York
Times databases and microfilm. The New Ventures category consists of new
projects developed in electronic media by The Times and The Globe as well as
various new media investments such as Video News International and The Popcorn
Channel.
(Dollars in thousands) 1995 1994
- ------------------------------------------------------------------
REVENUES
Newspapers $2,160,399 $2,006,184
New Ventures 957 -
- ------------------------------------------------------------------
Total Revenues $2,161,356 $2,006,184
- ------------------------------------------------------------------
EBITDA
Newspapers $ 354,415 $ 343,256
New Ventures (12,686) -
- ------------------------------------------------------------------
Total EBITDA $ 341,729 $ 343,256
- ------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 221,566 $ 207,489
New Ventures (13,101) -
- ------------------------------------------------------------------
Total Operating Profit $ 208,465 $ 207,489
- ------------------------------------------------------------------
F-4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
Excluding buyouts associated with the Group, operating profit in 1995 was
$217.0 million compared with $207.5 million in 1994. Revenues increased to $2.16
billion in 1995 from $2.01 billion in the prior year. Operating profit improved
despite a significant increase in newsprint prices over 1994. Increased
advertising and circulation rates and cost controls enabled the Group to
overcome a $76.2 million increase for the year in newsprint costs (net of
conservation programs).
Revenues increased approximately 8 percent for the year. The increase was
attributable to higher advertising rates and volume, higher circulation revenues
and database royalties. The Times experienced a 15 percent gain in circulation
revenues while The Globe recorded an 11 percent increase for the year. At the 21
Regional Newspapers, circulation revenue grew 7 percent for the year.
Average circulation on a comparable basis for the year was as follows:
Weekday Sunday
- ------------------------------------------------------------------
(Copies in thousands) 1995 % Change 1995 % Change
- ------------------------------------------------------------------
AVERAGE CIRCULATION
The New York Times 1,120.7 -1.9 1,712.6 -1.8
The Boston Globe 497.7 -1.3 789.3 -1.9
Regional Newspapers 753.7 -2.3 803.9 -1.6
- ------------------------------------------------------------------
The average circulation decline is partly attributable to the increase in
newsstand and home delivery prices and a decrease in distribution to selected
outlying areas.
Advertising volume on a comparable basis for the year was as follows:
- ------------------------------------------------------------------
(Inches in thousands) 1995 % Change
- ------------------------------------------------------------------
ADVERTISING VOLUME (EXCLUDING PREPRINTS)
The New York Times 3,831.2 +2.6
The Boston Globe 2,946.9 +2.2
Regional Newspapers 15,525.1 +1.1
- ------------------------------------------------------------------
Advertising volume at The Times increased 2.6 percent over 1994. Zoned and
national advertising categories increased 14.6 percent and 1.3 percent,
respectively, while retail and classified advertising experienced decreases of
3.8 percent and 2.8 percent, respectively.
At The Globe, advertising volume for the year increased 2.2 percent over
1994. Advertising increased in all categories except retail, which declined 2.1
percent. Advertising volume for the 21 Regional Newspapers increased 1.1 percent
over 1994. Classified advertising increased 8.0 percent, while the retail
category decreased 2.1 percent.
MAGAZINE GROUP: The Magazine Group is comprised of a number of publications, New
Ventures such as computerized systems for golf tee time reservations and on-line
magazine services, and related activities in the sports/leisure field. The
revenues for the Group include a $40.0 million non-compete agreement, associated
with the divestiture of the Women's Magazine Division, which is being recognized
straight-line over four years.
- ------------------------------------------------------------------
(Dollars in thousands) 1995 1994
- ------------------------------------------------------------------
REVENUES
Sports/Leisure Magazines $152,819 $144,777
New Ventures 122 -
Non-Compete 10,000 4,167
1994 Divested Magazines - 131,117
- ------------------------------------------------------------------
Total Revenues $162,941 $280,061
- ------------------------------------------------------------------
EBITDA
Sports/Leisure Magazines $ 22,876 $ 21,611
New Ventures (1,135) -
1994 Divested Magazines - 1,019
- ------------------------------------------------------------------
Total EBITDA $ 21,741 $ 22,630
- ------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Sports/Leisure Magazines $ 19,971 $ 19,439
New Ventures (1,230) -
Non-Compete 10,000 4,167
1994 Divested Magazines - (4,402)
- ------------------------------------------------------------------
Total Operating Profit $ 28,741 $ 19,204
- ------------------------------------------------------------------
<PAGE>
Operating profit for the Group was $28.7 million in 1995, compared with
$19.2 million in 1994, on revenues of $162.9 million and $280.1 million,
respectively. The decrease in revenues for the year was primarily due to the
revenues attributable to the Women's Magazines Division and the U.K. golf
publications, which were sold in the third quarter of 1994.
Excluding the operations of the 1994 divested magazines and the non-compete
income, revenues for 1995 increased approximately 6 percent due to higher
advertising revenues at Golf Digest and Golf World USA offset, in part, by
sluggish advertising at Tennis magazine. Operating profit for the Sports/Leisure
Magazines increased slightly due to improved revenues offset by higher paper
prices and subscription costs.
Advertising pages as reported to Publisher's Information Bureau ("PIB") for
Golf Digest decreased 1.3 percent to 1,304 pages and for Tennis decreased 12.9
percent to 717 pages.
THE BROADCASTING GROUP: The Broadcasting Group consists of six network-
affiliated television stations and two radio stations.
(Dollars in thousands) 1995 1994
- ------------------------------------------------------------------
Revenues $85,106 $71,318
- ------------------------------------------------------------------
EBITDA $30,462 $23,739
- ------------------------------------------------------------------
Operating Profit $18,943 $13,626
- ------------------------------------------------------------------
The Broadcasting Group's operating profit increased 39 percent over 1994.
The Group's operating profit was $18.9 million in 1995, compared with $13.6
million in 1994, on revenues of $85.1 million and $71.3 million, respectively.
Increased results for the year were due to higher local advertising revenues,
higher network compensation and the added operations of WTKR-TV, Norfolk, Va.,
which was acquired in June 1995.
FOREST PRODUCTS GROUP: Equity in operations of the Forest Products Group
(an after-tax amount) was $14.1 million in 1995 compared with $3.3 million in
1994. The 1995 improvement resulted principally from higher paper sales prices.
F-5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS: 1994 COMPARED WITH 1993
In 1994, the Company reported net income of $213.3 million, or $2.05 per share,
compared with $6.1 million, or $.07 per share, in 1993.
Exclusive of the special factors described below, annual earnings would have
been $1.06 per share in 1994 compared with $.91 per share in 1993. Operating
profit for 1994, after excluding the special factors, rose to $211.2 million
from $163.1 million in 1993. The improvement in ongoing operations in 1994's
annual earnings was due to higher revenues at The Times, Regional Newspapers and
Broadcasting and the inclusion of The Globe's operations for the entire year
compared with one quarter in 1993.
Revenues for 1994 increased to $2.36 billion from $2.02 billion in 1993. The
1994 annual revenues included The Globe for an entire year, but the Women's
Magazines and U.K. golf publications only through the first six months. Annual
revenues for 1993 included an entire year of revenues from the magazines sold in
1994, but only the fourth-quarter revenues from The Globe. On a comparable
basis, excluding revenues attributable to The Globe and the magazines sold, 1994
annual revenues increased by approximately 6 percent over 1993. The growth in
1994 revenues was due to higher revenues in the Newspaper and Broadcasting
Groups.
The Company's costs and expenses after excluding special factors increased
to $2.15 billion from $1.86 billion in 1993. The increase was due to the
inclusion of The Globe's operations and acquisition amortization expense for the
entire year, as well as higher wages and benefits costs throughout the Company
offset, in part, by the reduction in expenses associated with the magazines
sold.
Earnings for 1994 were affected by the following special factor:
- $200.9 million net pre-tax gain ($.99 per share) relating to the
divestitures of the Women's Magazines Division, U.K. golf publications
and a minority interest in Gaspesia.
Earnings for 1993 were affected by the following special factors:
- $47.0 million after-tax charge ($.56 per share) against equity in
operations of the Forest Products Group to write down the Company's
investment in Gaspesia.
- $35.4 million pre-tax charges ($.23 per share) for severance and
related costs resulting from staff reductions at The Times.
- $4.4 million unfavorable tax adjustment ($.05 per share) due to a
federal corporate income tax rate increase which required the
remeasurement of deferred tax balances.
- $3.7 million pre-tax costs ($.02 per share) due to a severe snowstorm
that disrupted delivery of The Times.
- $2.6 million pre-tax gain ($.02 per share) on the sale of assets.
Excluding the net gain from the dispositions, EBITDA rose significantly to
$361.3 million in 1994 from $255.4 million in 1993. The increase was due to
improved operating results and the inclusion of The Globe's operations for an
entire year in 1994.
Interest expense, net of interest income, rose to $28.2 million in 1994 from
$25.4 million in 1993. The increase was a result of higher borrowings in
connection with stock repurchases and the October 1993 acquisition of The Globe.
Exclusive of the taxes related to the 1994 magazine sales and the
disposition of Gaspesia, the Company's effective income tax rate for 1994 was
41.7 percent compared with 42.7 percent in 1993. The rates in both years reflect
the utilization of capital tax loss carryforwards.
A discussion of the Company's financial performance follows:
NEWSPAPER GROUP:
(Dollars in thousands) 1994 1993
- ------------------------------------------------------------------
Revenues $2,006,184 $1,563,281
- ------------------------------------------------------------------
EBITDA $ 343,256 $ 224,560
- ------------------------------------------------------------------
Operating Profit $ 207,489 $ 125,597
- ------------------------------------------------------------------
Operating profit of the Newspaper Group, adjusted for special factors, in
1994 was $207.5 million compared with $162.1 million in 1993. Revenues increased
to $2.01 billion in 1994 from $1.56 billion in the prior year. The improvements
in 1994 revenues and operating profit were due to a combination of higher
advertising and circulation rates, increased advertising volume, and the
inclusion of the operations of The Globe for an entire year. The Group was
affected by higher newsprint prices in the fourth quarter of 1994, as a result
of increased demand for newsprint in the market. These prices increased in 1995.
<PAGE>
Average circulation for 1994 throughout the Newspaper Group was adversely
affected by newsstand and home delivery price increases. Average circulation on
a comparable basis for the year was as follows:
Weekday Sunday
- ------------------------------------------------------------------
(Copies in thousands) 1994 % Change 1994 % Change
- ------------------------------------------------------------------
AVERAGE CIRCULATION
The New York Times 1,142.8 -3.1 1,743.9 -2.1
The Boston Globe 504.5 - 804.8 -1.2
Regional Newspapers 843.5 -0.9 851.4 -0.3
Advertising volume on a comparable basis for the year was as follows:
- ------------------------------------------------------------------
(Inches in thousands) 1994 % Change
- ------------------------------------------------------------------
ADVERTISING VOLUME (EXCLUDING PREPRINTS)
The New York Times 3,733.6 +3.5
The Boston Globe 2,884.2 +5.3
Regional Newspapers 17,086.8 +4.3
- ------------------------------------------------------------------
Advertising volume at The Times increased 3.5 percent. National, classified
and zoned advertising categories experienced increases of 2.1 percent, 4.1
percent and 8.3 percent, respectively. However, retail advertising decreased by
1.1 percent.
At The Globe, advertising volume for the year 1994 increased 5.3 percent
over 1993. Advertising increased in all categories, especially classified which
was up 8.6 percent over 1993.
F-6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
At the 28 regional newspapers that were in the Group for the entire 1994 and
1993 periods (two weekly newspapers were sold at the end of 1993), advertising
volume increased 4.3 percent. Advertising increased in all categories over 1993.
MAGAZINE GROUP:
(Dollars in thousands) 1994 1993
- ------------------------------------------------------------------
REVENUES
Sports/Leisure Magazines $144,777 $146,306
Non-Compete 4,167 -
1994 Divested Magazines 131,117 $248,157
- ------------------------------------------------------------------
Total Revenues $280,061 $394,463
- ------------------------------------------------------------------
EBITDA
Sports/Leisure Magazines $ 21,611 $ 26,364
1994 Divested Magazines 1,019 4,582
- ------------------------------------------------------------------
Total EBITDA $ 22,630 $ 30,946
- ------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Sports/Leisure Magazines $ 19,439 $ 22,780
Non-Compete 4,167 -
1994 Divested Magazines (4,402) (10,450)
- ------------------------------------------------------------------
Total Operating Profit $ 19,204 $ 12,330
- ------------------------------------------------------------------
Operating profit for the Magazine Group was $19.2 million in 1994, compared
with $12.3 million in 1993, on revenues of $280.1 million and $394.5 million,
respectively. The decrease in revenues for the year was primarily due to the
lack of revenues attributable to the Women's Magazines Division and the U.K.
golf publications, which were sold in the third quarter of 1994.
In connection with the sale of the Women's Magazines Division, the Company
entered into a four-year non-compete agreement for which it received $40.0
million. This amount is being recognized as income, on a straight-line basis,
over a four- year period commencing with the closing of the sale on July 26,
1994. The 1994 revenues for the Group included $4.2 million relating to this
agreement.
Excluding the 1993 and 1994 operations of the Women's Magazines Division,
the U.K. golf publications and the non-compete income arising from the Women's
sale in 1994, both the revenues and the operating profit of the Sports/Leisure
Magazines for 1994 were down from the comparable period in 1993. This was due
primarily to softness in advertising at Golf Digest and Tennis magazines and
higher subscription promotion costs.
Advertising pages as reported to Publisher's Information Bureau for Golf
Digest decreased 2 percent from 1993 to 1,321 pages and for Tennis increased 4
percent from 1993 to 823 pages.
BROADCASTING GROUP:
(Dollars in thousands) 1994 1993
- ------------------------------------------------------------------
Revenues $71,318 $61,910
- ------------------------------------------------------------------
EBITDA $23,739 $18,863
- ------------------------------------------------------------------
Operating Profit $13,626 $ 8,138
- ------------------------------------------------------------------
The Broadcasting Group's operating profit was $13.6 million in 1994,
compared with $8.1 million in 1993 on revenues of $71.3 million and $61.9
million, respectively. Higher national and local advertising revenues at the
television stations accounted for the improved operating results.
FOREST PRODUCTS GROUP: Equity in operations of the Forest Products Group (an
after-tax amount) was $3.3 million in 1994, compared with a loss of $4.9 million
in 1993, when adjusted for the Gaspesia write-down. The 1994 improvements
resulted from the Company no longer needing to record its share of operating
losses for Gaspesia as a result of the 1993 write-down. In addition, higher
sales prices improved the Group's operating results during the second half of
the year and this favorable trend continued into 1995.
- --------------------------------------------------------------------------------
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities in 1995 of $295.2 million and the
incremental proceeds from the debt offering (see below) were used primarily to
modernize facilities and equipment, to fund acquisitions, to pay dividends to
stockholders and to repurchase shares of the Company's Class A Common Stock. The
ratio of current assets to current liabilities was .89 at December 31, 1995,
compared with .91 at December 31, 1994, and long-term debt and capital lease
obligations as a percentage of total capitalization was 28 percent at December
31, 1995, compared with 25 percent at December 31, 1994.
FINANCING: In March 1995, the Company completed a public offering of $400.0
million of unsecured notes and debentures. The offering consisted of ten-year
notes aggregating $250.0 million maturing March 15, 2005 at an annual rate of
7.625% (the "Notes") and 30-year debentures aggregating $150.0 million maturing
March 15, 2025 at an annual rate of 8.25% (the "Debentures"), (collectively
referred to herein as the "Offering").
The Debentures are callable after ten years. Interest is payable semi-annually
on March 15 and September 15 on both the Notes and the Debentures.
The net proceeds from the Offering were used to repay the principal balance
of the $162.3 million 11.85% Notes due March 31, 1995, $50.0 million of 9.34%
Notes due July 15, 1995 and indebtedness outstanding under the Company's
commercial paper program. The remaining net proceeds were used for general
corporate purposes. Accordingly, at December 31, 1994, the 11.85% Notes due
March 31, 1995, the 9.34% Notes due July 15, 1995 and the amounts outstanding
under the Company's commercial paper facility were classified as long-term debt
as they were expected to be refinanced on a long-term basis under the Offering.
The Company has established a $200.0 million commercial paper program,
which is supported by the Company's revolving credit and term loan agreements.
Borrowings are in the form of
F-7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONCLUDED)
- -------------------------------------------------------------------------------
unsecured notes sold at a discount with maturities ranging up to 270 days.
There were no borrowings outstanding under the commercial paper program at
December 31, 1995.
In addition to the commercial paper program, the Company has several
established sources for future liquidity purposes, including several revolving
credit and term loan agreements. At December 31, 1995, $170.0 million was
available for borrowing by the Company under these agreements.
In connection with the divestiture of a jointly-owned affiliate, Spruce
Falls Power and Paper Company Limited, the Company has fulfilled its commitment
to lend $26.5 million in 1994 to the new owners of the mill. Under the terms of
the loan, the five-year repayment period is not scheduled to commence until
December 1997. The Company expects the former affiliate to fulfill its
contractual obligation as stipulated in the loan agreement.
At December 31, 1995, approximately $17.5 million remains from charges
associated with staff reductions. The remaining cash outflows associated with
these charges are expected to occur over the next three years as a result of the
timing of certain union pension and welfare fund contributions. The Company does
not anticipate that its ongoing business operations will be affected by this
reduction of staff and expects to fund these charges through
internally-generated funds.
STOCK REPURCHASE PROGRAM: During the first quarter of 1995, the Company spent
the remainder of the $100.0 million authorized pursuant to a stock repurchase
program announced in October 1994. In February 1995, the Board of Directors
authorized expenditures of up to an additional $50.0 million. Under the program,
purchases may be made from time to time either in the open market or through
private transactions. The number of shares that may be purchased in market
transactions may be limited as a result of The Globe transaction. Purchases may
be suspended from time to time or discontinued.
In 1995, $46.3 million was expended under the two programs to repurchase
approximately 2.1 million shares. To date, approximately $18.0 million remains
from the 1995 authorization.
CAPITAL EXPENDITURES: In July 1994, the Company's Board of Directors approved
the construction of a new production and distribution facility in College Point,
New York, for the production of The Times. The Company estimates that the cost
of the new facility will be approximately $315.0 million, exclusive of
capitalized interest currently projected to be $35.0 million. Construction began
in August 1994 and completion is expected in the middle of 1997. While the new
facility will replace The Times's Manhattan production and distribution
facility, business and news operations will remain at the Manhattan building. No
write-down is anticipated as a result of the discontinuance of production at the
Manhattan facility.
The Company currently estimates that, inclusive of the College Point
facility, capital expenditures for 1996 will range from $275.0 million to $325.0
million.
The Company believes that cash generated from its operations and the
availability of funds from external sources should be adequate to cover planned
capital expenditures, dividend payments to stockholders and other cash
requirements.
NEW ACCOUNTING PRONOUNCEMENTS: In March 1995, the Financial Accounting Standards
Board ("FASB"), issued Statement of Financial Accounting Standards ("SFAS") No.
121, Accounting for Impairment of Long-Lived Assets ("SFAS 121"). SFAS 121 will
require a review for impairment of long-lived assets and certain identifiable
intangible assets to be held and used, whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. This statement is effective for the Company's 1996 financial
statements. The Company does not believe operating results will be materially
affected upon the adoption of SFAS 121.
In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"). This statement is effective for the Company's 1996
financial statements. SFAS 123 encourages companies to account for stock
compensation awards based on their fair value at the date they are granted. The
resulting compensation cost would be shown as an expense on the income
statement. Companies choosing not to apply the new accounting method are
permitted to continue following current accounting requirements, however, they
will be required to disclose in the notes to the financial statements the effect
on net income and earnings per share had the new accounting method been applied.
The Company anticipates that it will continue to apply current accounting
requirements upon adoption of this standard.
F-8
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------------------------------------------
Dollars and shares in thousands except per share data
Year Ended December 31
1995 1994 1993
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Advertising $ 1,672,598 $ 1,656,999 $ 1,399,042
Circulation 551,985 545,854 473,971
Other 184,820 154,710 146,641
- ---------------------------------------------------------------------------------------
Total 2,409,403 2,357,563 2,019,654
- ---------------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs
Raw materials 368,152 304,360 280,531
Wages and benefits 537,159 529,701 437,528
Other 399,107 428,663 418,554
- ---------------------------------------------------------------------------------------
Total 1,304,418 1,262,724 1,136,613
Selling, general and
administrative expenses 876,405 883,597 756,460
- ---------------------------------------------------------------------------------------
Total 2,180,823 2,146,321 1,893,073
- ---------------------------------------------------------------------------------------
OPERATING PROFIT 228,580 211,242 126,581
Interest expense, net of interest income 25,230 28,162 25,375
Net gain on dispositions 11,291 200,873 --
- ---------------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 214,641 383,953 101,206
Income taxes 92,832 173,868 43,231
- ---------------------------------------------------------------------------------------
Income before equity in operations
of forest products group 121,809 210,085 57,975
Equity in operations of forest products group 14,051 3,264 (51,852)
- ---------------------------------------------------------------------------------------
NET INCOME $ 135,860 $ 213,349 $ 6,123
- ---------------------------------------------------------------------------------------
Average number of common shares outstanding 96,854 104,070 84,459
- ---------------------------------------------------------------------------------------
Per share of common stock
Net income $ 1.40 $ 2.05 $ .07
Dividends .56 .56 .56
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
F-9
<PAGE>
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
December 31
1995 1994
- --------------------------------------------------------------------------------
ASSETS Dollars in thousands
- --------------------------------------------------------------------------------
CURRENT ASSETS
Cash and short-term investments
(at cost which approximates market:
1995, $56,891,000; 1994, $14,255,000) $ 91,442 $ 41,419
Accounts receivable (net of allowances:
1995, $25,865,000; 1994, $28,157,000) 277,974 247,750
Inventories 42,844 30,545
Deferred subscription costs 10,333 10,659
Other current assets 40,042 81,401
- --------------------------------------------------------------------------------
Total current assets 462,635 411,774
- --------------------------------------------------------------------------------
INVESTMENT IN FOREST PRODUCTS GROUP 101,969 85,433
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT (at cost)
Land 65,188 62,945
Buildings, building equipment and improvements 649,131 629,152
Equipment 956,890 908,630
Construction and equipment installations in progress 345,721 218,041
- --------------------------------------------------------------------------------
Total 2,016,930 1,818,768
Less accumulated depreciation 740,864 660,017
- --------------------------------------------------------------------------------
Total property, plant and equipment - net 1,276,066 1,158,751
- --------------------------------------------------------------------------------
INTANGIBLE ASSETS ACQUIRED
Costs in excess of net assets acquired 1,383,687 1,391,250
Other intangible assets acquired 218,646 160,747
- --------------------------------------------------------------------------------
Total 1,602,333 1,551,997
Less accumulated amortization 207,489 172,531
- --------------------------------------------------------------------------------
Total intangible assets acquired - net 1,394,844 1,379,466
- --------------------------------------------------------------------------------
MISCELLANEOUS ASSETS 141,216 102,207
- --------------------------------------------------------------------------------
Total $3,376,730 $3,137,631
- --------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
December 31
1995 1994
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY Dollars in thousands
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 156,722 $ 121,504
Accrued payroll 74,560 67,012
Accrued expenses 200,576 182,338
Unexpired subscriptions 81,919 77,697
Current portion of capital lease obligations 3,139 2,681
- -----------------------------------------------------------------------------------------------------------------------
Total current liabilities 516,916 451,232
- -----------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt 589,193 473,530
Capital lease obligations 48,680 49,666
Deferred income taxes 168,715 176,588
Other 441,124 441,323
- -----------------------------------------------------------------------------------------------------------------------
Total other liabilities 1,247,712 1,141,107
- -----------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
5 1/2 percent cumulative prior preference stock of $100 par value - authorized
110,000 shares; outstanding: 1995 and 1994, 17,530 shares 1,753 1,753
Serial preferred stock of $1 par value - authorized 200,000 shares - none issued -- --
Common stock of $.10 par value
Class A - authorized 200,000,000 shares; issued: 1995, 108,950,897 shares;
1994, 108,052,347 shares (including treasury shares: 1995, 11,775,295; 1994, 10,242,381) 10,895 10,805
Class B, convertible - authorized 600,000 shares; issued: 1995, 568,919 shares;
1994, 570,121 (including treasury shares: 1995 and 1994, 139,943) 57 57
Additional capital 618,570 597,860
Earnings reinvested in the business 1,262,022 1,179,715
Common stock held in treasury, at cost (281,195) (244,898)
- -----------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,612,102 1,545,292
- -----------------------------------------------------------------------------------------------------------------------
Total $ 3,376,730 $ 3,137,631
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
F-11
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH PROVIDED (USED):
OPERATING ACTIVITIES
Net income $ 135,860 $ 213,349 $ 6,123
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation 102,271 104,624 89,274
Amortization - net 36,663 45,466 39,558
Equity in operations of forest products group - net (20,064) (3,240) 52,311
Cash distributions and dividends from forest products group 4,330 8,224 --
Net gain on dispositions (11,291) (200,873) --
Proceeds from non-compete agreement -- 40,000 --
Deferred income taxes (9,225) (33,732) (37,901)
Increase in receivables - net (32,762) (18,573) (21,636)
(Increase) Decrease in inventories (12,723) (4,035) 10,799
Decrease (Increase) in deferred subscription costs and other current assets 51,939 (17,820) 4,749
Increase (Decrease) in accounts payable 28,200 17,481 (41,429)
Increase (Decrease) in accrued payroll and accrued expenses 45,275 (6,359) 64,823
Increase in unexpired subscriptions 4,832 18,027 11,196
Other - net (28,140) 19,046 15,491
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 295,165 181,585 193,358
- ----------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Net proceeds from sale of BPI Communications, L.P. -- 55,367 --
Net proceeds from dispositions 27,536 243,776 --
Businesses acquired, net of cash acquired (71,214) -- (134,384)
Additions to property, plant and equipment (200,688) (186,203) (75,738)
Purchases of marketable securities (39,370) (88,358) (65,077)
Proceeds from sales of marketable securities 39,370 88,358 65,077
Other investing proceeds 8,610 7,725 944
Other investing payments (17,873) (8,505) (16,986)
- ----------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities (253,629) 112,160 (226,164)
- ----------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Short-term borrowing - net -- (1,935) 62,340
Long-term obligations
Increase 400,000 -- 200,000
Reduction (278,244) (5,113) (5,510)
Capital shares
Issuance 1,908 2,577 1,829
Repurchase (49,987) (232,815) (255,222)
Dividends paid to stockholders (54,291) (58,287) (47,076)
Other financing (payments) proceeds (10,899) 1,189 --
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 8,487 (294,384) (43,639)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Cash and short-term investments 50,023 (639) (76,445)
Cash and short-term investments at the beginning of the year 41,419 42,058 118,503
- ----------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at the end of the year $ 91,442 $ 41,419 $ 42,058
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements and supplemental disclosures to
consolidated statements of cash flows.
F-12
<PAGE>
<TABLE>
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------
<CAPTION>
Dollars in thousands Year Ended December 31
1995 1994 1993
- ------------------------------------------------------------------------------------------
NONCASH INVESTING AND FINANCING TRANSACTIONS
<S> <C> <C> <C>
Capital lease assets and obligations incurred $ 2,495 $ 5,990 $ 338
========== =========== ===========
Businesses acquired
Fair value of assets acquired 72,610 1,257,029
Liabilities assumed (1,396) (229,000)
Liabilities incurred, net of payments -- (18,744)
Common stock issued -- (874,901)
---------- -----------
Net cash paid $ 71,214 $ 134,384
========== ===========
Issuance of common shares $ 20,569 $ 21,723 $ 18,188
========== =========== ===========
CASH FLOW INFORMATION
Cash payments during the year for
Interest (net of amount capitalized) $ 29,277 $ 36,320 $ 26,861
========== =========== ===========
Income taxes $ 86,851 $ 220,973 $ 55,327
========== =========== ===========
----------------------------------------------------------------------------------------
</TABLE>
For 1994, the increase in income taxes paid (and corresponding decrease in net
cash provided by operating activities) is in large part due to an increase in
estimated income tax payments of approximately $113,500,000 related to the net
gain on dispositions in 1994. Under Statement of Financial Accounting Standards
No. 95, "Statement of Cash Flows," all income tax payments are included in
determining net cash flow from operating activities, but the net cash proceeds
received from the dispositions are reported as an investing cash inflow.
F-13
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
except per share data Capital Stock
-------------------------------------- Common
5 1/2 % Class A Class B Earnings Stock
Preference Common Common Reinvested Held in
-------------------------------------- Additional in the Treasury,
Capital Business at cost
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1993 $1,784 $8,805 $57 $164,928 $1,065,347 $(239,507)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income 6,123
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (47,003)
- ----------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
The Globe acquisition - 36,397,313 Class A shares 1,940 432,624 440,337
Retirement units, etc. - 10,877 Class A shares
from treasury 123 339
Employee stock purchase plan - 819,166
Class A shares (2,612) 20,329
Stock options - 185,611 Class A shares 23 4,695 (934)
Stock conversions - 180 shares - -
- ----------------------------------------------------------------------------------------------------------------------------------
Purchase of company stock: 10,260,900 Class A shares (255,222)
- ----------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,411)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 1,784 10,768 57 599,758 1,022,958 (34,658)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income 213,349
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (97)
Dividends, common - $.56 per share (58,190)
- ----------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 10,889 Class A shares
from treasury (128) 271
Employee stock purchase plan - 1,191,323
Class A shares 2 (7,237) 29,119
Stock options - 223,700 Class A shares 35 6,928 (3,385)
Stock conversions - 1,503 shares - -
- ----------------------------------------------------------------------------------------------------------------------------------
Purchase of company stock:
10,043,900 Class A shares (236,245)
307 5 1/2 percent preference shares (31) 10
Proceeds from the sale of put options 1,189
Equity put option obligations (2,660)
- ----------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation 1,695
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1994 1,753 10,805 57 597,860 1,179,715 (244,898)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income 135,860
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (96)
Dividends, common - $.56 per share (54,195)
- ----------------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 21,421 Class A shares
from treasury (308) 533
Employee stock purchase plan - 1,100,348
Class A shares 1 (4,852) 26,023
Stock options - 297,569 Class A shares 89 22,925 (16,317)
Stock conversions - 1,202 shares
- ----------------------------------------------------------------------------------------------------------------------------------
Purchase of company stock: 2,054,904 Class A shares (46,536)
Proceeds from the sale of put options 285
Fulfilled equity put option obligations 2,660
- ----------------------------------------------------------------------------------------------------------------------------------
Foreign currency translation 738
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1995 $1,753 $10,895 $57 $618,570 $1,262,022 $(281,195)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS. The New York Times Company and all subsidiaries (the
"Company"), is engaged in diversified activities in the communications field.
The Company's principal businesses are newspapers, magazines and broadcasting.
The Company also has equity interests in a Canadian newsprint company and a
supercalendered paper manufacturing partnership. The Company's major source of
revenue is advertising from its newspaper business. The newspapers operate in
the Northeast, Southeast and California markets.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of the Company after elimination of intercompany items.
FISCAL YEAR. The Company changed its fiscal
year-end to the last Sunday in December, beginning with the fiscal year ending
December 29, 1996.
INVENTORIES. Inventories are stated at the lower of cost or current market
value. Inventory cost generally is based on the last-in, first-out ("LIFO")
method for newsprint and magazine paper and the first-in, first-out ("FIFO")
method for other inventories.
INVESTMENTS. Investments in which the Company has at least a 20 percent but not
more than 50 percent interest are accounted for under the equity method.
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated at cost,
and depreciation is computed by the straight-line method over estimated service
lives. The Company capitalizes interest costs as part of the cost of
constructing major facilities and equipment.
INTANGIBLE ASSETS ACQUIRED. Costs in excess of net assets acquired consist of
excess costs of businesses acquired over values assigned to their net tangible
assets and other intangible assets. The Company evaluates periodically whether
there has been a permanent impairment in any of its intangible assets, inclusive
of goodwill. The major factors which are considered in such valuation include
the cash flow and any contemplated long-term strategies which might affect the
viability of such business. The excess costs which arose from acquisitions after
October 31, 1970 are being amortized by the straight-line method principally
over 40 years. The remaining portion of such excess, which arose from
acquisitions before November 1, 1970 (approximately $13,000,000), is not being
amortized since in the opinion of management there has been no diminution in
value. Other intangible assets acquired consist principally of advertiser and
subscriber relationships which are being amortized over the remaining lives,
ranging from 5 to 40 years. The general policy of 5 to 40 years relates to all
intangible assets with the life of 5 years used for various software licenses
and lives of 40 years used for mastheads on various acquired properties.
SUBSCRIPTION REVENUES AND COSTS. Proceeds from subscriptions and related costs,
principally agency commissions, are deferred at the time of sale and are
included in the Consolidated Statements of Income on a pro rata basis over the
terms of the subscriptions.
FOREIGN CURRENCY TRANSLATION. The assets and liabilities of foreign companies
are translated at the year-end exchange rates. Results of operations are
translated at the average rates of exchange in effect during the year. The
resultant translation adjustment is included as a component of stockholders'
equity.
EARNINGS PER SHARE. Earnings per share is computed after preference dividends
and is based on the weighted average number of shares of Class A and Class B
Common Stock outstanding during each year. The effect of shares issuable under
the Company's Incentive Plans (see Note 11), including stock options, is not
material and therefore is excluded from the computation.
CASH AND SHORT-TERM INVESTMENTS. For purposes of the Consolidated Statements of
Cash Flows, the Company considers all highly liquid debt instruments purchased
with maturities of three months or less to be cash equivalents. The Company has
overdraft positions at certain banks as a result of outstanding checks, which
have been reclassified to accounts payable.
DERIVATIVES. The Company had interest rate swap agreements with major
financial institutions that were used to manage exposure to fluctuations in
interest rates. The Company was exposed to credit losses in the event of
nonperformance by the counterparties to its interest rate swap agreements.
As of December 31, 1995, the Company did not have any derivative financial
instruments.
USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements. Actual results could differ from these estimates.
NEW ACCOUNTING PRONOUNCEMENTS. In March 1995, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 121, Accounting for Impairment of Long-Lived Assets ("SFAS
121"). SFAS 121 will require a review for impairment of long-lived assets
and certain identifiable intangible assets to be held and used, whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. This statement is effective for the Company's
1996 financial statements. The Company does not believe operating results
will be materially affected upon the adoption of SFAS 121.
<PAGE>
In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"). This statement is effective for the Company's 1996
financial statements. SFAS 123 encourages companies to account for stock
compensation awards based on their fair value at the date they are granted. The
resulting compensation cost would be shown as an expense on the income
statement. Companies choosing not to apply the new accounting method are
permitted to continue following current accounting requirements, however, they
will be required to disclose in the notes to the financial statements the effect
on net income and earnings per share had the new accounting method been applied.
The Company anticipates that it will continue to apply current accounting
requirements upon adoption of this standard.
F-15
<PAGE>
- --------------------------------------------------------------------------------
2. ACQUISITIONS/DIVESTITURES
In June 1995, the Company acquired WTKR-TV in Norfolk, Virginia. The acquisition
was accounted for as a purchase. The aggregate net cost of the acquisition was
$71,214,000 which was paid in cash. The purchase resulted in increases in other
intangible assets of approximately $57,705,000 (which consist of a network
affiliation agreement, FCC licenses and other intangible assets); property,
plant and equipment of $13,841,000, and other assets of $1,064,000. Net
liabilities assumed as a result of the transaction totaled approximately
$1,396,000. This acquisition will not have a material impact on the future
operations of the Company.
In the third quarter of 1995, the Company completed the sales of six small
regional newspapers: The Daily Commercial (Leesburg, FL); The Daily Corinthian
(Corinth, MS), The Messenger (Madisonville, KY), The Lenoir News-Topic (Lenoir,
NC), The State Gazette (Dyersburg, TN) and The Banner-Independent (Booneville,
MS). The sales resulted in a net pre-tax gain of approximately $11,300,000
($5,000,000 after taxes, or $.05 per share). In May 1995, the Company sold The
York County Coast Star (Kennebunk, ME). The sale did not have a material effect
on the Company's consolidated financial statements. These dispositions will not
have a material impact on the future operations of the Company.
In December 1994, the Company divested its minority interest in Gaspesia
Pulp & Paper Company Ltd. ("Gaspesia"), a Canadian newsprint mill. The Company's
49 percent interest was transferred to Abitibi-Price, Inc., the majority owner.
In connection with the transfer, a pre-tax charge of approximately $3,100,000
($.02 per share) was recorded. In 1993, the Company wrote down its investment in
Gaspesia by $47,000,000 ($.56 per share) to reflect its net realizable value.
In July and August 1994, the Company completed the sales of its Women's
Magazines Division and U.K. golf publications, respectively. These transactions
resulted in a pre-tax gain of approximately $204,000,000 ($1.01 per share). In
connection with the sale of the Women's Magazines Division, the Company entered
into a four-year non-compete agreement, for which it received $40,000,000. This
amount is being recognized as operating income, on a straight-line basis, over a
four-year period commencing with the closing of the sale on July 26, 1994.
The divestitures of the Women's Magazines Division, U.K. golf publications
and the minority interest in Gaspesia resulted in a net pre-tax gain of $200.9
million ($103.3 million after taxes or $.99 per share).
On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June
11, 1993, as amended as of August 12, 1993 (the "Agreement"), a wholly-owned
subsidiary of the Company was merged with Affiliated Publications, Inc., the
parent company of The Boston Globe ("The Globe"), which became a wholly-owned
subsidiary of the Company.
The transaction was accounted for as a purchase and, accordingly, The
Globe's operations have been included in the Company's consolidated financial
statements beginning October 1, 1993, the date the transaction closed. The
acquisition had a net cost of approximately $1,028,000,000. Under the Merger
Agreement the Company exchanged cash of approximately $160,000,000 for 15
percent of The Globe's common stock with the remainder of the consideration paid
by the exchange of approximately 36,400,000 shares of the Company's Class A
Common Stock valued at $24.03 per share. The purchase resulted in increases in
costs in excess of net assets acquired of approximately $850,000,000 (which is
being amortized by the straight-line method over 40 years); other intangible
assets acquired of $161,000,000 (which consist principally of advertiser and
subscriber relationships which are being amortized by the straight-line method
over an average period of 33 years); and property, plant and equipment of
$246,000,000. Net liabilities assumed as a result of the transaction totaled
approximately $229,000,000.
Pro forma operating results for the year ended December 31, 1993, had The
Globe transaction occurred at the beginning of that period are as follows:
revenues of $2,335,985,000; net income of $1,178,000; and net income per share
of $.01.
Pro forma operating results for the year ended December 31, 1994, had the
magazines sales occurred as of January 1, 1994 were as follows: revenues of
$2,231,942,000; net income of $115,518,000; and net income per share of $1.11.
Pro forma operating results for the year ended December 31, 1993, had the
magazine sales and The Globe transaction occurred at the beginning of that
period were as follows: revenues of $2,097,828,000; net income of $14,009,000;
and net income per share of $.13.
The above pro forma results are not necessarily indicative of the combined
results that would have occurred had the sales and the merger taken place as of
the beginning of the periods provided, nor necessarily indicative of results
that may be achieved in the future. The gain on the sales is not included in the
above pro forma operating results.
<PAGE>
In February 1994, the sale of BPI Communications, L.P., a partnership in
which the Company acquired a one-third interest through the 1993 acquisition of
The Globe, was completed. The Company received approximately $55,000,000 in 1994
from the sale. For financial reporting purposes, no gain or loss was recognized
on the sale.
On December 31, 1993, the Company sold two weekly newspapers and recognized
a pre-tax gain of $2,600,000, or $.02 per share, on the transaction.
In connection with the divestiture of a newsprint mill in 1991, the Company
made a loan commitment of up to $26,500,000 to the new owners of the mill. At
December 31, 1994, the commitment was fully funded. Interest on the outstanding
balance is payable quarterly at annual rates ranging from 4 to 10 percent.
Commencing in December 1997, the borrowings outstanding at December 1996 are
payable annually over a five-year period in 20 percent increments. The Company
expects the obligation to be satisfied as stipulated in the loan commitment.
F-16
<PAGE>
- --------------------------------------------------------------------------------
3. INVESTMENT IN FOREST PRODUCTS GROUP
The Company has equity interests in a Canadian newsprint company, Donohue
Malbaie, Inc. ("Malbaie"), and in a partnership operating a supercalendered
paper mill in Maine, Madison Paper Industries ("Madison"). The equity interest
in Malbaie represents a 49 percent ownership interest.
The Company and Myllykoski Oy, a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison. The partners' interests in the
net assets of Madison at any time will depend on their capital accounts, as
defined, at such time. Through an 80 percent-owned subsidiary, the Company's
share of Madison's profits and losses is 40 percent.
In December 1994, the Company divested its minority interest in Gaspesia,
which was written down to its net realizable value in 1993 (see Note 2).
Loans to Madison by the 80 percent-owned subsidiary of the Company totaled
$1,882,000, $1,523,000, and $1,279,000 in 1995, 1994 and 1993, respectively. No
contributions were made to Madison in 1995, 1994 or 1993.
The Company received distributions from Malbaie of $4,330,000 and $8,224,000
in 1995 and 1994, respectively. No distributions were received from Malbaie in
1993. The Company's share of undistributed earnings of Malbaie aggregated
approximately $9,200,000 and $4,882,000 at December 31, 1995 and 1994,
respectively.
No loans or contributions were made to Malbaie in 1995, 1994 or 1993.
Condensed combined balance sheets of the Forest Products Group are as
follows:
- ------------------------------------------------------------------
Condensed Combined Balance Sheets
of Forest Products Group
Dollars in thousands
- ------------------------------------------------------------------
December 31 1995 1994
- ------------------------------------------------------------------
Current assets $ 94,934 $ 66,280
Less current liabilities 88,129 33,027
- ------------------------------------------------------------------
Working capital 6,805 33,253
Fixed assets, net 234,240 236,961
Long-term debt (771) (62,355)
Deferred income taxes and other (106,667) (103,756)
- ------------------------------------------------------------------
Net assets $ 133,607 $ 104,103
- ------------------------------------------------------------------
The current portion of debt of the Forest Products Group of $46,678,000 is
included in current liabilities. At December 31, 1995, long-term debt of the
Forest Products Group matures as follows: 1997, $526,000; 1998, $152,000; and
1999, $93,000. The Forest Products Group's debt is not guaranteed by the
Company.
Condensed combined statements of operations of the Forest Products Group,
which exclude the operations of Gaspesia subsequent to the write-down at
December 31, 1993, are as follows:
- -------------------------------------------------------------------
Condensed Combined Statements of Operations
of Forest Products Group
Dollars in thousands
- -------------------------------------------------------------------
Year Ended December 31 1995 1994 1993
- -------------------------------------------------------------------
Net sales and other income $ 268,377 $ 189,805 $ 254,324
Costs and expenses 216,342 180,860 269,845
- -------------------------------------------------------------------
Income (Loss) before taxes 52,035 8,945 (15,521)
Income tax expense (benefit) 7,969 1,136 (2,700)
- -------------------------------------------------------------------
Net income (loss) $ 44,066 $ 7,809 $ (12,821)
- -------------------------------------------------------------------
The condensed combined financial information of the Forest Products Group
excludes the income tax effects attributable to Madison. Such tax effects (see
Note 6) have been included in the Company's consolidated financial statements.
Adjustments from translating certain balance sheet accounts, principally
of the Canadian newsprint companies, for each of the three years in the period
ended December 31, 1995, are set forth in the Consolidated Statements of
Stockholders' Equity.
The cumulative translation adjustment (included in earnings reinvested in
the business) decreased stockholders' equity by $195,000 and $933,000 at
December 31, 1995 and 1994, respectively. Upon the disposition of Gaspesia in
1994, stockholders' equity was increased by $3,000,000, net of tax, to reflect
the cumulative translation adjustment related to Gaspesia.
During 1995, 1994 and 1993, the Company's Newspaper Group purchased
newsprint and supercalendered paper from the Forest Products Group (including
Gaspesia through the disposal date) at competitive prices. Such purchases
aggregated approximately $59,000,000, $107,000,000 and $102,000,000,
respectively.
<PAGE>
- -------------------------------------------------------------------------------
4. INVENTORIES
Inventories as shown in the accompanying Consolidated Balance Sheets are
composed of the following:
- -----------------------------------------------------------------
Dollars in thousands
- -----------------------------------------------------------------
December 31 1995 1994
- -----------------------------------------------------------------
Newsprint and magazine paper $36,965 $24,783
Work-in-process, etc. 5,879 5,762
- -----------------------------------------------------------------
Total $42,844 $30,545
- -----------------------------------------------------------------
Utilization of the LIFO method reduced inventories as calculated on the FIFO
method by approximately $11,731,000 and $2,694,000 at December 31, 1995 and
1994, respectively.
F-17
<PAGE>
- --------------------------------------------------------------------------------
5. VOLUNTARY STAFF REDUCTIONS AND UNION NEGOTIATIONS
In 1995 the Company recorded pre-tax charges of approximately $10,100,000,
or $.06 per share, for work force reductions at The Times, The Globe and
corporate headquarters. In 1993 the Company recorded pre-tax charges of
$35,400,000, or $.23 per share, for severance and related costs resulting from
anticipated white-collar staff reductions (approximately $30,000,000) and
voluntary early retirements from the composing room (approximately $5,400,000)
at The Times.
At December 31, 1995 and 1994, approximately $17,472,000 and $22,563,000,
respectively, are included in accrued expenses in the accompanying Consolidated
Balance Sheets, which represents the unpaid balance of the pre-tax charges. The
Company has committed the remaining funds. The remaining cash flows associated
with these charges are expected to be paid over the next three years due to the
timing of certain union pension and welfare fund contributions.
- --------------------------------------------------------------------------------
6. INCOME TAXES
Income tax expense for each of the years presented is determined in accordance
with Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes ("SFAS 109").
Income tax expense as shown in the Consolidated Statements of Operations is
composed of the following:
- -------------------------------------------------------------------
Dollars in thousands 1995 1994 1993
- -------------------------------------------------------------------
Current tax expense
Federal $105,999 $159,779 $60,178
State, local, foreign 1,970 49,651 17,612
- -------------------------------------------------------------------
107,969 209,430 77,790
- -------------------------------------------------------------------
Deferred tax expense
Federal (22,483) (20,955) (26,982)
State, local, foreign 12,493 (13,088) (8,919)
- -------------------------------------------------------------------
(9,990) (34,043) (35,901)
- -------------------------------------------------------------------
Income tax expense from
continuing operations 97,979 175,387 41,889
Less income tax expense (benefit)
related to equity in operations 5,147 1,519 (1,342)
- -------------------------------------------------------------------
Income tax expense $ 92,832 $173,868 $43,231
- -------------------------------------------------------------------
Tax expense in 1995 was reduced by $10,986,000 as a result of a favorable
state tax ruling and federal, state and local tax refunds. A further reduction
of $4,339,000 ($6,676,000 before federal tax effect) in 1995 tax expense relates
to a reduction in the valuation allowance attributable to state and local
capital and net operating loss tax benefits. The remaining decrease in the
valuation reserve is due principally to the expiration of net operating loss tax
benefits and does not affect income tax expense.
Tax expense in 1994 was reduced by approximately $10,000,000 and $3,000,000,
respectively, relating to a decrease in valuation allowance and recognition of
federal capital loss tax benefits. The decrease in valuation allowance is
associated with federal capital loss tax benefits. An increase in valuation
allowance associated with state and local capital loss carryforward tax benefits
added approximately $688,000 (net of federal tax benefit) to 1994 tax expense.
Tax expense in 1993 was reduced by $6,317,000. The reduction was due to a
decrease in the valuation allowance of $4,390,000 related to federal capital
loss carryforwards, and benefits associated with state and local operating loss
carryforwards net of federal tax effect. Adjustment of the Company's deferred
tax balances for the one percent rate increase provided in the Tax Reform Act
of 1993 added $4,359,000 to deferred tax expense, inclusive of $600,000 of
expense reported in equity in operations of the Forest Products Group.
In accordance with the provisions of SFAS 109, approximately $1,600,000 of
additional reduction in valuation allowance, which was established against
acquired deferred tax assets, was recorded as a reduction of goodwill in 1993.
No such amounts affected 1995 or 1994 tax expense.
Income tax benefits credited directly to stockholders' equity totaled
$837,000, $2,434,000 and $3,595,000 during 1995, 1994 and 1993, respectively.
Foreign taxes included in income tax expense in 1994 of $4,979,000 were
principally attributable to the disposition of the Company's U.K. golf
publications. Foreign taxes included in income tax expense in 1995 and 1993
were not significant.
Equity in operations of the Forest Products Group (see Note 3) includes the
income tax effects of the Company's interest in Madison and its equity in the
operations of the Canadian newsprint companies. Of such amounts, tax expense of
$850,000 in 1995, and tax benefits of $117,000 in 1994 and $585,000 in 1993 are
applicable to the Canadian newsprint companies. Deferred taxes attributable to
the Company's interest in Madison were an expense of $273,000 in 1995, a benefit
of $(39,000) in 1994, and expense of $1,562,000 in 1993. These deferred taxes
result principally from differences between depreciation used for financial
reporting and that used for tax reporting. The Company's consolidated federal
income tax returns include the income tax effects of its interest in Madison.
F-18
<PAGE>
The reasons for the variance between the effective tax rate on income before
income taxes and equity in operations of the Forest Products Group and the
federal statutory rate (exclusive of the net gain on dispositions in 1995 and
1994) are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended December 31 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
% of % of % of
Dollars in thousands Amount Pretax Amount Pretax Amount Pretax
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax at federal statutory rate $71,173 35.0% $ 64,078 35.0% $35,422 35.0%
Increase (decrease) resulting from
State and local taxes - net 8,090 4.0 5,177 2.8 6,883 6.8
Capital loss tax benefits - - (10,000) (5.4) (6,875) (6.8)
Amortization of nondeductible
intangible assets acquired 11,061 5.4 11,139 6.1 5,602 5.5
Change in enacted tax rate - - - - 3,759 3.7
Other - net (3,826) (1.9) 5,920 3.2 (1,560) (1.5)
- ---------------------------------------------------------------------------------------------------
Subtotal 86,498 42.5% 76,314 41.7% 43,231 42.7%
- ---------------------------------------------------------------------------------------------------
Dispositions 6,334 97,554 -
- ---------------------------------------------------------------------------------------------------
Income tax expense $92,832 $173,868 $43,231
- ---------------------------------------------------------------------------------------------------
</TABLE>
Federal income taxes payable (refundable) totaled $8,725,000 and $(28,109,000)
as of December 31, 1995 and 1994, respectively. Current income taxes payable are
included in accrued expenses while refundable amounts are included in other
current assets. The components of the net deferred tax liabilities recognized on
the respective Consolidated Balance Sheets are as follows:
- -----------------------------------------------------------------
Dollars in thousands
December 31 1995 1994
- -----------------------------------------------------------------
Deferred Tax Assets
Intangible assets acquired $ 5,941 $ 10,425
Accrued state and local taxes 17,033 14,996
Postretirement and
postemployment benefits 86,822 81,707
Other accrued employee benefits
and compensation 93,777 89,569
Allowance for doubtful
accounts 13,411 13,113
Tax loss carryforwards 8,571 20,260
Deferred Income 29,811 35,040
Other 10,550 4,578
- -----------------------------------------------------------------
Total deferred tax assets 265,916 269,688
Valuation allowance (10,724) (19,774)
- -----------------------------------------------------------------
Net deferred tax assets $255,192 $249,914
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Dollars in thousands
December 31 1995 1994
- -----------------------------------------------------------------
Deferred Tax Liabilities
Property, plant and equipment $134,613 $121,617
Tax certificate 113,238 125,664
Nontaxable acquisition 123,880 125,782
Deferred subscription
expenses 8,013 8,627
Safe harbor tax lease 18,975 19,717
Unremitted earnings 1,238 833
Investment in Forest Products
Group 13,382 13,324
Other 1,084 2,641
- -----------------------------------------------------------------
Total deferred tax liabilities 414,423 418,205
- -----------------------------------------------------------------
Net deferred tax assets (255,192) (249,914)
- -----------------------------------------------------------------
Net deferred tax liability 159,231 168,291
- -----------------------------------------------------------------
Less amounts included in:
Other current assets (10,559) (9,296)
Accrued expenses 1,075 999
- -----------------------------------------------------------------
Deferred income taxes $168,715 $176,588
- -----------------------------------------------------------------
<PAGE>
At December 31, 1995, tax loss carryforwards include only state and local
tax loss benefits. The benefits are primarily attributable to tax operating
losses. Such loss carryforwards expire in accordance with provisions of
applicable tax laws and have remaining lives ranging from 1 to 13 years. The
remaining $8,571,000 of operating loss carryforwards will expire in years
through 2008.
In 1989, the Federal Communications Commission granted the Company a tax
certificate in connection with the sale of its cable television system. This
certificate permitted the Company to defer income taxes on the gain on the
transaction and pay such taxes over a number of years. Under the provisions of
the Internal Revenue Code, this is accomplished through a reduction in the tax
bases of various assets which results in lower tax depreciation and
amortization deductions in subsequent years. As a result, $10,994,000,
$10,508,000, and $10,820,000 of income taxes that were deferred became currently
payable in 1995, 1994 and 1993, respectively.
Federal income tax returns for all years through 1989 have been examined by the
Internal Revenue Service and the respective tax years have been closed by
statute. Examinations of the tax returns for the years 1990 through 1992 are in
process. Management is of the opinion that any assessments resulting from these
examinations will not have a material effect on the consolidated financial
statements.
F-19
<PAGE>
- --------------------------------------------------------------------------------
7. DEBT
Long-Term Debt consists of the following:
- ------------------------------------------------------------------
Dollars in thousands
- ------------------------------------------------------------------
December 31 1995 1994
- ------------------------------------------------------------------
5.50% to 5.77% Senior Notes due $200,000 $200,000
1998-2000 (a)
7.625% Notes due 2005, net of unamortized 244,041 -
debt issuance costs of $5,959 in 1995;
effective interest rate 7.996% (b)
8.25% Debentures due 2025 (due 2005 at 145,152 -
option of Company), net of unamortized
debt issuance costs of $4,848 in 1995;
effective interest rate 8.553% (b)
11.85% Notes, discounted, due 1995 net of - 161,789
unamortized discount of $511 in 1994 (c)
9.34% Notes due 1995, including - 51,336
unamortized premium of $1,336 in 1994;
effective interest rate 4.25% (c)
Commercial Paper (d) - 60,405
- ------------------------------------------------------------------
Total Notes, Debentures and Other 589,193 473,530
- ------------------------------------------------------------------
Less: Current Portion - -
- ------------------------------------------------------------------
Total Long-Term Debt $589,193 $473,530
- ------------------------------------------------------------------
(a) In October 1993, the Company issued senior notes totaling $200,000,000
to an insurance company with interest payable semi-annually. Five-year notes
totaling $100,000,000 were issued at an annual rate of 5.50 percent, and the
remaining $100,000,000 were issued as six and one-half year notes at an annual
rate of 5.77 percent.
(b) In March 1995, the Company completed a public offering of $400,000,000
of unsecured notes and debentures. The offering consisted of ten-year notes
aggregating $250,000,000 maturing March 15, 2005 at an annual rate of 7.625%
(the "Notes") and 30-year debentures aggregating $150,000,000 maturing March 15,
2025 at an annual rate of 8.25% (the "Debentures"), (collectively referred to
herein as the "Offering"). The Debentures are callable after ten years. Interest
is payable semi-annually on March 15 and September 15 on both the Notes and
Debentures.
The net proceeds from the Offering were used to repay the principal balance
of the $162,300,000 11.85% Notes due March 31, 1995, $50,000,000 of 9.34% Notes
due July 15, 1995 and indebtedness outstanding under the Company's commercial
paper program. The remaining net proceeds were used for general corporate
purposes. Accordingly, at December 31, 1994, the 11.85% Notes due March 31,
1995, the 9.34% Notes due July 15, 1995 and the amounts outstanding under the
Company's commercial paper program were classified as long-term debt as they
were refinanced on a long-term basis under the Offering.
(c) In connection with the 1985 acquisition of certain newspapers, the
Company issued 10-year notes with an aggregate stated value of $162,300,000
which were discounted at an annual interest rate of 11.85 percent for financial
reporting purposes. Interest on certain of the notes was payable semi-annually.
In connection with the 1993 acquisition of The Globe (see Note 2), the
Company assumed $50,000,000 of 9.34 percent fixed-rate notes maturing July 1995,
which had been valued for financial reporting purposes using a discount rate of
4.25 percent. Interest on the notes was payable semi-annually.
(d) In December 1994, the Company established a $200,000,000 commercial
paper program. Borrowings are in the form of unsecured notes sold at a discount
with maturities ranging up to 270 days. There were no borrowings outstanding
under the commercial paper program at December 31, 1995. The $60,700,000 in
aggregate face value of such notes outstanding at December 31, 1994 were issued
at a weighted average annual interest rate of 6.06 percent. The outstanding
commercial paper is supported by the Company's revolving credit and term loan
agreements.
Based on borrowing rates currently available for debt with similar terms and
average maturities, the fair value of long-term debt, excluding the current
portion, was $647,900,000 and $455,100,000 at December 31, 1995 and 1994,
respectively.
<PAGE>
- --------------------------------------------------------------------------------
The Company has a $93,300,000 revolving credit and term loan agreement with
a group of banks, which, as amended, terminates in October 1998. At such time,
the outstanding borrowings would be payable semi-annually in equal installments
over one year. At the Company's discretion, this facility may be converted into
term loans at any time. The agreement provides for an annual commitment fee of
0.11 percent on the unused commitment.
The Company also has a $46,700,000 revolving credit agreement with the same
group of banks, which expires in October 1996. The agreement provides for an
annual commitment fee of 0.06 percent on the unused commitment.
The agreements permit borrowings which bear interest, at the Company's
option, (i) for domestic borrowings: based on the certificates of deposit rate,
the Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the LIBOR rate. Borrowings under these agreements may be
prepaid without penalty.
The Company has a $20,000,000 revolving credit and term loan agreement with
a bank and its affiliate, which as amended, terminates in December 1999. At such
time, the outstanding borrowings would be payable semi-annually in equal
installments over one year. At the Company's discretion, this facility may be
converted into term loans at any time. The agreement provides for an annual
commitment fee of 0.09 percent on the unused commitment. The Company also has
entered into a $10,000,000 revolving credit agreement with the same bank and its
affiliate that expires November 1996, at which time, any outstanding borrowings
would be payable. The agreement provides for an annual commitment fee of 0.06
percent on the unused commitment.
The agreements permit borrowings which bear interest, at the Company's
option, (i) for domestic borrowings: based on the certificates of deposit rate,
a prime rate or a quoted rate; or (ii) for Eurodollar borrowings: based on the
LIBOR rate. Borrowings
F-20
<PAGE>
under these agreements may be prepaid without penalty.
No borrowings under any of the above agreements were outstanding during
1995 and 1994.
Certain of the agreements also include provisions which require, among other
matters, specified levels of stockholders' equity. At December 31, 1995,
approximately $862,000,000 of stockholders' equity was unrestricted.
Short-term debt is comprised of the current portion of capital lease
obligations. There were no outstanding notes payable at December 31, 1995 and
1994.
The aggregate amount of maturities of long-term debt over the next five
years are as follows: 1996, none; 1997, none; 1998, $100,000,000; 1999, none;
2000, $100,000,000; and $400,000,000 thereafter.
Interest expense, net of capitalized interest and interest income, as shown
in the accompanying Consolidated Statements of Income consists of the following:
- -----------------------------------------------------------------
Dollars in thousands
- -----------------------------------------------------------------
December 31, 1995 1994 1993
- -----------------------------------------------------------------
Interest expense $ 48,751 $39,823 $30,900
Capitalized interest (15,177) (4,943) (1,351)
Interest income (8,344) (6,718) (4,174)
- -----------------------------------------------------------------
Net $ 25,230 $28,162 $25,375
- -----------------------------------------------------------------
- --------------------------------------------------------------------------------
8. LEASE COMMITMENTS
OPERATING LEASES:
Such lease commitments are primarily for office space and equipment. Certain
office space leases provide for adjustments relating to changes in real estate
taxes and other operating expenses.
Rental expense amounted to $27,699,000 in 1995, $26,559,000 in 1994, and
$24,744,000 in 1993. The approximate minimum rental commitments under
noncancelable leases (exclusive of minimum sublease rentals of $152,000) at
December 31, 1995 were as follows: 1996, $17,454,000; 1997, $14,390,000; 1998,
$12,334,000; 1999, $9,919,000; 2000, $6,798,000 and $24,529,000 thereafter.
CAPITAL LEASES:
In 1993, the Company and the City of New York executed a long-term lease
agreement and related agreements, under which the Company is leasing 31 acres of
City-owned land in College Point, New York, on which The Times is building a
state-of-the-art printing and distribution facility. Conditions stipulated under
the lease were met in 1994 and, accordingly, a capital lease of $5,000,000 was
recorded at such time. The lease will continue for 25 years after the start of
construction with an option to ultimately purchase the property. Under the terms
of the agreement, The Times would receive various tax and energy cost
reductions.
The Company also has a long-term lease for a building and site in Edison,
New Jersey. The lease provides the Company with certain early cancellation
rights, as well as renewal and purchase options. For financial reporting
purposes, the lease has been classified as a capital lease; accordingly, an
asset of approximately $57,000,000 (included in buildings, building equipment
and improvements at December 31, 1995 and 1994) has been recorded.
The following is a schedule of future minimum lease payments under all
capitalized leases together with the present value of the net minimum lease
payments as of December 31, 1995:
- --------------------------------------------------------------------
Dollars in thousands
- --------------------------------------------------------------------
Year Ended December 31 Amount
- --------------------------------------------------------------------
1996 $ 7,433
1997 7,337
1998 7,386
1999 7,288
2000 7,140
Later years 57,108
- --------------------------------------------------------------------
Total minimum lease payments 93,692
Less: amount representing interest 41,873
- --------------------------------------------------------------------
Present value of net minimum
lease payments including current
maturities of $3,139 $51,819
- --------------------------------------------------------------------
F-21
<PAGE>
- --------------------------------------------------------------------------------
9. PENSION PLANS
The Company sponsors several pension plans and makes contributions to several
others in connection with collective bargaining agreements, including a joint
Company-union plan and a number of joint industry-union plans. These plans cover
substantially all employees.
The Company-sponsored pension plans provide participating employees with
retirement benefits in accordance with benefit provision formulas which are
based on years of service and final average or career pay and, where applicable,
employee contribu-tions. Funding is based on an evaluation and review of the
assets, liabilities and requirements of each plan. Retirement benefits are also
provided under supplemental unfunded pension plans.
Net periodic pension cost was $25,688,000 in 1995, $32,730,000 in 1994 and
$16,461,000 in 1993. The components of net periodic pension cost are:
-------------------------------------------------------------------
Dollars in thousands
-------------------------------------------------------------------
Year Ended December 31 1995 1994 1993
-------------------------------------------------------------------
Service cost $ 16,413 $ 19,194 $ 14,075
Interest cost 41,859 38,933 26,675
Actual (return) loss on plan assets (74,904) 2,942 (38,907)
Curtailment loss - 1,887 -
Net amortization and
deferral 42,320 (30,226) 14,618
-------------------------------------------------------------------
Net periodic pension cost $ 25,688 $ 32,730 $ 16,461
-------------------------------------------------------------------
Due to the sale of the Women's Magazines Division, the Company recognized a
curtailment loss in 1994 (see Note 2). Accordingly, net periodic pension cost
relating to certain plans was remeasured at July 1994, using an increased
discount rate of 8.0 percent.
Assumptions used in the actuarial computations were:
- -------------------------------------------------------------------
Year Ended December 31 1995 1994 1993
- -------------------------------------------------------------------
Discount rate 7.25% 8.25% 7.00%
Rate of increase in
compensation levels 5.50% 5.50% 5.50%
Expected long-term rate of
return on assets 8.75% 8.75% 8.75%
- -------------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several other pension plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Pension cost for these plans was $20,679,000 in 1995,
$19,535,000 in 1994 and $17,970,000 in 1993.
The funded status of the Company's plans which were valued at September 30, 1995
and 1994 is as follows:
- -------------------------------------------------------------------
Plans Whose Plans Whose
Assets Exceed Accumulated
December 31, 1995 Accumulated Benefits
Dollars in thousands Benefits Exceed Assets
- -------------------------------------------------------------------
Actuarial present value of benefit
obligation:
Vested benefit obligation $234,139 $256,239
- -------------------------------------------------------------------
Accumulated benefit obligation $239,507 $264,219
- -------------------------------------------------------------------
Projected benefit obligation $297,317 $331,039
Plan assets at fair value 269,633 178,539
- -------------------------------------------------------------------
Projected benefit obligation
in excess of plan assets 27,684 152,500
Unrecognized net (losses) gains (28,150) (23,770)
Unrecognized prior service cost 6,131 (9,945)
Unrecognized transition obligation (1,645) (1,274)
Fourth-quarter contribution, net (1,365) (8,986)
Adjustment required to recognize
additional minimum liability - 2,384
- -------------------------------------------------------------------
Recorded pension liability $ 2,655 $110,909
- -------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------
Plans Whose Plans Whose
Assets Exceed Accumulated
December 31, 1994 Accumulated Benefits
Dollars in thousands Benefits Exceed Assets
- -------------------------------------------------------------------
Actuarial present value of benefit obligation:
Vested benefit obligation $187,656 $207,104
- -------------------------------------------------------------------
Accumulated benefit obligation $193,129 $212,519
- -------------------------------------------------------------------
Projected benefit obligation $238,574 $263,044
Plan assets at fair value 231,236 144,200
- -------------------------------------------------------------------
Projected benefit obligation
in excess of plan assets 7,338 118,844
Unrecognized net (losses) gains (12,337) 11,269
Unrecognized prior service cost 6,567 (10,814)
Unrecognized transition obligation (2,038) (1,517)
Fourth-quarter contribution, net (2,483) (7,891)
- -------------------------------------------------------------------
Recorded pension (asset) liability $ (2,953) $109,891
- -------------------------------------------------------------------
Plan assets, which were valued as of September 30, 1995 and 1994, consist of
money market investments, investments in marketable fixed income and equity
securities, an investment in a diversified real estate equity fund and
investments in group annuity insurance contracts.
The additional minimum liability relating to the unfunded status of these
plans is included in other liabilities on the Consolidated Balance Sheets as of
December 31, 1995 and miscellaneous assets includes a related intangible asset
of an equal amount. No such liability was required as of December 31, 1994.
F-22
<PAGE>
- --------------------------------------------------------------------------------
10. POSTRETIREMENT BENEFITS OTHER THAN
PENSIONS AND POSTEMPLOYMENT BENEFITS
The Company provides health and life insurance benefits to retired employees
(and their eligible dependents) who are not covered by any collective bargaining
agreements if the employee meets specified age and service requirements.
In accordance with SFAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions, the Company accrues the costs of such benefits
during the employee's active years of service.
Net periodic postretirement cost was $7,842,000 in 1995, $12,419,000 in 1994
and $10,809,000 in 1993, respectively. The decrease in 1995 cost was a result of
a plan amendment which was adopted to reduce benefits for participants retiring
after January 1, 1995. The effect on the accumulated postretirement benefit
obligation is a reduction of $16,736,000. This amount is being amortized over a
period of approximately nine years beginning in 1995. The components of this
cost are as follows:
- ----------------------------------------------------------------
Dollars in thousands 1995 1994 1993
- ----------------------------------------------------------------
Service cost for benefits
earned during the period $ 2,820 $ 4,629 $ 3,955
Interest cost on accumulated
postretirement obligation 8,142 9,376 6,854
Net amortization and deferral (3,120) (102) -
Curtailment gain (See Note 2) - (1,484) -
- ----------------------------------------------------------------
Net periodic postretirement cost $ 7,842 $12,419 $10,809
- ----------------------------------------------------------------
The Company's policy is to fund the above-mentioned payments as claims and
premiums are paid.
The following table sets forth the amounts included in Accrued Expenses and
Other Liabilities on the Consolidated Balance Sheets at December 31, 1995 and
1994, based on valuation dates of September 30 in each year.
- ----------------------------------------------------------------
Dollars in thousands
- ----------------------------------------------------------------
December 31 1995 1994
- ----------------------------------------------------------------
Accumulated postretirement
benefit obligation
Retirees $ 55,954 $ 49,595
Fully eligible active plan 19,870 26,894
participants
Other active plan participants 44,965 45,017
- ----------------------------------------------------------------
Total 120,789 121,506
Unrecognized net gains 16,536 26,287
Unrecognized prior service cost 13,597 -
Fourth-quarter benefit
payments (544) (1,035)
- ----------------------------------------------------------------
Total accrued postretirement
benefit liability 150,378 146,758
Current portion included in
accrued expenses 4,400 4,400
- ----------------------------------------------------------------
Long-term accrued postretirement
benefit liability $145,978 $142,358
- ----------------------------------------------------------------
Increasing the assumed health care cost trend rates by one percentage point
in each year and holding all other assumptions constant would increase the
accumulated postretirement benefit obligation as of December 31, 1995 by
$16,706,000 and increase the net periodic postretirement benefit cost for 1995
by $1,785,000.
For 1995, the accumulated postretirement benefit obligation was determined
using a discount rate of 7.25 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of between 11.0 percent
and 9.25 percent in the first year, grading down to 5.0 percent in the year
2008.
For 1994, the accumulated postretirement benefit obligation was determined
using a discount rate of 8.25 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of between 12.0 percent
and 10.0 percent in the first year grading down to 5.0 percent in the year 2008.
In connection with collective bargaining agreements, the Company contributes
to several welfare plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Portions of these contributions, which cannot be
disaggregated, related to postretirement benefits for plan participants. Total
contributions to these welfare funds were approximately $26,034,000, $25,460,000
and $18,000,000 in 1995, 1994 and 1993, respectively.
In accordance with SFAS No. 112, Employers' Accounting for Postemployment
Benefits, the Company accrues the cost of certain benefits provided to former
or inactive employees, after employment but before retirement, such as workers'
compensation, disability benefits and health care continuation coverage during
the employees' active years of service.
F-23
<PAGE>
- --------------------------------------------------------------------------------
11. EXECUTIVE AND NON-EMPLOYEE DIRECTORS' INCENTIVE PLAN
Under the Company's 1991 Executive Stock Incentive Plan and 1991 Executive Cash
Bonus Plan (together the "1991 Executive Plans"), the Board of Directors may
authorize incentive compensation awards and grant stock options to key employees
of the Company. Awards may be granted in cash, restricted and unrestricted
shares of the Company's Class A Common Stock, Retirement Units or such other
forms as the Board of Directors deems appropriate. Under the 1991 Executive
Plans, stock options of up to 10,000,000 shares of Class A Common Stock may be
granted and stock awards of up to 1,000,000 shares of Class A Common Stock may
be made. In adopting the 1991 Executive Plans, shares previously available for
issuance of retirement units and stock options under prior plans are no longer
available for future awards.
Retirement Units are payable in Class A Common Stock over a period of 10
years following retirement.
Stock options currently outstanding were granted under the Company's 1984
Stock Option Plan and the 1991 Executive Plans. The Plans provide for granting
of both incentive and non-qualified stock options principally at an option price
per share of 100 percent of the fair market value of the Class A Common Stock on
the date of grant. These options have terms of five or ten years, and become
exercisable in annual periods ranging from one year to four years from the date
of grant. Payment upon exercise of an option may be made in cash, with
previously-acquired shares, with shares (valued at fair market value) which
would be otherwise issued on the exercise of the option or any combination
thereof.
Under the Company's Non-Employee Directors' Stock Option Plan (the
"Directors' Plan"), non-qualified options with ten-year terms are granted
annually to each non-employee director of the Company. Each annual grant allows
the director to purchase from the Company up to 1,000 shares of Class A Common
Stock at the fair market value of such shares at the date of grant. Options for
an aggregate of 250,000 shares of Class A Common Stock may be granted under the
Directors' Plan.
Outstanding stock options granted to key employees of The Globe to purchase
its Series A and/or Series B Common Stock prior to the merger have been
converted to stock options to purchase the Company's Class A Common Stock. The
former Globe stock options were converted at a ratio of 0.6 shares of Class A
Common for each share of Globe stock as determined by the merger agreement. All
of these stock options became exercisable as of the acquisition date.
Changes in stock options for each of the three years in the period ended
December 31, 1995 were as follows:
----------------------------------------------------------------
Dollars in thousands Option Price
except per share data Shares Per Share ($) Total
----------------------------------------------------------------
Options outstanding
January 1, 1993 4,880,616 13.96 to 38.87 $115,935
Granted 1,909,080 26.50 to 30.68 50,641
Globe stock option
conversion 958,654 6.89 to 22.50 14,381
Exercised (346,334) 6.89 to 26.75 (6,333)
Terminations (41,175) 20.00 to 36.43 (1,116)
----------------------------------------------------------------
Options outstanding
December 31, 1993 7,360,841 6.89 to 38.87 173,508
Granted 2,426,376 22.56 to 26.18 54,807
Exercised (378,392) 6.89 to 26.75 (6,634)
Terminations (127,037) 11.45 to 36.43 (3,174)
----------------------------------------------------------------
Options outstanding
December 31, 1994 9,281,788 6.89 to 38.87 218,507
Granted 2,047,438 23.18 to 29.75 60,826
Exercised (909,622) 6.89 to 26.75 (18,741)
Terminations (412,379) 11.45 to 36.43 (11,009)
----------------------------------------------------------------
Options outstanding
December 31, 1995 10,007,225 10.31 to 38.87 $249,583
----------------------------------------------------------------
Options which became
exercisable during
1993 1,803,174 6.89 to 28.88 $35,098
1994 761,221 20.00 to 30.68 19,021
1995 1,285,288 20.00 to 26.50 30,667
----------------------------------------------------------------
Options exercisable
at December 31,
1993 4,673,663 6.89 to 38.87 $104,789
1994 4,953,313 6.89 to 38.87 114,260
1995 5,272,657 10.31 to 38.87 124,603
----------------------------------------------------------------
F-24
<PAGE>
- --------------------------------------------------------------------------------
12. CAPITAL STOCK
The 5 1/2 percent cumulative prior preference stock, which is redeemable at the
option of the Company on 30-day's notice at par plus accrued dividends, is
entitled to an annual dividend of $5.50 payable quarterly.
The serial preferred stock is subordinate to the 5 1/2 percent cumulative
prior preference stock. The Board of Directors is authorized to set the
distinguishing characteristics of each series prior to issuance, including the
granting of limited or full voting rights; however, the consideration received
must be at least $100 per share. No shares of serial preferred stock have been
issued.
The Class A and Class B Common Stock are entitled to equal participation in
the event of liquidation and in dividend declarations. The Class B Common Stock
is convertible at the holders' option on a share-for-share basis into Class A
shares. As provided for in the Certificate of Incorporation, the Class A Common
Stock has limited voting rights, including the right to elect five of the
fifteen directors of the Board, and the Class A and Class B Common Stock have
the right to vote together on reservations of Company stock for stock options
and other stock-related plans, on the ratification of the selection of
independent certified public accountants and, in certain circumstances, on
acquisitions of the stock or assets of other companies. Otherwise, except as
provided by the laws of the State of New York, all voting power is vested solely
and exclusively in the holders of the Class B Common Stock.
At the April 1994 annual meeting of the Company's Class A and B Common
Stockholders, an amendment to the Employee Stock Purchase Plan was approved to
reserve an additional 6,000,000 shares of Class A Common Stock for sale under
the Plan.
At a special meeting of shareholders in September 1993, an amendment of the
Company's Restated Certificate of Incorporation was approved to increase the
total number of authorized shares of Class A Common Stock to 200,000,000 shares,
thereby increasing the Company's overall total number of authorized shares of
capital stock of The New York Times Company to 200,910,000 shares.
Under a stock repurchase program which commenced in June 1993 and expired at
the close of The Globe transaction on October 1, 1993, the Company repurchased
approximately 10,231,000 shares of its Class A Common Stock at an average price
of $24.87 per share.
The Company spent $150,000,000 authorized under its previous stock
repurchase program announced in October 1993. In October 1994, the Company
announced authorized expenditures of up to $100,000,000 for repurchases of its
Class A Common Stock. Under the two programs, the Company has repurchased
approximately 10,074,000 shares of its Class A Common Stock at an average
effective price of $23.42 per share. Had the stock repurchases, under both
programs, occurred as of January 1, 1994, earnings per share for the year 1994
would have been $2.12, an increase of $.07 per share.
During the first quarter of 1995, the remainder of the October 1994
$100,000,000 authorization was spent to repurchase approximately 639,000 shares
of Class A Common Stock at an average price of $22.08. In February 1995 the
Company's Board of Directors authorized additional expenditures of up to
$50,000,000. As of February 26, 1996, the Company repurchased approximately
1,415,000 shares of its Class A Common Stock at an average price of $22.84 per
share under this program. Under the program, purchases may be made from time to
time either in the open market or through private transactions. The number of
shares that may be purchased in market transactions may be limited as a result
of The Globe transaction. Purchases may be suspended from time to time or
discontinued. The remaining amount of this authorization is approximately
$18,000,000. Had the 1995 stock repurchases occurred as of January 1, 1995,
earnings per share for the year 1995 would have been $1.41, an increase of $.01
per share.
In addition to the Company's stock repurchase program, in 1994 the Company
began to sell equity put options in a series of private placements that entitle
the holder, upon exercise, to sell shares of Class A Common Stock to the Company
at a specified price. In 1995 and 1994, put options for 300,000 and 1,210,000
shares were issued for $285,000 and $1,189,000 in premiums, respectively, which
have been accounted for as a part of additional capital. As of December 31, 1995
all put options issued in 1995 have expired. Put options for 120,000 shares that
were outstanding at December 31, 1994 have been exercised or expired and the
amount of $2,660,000 that was recorded in other liabilities has been reclassed
to additional capital as of December 31, 1995. Premiums received in 1995 from
put options reduced the average price of shares repurchased during 1995 to
$22.51 per share from $22.65 per share; premiums received in 1994 reduced the
average price of shares repurchased during 1994 to $23.42 per share from $23.53
per share.
Under the 1996 Offering of the Employee Stock Purchase Plan, eligible
employees may purchase Class A Common Stock through payroll deductions during
1996 at the lower of $23.85 per share (85 percent of the average market price on
November 1, 1995) or 85 percent of the average market price on December 30,
1996. Shares of Class A Common Stock reserved for issuance at December 31, 1995
and 1994 were as follows:
<PAGE>
-----------------------------------------------------------------
December 31 1995 1994
-----------------------------------------------------------------
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
-----------------------------------------------------------------
Total 18,330,039 20,495,417
-----------------------------------------------------------------
F-25
<PAGE>
- --------------------------------------------------------------------------------
13. SEGMENTS
The Company's segment and related information is included on pages 2 and 3 of
this Appendix. The information for the years 1995, 1994 and 1993 appearing
therein is presented on a basis consistent with, and is an integral part of, the
consolidated financial statements. Revenues from individual customers, revenues
between business segments and revenues, operating profit and identifiable assets
of foreign operations are not significant.
- --------------------------------------------------------------------------------
14. COMMITMENTS AND CONTINGENT LIABILITIES
In July 1994, the Company's Board of Directors approved the construction of the
new facility in College Point which will allow for later news deadlines and
provide color and inserting capability for The Times's daily newspaper. The cost
of the new facility, excluding capitalized interest currently projected to be
$35,000,000, is estimated to be $315,000,000. As of December 31, 1995, the
Company has spent approximately $176,600,000 excluding capitalized interest.
The Company is presently engaged in additional projects to modernize and
improve other production facilities. As of December 31, 1995, the Company has
committed $123,200,000 and spent approximately $50,000,000 for these additional
projects.
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that the Company may be
required to make. It is the opinion of management after reviewing such actions
with legal counsel to the Company that the ultimate liability which might result
from such actions would not have a material adverse effect on the consolidated
financial statements.
- --------------------------------------------------------------------------------
15. RECLASSIFICATIONS
For comparability, certain 1993 and 1994 amounts have been reclassified to
conform with the 1995 presentation.
<PAGE>
INDEPENDENT AUDITORS' REPORT BOARD OF DIRECTORS AND STOCKHOLDERS OF
THE NEW YORK TIMES COMPANY:
We have audited the accompanying consolidated balance sheets of The New York
Times Company as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1995. Our audits also include the
financial schedule listed in the Index at Item 14(a). These consolidated
financial statements and financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of The New York Times Company as
of December 31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles. Also, in our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/S/Deloitte & Touche LLP
- ------------------------
Deloitte & Touche LLP
New York, New York
February 7, 1996
MANAGEMENT'S RESPONSIBILITIES REPORT
The Company's consolidated financial statements were prepared by management who
is responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and, as such, include amounts based on management's best estimates
and judgments.
Management is further responsible for maintaining a system of internal
accounting control, designed to provide reasonable assurance that the Company's
assets are adequately safeguarded and that the accounting records reflect
transactions executed in accordance with management's authorization. The system
of internal control is continually reviewed for its effectiveness and is
augmented by written policies and procedures, the careful selection and training
of qualified personnel and a program of internal audit.
The consolidated financial statements were audited by Deloitte & Touche LLP,
independent auditors. Their audit was conducted in accordance with generally
accepted auditing standards and their report is shown on this page.
The Audit Committee of the Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, internal
auditors and management to discuss specific accounting, financial reporting and
internal control matters. Both the independent auditors and the internal
auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to
perform audit and other related work for the Company.
- --------------------------------------------------------------------------------
MARKET INFORMATION
- --------------------------------------------------------------------------------
The Class A Common Stock is listed on the American Stock Exchange. The Class B
convertible Common Stock and the 5 1/2 percent cumulative prior preference stock
are unlisted and are not actively traded. Dividends on the preference stock were
paid at the quarterly rate of $1.375 per share during each of the two years.
The approximate number of security holders of record as of January 31, 1996
was as follows: Class A Common Stock: 16,111; Class B Common Stock: 41; 5 1/2
percent cumulative prior preference stock: 61.
The market price range of Class A Common Stock in 1995 and 1994 is as follows:
-------------------------------------------------------------------
Quarter Ended 1995 1994
------------------------------------------------------------------
High Low High Low
March 31 $23.50 $20.12 $29.50 $25.75
June 30 24.50 21.62 27.62 23.00
September 30 29.25 22.62 25.00 21.62
December 31 30.87 27.12 24.62 21.25
Year 30.87 20.12 29.50 21.25
------------------------------------------------------------------
F-27
<PAGE>
QUARTERLY INFORMATION (Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in millions First Quarter Second Quarter Third Quarter Fourth Quarter Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
except per share data 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
Revenues $ 571.2 $ 589.5 $ 610.4 $ 635.5 $ 572.7 $ 527.2 $ 655.1 $ 605.4 $ 2,409.4 $ 2,357.6
- -----------------------------------------------------------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 80.0 78.4 85.7 80.4 90.5 66.0 111.9 79.6 368.1 304.4
Wages and benefits 131.4 132.1 133.6 133.7 135.1 129.8 137.1 134.1 537.2 529.7
Other 96.2 112.9 97.6 117.6 97.2 96.2 108.1 102.0 399.1 428.7
- -----------------------------------------------------------------------------------------------------------------------------------
Total 307.6 323.4 316.9 331.7 322.8 292.0 357.1 315.7 1,304.4 1,262.8
Selling, general and
administrative expenses 206.0 223.0 211.9 230.4 209.7 201.9 248.8 228.3 876.4 883.6
- -----------------------------------------------------------------------------------------------------------------------------------
Total 513.6 546.4 528.8 562.1 532.5 493.9 605.9 544.0 2,180.8 2,146.4
- -----------------------------------------------------------------------------------------------------------------------------------
Operating profit 57.6 43.1 81.6 73.4 40.2 33.3 49.2 61.4 228.6 211.2
Interest expense, net 7.3 8.7 6.7 8.0 5.6 6.2 5.6 5.3 25.2 28.2
Net gain (loss) on dispositions - - - - 11.3 204.0 - (3.1) 11.3 200.9
Income taxes 24.5 16.7 34.2 31.4 18.0 112.0 16.1 13.8 92.8 173.9
- -----------------------------------------------------------------------------------------------------------------------------------
Income before
equity in operations of
forest products group 25.8 17.7 40.7 34.0 27.9 119.1 27.5 39.2 121.9 210.0
Equity in operations of
forest products group 1.6 - 2.6 0.3 4.3 1.5 5.5 1.5 14.0 3.3
- -----------------------------------------------------------------------------------------------------------------------------------
Net income $ 27.4 $ 17.7 $ 43.3 $ 34.3 $ 32.2 $ 120.6 $ 33.0 $ 40.7 $ 135.9 $ 213.3
- -----------------------------------------------------------------------------------------------------------------------------------
Average number of common
shares outstanding 97.8 106.9 96.8 106.3 96.3 104.3 96.5 98.8 96.9 104.1
Per share of common stock
Net income $ .28 $ .17 $ .45 $ .32 $ .33 $ 1.16 $ .34 $ .41 $ 1.40 $ 2.05
Dividends .14 .14 .14 .14 .14 .14 .14 .14 .56 .56
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The 1994 quarters do not equal the respective year-end amounts for earnings
per share due to the weighted average number of shares outstanding used in the
computations for the respective periods. Per share amounts for the respective
quarters and years have been computed using the average number of common shares
outstanding as presented in the table above.
Annual and quarterly per share amounts are affected by the timing of share
issuances and repurchases. During 1994, approximately $235.2 million was
expended to repurchase 10.0 million shares.
The Company's largest source of revenues is advertising, which influences
the pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that in the first quarter. Advertising volume tends to be lower in
the third quarter primarily because of the summer slow-down in many areas of
economic activity.
The cost of raw materials for the Company and the entire publishing industry
has been adversely affected by the significant increases in newsprint and
magazine paper prices throughout 1995. The unfavorable impact of these increases
is expected to continue during 1996. Quarterly trends are also affected by the
overall economy and economic conditions that may exist in specific markets
served by each of the Company's business segments.
Third-quarter 1995 includes a $11.3 million pre-tax gain ($.05 per share)
from the sales of small regional newspapers.
Fourth-quarter 1995 includes a $10.1 million pre-tax charge ($.06 per
share) for severance and related costs for work force reductions.
Third-quarter 1994 includes a $204.0 million pre-tax gain ($.99 per share)
from the sales of the Women's Magazines Division and U.K. golf publications.
Fourth-quarter 1994 includes a $3.1 million loss ($.02 per share) on the
disposition of Gaspesia.
F-28
<PAGE>
<TABLE>
<CAPTION>
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in millions Year Ended December 31
except per share data 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and Income
Revenues $2,409 $2,358 $2,020 $1,774 $1,703 $1,777 $1,769 $1,700 $1,642 $1,524
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Profit 229 211 127 88 94 130 169 251 284 266
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing
operations before equity
in forest products group 122 210 58 (2) 41 61 84 132 138 110
Equity in operations of
forest products group 14 3 (52) (9) 6 4 (16) 29 18 20
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing
operations 136 213 6 (11) 47 65 68 161 156 130
Discontinued operations - - - - - - 199 7 4 2
Net cumulative effect of
accounting changes - - - (34) - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 136 213 6 (45) 47 65 267 168 160 132
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Total assets 3,377 3,138 3,215 1,995 2,128 2,150 2,188 1,915 1,712 1,405
Long-term debt
and capital lease obligations 638 523 460 207 213 319 337 378 391 217
Common stockholders' equity 1,610 1,544 1,599 1,000 1,073 1,056 1,064 873 823 705
- ------------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock
Continuing operations 1.40 2.05 .07 (.14) .61 .85 .87 2.00 1.91 1.60
Discontinued operations - - - - - - 2.52 .08 .05 .03
Net cumulative effect of
accounting changes - - - (.43) - - - - - -
Net income (loss) 1.40 2.05 .07 (.57) .61 .85 3.39 2.08 1.96 1.63
Dividends .56 .56 .56 .56 .56 .54 .50 .46 .40 .33
Common stockholders'
equity (end of year) 16.50 15.71 14.96 12.54 13.70 13.68 13.63 11.02 10.04 8.59
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding (end of year)
Class A and Class B Common 97.6 98.2 106.9 79.7 78.4 77.2 78.1 79.2 82.0 82.0
- ------------------------------------------------------------------------------------------------------------------------------------
Market Price (end of year) 29.62 22.12 26.25 26.37 23.62 20.62 26.37 26.87 31.00 35.50
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1995 - Results included: a net pre-tax gain of $11.3 million ($.05 per share)
from the sales of small regional newspapers; $10.1 million pre-tax charge ($.06
per share) for work force reductions.
1994 - Results included: a net pre-tax gain of $200.9 million ($.99 per share)
from the sales of the Women's Magazines Division and U.K. golf publications
and the disposition of Gaspesia.
1993 - Results included: a pre-tax $3.7 million ($.02 per share) rate
adjustments due to a severe snowstorm; $4.4 million ($.05 per share) of
additional tax expense for remeasurement of deferred tax balances due to the
enactment of the Tax Act; $1.2 million ($.02 per share) of additional tax
expense due to the Tax Act which increased the federal corporate income tax
rate; a $2.6 million pre-tax gain ($.02 per share) on the sale of assets; $35.4
million of pre-tax charges ($.23 per share) for staff reductions at The Times;
an after-tax noncash charge of $47.0 million ($.56 per share) against equity in
operations to write down the Company's investment in Gaspesia to its net
realizable value.
1992 - Results included: $53.8 million pre-tax loss ($.47 per share) on the
closing of The Gwinnett (Ga.) Daily News; a $3.1 million pre-tax gain ($.02 per
share) from the sales of assets; a $28.0 million pre-tax charge ($.20 per share)
for voluntary union staff reductions at The Times; $21.4 million pre-tax ($.15
per share) for labor disruptions and training and start-up costs at Edison. Net
cumulative effect of accounting changes reflects the 1992 adoption of the change
in methods of accounting for income taxes, postretirement benefits other than
pensions and postemployment benefits.
1991 - Results included: a $20.0 million pre-tax charge ($.15 per share) for
voluntary union staff reductions at The Times; the reversal of a provision for
income taxes of $10.0 million ($.13 per share) for a favorable tax settlement.
1989 - Results included: an after-tax gain of $193.3 million ($2.46 per share)
from the sale of the Company's cable television operations, of which the gain
and results of operations through the 1989 sale date are included as
discontinued operations; a $30.0 million pre-tax charge ($.22 per share) for
voluntary union staff reductions at The Times; an after-tax charge of $27.2
million ($.35 per share) for a valuation reserve against the Company's
investment in the Forest Products Group.
1986 - Results included: an interest charge of $8.5 million ($.05 per share)
which relates to a court decision arising from the Company's 1981 acquisition of
two cable television systems.
F-29
<PAGE>
<TABLE><CAPTION>
SCHEDULE II
THE NEW YORK TIMES COMPANY
VALUATION AND QUALIFYING ACCOUNTS
For the Three Years Ended December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ------------------------------------------------------------------------------------------------------------------------
Deduc-
tions
Additions for
charged purposes
to costs for
Balance and which
at expenses accounts Balance
beginning or were set at end
Description of period revenues up of period
- -------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Deducted from assets to which they apply
Uncollectible accounts . . . . . . . $22,268 $20,749 $24,075 $18,942
Returns and allowances, etc. . . . . 5,889 9,892 8,858 6,923
------- ------- ------- -------
Total . . . . . . . . . . . . . . . $28,157 $30,641 $32,933 $25,865
======= ======= ======= =======
YEAR ENDED DECEMBER 31, 1994
Deducted from assets to which they apply
Uncollectible accounts . . . . . . . $17,108 $23,134 $17,974 $22,268
Returns and allowances, etc. . . . . 26,399 44,562 65,072 5,889
------- ------- ------- -------
Total . . . . . . . . . . . . . . . $43,507 $67,696 $83,046 $28,157
======= ======= ======= =======
YEAR ENDED DECEMBER 31, 1993
Deducted from assets to which they apply
Uncollectible accounts . . . . . . . $12,809 $18,495 $14,196 $17,108
Returns and allowances, etc. . . . . 20,491 71,657 65,749 26,399
------- ------- ------- -------
Total . . . . . . . . . . . . . . . $33,300 $90,152 $79,945 $43,507
======= ======= ======= =======
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
(2.1) Agreement and Plan of Merger dated as of June 11, 1993, as amended by the
First Amendment dated as of August 12, 1993, by and among the Company,
Sphere, Inc. and Affiliated Publications, Inc. (filed as Exhibit 2 to the
Form S-4 Registration Statement, Registration No. 33-50043, on August 23,
1993, and included as Annex I to the Joint Proxy Statement/Prospectus
included in such Registration Statement (schedules omitted--the Company
agrees to furnish a copy of any schedule to the Commission upon request), and
incorporated by reference herein).
(2.2) Stockholders Agreement dated as of June 11, 1993, by and between the Company
and the other parties signatory thereto (filed as Exhibit 2.1 to the Form S-4
Registration Statement, Registration No. 33-50043, on August 23, 1993, and
included as Annex II to the Joint Proxy Statement/Prospectus included in such
Registration Statement, and incorporated by reference herein).
(3.1) Certificate of Incorporation as amended by the Class A and Class B
stockholders and as restated on September 29, 1993 (filed as an Exhibit to
the Company's Form 10-K dated March 21, 1994, and incorporated by reference
herein).
(3.2) By-laws as amended through February 16, 1995 (filed as an Exhibit to the
Company's Form 10-Q dated May 11, 1995, and incorporated by reference
herein).
(4) The Company agrees to furnish to the Commission upon request a copy of any
instrument with respect to long-term debt of the Company and any subsidiary
for which consolidated or unconsolidated financial statements are required to
be filed, and for which the amount of securities authorized thereunder does
not exceed 10% of the total assets of the Company and its subsidiaries on a
consolidated basis.
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993, as amended
effective October 1, 1995.
(10.1) The Company's Executive Incentive Compensation Plan as amended through
December 20, 1990 (filed as an Exhibit to the Company's Form 10-K dated March
1, 1991, and incorporated by reference herein).
(10.2) The Company's 1991 Executive Stock Incentive Plan, as amended through April
18, 1995.
(10.3) The Company's 1991 Executive Cash Bonus Plan, as amended through April 18,
1995.
(10.4) The Company's Non-Employee Directors' Stock Option Plan, adopted on April 16,
1991 (filed as an Exhibit to the Company's Proxy Statement dated March 1,
1991, and incorporated by reference herein).
(10.5) The Company's Supplemental Executive Retirement Plan, as amended and restated
through January 1, 1993.
(10.6) Lease (short form) between the Company and Z Edison Limited Partnership dated
April 8, 1987 (filed as an Exhibit to the Company's Form 10-K dated March 27,
1988, and incorporated by reference herein).
(10.7) Agreement of Lease, dated as of December 15, 1993, between The City of New
York, Landlord, and the Company, Tenant (as successor to New York City
Economic Development Corporation (the "EDC"), pursuant to an Assignment and
Assumption of Lease With Consent, made as of December 15, 1993, between the
EDC, as Assignor, to the Company, as Assignee) (filed as an Exhibit to the
Company's Form 10-K dated March 21, 1994, and incorporated by reference
herein).
(10.8) Funding Agreement #1, dated as of December 15, 1993, between the EDC and the
Company (filed as an Exhibit to the Company's Form 10-K dated March 21, 1994,
and incorporated by reference herein).
(10.9) Funding Agreement #2, dated as of December 15, 1993, between the EDC and the
Company (filed as an Exhibit to the Company's Form 10-K dated March 21, 1994,
and incorporated by reference herein).
</TABLE>
<PAGE>
<TABLE><CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
(10.10) Funding Agreement #3, dated as of December 15, 1993, between the EDC and the
Company (filed as an Exhibit to the Company's Form 10-K dated March 21, 1994,
and incorporated by reference herein).
(10.11) Funding Agreement #4, dated as of December 15, 1993, between the EDC and the
Company (filed as an Exhibit to the Company's Form 10-K dated March 21, 1994,
and incorporated by reference herein).
(10.12) New York City Public Utility Service Power Service Agreement, made as of May
3, 1993, between The City of New York, acting by and through its Public
Utility Service, and The New York Times Newspaper Division of the Company
(filed as an Exhibit to the Company's Form 10-K dated March 21, 1994, and
incorporated by reference herein).
(10.13) Employment Agreement, dated May 19, 1993, between API, Globe Newspaper
Company and William O. Taylor (filed as an Exhibit to the Company's Form 10-K
dated March 21, 1994, and incorporated by reference herein).
(10.14) API's 1989 Stock Option Plan (filed as Annex F-1 to API's Proxy
Statement-Joint Prospectus, dated as of April 28, 1989, contained in API's
Registration Statement on Form S-4 (Registration Statement No. 33-28373)
declared effective April 28, 1989, and incorporated by reference herein).
(10.15) API's Supplemental Executive Retirement Plan, as amended effective September
15, 1993 (filed as an Exhibit to the Company's Form 10-K dated March 21,
1994, and incorporated by reference herein).
(10.16) API's 1990 Stock Option Plan (Restated 1991) (filed as Exhibit 1 to API's
Quarterly Report on Form 10-Q for the Quarter ended June 30, 1991 (Commission
File No. 1-10251), and incorporated by reference herein).
(10.17) Form of Substituted Stock Option Agreement/Incentive 86 among API, its
predecessor company and certain employees (filed as Exhibit 10.27 to Post-
Effective Amendment No. 1 filed August 11, 1989, to API's Registration
Statement on Form S-4 (Registration Statement No. 33-28373) declared
effective April 28, 1989, and incorporated by reference herein).
(10.18) Form of Substituted Stock Option Agreement/Incentive 87 among API, its
predecessor company and certain employees (filed as Exhibit 10.29 to Post-
Effective Amendment No. 1 filed August 11, 1989, to API's Registration
Statement on Form S-4 (Registration Statement No. 33-28373) declared
effective April 28, 1989, and incorporated by reference herein).
(10.19) Form of Substituted Stock Option Agreement/Incentive 88 among API, its
predecessor company and certain employees (filed as Exhibit 10.31 to Post-
Effective Amendment No. 1 filed August 11, 1989, to API's Registration
Statement on Form S-4 (Registration Statement No. 33-28373) declared
effective April 28, 1989, and incorporated by reference herein).
(10.20) The Company's Deferred Executive Compensation Plan, adopted on May 19, 1994.
(21) Subsidiaries of the Company.
(23) Consent of Deloitte & Touche LLP.
(27) Financial Data Schedule.
</TABLE>
EXHIBIT 9.1
GLOBE VOTING TRUST
VOTING TRUST AGREEMENT dated as of October 1, 1993 by
and among the stockholders of The New York Times Company (the
"Company") who execute this Agreement (the "Holders") and
William O. Taylor, Charles H. Taylor, Benjamin B. Taylor,
Alexander B. Hawes, Jr. and Davis Taylor Pillsbury
(collectively, with their successors in trust, the "Voting
Trustees"), amending, restating and extending the Taylor
Voting Trust dated as of October 1, 1954, as heretofore
amended.
RECITALS
1. This Agreement may from time to time be referred to
as the "Globe Voting Trust."
2. All the initial Holders were indirect stockholders
of Affiliated Publications, Inc. ("API"), prior to the merger
of a subsidiary of the Company into API, by reason of their
participation in the Taylor Voting Trust.
3. On October 1, 1993, the Taylor Voting Trust became
entitled to receive shares of Class A Common Stock of the
Company ("Class A Stock") upon the merger of the subsidiary
of the Company into API.
4. The Holders are unanimously of the opinion that,
throughout the term of this Agreement, the operation of this
Agreement in accordance with its terms (i) would assure the
voting of shares of Class A Stock deposited hereunder
("Deposited Stock") as a unit for the election of a Board of
Directors of the Company and on other matters as provided
herein, (ii) would be conducive to safe and prudent
management of the Company, (iii) would support the current
emphasis of the Company on maintaining the independence and
editorial excellence of its newspaper properties, including
The Boston Globe, and a long-term corporate perspective for
the benefit of its shareholders, employees, communities,
suppliers and readers and (iv) would be in the interests of
all the Holders and also in the interests of the beneficial
<PAGE>
-2-
owners of any such additional shares of Class A Stock as may
be deposited hereunder.
5. API shares were also held by the Jordan Voting
Trust pursuant to a Voting Trust Agreement dated as of
January 29, 1987, as amended, established by the trustees of
the Jordan Trust created pursuant to the Will of Eben D.
Jordan. Such API shares have also been converted into Class
A Stock. When the Jordan Voting Trust and the Jordan Trust
terminate on January 16, 1996 in accordance with their terms,
the beneficiaries of the Jordan Trust who receive shares of
Class A Stock upon the liquidation of the Jordan Trust will
be offered the opportunity to deposit their holdings of Class
A Stock with the Voting Trustees under this Agreement.
6. The terms "Deposited Stock" and "Class A Stock" and
words of similar import wherever appearing in this Agreement
shall be taken to be synonymous and to mean and include any
voting stock of the Company (other than Class B Common Stock
of the Company), or of any entity which is a successor of the
Company or which may from time to time be issued with respect
to or in exchange for any voting stock held by the Voting
Trustees hereunder or into which any such voting stock may be
changed as a result of any reorganization, merger,
recapitalization or similar transaction. The term "Company"
wherever appearing in this Agreement shall be taken to mean
and include the issuer of any voting stock held hereunder for
the time being as "Deposited Stock."
7. "Taylor Descendant" means a descendant by blood or
adoption of Charles H. Taylor, first Treasurer of Globe
Newspaper Company, a spouse of such descendant or a trustee
or trustees holding for the benefit of any such descendant or
descendants or for the benefit of a spouse of any such
descendant or descendants or a stock corporation all the
voting stock of which is owned by the foregoing.
8. "Jordan Descendant" means a descendant by blood or
adoption of Eben D. Jordan, a spouse of such descendant or a
trustee or trustees holding for the benefit of any such
descendant or descendants or for the benefit of a spouse of
any such descendant or descendants or a stock corporation all
the voting stock of which is owned by any of the foregoing.
NOW, THEREFORE, in consideration of the premises and of
the agreements herein contained and for other good and
valuable consideration, receipt of all of which consideration
is hereby acknowledged, the parties hereto amend, restate and
extend the Taylor Voting Trust so that it reads in its
entirety as follows:
1. Initial Interests in the Voting Trust. The
-------------------------------------------
interest of each Holder is set forth in Schedule A and shall
-------- -
<PAGE>
-3-
be reflected in transfer records maintained by the Voting
Trustees, periodic reports of which will be sent to the
Holder. Only if a Holder expressly requests that his
interest be represented by a certificate shall the Voting
Trustees issue to the Holder a Voting Trust Certificate,
registered in the name of that Holder. Certificates issued
under the Taylor Voting Trust are no longer valid and should
be destroyed.
2. Subsequent Deposits and Interests. The Voting
------------------------------------
Trustees shall accept transfer and delivery to them of
additional shares of Class A Stock from any Taylor Descendant
and from any Jordan Descendant who shall have executed a copy
of this Agreement. The interest of each person who so
becomes a Holder shall be reflected in the Voting Trustees'
transfer records. Only if such a Holder expressly so
requests shall the Voting Trustees issue a Voting Trust
Certificate. The Voting Trustees shall prepare a revised
Schedule A adding the name and address of each new Holder and
-------- -
the number of additional shares of Class A Stock so
transferred. All such additional shares shall be held by the
Voting Trustees hereunder in accordance with and subject to
the provisions of this Agreement.
3. Voting. The Voting Trustees shall vote all shares
------
of Deposited Stock as the holders of record of such shares as
follows:
(a) With respect to any shares of Class A Stock
deposited by any stockholder who is a party to the
Stockholders Agreement dated June 11, 1993 among the
Company and certain of the Stockholders (the
"Stockholders Agreement"), as required by Section 3.6 of
the Stockholders Agreement for so long as the provisions
of such Section 3.6 shall apply.
(b) On any question of selling, mortgaging,
leasing or otherwise disposing of substantially all the
assets or dissolving, merging or consolidating the
Company not governed by paragraph (a) of this Section 3,
in accordance with the written instructions of the
Holder with respect to his or her shares of Deposited
Stock.
(c) On all other matters, including the election
of directors of the Company, as recommended by the Board
of Directors of the Company.
4. Disposition of Deposited Stock by Voting Trustees.
---------------------------------------------------
The Voting Trustees shall not pledge, mortgage, sell or
otherwise dispose of any of the Deposited Stock or any
interest therein, provided, however, that if any transaction
requires the exchange or conversion of Deposited Stock, the
<PAGE>
-4-
Voting Trustee may surrender the Deposited Stock and receive
distribution in respect thereof in accordance with the terms
of the transaction and provided, further, that any
dissenters' appraisal rights in respect of any such
transaction shall be exercised by the Voting Trustees on
behalf of any Holder in accordance with the instructions of
that Holder at the Holder's expense and provided, further,
that the Voting Trustees will exercise no right of dissent
with respect to any transaction approved in accordance with
Section 3.6 of the Stockholders Agreement.
5. Transfer of Deposited Stock to Other Holders, Other
---------------------------------------------- -----
Taylor Descendants and Other Jordan Descendants. Any Holder
------------------------------------------------
may at any time and from time to time transfer his or her
interest in any shares of Deposited Stock to any other
Holder, whether by gift or by sale. Any Holder may at any
time and from time to time transfer his or her interest in
any shares of Deposited Stock to any other Taylor Descendant
or Jordan Descendant, whether by gift, by bequest or by sale,
and each recipient of an interest shall be conclusively
deemed to have assented to all the terms of this Agreement as
fully as though the recipient had executed a copy of this
Agreement as a Holder. Promptly after receiving advice of
any such transfer, the Voting Trustees shall correct Schedule
--------
A.
-
6. Withdrawal of Deposited Stock for Sale by a
-------------------------------------------
Holder. A Holder may withdraw shares of Deposited Stock
------
for the purpose of selling them, subject to the limitations
set forth in this Section 6. Notice of withdrawal of more
than 10,000 shares in any calendar year by any Holder shall
be given by the Voting Trustees to the Company at 229 West
43rd Street, New York, New York 10036, Attention:
Secretary. No Holder may withdraw in any calendar year
more than 20% of the total number of shares of Deposited
Stock deposited by or for him or her from time to time,
computed without deducting withdrawals in prior calendar
years. In the event that the value of any interest in
shares of Deposited Stock is taxed to any person, estate or
trust by reason of the death of any person, the 20%
limitation shall not apply to the Holder or Holders of such
interest, who shall be limited instead, in the aggregate,
to the number of shares the sale of which will generate
funds in the amount of the taxes and expenses arising by
reason of such person's death, whether or not attributable
to the value of an interest in Deposited Stock. A Holder
may sell any withdrawn shares in one or more broker's
transactions or in a private transaction with the Company.
<PAGE>
-5-
7. Withdrawal of Deposited Stock for Charitable
----------------------------------------------------
Contribution. A Holder may withdraw any number of shares for
------------
contribution to any corporation, trust of community chest,
fund or foundation, gifts to which are deductible under
Section 170(c)(2) of the Internal Revenue Code of 1986 or any
successor provisions thereto. If the contribution shall not
have been completed within six months after the withdrawal,
the remaining shares shall once again become Deposited Stock.
8. Compensation and Expenses. The Voting Trustees
---------------------------
shall serve without compensation. Each Voting Trustee shall
be entitled to reimbursement from the assets held by them
under this Agreement for such reasonable out-of-pocket
expenses as he may incur and as are reasonably incident to
the performance of his duties hereunder.
9. Dividends and Other Distributions. From all
-------------------------------------
dividends or other cash distributions received from the
Company by the Voting Trustees as record holders hereunder of
Deposited Stock, the Voting Trustees may deduct such sums as
may be required to pay any and all reasonable expenses
incurred by the Voting Trustees in the administration of this
Voting Trust Agreement. After such deductions, the Voting
Trustees shall forthwith pay to the Holders, in proportion to
their beneficial interest in the Deposited Stock, the entire
balance of the dividends and other cash distributions so
received by the Voting Trustees. Dividends and other
distributions received by the Voting Trustees in respect of
Deposited Stock in the form of voting stock of the Company
shall be held by the Voting Trustees as additional Deposited
Stock. Any other distributions of securities or property
shall be distributed by the Voting Trustees pro rata to the
Holders. In case the Company should grant to its
stockholders the right to subscribe to any securities, such
rights will be granted by the Voting Trustees pro rata to
the Holders, provided, however, that if such rights relate to
securities which would constitute Deposited Stock, such
rights may be exercised through the Voting Trustees only,
with funds provided by the respective Holders and the
securities so purchased will be retained hereunder as
additional Deposited Stock. If the Voting Trustees are
required to pay over to any government any withholding tax,
they may deduct the amount so required to be paid over from
cash distributions received and, if such distributions are
insufficient for the purpose, the Holders agree to deliver to
the Voting Trustees such amounts as they may require for the
purpose.
<PAGE>
-6-
10. Termination. This Voting Trust Agreement (a) shall
-----------
terminate on September 30, 2003, (b) may be terminated on any
earlier date as may be fixed in a written notice to the
Voting Trustees signed by the Holders of Voting Trust
Certificates representing 66-2/3% of the Deposited Stock
delivered to the Voting Trustees at least 30 calendar days
prior to the termination date so fixed in such notice and (c)
may be terminated on any earlier date by unanimous
declaration of the Voting Trustees made by written notice
addressed to the Holders at least 15 calendar days prior to
the date of expiration fixed in such declaration. Upon
termination of this Voting Trust Agreement, the Holders who
hold certificates shall promptly surrender their certificates
to the Voting Trustees for cancellation, and the Voting
Trustees shall cause to be delivered to the Holders
certificates for the Deposited Stock.
11. Resignation and Replacement. Any Voting Trustee
-----------------------------
may resign at any time by delivering to the remaining Voting
Trustees and to the Company his written resignation, to take
effect at the time of delivery. If any Voting Trustee shall
die or resign before any Jordan Descendants shall have become
Holders, the then remaining Voting Trustees shall elect a
successor Voting Trustee from among Taylor Descendants. When
any Jordan Descendant shall have become a Holder, three of
the Voting Trustees shall resign. Two of the positions shall
be filled by the Holders who are Jordan Descendants, voting
as a class (in proportion to their interests in the Globe
Voting Trust) for Jordan Descendants; and the remaining
position (the "Fifth Trustee") shall be filled by the
executive of Globe Newspaper Company, if any, who is a
director of the Company or, if none, by vote of the other
four Voting Trustees. Thereafter, any vacancy caused by
death or resignation of a Voting Trustee who is a Taylor
Descendant (but not the Fifth Trustee) shall be filled by the
Holders who are Taylor Descendants, voting as a class for a
Taylor Descendant, any vacancy caused by the death or
resignation of a Voting Trustee who is a Jordan Descendant
(but not the Fifth Trustee) shall be filled by the Holders
who are Jordan Descendants, voting as a class for a Jordan
Descendant, and any vacancy caused by the death or
resignation of the Fifth Trustee shall be filled in the same
manner as the vacancy filled by election of the original
Fifth Trustee. Each and every power granted to a Voting
Trustee under this Voting Trust Agreement shall vest in each
and every successor Voting Trustee immediately upon his or
her appointment and acceptance of said office. Each
successor Voting Trustee shall be deemed to have accepted
said office upon delivery of a writing to that effect to the
remaining Voting Trustees and to the Company.
12. Standards of Conduct. In voting or consenting or
--------------------
taking or failing to take any action with respect to the
<PAGE>
-7-
Deposited Stock, the Voting Trustees shall exercise their
best judgment with respect to the proper management of the
Company and the best interests of the Holders, but it is
understood and agreed that no Voting Trustee incurs any
liability as Voting Trustee hereunder, except for his own
individual malfeasance, and no Voting Trustee shall be
responsible for the acts or omissions of any other Voting
Trustee hereunder. The Voting Trustees may vote any shares
of Deposited Stock held by them in their own interests in
each case without any liability to account. The Voting
Trustees or any firms of which they may be members or any
corporations of which they may be stockholders, directors,
officers or counsel may enter into any contract or financial
arrangements with, or be pecuniarily interested in any matter
or transaction with, the Company as fully as though the
Voting Trustees were not Voting Trustees hereunder.
13. Proof of Authority of Voting Trustees. No person
--------------------------------------
dealing with the Voting Trustees or their agents shall be
bound to make any inquiry concerning the authorization or
validity of any act purporting to be done by the Voting
Trustees or their agents. Any certificate signed by the
Voting Trustees shall be conclusive evidence of the matters
contained therein in favor of all persons acting in good
faith in reliance thereon.
14. Notices. All notices to Holders shall be given by
-------
mail at the address furnished by the Holders to the Voting
Trustees. All notices to the Voting Trustees shall be c/o
Bingham, Dana & Gould, 150 Federal Street, Boston,
Massachusetts 02110, Attention: Director of Fiduciary
Services.
15. Amendments. This Agreement may be amended at any
----------
time by a written instrument executed by all of the Voting
Trustees then acting and consented to in writing by the
Holders of interests in two-thirds or more of the Deposited
Stock.
16. Securities Law Representation and Transfer
----------------------------------------------------
Restriction. Each Holder represents and warrants to the
-----------
Voting Trustees that the Holder's interest in the Voting
Trust is being acquired for the Holder's own account for
investment only and not with a view to any resale or
distribution thereof, and each Holder agrees that no interest
in the Globe Voting Trust may be sold or otherwise disposed
of in violation of the Securities Act of 1933, as amended.
The Holder understands that the Holder's interest must be
held indefinitely unless transfers are made in compliance
with applicable law and understands that any certificate that
may be issued to evidence the Holder's interest in the Globe
Voting Trust will bear the following restrictive legend:
<PAGE>
-8-
"This security has not been registered under the
Securities Act of 1933 and may not be sold,
assigned or otherwise transferred in the absence of
an effective registration statement under that Act
or an opinion of counsel satisfactory to the issuer
that registration under that Act is not required."
17. Acceptance of Trust. The Voting Trustees hereby
--------------------
accept the trust created hereby and agree that they will in
good faith in all respects exercise the powers granted to
them hereunder or accruing to them by reason of the ownership
of Deposited Stock in trust as herein provided.
18. No Action Inconsistent with Stockholders Agreement.
---------------------------------------------------
Notwithstanding the express provisions of Sections 5, 6, 7
and 15 of this Agreement, transfer of interests in Deposited
Stock and transfer of Deposited Stock will at no time be made
by any Holder bound by the Stockholders Agreement in
violation of any of the provisions of the Stockholders
Agreement.
19. Counterparts. This Agreement may be signed in any
------------
number of counterparts, with Holders signing separate
counterparts; and all counterparts taken together shall
constitute a single instrument.
IN WITNESS WHEREOF, the Voting Trustees and the Holders
have caused this Voting Trust Agreement to be executed and
delivered on the date first written above.
s/ William O. Taylor s/ Alexander B. Hawes, Jr.
----------------------------- -----------------------------
William O. Taylor Alexander B. Hawes, Jr.
s/ Charles H. Taylor s/ Davis Taylor Pillsbury
----------------------------- -----------------------------
Charles H. Taylor Davis Taylor Pillsbury
s/ Benjamin B. Taylor
-----------------------------
Benjamin B. Taylor
Charles H. Taylor
-----------------------------
Name of Holder
s/ Charles H. Taylor
-----------------------------
Signature
<PAGE>
SCHEDULE A
NYTCO SHS DEPOSITED TO:
** GLOBE VOTING TRUST ** 12/29/93
# of NYT A
Shs to
UNIT HOLDER GLOBE
VTG TR
C H TAYLOR 1993 GLOBE TRUST 199,656
C H TAYLOR GLOBE FAMILY TRUST 248,400
ROSAMOND T DYE REV TRUST 61,531
PAMELA S COTHEY REV TRUST 10,638
CHARLES H TAYLOR 85,560
CHARLES H TAYLOR 88 IRR TRUST 19,440
STEPHEN EMYLIN TAYLOR 10,000
E B TAYLOR STUART 13,230
PAMELA ROGERS WETZELS 127,291
KATRINA WETZELS TRUST 15,921
THOMAS T WETZELS TRUST 15,921
PETER BLACK 1,636
SYLVIA BLACK RIPLEY 20,787
EMILY TAYLOR ANDREWS 460,272
EUNICE T VANDERHOEF TRUST 248,380
ELIZABETH T FESSENDEN TRUST 625,817
LOUISE C RIEMER (MOTHER) 4,708
KARL DAVIS RIEMER 2,760
LOUISE C REIMER (DAUGHTER) 2,760
HENRY F REIMER 2,220
ELIZABETH L RIEMER REECE 2,760
KATHARINE C FEGUSON TRUST 4,708
WILLIAM DAVIS TAYLOR REV TR 289,681
ANNE MACY TAYLOR REV TRUST 26,907
WILLIAM OSGOOD TAYLOR 426
WILLIAM OSGOOD TAYLOR 20,449
WILLIAM OSGOOD TAYLOR 42,970
WILLIAM DAVIS TAYLOR II 499
EDMUND C TAYLOR 180
EDMUND C TAYLOR 630
OLIVIA P HEARFIELD TRUST 387,403
EVANS S PILLSBURY III MAR TRUST 311,318
EVANS S PILLSBURY III RES TR 192,218
TAYLOR PILLSBURY GLOBE TRUST 129,822
ELIZ SCULLY MARCHEWKA 9,570
<PAGE>
NYTCO SHS DEPOSITED TO:
** GLOBE VOTING TRUST ** 12/29/93
# of NYT A
Shs to
UNITHOLDER GLOBE
VTG TR
MARGARET B TAYLOR FAM TRUST 22,200
BLAKE TAYLOR CHLDRN'S TRUST 184,548
JOHN I TAYLOR REV TRUST 117,734
CARSON TAYLOR 1,338
TIMOTHY B TAYLOR REV TRUST 79,864
DAVID V N TAYLOR REV TRUST 149,662
SHELLEY G HALL-TAYLOR REV TR 30,000
SUSAN D CONNER 1,000
ELIZA TAYLOR 6,676
MATTHEW VAN NESS TAYLOR 6,676
BENJAMIN B TAYLOR REV TRUST 194,312
KATHERINE S TAYLOR REV TRUST 1,338
ABIGAIL TAYLOR 1,781
SAMUEL S TAYLOR 1,781
WILLIAM I TAYLOR 1,781
LITTLE CHILDREN'S TRUST 116,098
ALEXANDER BOYD HAWES TRUST 242,852
ALEXANDER BOYD HAWES 1,330
ELIZABETH SAVAGE WRIGHT 1,526
JOHN WRIGHT 238
MATT. ARMSTRONG HAWES TR 55,384
CHRIS. DeBOUVRY HAWES TRUST 8,533
TOTAL NYTCO SHARES DEPOSITED 4,823,121
---------
---------
EXHIBIT 10.2
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE STOCK INCENTIVE PLAN
AS AMENDED
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Stock
Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to
enable the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 12 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan.
(d) "Code"--means the Internal Revenue Code of 1986, as amended.
(e) "Committee"--means the Committee referred to in Section 3 of the Plan.
If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by those members of the Board
who are Disinterested Persons.
(f) "Common Stock"--means shares of the Class A Common Stock of the Company.
(g) "Company"--means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor corporation), and its
subsidiaries (as hereinafter defined) and other non-corporate entities in which
it owns directly or indirectly 40% or more of the equity interests. A
"subsidiary" means any corporation in which the Company possesses directly or
indirectly 50% or more of the combined voting power of all classes of stock.
(h) "Consolidated Statement of Income"--means the consolidated statement of
income (or any comparable statement, however designated) of the Company, audited
by the independent certified public accountants of the Company and contained in
the Company's annual report to stockholders or proxy statement.
(i) "Disability"--means total disability as defined under the Company's
long-term disability plan, whether or not the Participant is covered by such
plan, as determined by the Committee.
(j) "Disinterested Person"--means any Director of the Company who at the
time of acting is a "disinterested person" under Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(k) "Equity in Operations of Forest Products Group"--means the amount
designated as Equity in Operations of the Forest Products Group for the
applicable year and shown separately in the Consolidated Statement of Income for
such year.
(l) "Fair Market Value"--means the arithmetic mean of the highest and lowest
sales prices of the Common Stock as reported in the Consolidated Transactions of
the American Stock Exchange ("AMSE") (or such other national securities exchange
on which the Common Stock may be listed at the time of determination, and if the
Common Stock is listed on more than one exchange, then on the one located in New
York or if the Common Stock is listed only on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), then on such system)
on the date of the grant or other date on which the Common Stock is to be valued
hereunder. If no sale shall have been made on the AMSE, such other exchange or
the NASDAQ on such date or if the Common Stock is not then listed on
<PAGE>
any exchange or on the NASDAQ, Fair Market Value shall be determined by the
Committee in accordance with Treasury Regulations applicable to incentive stock
options.
(m) "Participant"--means a key employee of the Company who is selected by
the Committee to participate in any one or more parts of the Plan from among
persons who in the judgment of the Committee are key employees of the Company.
In general, key employees are those employees who have principal responsibility
for, or who contribute substantially to, the management efficiency, editorial
achievement or financial success of the Company.
(n) "Pre-Tax Income"--means income before income taxes and Equity in
Operations of Forest Products Group, as shown in the Consolidated Statement of
Income for the applicable year, but before the amount of any provision for
Awards under the Plan and awards under the Cash Plan for such year.
(o) "Retirement"--means retirement as defined by the terms of "The New York
Times Companies Pension Plan" which became effective December 31, 1988, or any
successor retirement plan, whether or not the Participant is a member of such
retirement plan, and, in the case of employees of Affiliated Publications, Inc.,
or any subsidiary thereof, who are not subject to the reporting requirements of
Section 16 of the Exchange Act with respect to Common Stock and who retire under
the terms of the Globe Newspaper Company Retirement Plan, which became effective
January 1, 1994 (the "Globe Pension Plan") or any successor retirement plan,
"Retirement" shall also mean retirement as defined by the terms of the Globe
Pension Plan or any successor plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Committee appointed by it
and composed of two or more directors all of whom shall be Disinterested
Persons. The membership of the Committee shall be constituted so as to comply at
all times with the applicable requirements of Rule 16b-3, and with the
administration requirements of Section 162(m)(4)(C) of the Code. The Committee
shall serve at the pleasure of the Board and shall have such powers as the Board
may from time to time confer upon it.
4. OPTIONS AND AWARDS UNDER THE PLAN
Options, which include "Non-Qualified Options" and "Incentive Stock Options"
or combinations thereof, are rights to purchase Common Stock of the Company.
Non-Qualified Options and Incentive Stock Options are subject to the terms,
conditions and restrictions provided in Part I of the Plan.
Awards under the Plan may include one or more of the following types, either
alone or in any combination thereof: (i) "Stock Awards," (ii) "Restricted Stock
Awards," (iii) "Retirement Unit Awards," (iv) "Annual Performance Awards," (v)
"Performance Awards" or "Other Awards."
Stock Awards are granted under Part IIA of the Plan. Restricted Stock Awards
are granted under Part IIB of the Plan. Retirement Unit Awards are granted under
Part IIC of the Plan. Annual Performance Awards are granted under Part IID of
the Plan. Performance Awards or Other Awards are granted under Part IIE of the
Plan. Awards are subject to the terms, conditions and restrictions provided in
the respective subparts of Part II of the Plan. Annual Performance Awards will
be based exclusively on the criteria set forth in Section 27A.
PART I STOCK OPTIONS
5. PURPOSE
The purpose of the Stock Option portion of the Plan is to provide an added
incentive for effective service and high levels of performance to participating
key employees of the Company by affording them an opportunity, under the terms
of the Plan, to acquire Common Stock and thereby to increase their proprietary
interest in the continued progress and success of the Company.
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6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS
(a) The Committee may grant options to purchase Common Stock ("Options") to
key employees of the Company in such amounts as the Committee may determine,
subject to the conditions and limitations set forth in the Plan. Options may be
granted in combination with Awards made under the Plan, and Options may be
granted to any Participant whether or not he or she was eligible for, or
received, an Award.
(b) The number of shares of Common Stock with respect to which Options may
be granted to any key employee during any calendar year shall not exceed 200,000
(subject to adjustment as provided in Sections 28 and 29 hereof).
(c) There may be issued under the Plan pursuant to the exercise of Options,
an aggregate of not more than 10,000,000 shares of Common Stock, subject to
adjustment as provided in Sections 28 and 29 hereof. Shares of Common Stock
issued pursuant to Options may be either authorized but unissued shares,
treasury shares, reacquired shares, or any combination thereof. Any shares
subject to an Option which expires without being exercised shall be available
for issuance under new Options.
7. OPTION PRICE
The exercise price of Common Stock subject to Options granted pursuant to
the Plan shall be the Fair Market Value thereof at the time the Option is
granted. If a Participant owns or is deemed to be the owner of, by reason of the
attribution rules under Section 425(d) of the Code, more than 10% of the
combined voting power of all classes of the stock of the Company or any
subsidiary of the Company and an Option granted to such Participant is intended
to qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code, the option price shall be no less than 110% of the Fair Market Value of
the Common Stock on the date the Option is granted.
8. PAYMENT OF OPTION PRICE
The purchase price is to be paid in full when the Option is exercised and
stock certificates will be delivered only against such payment. Such purchase
price may be paid in such form as the Committee may determine. Payment of the
option price may be made (i) in cash, (ii) by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the purchase price, (iii) by delivering to the Company shares of
Common Stock previously owned, (iv) by electing to have the Company retain
Common Stock which would be otherwise issued on exercise of the Option, or (v)
any combination of the foregoing forms, all subject to the approval of the
Committee and to such rules as the Committee may adopt. In determining the
number of shares of Common Stock necessary to be delivered to or retained by the
Company, such Common Stock shall be valued at Fair Market Value.
9. TYPES OF STOCK OPTIONS
(a) Options granted under the Plan may be two types, an incentive stock
option ("Incentive Stock Option") and a non-qualified stock option
("Non-Qualified Option"). It is intended that Incentive Stock Options granted
hereunder shall constitute incentive stock options within the meaning of Section
422 of the Code. Anything in the Plan to the contrary notwithstanding, (i) no
provision of this Plan relating to Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify either the Plan or any Incentive Stock
Option granted under such provisions of the Code, and (ii) no Option designated
by the Committee as a Non-Qualified Option shall constitute an Incentive Stock
Option. In furtherance of the foregoing and not by way of limitation, no
Incentive Stock Option shall be granted to a Participant who is not an employee
of The New York Times Company or one of its subsidiaries.
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(b) If the aggregate Fair Market Value of the Common Stock (determined as of
the date of grant) for which any optionee may for the first time exercise
Incentive Stock Options in any calendar year under the Plan and any other stock
option plan of the Company, considered in the aggregate, exceeds $100,000, such
excess Incentive Stock Options will be treated as Non-Qualified Options.
10. TERMS OF STOCK OPTIONS
(a) Each Option will be for a term of not more than ten years from the date
of grant, except that if a Participant owns or is deemed to be the owner of, by
reason of the attribution rules of Section 425(d) of the Code, more than 10% of
the combined voting power of all classes of stock of the Company or any
subsidiary of the Company and an Incentive Stock Option is granted to such
Participant, the term of such Option shall be no more than five years from the
date of grant.
(b) An Option may not be exercised within one year after the date of grant
except in the case of the death of the optionee or upon termination of active
employment with the Company by reason of the Disability or Retirement of the
optionee during such period (but subject to the provisions of Section 18 hereof
with respect to any optionee subject to the reporting requirements of Section 16
of the Exchange Act). Thereafter, an Option shall be exercisable in such
installments, if any, as the Committee may specify, and shall be exercisable
during the optionee's lifetime only by the optionee (or, if the optionee is
disabled, by any guardian or other legal representative appointed to represent
him or her) and, except as provided in subsections (c) and (d) below, shall not
be exercisable by the optionee unless at the time of exercise such optionee is
an employee of the Company.
(c) Upon termination of active employment with the Company by reason of
Disability or Retirement, an optionee (or, if the optionee is disabled, any
guardian or legal representative appointed to represent him or her) may exercise
all Options otherwise exercisable by him or her at the time of such termination
of employment (subject to the provisions of subsection (e) below) until the
expiration thereof. In the event an optionee dies while employed by the Company
or after termination of employment by reason of Disability or Retirement, the
person who acquired the right to exercise his or her Options by reason of the
death of the optionee, as provided in Section 30 hereof, may exercise such
Options otherwise exercisable at the time of death (subject to the provisions of
subsection (e) below) at any time until the expiration thereof.
(d) Upon termination of employment with the Company for any reason other
than death, Retirement or Disability, the optionee may exercise all Options
otherwise exercisable by him or her at the time of such termination of
employment for an additional one year after such termination of employment. In
the event such optionee dies within such one-year period, the person who
acquired the right to exercise his or her Options by reason of the death of the
optionee, as provided in Section 30 hereof, may exercise such Options at any
time within the period of the greater of (i) the remainder of the one-year
period described in the foregoing sentence, or (ii) three months from the date
of the optionee's death. For purposes of this Section 10(d), in the event that
any optionee, who is not subject to the reporting requirements of Section 16 of
the Exchange Act with respect to Common Stock, is rehired by the Company within
one year of such optionee's termination of employment with the Company, such
optionee shall be deemed not to have terminated employment for purposes of
determining the expiration date of all unexpired non-qualified stock options
held by such individual on the date of rehire, with the effect that such options
shall continue to be exercisable at any time until the expiration thereof
(subject to the terms thereof and the provisions of this Section 10).
(e) Notwithstanding any of the foregoing, no Option shall be exercisable in
whole or in part after the expiration date provided in the Option. In the event
of the death of the optionee while employed by the Company, or the Disability or
Retirement of the optionee, the Committee shall have the discretion to provide
for the acceleration of the exercisability of Options exercisable over a period
of time, or alternatively, to provide for all or any part of such Options to
continue to become exercisable in such installments as originally specified by
the Committee, or such revised installments as specified by the
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Committee at the time of termination of employment (but in no event beyond the
original expiration date), in either case subject to such conditions as
determined by the Committee in its discretion (but in all cases subject to the
provisions of Section 18 hereof with respect to any optionee subject to the
reporting requirements of Section 16 of the Exchange Act). No Option shall be
transferable otherwise than by will or by the laws of descent and distribution.
11. OPTION AGREEMENTS
In consideration of any Options granted to a Participant under the Plan,
such Participant shall enter into an Option Agreement with the Company
providing, in addition to such other terms as the Committee may deem advisable,
that the optionee must remain in the employ of the Company for one year before
such optionee will be entitled to exercise the Option, except as provided in
Section 10 hereof with respect to death, Disability and Retirement, and
specifying the installments, if any, in which such Option shall become
exercisable.
PART II AWARDS
12. FORM OF AWARDS
The Award portion of the Plan is designed to provide incentives for key
employees of the Company by the making of awards of supplemental compensation
("Awards"). The Committee, subject to the terms and conditions hereof, may make
Awards to a Participant in any one, or in any combination, of the following
forms:
(a) Common Stock as provided in Part IIA of the Plan ("Stock Awards");
(b) Restricted Stock as provided in Part IIB of the Plan ("Restricted
Stock Awards");
(c) Retirement Units as provided in Part IIC of the Plan ("Retirement
Unit Awards");
(d) Annual Performance Awards as provided in Part IID of the Plan
("Annual Performance Awards"); and
(e) Performance Awards ("Performance Awards") or other forms of Awards
("Other Awards"), as provided in Part IIE of the Plan.
Awards may be made to a Participant whether or not he or she is receiving an
Option grant under Part I of the Plan for the year and whether or not he or she
receives an award under the Cash Plan.
Awards will be based on a Participant's performance in those areas for which
the Participant is directly responsible. Performance for this purpose may be
measured by the achievement of specific management goals such as, but not
limited to, an increase in earnings or the operating cash flow of the Company,
outstanding initiative or achievement in any department of the Company, or any
other standards specified by the Committee. Annual Performance Awards will be
based exclusively on the criteria set forth in Section 27A.
13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF
AWARDS UNDER PART II OF THE PLAN FOR ANY YEAR
(a) No accrual for Awards shall be made hereunder (or under the Cash Plan)
for any year unless cash dividends of not less than ten cents ($.10) per share
(subject to adjustment as provided in Sections 28 and 29 hereof) have been
declared on the outstanding Class A and Class B Common Stock of the Company
during such year.
(b) In the event that the above condition is met for any year during the
continuance of this Plan, the maximum aggregate amount that may be accrued for
Awards under the Plan and the Cash Plan for such year shall be 4% of the sum of:
(1) Pre-Tax Income plus (2) Equity in Operations of Forest Products Group. The
Committee, in its sole discretion, may make adjustments in Pre-Tax Income and
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Equity in Operations of Forest Products Group to take account of extraordinary,
unusual or infrequently occurring events and transactions, changes in accounting
principles that substantially affect the foregoing, or such other circumstances
as the Committee may determine warrant such adjustment.
(c) As soon as feasible after the close of each year, the independent
certified public accountants of the Company shall report the maximum amount that
may be accrued for Awards for such year under the formula described in Section
13(b), subject to the second sentence of such Section.
(d) If amounts are accrued in any year under the formula described in this
Section 13 and are not awarded in full in such year under the Plan and the Cash
Plan, such unawarded amounts may, in the discretion of the Committee, be carried
forward and be available for Awards under the Plan and under the Cash Plan in
any future year without regard to the provisions of Sections 13(a) or (b) of the
Plan applicable to Awards made in such year.
(e) Awards under the Plan for any year may not exceed the sum of (i) the
amount accrued for such year under Section 13(b) above plus (ii) unawarded
accrued amounts carried forward from previous years under Section 13(d) above
plus (iii) amounts that may become available for Awards pursuant to the last
sentence of Sections 15(c) and 27A hereof, minus (x) the amount of interest or
dividend equivalents set aside during such year pursuant to Sections 15(c) and
27A hereof and the amount of dividend equivalents allocated to Retirement Unit
Accounts during such year pursuant to Section 24 hereof, and minus (y) the
amount of awards made for such year under the Cash Plan (and any interest
equivalents allocated during such year pursuant to Section 10(b), 11(f) and
12(b) thereof). For this purpose, the amount of Awards of Common Stock under the
Plan shall be based on the Fair Market Value of the Common Stock subject to
Awards as of the date of grant of such Awards.
(f) Subject to Sections 28 and 29 hereof, the aggregate number of shares of
Common Stock for which Stock, Restricted Stock, Retirement Units, Annual
Performance Awards, and Performance and Other Awards may be made under the Plan
shall not exceed 1,000,000 shares, which shall be treasury shares reserved for
issuance of Awards under the Plan. Shares of Common Stock subject to, but not
issued under, any deferred Award which has been discontinued by the Committee
pursuant to the provisions hereof or any Restricted Stock which is forfeited by
any Participant shall again be available for Awards under the Plan.
14. DETERMINATION OF AWARDS AND PARTICIPANTS
(a) As promptly as practicable after the end of each year, the Committee may
make Awards (other than Annual Performance Awards, which are to be made
exclusively as set forth in Section 27A) for such year and determine the amounts
to be carried forward for Awards in future years. The Committee may also, in its
discretion, make Awards (other than Annual Performance Awards, which are to be
made exclusively as set forth in Section 27A) prior to the end of the year based
on the amounts available under clauses (ii) and (iii) of Section 13(e) and
reasonable estimates of the accrual for the year in question.
(b) The Committee shall have absolute discretion to determine the key
employees who are to receive Awards (other than Annual Performance Awards, which
are to be made exclusively as set forth in Section 27A) under the Plan for any
year and to determine the amount of such Awards based on such criteria and
factors as the Committee in its sole discretion may determine, such as the
Company's operating cash flow and overall financial performance. Recommendations
as to the key employees who are to receive Awards (including Annual Performance
Awards) under the Plan for any year and as to the amount and form of such Awards
shall, however, be made to the Committee by the chief executive officer of the
Company. The fact that an employee is selected as eligible for an Award shall
not mean, however, that such employee will necessarily receive an Award.
(c) A person whose employment terminates during the year or who is granted a
leave of absence during the year may, in the discretion of the Committee and
under such rules as the Committee may
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from time to time prescribe, be given an Award with respect to the period of
such person's service during such year.
15. METHOD AND TIME OF PAYMENT OF AWARDS
(a) Awards shall be paid in full as soon as practicable after the Award is
made; provided, however, that the payment of Annual Performance Awards shall be
subject to the provisions of Section 27A, and further provided that the payment
of any or all Awards may be deferred, divided into annual installments, or made
subject to such other conditions as the Committee in its sole discretion may
authorize under such rules and regulations as may be adopted from time to time
by the Committee.
(b) The Committee's rules and regulations may include procedures by which a
Participant expresses a preference to the Committee as to the form of Award or
method of payment of an Award but the final determination as to the form and the
terms and conditions of any Award shall rest solely with the Committee.
(c) Awards deferred under the Plan shall become payable to the Participant
or, in the event of the Participant's death, as specified in Section 30 hereof,
in such manner, at such time or times (which may be either before or after
Retirement or other termination of service), and subject to such conditions as
the Committee in its sole discretion shall determine. In any year the Committee
shall have the discretion to set aside, for payment in such year or any future
year, interest on any deferred Award payable partly in cash, and amounts
equivalent to dividends on any deferred Award payable wholly or partly in stock;
provided, however, that the total amount of such interest and dividend
equivalents shall be deducted from the maximum amount available for Awards under
Section 13(e) of the Plan. Any forfeited deferred Awards (including any
forfeited stock at its Award value) shall be carried forward and be available
for Awards in any future year without regard to the provisions of Sections 13(a)
or (b) of the Plan.
16. INDIVIDUAL AGREEMENTS
(a) The Committee may in its discretion require that each Participant
receiving an Award enter into an agreement with the Company which shall contain
such terms and conditions as the Committee in its discretion may require.
(b) The Committee may cancel any unexpired, unpaid or deferred Award at any
time if the Participant is not in compliance with all applicable provisions of
the agreement referred to above, if any, and the Plan.
17. STATUS OF PARTICIPANTS
No Participant in this Plan shall be deemed to be a stockholder of the
Company, or to have any interest in any stock or any specific assets of the
Company by reason of the fact that deferred Stock Awards, Retirement Unit
Awards, Annual Performance Awards, Performance Awards, Other Awards or dollar
credits are to be recorded as being held for such Participant's account to be
paid in installments in the future. The interest of all Participants shall
derive from and be determined solely by the terms and provisions of the Plan set
forth herein.
18. DISPOSITION OF STOCK RECEIVED UNDER AN AWARD; SECTION 16(B)
In the case of any Participant subject to the reporting requirements of
Section 16 of the Exchange Act, no shares of Common Stock received pursuant to
any Award under the Plan or upon the exercise of any "derivative security" (as
defined in the rules promulgated under Section 16 of the Exchange Act) received
under the Plan may be sold, assigned, pledged or otherwise transferred for the
period of time after the date of such Award or receipt of such derivative
security as is specified in Rule 16b-3.
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PART IIA STOCK AWARDS
19. DETERMINATION OF STOCK AWARDS
(a) Each year the Committee shall designate those key employees of the
Company who shall receive Stock Awards under this part of the Plan. Stock Awards
are made in the form of grants of Common Stock, which may be delivered
immediately, in installments or on a deferred date, as the Committee, in its
discretion, may provide.
(b) If the Committee determines that some portion of a Stock Award to a
Participant shall be treated as a deferred Stock Award and payable in annual or
other periodic installments, then the Participant will be notified in writing
when such deferred Stock Awards shall be paid and over what period of time. As
soon as feasible after the granting of such a Stock Award, there shall be
reserved out of the treasury shares of the Company, a number (which may include
a fraction) of shares of Common Stock equal to the number of shares of Common
Stock so awarded. In each year at the discretion of the Committee there may also
be allocated or credited to each Participant a dollar amount equal to the cash
dividends declared and paid by the Company on its Common Stock which the
Participant would have received had such Participant been the owner of the
number of shares of any Common Stock deferred for future payment. Any amounts
provided for pursuant to the preceding sentence shall become payable in such
manner, at such time or times, and subject to such conditions (which may include
provision for an amount equivalent to interest on such dividend equivalents at
rates fixed by the Committee) as the Committee in its sole discretion shall
determine; provided, however, that the total value of such dividend equivalents
(and any interest thereon) shall be deducted from the amount available for
Awards under the provisions of Section 13(e) of the Plan. The Committee in its
discretion may make appropriate equitable adjustments to such deferred Stock
Award to account for any dividends of property (other than cash) declared and
paid by the Company on its Common Stock, or to account for any other event
described in Sections 28 and 29 hereof.
PART IIB RESTRICTED STOCK AWARDS
20. DETERMINATION OF RESTRICTED STOCK AWARDS
Each year the Committee shall designate the key employees of the Company who
shall receive Restricted Stock Awards. Shares awarded under this part of the
Plan, while subject to the restrictions hereinafter set forth, are referred to
as "Restricted Stock."
21. TERMS OF RESTRICTED STOCK AWARDS
Any Award of Restricted Stock shall be subject to the following terms and
conditions and to any other terms and conditions not inconsistent with the Plan
as shall be prescribed by the Committee in its sole discretion and which may be
contained in the agreement, if any, referred to in Section 16 above (or in any
amendment thereto):
(a) Delivery of Restricted Stock. Unless otherwise determined by the
Committee, the Company shall transfer treasury shares to each Participant to
whom an Award of Restricted Stock has been made equal to the number of
shares of Restricted Stock specified in the Award, and hold the certificates
representing such shares of Restricted Stock for the Participant for the
period of time during which such shares shall remain subject to the
restrictions set forth in the Award (the "Restricted Period"). Shares of
Restricted Stock may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered by a Participant during the Restricted
Period, except as hereinafter provided. Except for the restrictions set
forth herein and unless otherwise determined by the Committee, a Participant
shall have all the rights of a stockholder with respect to the shares of
Restricted Stock comprising his or her Award, including, but not limited to,
the right to vote and the right to receive dividends (which if in shares of
Common Stock shall be Restricted Stock under the same terms and conditions).
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(b) Lapse of Restricted Period. The Restricted Period shall commence
upon the date of the Award (which unless otherwise specified by the
Committee shall be the date the Restricted Stock is transferred to the
Participant) and, unless sooner terminated as otherwise provided herein,
shall continue for such period of time as specified by the Committee in the
Award, which shall in no event be less than one year, and thereafter shall
lapse in such installments, if any, as provided by the Committee in the
Award.
(c) Legend. Each certificate issued in respect of shares of Restricted
Stock transferred or issued to a Participant under an Award shall be
registered in the name of the Participant and shall bear the following (or a
similar) legend:
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK
TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE "PLAN")
APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK
AGREEMENT DATED (THE "AGREEMENT"), AND MAY NOT BE
SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED, OR OTHERWISE
DISPOSED OF OR ENCUMBERED IN ANY MANNER DURING THE RESTRICTED
PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF SUCH PLAN AND
AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
(d) Death or Disability. Unless the Committee shall otherwise determine
in the Award (and subject to Section 18 hereof), if a Participant ceases to
be employed by the Company by reason of death or Disability, the Restricted
Period covering all shares of Restricted Stock transferred or issued to such
Participant under the Plan shall immediately lapse.
(e) Retirement. Unless the Committee shall otherwise determine in the
Award (and subject to the provisions of Section 18 hereof), the Restricted
Period covering all shares of Restricted Stock transferred to a Participant
under the Plan shall immediately lapse upon such Participant's Retirement,
whether early or not.
(f) Termination of Employment. Unless the Committee shall otherwise
determine in the Award or otherwise determine at or after the date of grant,
if a Participant ceases to be employed by the Company other than due to a
condition described in Sections 21(d) or (e) above, all shares of Restricted
Stock owned by such Participant for which the Restricted Period has not
lapsed shall revert back to the Company upon such termination. Authorized
leave of absence or absence in military service shall constitute employment
for the purposes of this Section 21(f). Whether absence in government
service may constitute employment for the purposes of the Plan shall be
conclusively determined by the Committee.
(g) Waiver of Forfeiture Provisions. The Committee, in its sole and
absolute discretion (but subject to the provisions of Section 18 hereof),
may waive the forfeiture provisions in respect of all or some of the
Restricted Stock awarded to a Participant.
(h) Issuance of New Certificates. Upon the lapse of the Restricted
Period with respect to any shares of Restricted Stock, such shares shall no
longer be subject to the restrictions imposed in the Award and shall no
longer be considered Restricted Stock for the purposes of the Award and the
Plan, and the Company shall issue new share certificates respecting such
shares registered in the name of the Participant without the legend
described in Section 21(c) in exchange for those previously issued.
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PART IIC RETIREMENT UNIT AWARDS
22. DETERMINATION OF RETIREMENT UNIT AWARDS
Each year the Committee shall designate those key employees of the Company
who shall receive Retirement Unit Awards under the Plan. The Company shall
create and maintain appropriate records of account for each Participant which
shall be designated as the Participant's Retirement Unit Account.
23. CREDITS TO RETIREMENT UNIT ACCOUNTS
The Committee shall allocate to each Participant selected to receive a
Retirement Unit Award for that year such dollar amount as the Committee shall
determine, taking into account the value of the Participant's services to the
Company. Such dollar amount shall thereupon be converted into Retirement Units
or fractions of Units and credited to each such Participant's Retirement Unit
Account in a number equal to the quotient obtained by dividing such allocated
dollar amount by the Fair Market Value of one share of Common Stock as of the
date the allocation is made.
24. DIVIDEND CREDITS
At the discretion of the Committee there may also be allocated in each year
to each Participant a dollar amount equal to the cash dividends declared and
paid by the Company on the Common Stock which the Participant would have
received had such Participant been the owner of the number of shares of Common
Stock equal to the number of the whole Retirement Units (but not fractional
Units) credited to the Participant's Retirement Unit Account; provided, however,
that the total value of such dividend equivalents shall be deducted from the
amount available for Awards under Section 13 of the Plan. The dollar amounts
allocated shall be converted into and credited to the Participant's Retirement
Unit Accounts as Retirement Units or fractions thereof as set forth in Section
23 above as of the date on which such dividends were paid by the Company. No
interest shall be paid on the dollar amount so allocated to the Retirement Unit
Account of any Participant. The Committee in its discretion may make appropriate
equitable adjustments to such Retirement Unit Accounts to account for any
dividends of property (other than cash) declared and paid by the Company on its
Common Stock, or to account for any other event described in Sections 28 and 29
hereof.
25. RESERVATION OF STOCK AND ACCOUNTING RECORDS
The Company shall keep records of the Participant's Retirement Unit
Accounts. At the time of any allocation to a Participant's account under
Sections 23 or 24 hereof, there shall be reserved out of treasury shares of the
Company a number (which may include a fraction) of shares of Common Stock equal
to the number of Units or fraction thereof so allocated.
26. MATURITY AND PAYMENT AFTER MATURITY
(a) The Retirement Unit Account of each Participant shall mature upon such
Participant's death, Retirement or other termination of employment.
(b) After maturity, the Company shall deliver to the Participant (or in the
event of the death of the Participant, as specified in Section 30 hereof) in ten
approximately equal annual installments, shares of Common Stock equal in the
aggregate to the number of Retirement Units credited to the Participant's
Retirement Unit Account. Any fraction of a Unit credited to the Participant's
account at maturity shall be paid in cash with the first installment, the
fractional Unit being converted into cash at the Fair Market Value of the Common
Stock on such first payment date. The first such installment shall be paid
within 90 days after maturity. However, the Committee in its discretion at or
any time after maturity may, with the consent of the Participant (or the
beneficiary of a deceased Participant as specified in Section 30 hereof), (i)
defer the commencement of such distribution or defer any installment, (ii)
deliver full payment of the shares of Common Stock equal to the aggregate number
of Retirement Units credited to the Participant's Retirement Unit Account and
the dollar amount credited
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thereto, or (iii) reduce or increase the number of annual installments in which
the payments are to be made.
(c) So long as Retirement Units remain credited to the Retirement Unit
Account of a Participant subsequent to maturity, such account shall be credited
with the dollar amount allocated to the account as dividends as provided for in
Section 24 hereof. Any dollar amount so credited may be paid in cash with the
next succeeding annual installment made under Section 26(b) above, or in such
manner, at such time or times, and subject to such conditions as the Committee
in its sole discretion shall determine; provided, however, that in the case of
any dollar amount credited to an account after maturity in respect of a dividend
declared prior to maturity, such dollar amounts shall be converted to Retirement
Units as of the date of payment and the remaining installments of Common Stock
shall be increased accordingly.
PART IID ANNUAL PERFORMANCE AWARDS
27A. DETERMINATION OF ANNUAL PERFORMANCE AWARDS
(a) General. Each year the Committee may make Annual Performance Awards
under this part of the Plan; provided that no Participant may be eligible to
receive an Annual Performance Award hereunder and under the Cash Plan in the
same year.
(b) Certain Definitions. For the purposes of this Section 27A, the following
terms shall have the meanings specified:
"Affected Officers" shall mean those executive officers of the Company
whose compensation is required to be disclosed in the Company's annual proxy
statement relating to the election of directors.
"Code Section 162(m)" shall mean Section 162(m) of the Code (or any
successor provision), and "Regulations" shall mean the regulations
promulgated thereunder, as from time to time in effect.
"Eligible Participants" shall have the meaning set forth in subsection
(c) below.
"Performance Adjustment" means, for any year, a factor ranging from 0%
to 200%, based upon the achievement of Performance Goal Targets established
by the Committee, that, when multiplied by an Eligible Participant's Target
Award, determines the amount of such Eligible Participant's Annual
Performance Award for such year.
"Performance Goal" means, for any year, the business criteria selected
by the Committee to measure the performance during such year of the Company
(or of a division, subsidiary or group thereof) from one or more of the
following:
(i) earnings per share of the Company for the year;
(ii) net income of the Company for the year;
(iii) return on assets of the Company for the year (net income of the
Company for the year divided by average total assets during such year);
(iv) return on stockholders' equity of the Company for the year (net
income of the Company for the year divided by average stockholders'
equity during such year); and
(v) operating profit of the Company or of a division, subsidiary or
group thereof for the year.
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"Performance Goal Target" means, for any Performance Goal, the levels of
performance during a year under such Performance Goal established by the
Committee to determine the Performance Adjustment to an Eligible
Participant's Target Award for such year.
"Target Award" means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied by
the applicable Performance Adjustment, determines the dollar amount of such
Eligible Participant's Annual Performance Award.
(c) Eligibility. Annual Performance Awards are available each year only to
Plan Participants who are designated by the Committee, prior to March 31 of such
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), as likely to be Affected Officers for such year, whose annual
salary and bonus for such year are expected to exceed $1,000,000 and who are not
designated by the Committee as eligible for an annual performance award under
the Cash Plan for such year ("Eligible Participants").
(d) Determination of Annual Performance Awards. Prior to March 31 of each
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), the Committee will determine the Eligible Participants for such
year, will designate those Eligible Participants who will be entitled to earn an
Annual Performance Award for such year under this Plan, and will establish for
each such Eligible Participant for such year: (i) a Target Award, (ii) one or
more Performance Goals, and (iii) for each such Performance Goal, a Performance
Goal Target, the method by which achievement thereof will be measured and a
schedule of Performance Adjustment factors corresponding to varying levels of
Performance Goal Target achievement. In the event more than one Performance Goal
is established for any Eligible Participant, the Committee shall at the same
time establish the weighting of each such Performance Goal in determining such
Eligible Participant's Annual Performance Award. Notwithstanding anything in
this Section 27A to the contrary, the Annual Performance Award payable to any
Eligible Participant in any year may not exceed $1.5 million.
(e) Payment of Annual Performance Awards. Subject to subsection (f) below,
Annual Performance Awards will be paid as soon as practicable after the end of
the year to which it relates and after the Committee certifies the extent to
which the Performance Goal Target or Targets under the Performance Goal or Goals
have been met or exceeded. In the discretion of the Committee, an Annual
Performance Award may be paid in cash, shares of Common Stock, shares of
Restricted Stock (subject to the provisions of Section 21 hereof), Retirement
Units (subject to the provisions of Sections 23-26 hereof) or any combination
thereof. For this purpose, shares of Common Stock shall be valued at Fair Market
Value, and Restricted Stock and Retirement Units shall be deemed to have a value
equal to the Fair Market Value of the underlying Common Stock, in each case as
of the date of the Committee's determination to pay such Annual Performance
Award in such form or forms. If permitted by the Regulations and Code Section
162(m), the Committee may determine to pay a portion of an Annual Performance
Award in December of the year to which it relates. The Committee may not
increase the amount of an Annual Performance Award that would otherwise be
payable upon achievement of the Performance Target or Targets, but it may reduce
any Eligible Participant's Annual Performance Award in its discretion. Subject
to Section 14(c) above, no Annual Performance Award will be payable to any
Eligible Participant who is not an employee of the Company on the last day of
the year to which such Annual Performance Award relates.
(f) Deferral of Annual Performance Awards. If the Committee determines that
some portion of an Annual Performance Award to an Eligible Participant shall be
treated as a deferred Annual Performance Award and be payable in annual or other
periodic installments, the Eligible Participant will be notified in writing when
such deferred Annual Performance Award shall be paid and over what period of
time. A deferred Award in the form of shares of Common Stock shall be subject to
the provisions of Section 19 (b) hereof. In the case of a deferred Award in the
form of cash, in each year the Committee shall have the discretion to provide
for the payment of an amount equivalent to interest, at such rate or rates fixed
by the Committee, on such deferred cash Annual Performance Award. Any amounts
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provided for pursuant to the preceding sentence shall become payable in such a
manner, at such time or times, and subject to such conditions as the Committee
shall in its sole discretion determine; provided, however, that the total amount
of such interest shall be deducted from the maximum amount available for Awards
under the formula described in Section 13 of the Plan.
(g) Code Section 162(m). It is the intent of the Company that Annual
Performance Awards satisfy, and this Section 27A be interpreted in a manner that
satisfies, the applicable requirements of Code Section 162(m) and the
Regulations so that the Company's tax deduction for Annual Performance Awards to
Affected Officers is not disallowed in whole or in part by operation of Code
Section 162(m). If any provision of this Plan or of any Annual Performance Award
would otherwise frustrate or conflict with such intent, that provision shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any irreconcilable conflict with such intent, such provision shall be deemed
void as applicable to Eligible Participants.
PART IIE PERFORMANCE OR OTHER AWARDS
27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other forms
of Awards such as, but not limited to, Performance Awards, if the Committee
deems it appropriate to do so in order to further the purposes of the Plan.
(b) A "Performance Award" shall mean an Award which entitles the Participant
to receive Common Stock, Restricted Stock, Retirement Units, Options under Part
I of the Plan or other compensation (which may include cash), or any combination
thereof, in an amount which depends upon the financial performance of the
Company during a stated period of more than one year. Performance for this
purpose may be measured by the growth in book value of the Common Stock, an
increase in per share earnings of the Company, an increase in operating cash
flow, or any other indicators specified by the Committee. The Committee shall
also fix the period during which such performance is to be measured, the value
of a Performance Award for purposes of providing for the accrual pursuant to
Section 13 of the Plan and the form of payment to be made in respect of the
Performance Award.
PART III GENERAL PROVISIONS
28. STOCK DIVIDEND OR STOCK SPLIT
If at any time the Company shall take any action whether by stock dividend,
stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares of Common Stock
then subject to deferred Awards, credited to Retirement Unit Accounts (matured
or unmatured) or set aside for Performance or Other Awards, (ii) the number of
outstanding Options, the number of shares of Common Stock for which such Options
are exercisable and the exercise price thereof, (iii) the number of shares of
Common Stock reserved for Awards, (iv) the number of shares of Common Stock
reserved for Options, and (v) the maximum number of shares with respect to which
Options may be granted to any key employee in any calendar year under Section
6(b), shall be increased or decreased in the same proportion. The Committee
shall make an appropriate equitable adjustment to the provisions of Section
13(a) to take account of such increase or decrease in issued and outstanding
shares. The Committee in its discretion may make appropriate equitable
adjustments respecting deferred Stock Awards, Retirement Units, Annual
Performance Awards, Performance or Other Awards and outstanding Options to take
account of a dividend by the Company of property other than cash. All such
adjustments shall be made by the Committee whose determination shall be
conclusive and binding upon all Participants and any person claiming under or
through any Participant.
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29. RECLASSIFICATION OR MERGER
If at any time the Company reclassifies or otherwise changes its issued and
outstanding Common Stock (other than in par value) or the Company and one or
more corporations merge and the Company is the surviving corporation of such
merger, then each Stock Award, Retirement Unit (matured or unmatured), Annual
Performance Award, Performance or Other Award which at the time of such
reclassification or merger is credited as a Stock Award, Retirement Unit, Annual
Performance Award, Performance or Other Award shall thereafter be deemed to be
the equivalent of (and all Units thereafter credited to a Retirement Unit
Account shall be computed with reference to), and outstanding Options shall be
exercisable for, the shares of stock or other securities of the Company which
pursuant to the terms of such reclassification or merger are issued with respect
to each share of Common Stock. The Committee shall also make an appropriate
equitable adjustment to the provisions of Sections 6(b) and 13(a) to take
account of such event. All such adjustments shall be made by the Committee whose
determination shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
30. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the foregoing,
rights and benefits hereunder shall pass by will or the laws of descent and
distribution in the following order: (i) to beneficiaries so designated by the
Participant; if none, then (ii) to a legal representative of the Participant; if
none, then (iii) to the persons entitled thereto as determined by a court of
competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
31. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment or delivery of
any Common Stock to any Participant or beneficiary, any law or regulation of any
governmental authority having jurisdiction in the premises shall require the
Company to withhold, or to make any deduction for, any taxes or take any other
action in connection with the payment or delivery then to be made, such payment
or delivery shall be deferred until such withholding or deduction shall have
been provided for by the Participant or beneficiary, or other appropriate action
shall have been taken. Subject to the provisions of Rule 16b-3 and the consent
of the Committee for persons subject to Section 16 of the Exchange Act, the
Participant or beneficiary may satisfy the obligation for such withholding or
deduction in whole or in part by electing to deliver shares of Common Stock
already owned or to have the Company retain from the distribution shares of
Common Stock, in each case having a Fair Market Value equal to the amount to be
withheld or deducted.
32. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the Company.
33. GENERAL CONDITIONS
(a) The Board in its discretion may from time to time amend, suspend or
terminate any or all of the provisions of this Plan, provided that no change may
be made which would prevent Incentive Stock Options granted under the Plan from
being Incentive Stock Options as described therein without the consent of the
optionees concerned, and further provided that the Board may not make any
amendment which (1) changes the class of persons eligible for Incentive Stock
Options, or (2) increases the total number of shares for which Options may be
granted under Section 6(b), or (3) materially affects the
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provisions of Sections 13(a) or (b) of the Plan, or (4) increases the total
number of shares authorized under Section 13(f) for which Awards may be granted,
without the consent and approval of the holders of a majority of the outstanding
shares of Class A and Class B Common Stock of the Company entitled to vote
thereon, voting together as one class. The foregoing provisions shall not be
construed to prevent the Committee from exercising its discretion, or to limit
such discretion, to increase the total number of shares for which Options may be
granted under Section 6(b) or the total number of shares authorized under
Section 13(f) for which Awards may be granted, as expressly permitted by
Sections 28 and 29 hereof, or to adjust the provisions of Sections 13(a) and (b)
hereof as expressly permitted by Sections 13(b), 28 and 29 hereof, or otherwise
to exercise any discretion to the extent expressly authorized hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this Plan and
the Cash Plan. Payments made under any such separate arrangements shall not be
included in or considered a part of the maximum dollar amount available for
Awards under the Plan and Cash Plan, or number of shares available for Awards or
Options under the Plan, and shall not be charged against the dollar or share
amounts available for Awards under the Plan and Cash Plan or Options under the
Plan. In the discretion of the Committee, employees shall be eligible to
participate in such other arrangements, as well as the Plan and Cash Plan, in
the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right of
the Company to terminate a Participant's employment with the Company at any
time.
(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the Plan. Any
decision or action taken by the Company, the Board or the Committee arising out
of or in connection with the construction, administration, interpretation and
effect of the Plan shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
(e) No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, taken by any other member or by
any officer, agent or employee, nor for anything done or omitted to be done by
such Director except in circumstances involving actual bad faith.
(f) Notwithstanding any other provision of this Plan, the Company shall not
be obligated to make any Award, issue any shares of Common Stock, or grant any
Option with respect thereto, unless it is advised by counsel of its selection
that it may do so without violation of the applicable Federal and State laws
pertaining to the issuance of securities, and may require any stock so issued to
bear a legend, may give its transfer agent instructions, and may take such other
steps, as in its judgment are reasonably required to prevent any such violation.
(g) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3, that any ambiguities or inconsistencies in construction of the
Plan be interpreted to give effect to such intention and that if any provision
of the Plan is found not to be in compliance with Rule 16b-3, such provision
shall be deemed null and void to the extent required to permit the Plan to
comply with Rule 16b-3. The Board may adopt rules and regulations under, and
amend, the Plan in furtherance of the intent of the foregoing.
34. TRANSITION
Upon the effectiveness of this Plan, as provided below, and the Cash Plan,
such plans replaced the Company's Executive Incentive Compensation Plan
("EICP"), except that the EICP shall continue to govern options and awards of
restricted stock outstanding under the EICP. No further awards will be made
under the EICP, and all amounts accrued for awards under the EICP and unawarded
were carried forward and made available for Awards under the Plan and awards
under the Cash Plan. All
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unmatured and matured but undistributed retirement units and all performance
awards respecting current performance cycles awarded under the EICP became
Retirement Units and Performance Awards hereunder and any payments or
distributions in respect thereof shall be made hereunder; provided, however,
that the number of shares of Common Stock available for Awards pursuant to
Section 13(f) hereof shall not be reduced by the number of such retirement units
previously awarded under the EICP and paid subsequently under the Plan.
35. EFFECTIVE DATES
The Plan became effective for periods beginning after January 1, 1991 upon
approval by the holders of a majority of the outstanding shares of Class A and
Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual
Meeting of Stockholders, in person or by proxy, voting together as a single
class. No Options may be granted or Awards made under the Plan after December
31, 2000, or such earlier expiration date as may be designated by resolution of
the Board.
16
EXHIBIT 10.3
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE CASH BONUS PLAN
AS AMENDED
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Cash
Bonus Plan (hereinafter called the "Plan"). The purpose of the Plan is to enable
the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 4 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Committee"--means the Committee referred to in Section 3 of the Plan.
If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by the non-employee members
of the Board.
(d) "Company"--means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor corporation), and its
subsidiaries (as hereinafter defined) and other non-corporate entities in which
it owns directly or indirectly 40% or more of the equity interests. A
"subsidiary" means any corporation in which the Company possesses directly or
indirectly 50% or more of the combined voting power of all classes of stock.
(e) "Consolidated Statement of Income"--means the consolidated statement of
income (or any comparable statement, however designated) of the Company, audited
by the independent certified public accountants of the Company and contained in
the Company's annual report to stockholders or proxy statement.
(f) "Equity in Operations of Forest Products Group"--means the amount
designated as Equity in Operations of the Forest Products Group for the
applicable year and shown separately in the Consolidated Statement of Income for
such year.
(g) "Participant"--means a key employee of the Company who is selected by
the Committee to participate in any part of the Plan from among persons who in
the judgment of the Committee are key employees of the Company. In general, key
employees are those employees who have principal responsibility for, or who
contribute substantially to, the management efficiency, editorial achievement or
financial success of the Company.
(h) "Pre-Tax Income"--means income before income taxes and Equity in
Operations of Forest Products Group, as shown in the Consolidated Statement of
Income for the applicable year, but before the amount of any provision for
Awards under the Plan and awards under the Stock Plan for such year.
(i) "Stock Plan"--means the Company's 1991 Executive Stock Incentive Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Committee appointed by it
and composed of two or more directors who are not employees of the Company. The
Committee shall be constituted so as to enable the Plan to comply with the
administration requirements of Section 162(m)(4)(C) of the Internal Revenue Code
of 1986, as amended. The Committee shall serve at the pleasure of the Board and
shall have such powers as the Board may from time to time confer upon it.
<PAGE>
PART I AWARDS
4. FORM OF AWARDS
The Plan is designed to provide incentives for key employees of the Company
by the making of awards of supplemental compensation ("Awards"). The Committee,
subject to the terms and conditions hereof, may make Awards to a Participant in
any one, or in any combination, of the following forms:
(a) Cash Awards as provided in Part IA of the Plan ("Cash Awards");
(b) Annual Performance Awards as provided in Part IB of the Plan
("Annual Performance Awards"); and
(c) Performance Awards ("Performance Awards") or other forms of Awards
as provided in Part IC of the Plan.
Awards may be made to a Participant whether or not he or she receives an
award or option under the Stock Plan. Cash Awards, Performance Awards and other
forms of Awards pursuant to Part IC will be based on a Participant's performance
in those areas for which the Participant is directly responsible. Performance
for this purpose may be measured by the achievement of specific management goals
such as, but not limited to, an increase in earnings or the operating cash flow
of the Company, outstanding initiative or achievement in any department of the
Company, or any other standards specified by the Committee. Annual Performance
Awards will be based exclusively on the criteria set forth in Part IB.
No Award under the Plan is payable in common stock or preferred stock of the
Company.
5. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS FOR ANY YEAR
(a) No accrual for Awards shall be made hereunder (or under the Stock Plan)
for any year unless cash dividends of not less than ten cents ($.10) per share
(as adjusted as hereafter provided) have been declared on the outstanding Class
A and Class B Common Stock of the Company during such year. If at any time the
Company shall take any action, whether by stock dividend, stock split,
combination of shares, or otherwise, which results in an increase or decrease in
the number of shares of Class A and/or Class B Common Stock theretofore issued
and outstanding, or the Company reclassifies or otherwise changes its issued and
outstanding Class A and/or Class B Common Stock (other than in par value) or the
Company and one or more corporations merge and the Company is the surviving
corporation of such merger, then the Committee shall make an equitable
adjustment to the provisions of this Section 5(a) to take account of such event.
(b) In the event that the above condition is met for any year during the
continuance of this Plan, the maximum aggregate amount that may be accrued for
Awards under the Plan and the Stock Plan for such year shall be 4% of the sum
of: (1) Pre-Tax Income plus (2) Equity in Operations of Forest Products Group.
The Committee, in its sole discretion, may make adjustments in Pre-Tax Income
and Equity in Operations of Forest Products Group to take account of
extraordinary, unusual or infrequently occurring events and transactions,
changes in accounting principles that substantially affect the foregoing, or
such other circumstances as the Committee may determine warrant such adjustment.
(c) As soon as feasible after the close of each year, the independent
certified public accountants of the Company shall determine and report the
maximum amount that may be accrued for Awards for such year under the formula
described in Section 5(b), subject to the second sentence of such Section.
(d) If amounts are accrued in any year under the formula described in this
Section 5 and are not awarded in full in such year under the Plan and the Stock
Plan, such unawarded amounts may, in the discretion of the Committee, be carried
forward and be available for Awards under this Plan and under
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the Stock Plan in any future year without regard to the provisions of Sections
5(a) or (b) of the Plan applicable to Awards made in such year.
(e) Awards under the Plan for any year may not exceed the sum of (i) the
amount accrued for such year under Section 5(b) above plus (ii) unawarded
accrued amounts carried forward from previous years under Section 5(d) above
plus (iii) amounts that may become available for Awards pursuant to the last
sentence of Section 7(c) hereof, minus (x) the amount of interest equivalents
allocated during such year pursuant to Section 10(b) hereof, and minus (y) the
amount of awards made for such year under the Stock Plan valued as set forth in
Section 13(e) of the Stock Plan (and any interest or dividend equivalents
allocated during such year pursuant to Sections 15(c), 24 and 27A thereof).
6. DETERMINATION OF AWARDS AND PARTICIPANTS
(a) As promptly as practicable after the end of each year, the Committee may
make Awards (other than Annual Performance Awards, which are to be made
exclusively as set forth in Part IB) for such year and determine the amounts to
be carried forward for Awards in future years. The Committee may also, in its
discretion, make Awards (other than Annual Performance Awards, which are to be
made exclusively as set forth in Part IB) prior to the end of the year based on
amounts available under clauses (ii) and (iii) of Section 5(e) and reasonable
estimates of the accrual for the year in question.
(b) The Committee shall have absolute discretion to determine the key
employees who are to receive Awards (other than Annual Performance Awards, which
are to be made exclusively as set forth in Part IB) under the Plan for any year
and to determine the amount of such Awards based on such criteria and factors as
the Committee in its sole discretion may determine, such as the Company's
operating cash flow and overall financial performance. Recommendations as to the
key employees who are to receive Awards (including Annual Performance Awards)
under the Plan for any year and to the amount and form of such Awards shall,
however, be made to the Committee by the chief executive officer of the Company.
The fact that an employee is selected as eligible for an Award shall not mean,
however, that such employee will necessarily receive an Award.
(c) A person whose employment terminates during the year or who is granted a
leave of absence during the year may, in the discretion of the Committee and
under such rules as the Committee may from time to time prescribe, be given an
Award with respect to the period of such person's service during such year.
7. METHOD AND TIME OF PAYMENT OF AWARDS
(a) Awards shall be paid in full as soon as practicable after the Award is
made; provided, however, that payment of Annual Performance Awards shall be
subject to the provisions of Part IB; and provided further, that the payment of
any or all Awards may be deferred, divided into annual installments, or made
subject to such other conditions as the Committee in its sole discretion may
authorize under such rules and regulations as may be adopted from time to time
by the Committee.
(b) The Committee's rules and regulations may include procedures by which a
Participant expresses a preference to the Committee as to the form of Award or
method of payment of an Award but the final determination as to the form and the
terms and conditions of any Award shall rest solely with the Committee.
(c) Awards deferred under the Plan shall become payable to the Participant
or, in the event of the Participant's death, as specified in Section 13 hereof,
in such manner, at such time or times (which may be either before or after
termination of service), and subject to such conditions as the Committee in its
sole discretion shall determine. In any year the Committee shall have the
discretion to set aside, for payment in such year or any future year, interest
on any deferred Award; provided, however, that the total amount of such interest
shall be deducted from the maximum amount available for Awards under
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Section 5 of the Plan. Any forfeited deferred Awards shall be carried forward
and be available for Awards in any future year without regard to the provisions
of Sections 5(a) or (b) of the Plan.
8. INDIVIDUAL AGREEMENTS
(a) The Committee may in its discretion require that each Participant
receiving an Award enter into an agreement with the Company which shall contain
such terms and conditions as the Committee may in its discretion request.
(b) The Committee may cancel any unexpired, unpaid or deferred Award at any
time if the Participant is not in compliance with all applicable provisions of
the agreement referred to above, if any, and the Plan.
9. STATUS OF PARTICIPANTS
No Participant in the Plan shall have any interest in any specific assets of
the Company by reason of the fact that deferred Awards are to be recorded as
being held for such Participant's account to be paid in installments in the
future. The interest of all Participants shall derive from and be determined
solely by the terms and provisions of the Plan set forth herein.
PART IA CASH AWARDS
10. DETERMINATION OF CASH AWARDS
(a) Each year the Committee shall designate those key employees of the
Company who shall receive Cash Awards under this part of the Plan. Cash Awards
may be paid immediately, in installments or on a deferred date, as the
Committee, in its discretion, may provide.
(b) If the Committee determines that some portion of a Cash Award to a
Participant shall be treated as a deferred Cash Award and be payable in annual
or other periodic installments, the Participant will be notified in writing when
such deferred Cash Award shall be paid and over what period of time. In each
year the Committee shall have discretion to provide for the payment of an amount
equivalent to interest, at such rate or rates fixed by the Committee, on any
deferred Cash Award. Any amounts provided for pursuant to the preceding sentence
shall become payable in such manner, at such time or times, and subject to such
conditions as the Committee shall in its sole discretion determine; provided,
however, that the total amount of such interest shall be deducted from the
maximum amount available for Awards under the formula described in Section 5 of
the Plan.
PART IB ANNUAL PERFORMANCE AWARDS
11. DETERMINATION OF ANNUAL PERFORMANCE AWARDS
(a) General. Each year the Committee may make Annual Performance Awards
under this part of the Plan; provided that no Participant may be eligible to
receive an Annual Performance Award hereunder and under the Stock Plan in the
same year.
(b) Certain Definitions. For the purposes of this Part IB, the following
terms shall have the meanings specified:
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"Affected Officers" shall mean those executive officers of the Company
whose compensation is required to be disclosed in the Company's annual proxy
statement relating to the election of directors.
"Code Section 162(m)" shall mean Section 162(m) of the Internal Revenue
Code of 1986, as amended (or any successor provision), and "Regulations"
shall mean the regulations promulgated thereunder, as from time to time in
effect.
"Eligible Participants" shall have the meaning set forth in subsection
(c) below.
"Performance Adjustment" means, for any year, a factor ranging from 0%
to 200%, based upon the achievement of Performance Goal Targets established
by the Committee, that, when multiplied by an Eligible Participant's Target
Award, determines the amount of such Eligible Participant's Annual
Performance Award for such year.
"Performance Goal" means, for any year, the business criteria selected
by the Committee to measure the performance during such year of the Company
(or of a division, subsidiary or group thereof) from one or more of the
following:
(i) earnings per share of the Company for the year;
(ii) net income of the Company for the year;
(iii) return on assets of the Company for the year (net income of the
Company for the year divided by average total assets during such year);
(iv) return on stockholders' equity of the Company for the year (net
income of the Company for the year divided by average stockholders'
equity during such year); and
(v) operating profit of the Company or of a division, subsidiary or
group thereof for the year.
"Performance Goal Target" means, for any Performance Goal, the levels of
performance during a year under such Performance Goal established by the
Committee to determine the Performance Adjustment to an Eligible
Participant's Target Award for such year.
"Target Award" means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied by
the applicable Performance Adjustment, determines such Eligible
Participant's Annual Performance Award.
(c) Eligibility. Annual Performance Awards are available each year only to
Plan Participants who are designated by the Committee, prior to March 31 of such
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), as likely to be Affected Officers for such year, whose annual
salary and bonus for such year are expected to exceed $1,000,000 and who are not
designated by the Committee as eligible for an Annual Performance Award under
the Stock Plan for such year ("Eligible Participants").
(d) Determination of Annual Performance Awards. Prior to March 31 of each
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), the Committee will determine the Eligible Participants for such
year, will designate those Eligible Participants who will be entitled to earn an
Annual Performance Award for such year under this Plan, and will establish for
each such Eligible Participant for such year: (i) a Target Award, (ii) one or
more Performance Goals, and (iii) for each such Performance Goal, a Performance
Goal Target, the method by which achievement thereof will be measured and a
schedule of Performance Adjustment factors corresponding to varying levels of
Performance Goal Target achievement. In the event more than one Performance Goal
is established for any Eligible Participant, the Committee shall at the same
time establish the weighting of each such Performance Goal in determining such
Eligible Participant's Annual Performance Award.
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Notwithstanding anything in this Part IB to the contrary, the Annual Performance
Award payable to any Eligible Participant in any year may not exceed $1.5
million.
(e) Payment of Annual Performance Awards. Subject to subsection (f) below,
Annual Performance Awards will be paid in cash as soon as practicable after the
end of the year to which it relates and after the Committee certifies the extent
to which the Performance Goal Target or Targets under the Performance Goal or
Goals have been met or exceeded. If permitted by the Regulations and Code
Section 162(m), the Committee may determine to pay a portion of an Annual
Performance Award in December of the year to which it relates. The Committee may
not increase the amount of an Annual Performance Award that would otherwise be
payable upon achievement of the Performance Target or Targets, but it may reduce
any Eligible Participant's Annual Performance Award in its discretion. Subject
to Section 6(c) above, no Annual Performance Award will be payable to any
Eligible Participant who is not an employee of the Company on the last day of
the year to which such Annual Performance Award relates.
(f) Deferral of Annual Performance Awards. If the Committee determines that
some portion of an Annual Performance Award to an Eligible Participant shall be
treated as a deferred Annual Performance Award and be payable in annual or other
periodic installments, the Eligible Participant will be notified in writing when
such deferred Annual Performance Award shall be paid and over what period of
time. In each year the Committee shall have discretion to provide for the
payment of an amount equivalent to interest, at such rate or rates fixed by the
Committee, on any deferred Annual Performance Award. Any amounts provided for
pursuant to the preceding sentence shall become payable in such a manner, at
such time or times, and subject to such conditions as the Committee shall in its
sole discretion determine; provided, however, that the total amount of such
interest shall be deducted from the maximum amount available for Awards under
the formula described in Section 5 of the Plan.
(g) Code Section 162(m). It is the intent of the Company that Annual
Performance Awards satisfy, and this Part IB be interpreted in a manner that
satisfies, the applicable requirements of Code Section 162(m) and the
Regulations so that the Company's tax deduction for Annual Performance Awards to
Affected Officers is not disallowed in whole or in part by operation of Code
Section 162(m). If any provision of this Plan or of any Annual Performance Award
would otherwise frustrate or conflict with such intent, that provision shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any irreconcilable conflict with such intent, such provision shall be deemed
void as applicable to Eligible Participants.
PART IC PERFORMANCE AND OTHER AWARDS
12. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other forms
of Awards such as, but not limited to, Performance Awards, if the Committee
deems it appropriate to do so in order to further the purposes of the Plan.
(b) A "Performance Award" shall mean an Award which entitles the Participant
to receive cash or other compensation, or any combination thereof, in an amount
which depends upon the financial performance of the Company during a stated
period of more than one year. Performance for this purpose may be measured by
the growth in book value of the common stock of the Company, an increase in per
share earnings of the Company, an increase in operating cash flow or any other
indicators specified by the Committee. The Committee shall also fix the period
during which such performance is to be measured, the value of a Performance
Award for purposes of providing for the
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accrual pursuant to Section 5 of the Plan and the form of payment to be made in
respect of the Performance Award.
PART II GENERAL PROVISIONS
13. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the foregoing,
rights and benefits hereunder shall pass by will or the laws of descent and
distribution in the following order: (i) to beneficiaries so designated by the
Participant; if none, then (ii) to a legal representative of the Participant; if
none, then (iii) to the persons entitled thereto as determined by a court of
competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
14. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment to any
Participant or beneficiary, any law or regulation of any governmental authority
having jurisdiction in the premises shall require the Company to withhold, or to
make any deduction for, any taxes or take any other action in connection with
the payment then to be made, such payment shall be deferred until such
withholding or deduction shall have been provided for by the Participant or
beneficiary, or other appropriate action shall have been taken.
15. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the Company.
16. GENERAL CONDITIONS
(a) The Board in its discretion may from time to time amend, suspend or
terminate any or all of the provisions of this Plan, provided that the Board may
not make any amendment which materially affects the provisions of Sections 5(a)
or (b) of the Plan without the consent and approval of the holders of a majority
of the outstanding shares of Class A and Class B Common Stock of the Company
entitled to vote thereon, voting together as one class. The foregoing provisions
shall not be construed to prevent the Committee from exercising its discretion,
or to limit such discretion, to adjust the provisions of Sections 5(a) and (b)
hereof as expressly permitted thereby or otherwise to exercise any discretion to
the extent expressly authorized hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this Plan and
the Stock Plan. Payments made under any such separate arrangements shall not be
included in or considered a part of the maximum amount available for Awards
under the Plan and Stock Plan and shall not be charged against the amount
available for Awards under the Plan and Stock Plan for any year. In the
discretion of the Committee, employees shall be eligible to participate in such
other arrangements, as well as the Plan and Stock Plan, in the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right of
the Company to terminate a Participant's employment with the Company at any
time.
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(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the Plan. Any
decision or action taken by the Company, the Board or the Committee arising out
of or in connection with the construction, administration, interpretation and
effect of the Plan shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
(e) No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, taken by any other member or by
any officer, agent or employee, nor for anything done or omitted to be done by
such Director except in circumstances involving actual bad faith.
17. TRANSITION
Upon the effectiveness of this Plan, and the Stock Plan, such plans replaced
the Company's Executive Incentive Compensation Plan ("EICP"), except that the
EICP shall continue to govern options and awards of restricted stock outstanding
under the EICP. No further awards will be made under the EICP, and all amounts
accrued for awards under the EICP and unawarded were carried forward and made
available for Awards under the Plan and awards under the Stock Plan.
18. EFFECTIVE DATES
The Plan became effective for periods beginning after January 1, 1991 upon
the approval by the holders of a majority of the outstanding shares of Class A
and Class B Common Stock of the Company entitled to vote thereon at the 1991
Annual Meeting, in person or by proxy, voting together as a single class. No
Awards may be granted under the Plan after December 31, 2000, or such earlier
expiration date as may be designated by resolution of the Board.
8
EXHIBIT 10.5
THE NEW YORK TIMES COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
PURPOSE
The Supplemental Executive Retirement Plan is designed to provide a benefit
which, when added to the retirement income provided under other Company plans,
will ensure the payment of a competitive level of retirement income to key
senior executives of The New York Times Company, thereby providing an additional
incentive for assuring orderly management succession. Eligibility for
participation in the Plan shall be limited to executives designated by the
Executive Committee. This Plan shall become effective as of January 1, 1983, and
shall be effective as to each Participant on the date he or she is designated as
such hereunder.
SECTION I - DEFINITIONS
1.1. "Basic Plan" means the qualified non-contributory defined benefit
pension plan to which the Company makes or has made contributions on behalf of a
designated Participant (including, but not limited to, The New York Times
Companies Pension Plan, The Guild-Times Pension Plan, The New York Times Company
Retirement Annuity Plan) and any excess benefit plan (within the meaning of
Section 3(36) of the Employee Retirement Income Security Act of 1974) pursuant
to which the Company makes payments to or on behalf of a designated Participant.
1.2. "Basic Plan Benefit" means the amount of benefit payable to a
Participant under any Basic Plan, assuming immediate commencement of payments as
of the date of Retirement, with benefits payable in the form of a straight life
annuity.
1.3. "Committee" means a committee consisting of the Chairman and the
President of The New York Times Company, which has been given authority by the
Board of Directors to administer this Plan.
1.4. "Company" means The New York Times Company and its subsidiaries and
affiliates.
1.5. "Final Average Earnings" means the average of a Participant's
"Earnings" for the highest five consecutive calendar years out of the last ten
years (or the total number of calendar years as a Participant in the Basic Plan
if less than five) prior to the year of Retirement under Section 2.1. "Earnings"
for any calendar year shall include the Participant's base salary, annual cash
bonuses and sales commissions paid during such year, and shall exclude any other
compensation (such as deferred incentive compensation under the Long-Range
Incentive Plan, retirement units, performance awards under the Executive
Incentive Award Plan and stock options under the 1974 Incentive Stock Option
Plan, the Employee Stock Purchase Plan and any successor plans) and any
contributions to or benefits under this Plan or any other pension,
profit-sharing, stock bonus or other plan of deferred compensation; except that
amounts deferred under a non-qualified deferred compensation plan and/or amounts
which the Company contributes to a plan on behalf of the Participant pursuant to
a salary reduction agreement which are not includible in the Participant's gross
income under Section 125, 402(e)(3), 492(h) or 403(b) of the Code shall be
included.
1.6. "Key Executive Position" means a position so designated by the
Committee.
1.7. "Participant" means a key senior executive of the Company who has been
designated as a Participant by the Committee. An executive shall become a
Participant in the Plans as of the date he or she is individually selected by,
and specifically named by the Committee for inclusion in the Plan. If a
<PAGE>
participant is reclassified to a responsibility that is not a Key Executive
Position, the Participant's continuing eligibility will be subject to the
approval of the Committee.
1.8. "Plan" means the Company's Supplemental Executive Retirement Plan.
1.9. "Retirement" means the termination of a Participant's employment with
the Company on one of the retirement dates specified in Section 2.1.
1.10. "Service" means the Participant's service for vesting purposes as
defined in the Basic Plan, up to a maximum of 20 years, and shall include any
additional service credit in specific situations as may be authorized by the
Committee, and approved by the Compensation Committee of the Board.
1.11. "Surviving Spouse" means the Participant's spouse who qualifies for a
surviving spouse's benefit under the Basic Plan in the event of a Participant's
death before retirement.
1.12. The masculine gender, where appearing in the Plan, will be deemed to
include the feminine gender, and the singular may include the plural, unless the
context clearly indicates the contrary.
SECTION II - ELIGIBILITY FOR BENEFITS
2.1. Each Participant with ten or more years of Service shall be eligible to
retire and receive a benefit under this Plan beginning on one of the following
dates:
(a) "Normal Retirement Date," which is the first day of the month
following the month in which the Participant reaches age 65.
(b) "Early Retirement Date," which is the first day of any month
following (i) the Participant's 60th birthday when an election to retire has
been made in accordance with Section 4.1(a), or (ii) if the Committee
consents to the Participant's early retirement, the Participant's 55th
birthday.
(c) "Postponed Retirement Date," which in the case of a Participant who
terminates his employment with the Company after his Normal Retirement Date,
is the first day of the month next following the month in which the
Participant terminates employment with the Company.
SECTION III - AMOUNT OF AND FORM OF RETIREMENT BENEFIT
AMOUNT OF BENEFIT
3.1. The annual retirement benefit payable at Normal Retirement Date under
the Plan shall equal the excess, if any, of (a) 50% of the Final Average
Earnings (prorated at 2.5% times Final Average Earnings times years of Service
for Service of less than 20 years) over (b) the sum of the Basic Plan Benefits
payable as of the Participant's Normal Retirement Date.
3.2. The annual benefit payable at an Early Retirement Date shall equal the
benefit determined using the formula in Section 3.1, reduced by 4% for each year
(1/3 of 1% for each month) benefits commenced prior to age 60, less the sum of
the annual Basic Plan Benefits payable as of the Participant's Early Retirement
Date.
3.3. The annual benefit payable at a Postponed Retirement Date shall be
equal to the benefit determined in accordance with Section 3.1 based on the
Participant's Service and Final Average Earnings as of the Participant's Normal
Retirement Date.
FORM OF BENEFIT
3.4. Retirement Benefits payable under this Plan shall be payable at the
same time and in the same manner as benefits under the Basic Plan (except the
Level Income options), unless otherwise determined
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by the Company. Once in pay status, a Participant may not change the form of
benefit payable under the Plan.
SECTION IV - PAYMENT OF RETIREMENT BENEFITS
4.1. (a) A Participant with ten or more years of Service who is age 60 or
older, may elect to retire under the Plan by giving a minimum of six months'
notice to the Committee (unless such notice is waived by the Committee).
(b) A Participant with ten or more years of Service who is not eligible
for early retirement under Section 4.1(a) may request retirement under this Plan
as of the first of any month between the ages of 55 and 60, but such request
shall be subject to the approval of the Committee which may approve or deny the
request based on the needs of the Company. If the request is denied, the
Committee and the Participant will defer such Retirement under this Plan for a
mutually agreed upon period of time. This will not preclude the right of the
Participant to retire under the Basic Plan, in which case the Participant will
not be entitled to any benefit hereunder.
4.2. Benefits payable in accordance with Section III will commence on the
Participant's date of Retirement under Section 2.1. Plan payments must begin
immediately upon Retirement and may not be deferred. Benefits will continue to
be paid on the first day of each succeeding month. The last payment will be on
the first day of the month in which the retired Participant dies unless an
optional form of benefit was elected in accordance with Section 3.4.
SECTION V - DEATH BENEFITS PAYABLE
5.1. (a) If a Participant dies while actively employed by the Company or
while receiving Long-Term Disability benefits from the Company and (i) a
Surviving Spouse is eligible to receive benefits under the provisions of a Basic
Plan and (ii) the Participant had ten or more years of Service and (iii) the
Participant's age plus Service equalled or exceeded 65, the Surviving Spouse
shall be entitled to receive an annual benefit commencing as of the month
following the month in which the Participant's death occurs in an amount equal
to 50% of the amount of the Participant's accrued benefit as of his date of
death determined in accordance with Section III in which case the sum of the
Basic Plan Benefits actually payable as of each respective benefit payment date
hereunder shall be substituted for the sum of the Basic Plan Benefits payable as
of the Participant's Normal Retirement Date. The reduction described in Section
3.2 for the early payment of benefits does not apply to this benefit.
(b) If there is no Surviving Spouse, but there are dependent children
under age 23, or if the Surviving Spouse dies while there are dependent children
under age 23, the Surviving Spouse's benefits will be shared equally by each
such child until he or she reaches the age of 23.
5.2. The Surviving Spouse's benefit will be payable monthly, and will
commence on the first day of the month following the month in which the
Participant dies. The last payment will be made on the first day of the month in
which the Surviving Spouse dies, or, where Section 5.1(b) applies, the date a
dependent child reaches age 23 or dies.
SECTION VI - FORFEITURE OF BENEFIT
Notwithstanding any other provision of this Plan, if at any time during
which a Participant is entitled to receive payments under the Plan, the
Participant elects to engage in any business or practice or become employed in
any position, which the Committee, in its sole discretion, deems to be in
competition with the Company or any of its business or interests, or which is
deemed by the Committee, in its sole discretion, to be otherwise prejudicial to
any of its interests, or such Participant fails to make himself available to the
Company for reasonable consultation and other services, the Committee, in its
sole discretion, may cause the Participant's entire interest in benefits
otherwise payable under the Plan
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to be forfeited and discontinued, or may cause the Participant's payments of
benefits under the Plan to be limited or suspended until such Participant is no
longer engaging in the conduct above or for such other period the Committee
finds advisable under the circumstances, or may take any other action the
Committee, in its sole discretion, deems appropriate. The decision of the
Committee shall be final. The omission or failure of the Committee to exercise
this right at any time shall not be deemed a waiver of its right to exercise
such right in the future. The exercise of discretion will not create a precedent
in any future cases.
SECTION VII - MISCELLANEOUS
7.1. The Committee may, in its sole discretion, terminate, suspend or amend
this Plan at any time or from time to time, in whole or in part. However, no
amendment or suspension of the Plan will affect a retired Participant's right or
the right of a Surviving Spouse or other beneficiary to continue to receive a
benefit in accordance with this Plan as in effect on the date such Participant
commenced to receive a benefit under this Plan.
7.2. Nothing contained herein will confer upon any Participant or other
employee the right to be retained in the service of the Company nor will it
interfere with the right of the Company to discharge or otherwise deal with
Participants and other employees without regard to the existence of this Plan.
7.3. This Plan is intended to meet the Employee Retirement Income Security
Act's definition of "an unfunded plan for management or other highly compensated
individuals" and, as such, the Company will make Plan benefit payments solely on
a current disbursement basis out of general assets of the Company.
7.4. To the maximum extent permitted by law, no benefit under this Plan will
be assignable or subject in any manner to alienation, sale, transfer, claims of
creditors, pledge, attachment or encumbrances of any kind.
7.5. The Committee may adopt rules and regulations to assist it in the
administration of the Plan.
7.6. This Plan is established under and will be construed according to the
laws of the State of New York.
7.7. CLAIMS. If any Participant, beneficiary or other properly interested
party is in disagreement with any determination that has been made under the
Plan, a claim may be presented, but only in accordance with the procedures set
forth herein.
(a) ORIGINAL CLAIM. Any Participant, beneficiary or other properly
interested party may, if he/she so desires, file with the Committee a written
claim for benefits or a determination under the Plan. Within ninety (90) days
after the filing of such a claim, the Committee shall notify the claimant in
writing whether the claim is upheld or denied in whole or in part or shall
furnish the claimant a written notice describing specific special circumstances
requiring a specified amount of additional time (but not more than one hundred
eighty (180) days from the date the claim was filed) to reach a decision in the
claim. If the claim is denied in whole or in part, the Committee shall state in
writing:
(i) the reasons for the denial;
(ii) the references to the pertinent provisions of this Plan on which
the denial is based;
(iii) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(iv) an explanation of the claim review procedure set forth in this
section.
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(b) CLAIM REVIEW PROCEDURE. Within sixty (60) days after receipt of notice
that a claim has been denied in whole or in part, the claimant may file with the
Committee a written request for a review and may, in conjunction therewith,
submit written issues and comments. Within sixty (60) days after the filing of
such a request for review, the Committee shall notify the claimant in writing
whether, upon review, the claim was upheld or denied in whole or in part or
shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred twenty (120) days from the date the request for review was filed) to
reach a decision on the request for review.
(c) GENERAL RULES.
(i) No inquiry or question shall be deemed to be a claim or a request
for a review of a denied claim unless made in accordance with the foregoing
claims procedure. The Committee may require that any claim for benefits and
any request for a review of a denied claim be filed on forms to be furnished
by the Committee upon request.
(ii) All decisions on claims and on requests for a review of denied
claims shall be made by the Committee. The decisions of the Committee shall
be final, binding and conclusive upon all persons.
(iii) The decision of the Committee on a claim and on a request for a
review of a denied claim shall be served on the claimant in writing. If a
decision or notice is not received by a claimant within the time specified,
the claim or request for a review of a denied claim shall be deemed to have
been denied.
(iv) Prior to filing a claim or a request for a review of a denied
claim, the claimant or the claimant's representative shall have a reasonable
opportunity to review a copy of this Plan and all other pertinent documents
in the possession of the Company and the Committee.
(v) The individuals serving on the Committee shall, except as prohibited
by law, be indemnified and held harmless by the employer from any and all
liabilities, costs, and expenses (including legal fees), to the extent not
covered by liability insurance arising out of any action taken by any
individual of this Committee with respect to this Plan, unless such
liability arises from the individual's claim for such individual's own
benefit, the proven gross negligence, bad faith, or (if the individual had
reasonable cause to believe such conduct was unlawful) the criminal conduct
of such individual. This indemnification shall continue as to an individual
who has ceased to be a member of the Committee for the employer and shall
enure to the benefit of the heirs, executors and administrators of such an
individual.
5
EXHIBIT 10.20
THE NEW YORK TIMES COMPANY
DEFERRED EXECUTIVE COMPENSATION PLAN
ARTICLE I - INTRODUCTION
1.1 PURPOSE OF PLAN. The Employer has adopted the Plan set forth herein to
provide a means by which certain employees may elect to defer receipt of
designated percentages or amounts of their Compensation.
1.2 STATUS OF PLAN. The Plan is intended to be "a plan which is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of Sections 201(2) and 301(a)(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), and shall be interpreted and administered
to the extent possible in a manner consistent with that intent.
ARTICLE II - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:
2.1 ACCOUNT means, for each Participant, the account established for his or her
benefit under Section 5.1.
2.2 CHANGE OF CONTROL means
(a) any individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof (a
"Person") (or two or more Persons acting in concert), other than any descendent
(or any spouse thereof) of Iphigene Ochs Sulzberger (a "Family Member") or a
beneficiary or trustee (as the same may change from time to time) of a trust
over 50% of the individual beneficiaries of which are Family Members, acquiring
the power to elect a majority of the directors of the Company in a transaction
or series of transactions not approved in advance by a vote of at least three
quarters of the Continuing Directors (as defined below); or
(b) individuals who, as of the date hereof, constitute the Board (as of the
date hereof the "Continuing Directors") ceasing for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or a nomination for election by
the Company's shareholders, was approved in advance by a vote of at least three
quarters of the Continuing Directors (other than a nomination of an individual
whose initial assumption of office is in connection with an actual or threatened
solicitation with respect to the election or removal of the directors of the
Company, as such terms are used in Rule 14a-11 of the Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a Continuing Director; or
(c) approval by the stockholders of the Company of a reorganization, merger,
consolidation, liquidation or dissolution of the Company or of the sale (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company other than a reorganization, merger, consolidation,
liquidation, dissolution or sale approved in advance by three quarters of the
Continuing Directors.
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2.3 CODE means the Internal Revenue Code of 1986, as amended from time to time.
Reference to any section or subsection of the Code includes reference to any
comparable or succeeding provisions of any legislation which amends, supplements
or replaces such section or subsection.
2.4 COMPENSATION means the annual bonus of the Participant and any portion of
such Participant's salary that the ERISA Committee of the Board of Directors of
the Employer, in its sole discretion, may designate from time to time. The
portion of the salary included in Compensation shall be listed in Appendix A.
For purposes of the Plan, Compensation shall be determined before giving
effect to Elective Deferrals and other salary reduction amounts which are not
included in the Participant's gross income under Code Section 125, 401(k),
402(h) or 403(b).
2.5 EFFECTIVE DATE means July 1, 1994.
2.6 ELECTION FORM means the participation election form as approved and
prescribed by the Plan Administrator.
2.7 ELECTIVE DEFERRAL means the portion of Compensation which is deferred by a
Participant under Article IV.
2.8 ELIGIBLE EMPLOYEE means, on the Effective Date or on any Entry Date
thereafter, each employee of the Employer who is a participant in The New York
Times Company 1991 Executive Stock Incentive Plan.
2.9 EMPLOYER means The New York Times Company, any successor to all or a major
portion of the Employer's assets or business which assumes the obligations of
the Employer, and each other entity that is affiliated with the Employer which
adopts the Plan with the consent of the Employer.
2.10 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to any section or subsection of ERISA includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such section or subsection.
2.11 INSOLVENT means either (i) the Employer is unable to pay its debts as they
become due, or (ii) the Employer is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
2.12 PARTICIPANT means any Eligible Employee who participates in the Plan in
accordance with Article 3.
2.13 PLAN means The New York Times Company Deferred Executive Compensation Plan
and all amendments thereto.
2.14 PLAN ADMINISTRATOR means the person, persons or entity designated by the
Employer under Article VIII to oversee the administration of the Plan and to
serve as the agent for "Company" with respect to the Trust as contemplated by
the agreement establishing the Trust. If no such person or entity is so serving
at any time, the Employer shall be the Plan Administrator.
2.15 PLAN YEAR means the 12-month period beginning on January 1 and ending on
December 31 of each year, except for the first plan year which begins on July 1,
1994, and ends on December 31, 1994.
2.16 TOTAL AND PERMANENT DISABILITY means the inability of a Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, and the permanence and degree of which shall be
supported by medical evidence satisfactory to the Plan Administrator.
2
<PAGE>
2.17 TRUST means the trust established by the Employer that identifies the Plan
as a plan with respect to which assets are to be held by the Trustee.
2.18 TRUSTEE means the trustee or trustees under the Trust.
2.19 VALUATION OPTION means the performance of the investment funds listed in
Appendix B of the Plan.
ARTICLE III - PARTICIPATION
3.1 COMMENCEMENT OF PARTICIPATION
Any Eligible Employee who elects to defer part of his or her Compensation in
accordance with Article IV shall become a Participant in the Plan as of the date
such deferrals commence in accordance with such Article.
3.2 CONTINUED PARTICIPATION
A Participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.
ARTICLE IV - ELECTIVE DEFERRALS
4.1 ELECTIVE DEFERRALS
An individual who is an Eligible Employee on the Effective Date may, by
completing an Election Form and filing it with the Plan Administrator by the end
of the first month following the Effective Date, elect to defer the receipt of a
percentage or dollar amount of one or more payments of Compensation for a period
of at least three Plan Years and on such terms as the ERISA Management Committee
may permit. Thereafter, any Eligible Employee may elect to defer the receipt of
a percentage or dollar amount of one or more payments of Compensation for a
period of at least three Plan Years and on such terms as the ERISA Management
Committee may permit, commencing with Compensation paid in the next succeeding
Plan Year, by completing an Election Form during the annual enrollment period
for the Plan as determined by the Plan Administrator. No Participant may defer
more than 100% of his or her Compensation for a Plan Year. A Participant's
Compensation shall be reduced in accordance with the Participant's election
hereunder and amounts deferred hereunder shall be paid by the Employer to the
Trust as soon as administratively feasible and credited to the Participant's
Account as of the date the amounts are received by the Trustee.
4.2 INVESTMENT ELECTION
An individual who is an Eligible Employee and elects to defer Compensation
under this Plan shall elect to have his or her Account valued based on the
Valuation Option represented by the performance of one or more of the investment
funds listed in Appendix B of the Plan. Such Appendix B may be amended at any
time by an action of the ERISA Management Committee. If a Participant does not
elect a Valuation Option for any portion of his or her Account, that portion
shall be valued based on the Valuation Option represented by the performance of
Fund A.
ARTICLE V - ACCOUNTS
5.1 ACCOUNTS
The Plan Administrator and/or the Record Keeper shall establish an Account
for each Participant reflecting his or her Elective Deferrals made for the
Participant's benefit together with any adjustments for income, gain or loss and
any payments from the Account. The Trustee will maintain and invest
3
<PAGE>
separate asset accounts corresponding to each Participant's Account. The Plan
Administrator and/or the Record Keeper shall establish sub-accounts for each
Participant that has more than one election in effect under Section 7.1 and such
other sub-accounts as are necessary for the proper administration of the Plan.
As of the last business day of each calendar quarter, the Plan Administrator
shall provide, or cause to be provided, the Participant with a statement of his
or her Account reflecting the income, gains and losses (realized and
unrealized), amounts of deferrals, fund transfers and distributions of such
Account since the prior statement.
5.2 INVESTMENTS
The assets of the Trust shall be invested in such investments as the Trustee
shall determine. The Trustee may (but is not required to) consider the
Employer's or a Participant's investment preferences when investing the assets
attributable to a Participant's Account.
ARTICLE VI - VESTING
A Participant shall be immediately vested in, i.e., shall have a
nonforfeitable right to, all Elective Deferrals, and all income and gain
attributable thereto, credited to his or her Account.
ARTICLE VII - PAYMENTS
7.1 ELECTION AS TO TIME AND FORM OF PAYMENT
A Participant shall elect (on the Election Form used to elect to defer
Compensation under Article IV) the date at which the Elective Deferrals
(including any earnings attributable thereto) will commence to be paid to the
Participant. Payments to Participants shall be paid in annual installments over
a period of 10 years commencing by March 15 immediately following the end of the
deferral period, the amount of each installment to equal the balance of his or
her Account immediately prior to the installment divided by the number of
installments remaining to be paid.
The above notwithstanding, a Participant may elect in writing to receive his
or her Elective Deferrals in one lump sum, in annual installments over a period
of five years, or in annual installments over a period of fifteen years, so long
as such election is made at least 13 months prior to the beginning of the
10-year installment payments.
7.2 CHANGE OF CONTROL
As soon as possible following a Change of Control of the Employer, each
Participant shall be paid his or her entire Account balance in a single lump
sum.
7.3 TERMINATION OF EMPLOYMENT OR DISABILITY
Upon termination of a Participant's employment for any reason other than
death, the Participant's Account shall be paid to the Participant in the form of
payment in effect at the time the disability or termination of employment
occurs; provided, however, that the Plan Administrator, in its sole discretion,
may pay out a Participant's Account balance in one lump sum.
7.4 DEATH
If a Participant dies prior to the complete distribution of his or her
Account, the balance of the Account shall be paid as soon as practicable to the
Participant's designated beneficiary or beneficiaries, in the form elected by
the Participant at the time of his or her death, provided, however, that the
4
<PAGE>
ERISA Management Committee and/or the Plan Administrator may, in their sole
discretion, pay out the balance of such Participant's Account in one lump sum.
Any designation of beneficiary and form of payment to such beneficiary shall
be made by the Participant on an Election Form filed with the Plan Administrator
and may be changed by the Participant at any time by filing another Election
Form containing the revised instructions. If no beneficiary is designated or no
designated beneficiary survives the Participant, payment shall be made to the
Participant's surviving spouse, or, if none, to his or her issue per stirpes, in
a single payment. If no spouse or issue survives the Participant, payment shall
be made in a single lump sum to the Participant's estate.
7.5 TAXES
All federal, state or local taxes that the Plan Administrator determines are
required to be withheld from any payments made pursuant to this Article 7 shall
be withheld.
ARTICLE VIII - PLAN ADMINISTRATION
8.1 PLAN ADMINISTRATION AND INTERPRETATION
The ERISA Management Committee shall oversee the administration of the Plan,
shall serve as the agent of "Company" with respect to the trust, and shall
appoint a Plan Administrator and/or Record Keeper for the day-to-day operations
of the Plan. Such Plan Administrator and/or Record Keeper shall be listed in
Appendix C to this Plan. The Committee shall have complete control and authority
to determine the rights and benefits under all claims, demands and actions
arising out of the provisions of the Plan of any Participant, beneficiary,
deceased Participant, or other person having or claiming to have any interest
under the Plan. The Committee shall have complete discretion to interpret the
Plan and to decide all matters under the Plan. Such interpretation and decision
shall be final, conclusive and binding on all Participants and any person
claiming under or through any Participant. Any individual(s) serving on the
Committee who is a Participant will not vote or act on any matter relating
solely to himself or herself.
8.2 COMMITTEE POWERS, DUTIES, PROCEDURES, ETC.
The Committee shall have such powers and duties, may adopt such rules and
tables, may act in accordance with such procedures, may appoint such agents, may
delegate such powers and duties, may receive such reimbursements and
compensation, and shall follow such claims and appeal procedures with respect to
the Plan as it may establish.
8.3 PLAN ADMINISTRATOR'S DUTIES
The Plan Administrator shall be responsible for the day-to-day operations of
the Plan. His or her duties shall include, but not be limited to, the following:
(a) Keeping track of employees eligible to participate in the Plan and the
date each employee becomes eligible to participate.
(b) Maintaining, or causing to be maintained by the Record Keeper,
Participants' Accounts, including all sub-accounts required for different
contribution types and payment elections made by Participants under the Plan and
any other relevant information.
(c) Transmitting, or causing to be transmitted by the Record Keeper, various
communications to the Participant and obtaining information from Participants
such as changes in investment selections.
(d) Filing reports required by various governmental agencies.
5
<PAGE>
When making a determination or calculation, the Plan Administrator and the
Record Keeper shall be entitled to rely on information furnished by a
Participant, a beneficiary, the Employer or the Trustee. The Plan Administrator
shall have the responsibility for complying with any reporting and disclosure
requirements of ERISA.
8.4 INFORMATION
To enable the Plan Administrator and/or Record Keeper to perform their
functions, the Employer shall supply full and timely information to the Plan
Administrator and/or Record Keeper on all matters relating to the compensation
of Participants, their employment, retirement, death, termination of employment,
and such other pertinent facts as the Plan Administrator and/or Record Keeper
may require.
8.5 INDEMNIFICATION OF COMMITTEE AND PLAN ADMINISTRATOR
The Employer agrees to indemnify and to defend to the fullest extent
permitted by law any officer(s) or employee(s) who serve on the Committee or as
Plan Administrator (including any such individual who formerly served on the
Committee or as Plan Administrator) against all liabilities, damages, costs and
expenses (including attorneys' fees and amounts paid in settlement of any claims
approved by the Employer) occasioned by any act or omission to act in connection
with the Plan, if such act or omission is in good faith.
ARTICLE IX - AMENDMENT AND TERMINATION
9.1 AMENDMENTS
The Employer shall have the right to amend the Plan from time to time,
subject to Section 9.3, by an action of the ERISA Committee of the Board of
Directors of the Employer. However, the preceding notwithstanding, the ERISA
Management Committee shall have the power to amend at any time the payment
provisions under Article VII of the Plan.
9.2 TERMINATION OF PLAN
This Plan is strictly a voluntary undertaking on the part of the Employer
and shall not be deemed to constitute a contract between the Employer and any
Eligible Employee (or any other employee) or a consideration for, or an
inducement or condition of employment for, the performance of the services by
any Eligible Employee (or other employee). The Employer reserves the right to
terminate the Plan at any time, subject to Section 9.3, by an action of the
ERISA Committee of the Board of Directors. Upon termination, the Employer may
(a) elect to continue to maintain the Trust to pay benefits hereunder as they
become due as if the Plan had not terminated or (b) direct the Trustee to pay
promptly to Participants (or their beneficiaries) the vested balance of their
Accounts.
9.3 EXISTING RIGHTS
No amendment or termination of the Plan shall adversely affect the rights of
any Participant with respect to amounts that have been credited to his or her
Account prior to the date of such amendment or termination.
ARTICLE X - MISCELLANEOUS
10.1 NO FUNDING
The Plan constitutes a mere promise by the Employer to make payments in
accordance with the terms of the Plan and Participants and beneficiaries shall
have the status of general unsecured creditors
6
<PAGE>
of the Employer. Nothing in the Plan will be construed to give any employee or
any other person rights to any specific assets of the Employer or of any other
person. In all events, it is the intent of the Employer that the Plan be treated
as unfunded for tax purposes and for purposes of Title I of ERISA.
10.2 NON-ASSIGNABILITY
None of the benefits, payments, proceeds or claims of any Participant or
beneficiary shall be subject to any claim of any creditor of any Participant or
beneficiary and, in particular, the same shall not be subject to attachment or
garnishment or other legal process by any creditor of such Participant or
beneficiary, nor shall any Participant or beneficiary have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise, under the Plan.
10.3 LIMITATION OF PARTICIPANTS' RIGHTS
Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of the Employer, or interfere in any way
with the right of the Employer to terminate the employment of a Participant in
the Plan at any time, with or without cause.
10.4 PARTICIPANTS BOUND
Any action with respect to the Plan taken by the Plan Administrator or the
Employer or the Trustee or any action authorized by or taken at the direction of
the Plan Administrator, the Employer or the Trustee shall be conclusive upon all
Participants and beneficiaries entitled to benefits under the Plan.
10.5 RECEIPT AND RELEASE
Any payment to any Participant or beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in full satisfaction of
all claims against the Employer, the Plan Administrator and the Trustee under
the Plan, and the Plan Administrator may require such Participant or
beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect. If any Participant or beneficiary is determined by the
Plan Administrator to be incompetent by reason of physical or mental disability
(including minority) to give a valid receipt and release, the Plan Administrator
may cause the payment or payments becoming due to such person to be made to
another person for his or her benefit without responsibility on the part of the
Plan Administrator, the Employer or the Trustee to follow the application of
such funds.
10.6 GOVERNING LAW
The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of New York. If any provision shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
10.7 HEADINGS AND SUBHEADINGS
Headings and subheadings in this Plan are inserted for convenience only and
are not to be considered in the construction of the provisions hereof.
7
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY(1)(2)
JURISDICTION OF
INCORPORATION
OR
NAME OF SUBSIDIARY ORGANIZATION
------------------ ---------------
Affiliated Publications, Inc.................................. Massachusetts
Boston Globe Electronic Publishing, Inc..................... Massachusetts
Boston Globe Investments, Inc............................... Massachusetts
Zakrewski Ltd. Partnership (99%).......................... Massachusetts
Community Newsdealers Inc................................... Massachusetts
Globe Newspaper Company..................................... Massachusetts
Globe Specialty Products, Inc............................... Massachusetts
Retail Sales, Inc........................................... Massachusetts
Comet-Press Newspapers, Inc................................... Delaware
Crossroads Holding Corporation................................ New Jersey
Cruising World Publications, Inc.............................. Delaware
Donohue Malbaie Inc. (49%).................................... Canada
Fernandina Beach News-Leader, Inc............................. Florida
Gainesville Sun Publishing Company............................ Florida
Golf World Limited............................................ United Kingdom
Hendersonville Newspaper Corporation.......................... North Carolina
International Herald Tribune S.A. (50%)....................... France
Lake City Reporter, Inc....................................... Florida
Lakeland Ledger Publishing Corporation........................ Florida
London Bureau Limited......................................... United Kingdom
Northern SC Paper Corporation (80%)........................... Delaware
Madison Paper Industries (partnership)...................... Maine
NYT 1896T, Inc................................................ Delaware
NYT Broadcast Holdings, Inc................................... Delaware
Popcorn Channel, L.P. (40%)................................. Delaware
NYTRNG, Inc................................................... Delaware
NYT Shared Service Center, Inc................................ Delaware
NYT Video News International, Inc............................. Delaware
Ocala Star-Banner Corporation................................. Florida
110 Fifth Avenue Corporation.................................. Iowa
Retail Magazines Marketing Company, Inc....................... New York
Rome Bureau S.r.l............................................. Italy
Sarasota Herald-Tribune Co.................................... Florida
Sebring News-Sun, Inc......................................... Florida
The Dispatch Publishing Company, Inc.......................... North Carolina
The Houma Courier Newspaper Corporation....................... Delaware
The New York Times Broadcasting Service, Inc.................. Tennessee
Interstate Broadcasting Company, Inc........................ New York
The Times Southwest Broadcasting, Inc....................... Arkansas
The New York Times Company Magazine Group, Inc................ Delaware
Golf Digest Information Systems, Inc........................ Delaware
NYT Special Services, Inc................................... Delaware
The New York Times Distribution Corporation................... Delaware
The New York Times Electronic Media Company................... Delaware
The New York Times Sales, Inc................................. Delaware
The New York Times Syndication Sales Corporation.............. Delaware
The Palatka Daily News, Inc................................... Florida
Times Leasing, Inc............................................ Delaware
Times On-Line Services, Inc................................... New Jersey
TSP Newspapers, Inc........................................... Delaware
Times Daily, Inc............................................ Alabama
Wilmington Star-News, Inc..................................... New York
WNEP-TV, Inc.................................................. Pennsylvania
WTKR-TV, Inc.................................................. Delaware
- ------------
(1) 100% owned unless otherwise indicated.
(2) The names of certain subsidiaries have been omitted because, considered
in the aggregate, as a single subsidiary, they would not constitute a
significant subsidiary.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
THE NEW YORK TIMES COMPANY:
We consent to the incorporation by reference in Registration Statements No.
2-91826, 33-31538, 33-43210, 33-43211, 33-50461, 33-50465, 33-50457, 33-50467,
33-50459 and 33-56219 on Forms S-8 and in Registration Statement No. 33-57403 on
Form S-3 of our report dated February 7, 1996, appearing in this Annual Report
on Form 10-K of The New York Times Company (the "Company") for the year ended
December 31, 1995.
We also consent to the Company extending the reference to us under the
heading "Experts" in Registration Statements No. 33-31538, No. 2-91826 and No.
33-57403 to comprehend our report, dated February 7, 1996, on the consolidated
balance sheets of the Company as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995 included in the
aforementioned Form 10-K.
DELOITTE & TOUCHE LLP
New York, New York
March 11, 1996
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<MULTIPLIER> 1,000
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 91,442
<SECURITIES> 0
<RECEIVABLES> 303,839
<ALLOWANCES> 25,865
<INVENTORY> 42,844
<CURRENT-ASSETS> 462,635
<PP&E> 2,016,930
<DEPRECIATION> 740,864
<TOTAL-ASSETS> 3,376,730
<CURRENT-LIABILITIES> 516,916
<BONDS> 637,873
0
1,753
<COMMON> 10,952
<OTHER-SE> 1,599,397
<TOTAL-LIABILITY-AND-EQUITY> 3,376,730
<SALES> 0
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<CGS> 0
<TOTAL-COSTS> 1,304,418
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<INCOME-PRETAX> 214,641
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