<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For Quarter Ended September 29, 1996
----------------------------------
THE NEW YORK TIMES COMPANY
---------------------------------
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
NEW YORK 1-5837 13-1102020
---------------------------- ---------------------------- ----------------------------
(State or other jurisdiction of Commission file number (I.R.S. Employer Identification No.)
incorporation or organization)
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229 WEST 43RD STREET, NEW YORK, NEW YORK
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(Address of principal executive offices)
10036
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(Zip Code)
Registrant's telephone number, including area code 212-556-1234
------------
I ndicate 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 / /.
Number of shares of each class of the registrant's common stock outstanding
as of November 3, 1996 (exclusive of treasury shares):
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<S> <C>
Class A Common Stock 96,314,646 shares
Class B Common Stock 428,316 shares
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE NEW YORK TIMES COMPANY
--------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
(Dollars and shares in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- --------------------------
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
1996 1995 1996 1995
---------- ---------- ------------ ------------
(13 Weeks) (39 Weeks)
<S> <C> <C> <C> <C>
Revenues
Advertising................................................ $ 422,299 $ 385,065 $ 1,299,204 $ 1,213,888
Circulation................................................ 134,087 139,315 442,755 407,659
Other...................................................... 72,657 48,598 154,813 132,454
---------- ---------- ------------ ------------
Total.................................................. 629,043 572,978 1,896,772 1,754,001
---------- ---------- ------------ ------------
Costs and Expenses
Production Costs
Raw Materials............................................ 85,920 90,499 288,418 256,165
Wages and Benefits....................................... 140,682 135,053 413,062 400,020
Other.................................................... 107,425 97,224 308,773 291,004
---------- ---------- ------------ ------------
Total.................................................. 334,027 322,776 1,010,253 947,189
Selling, General and Administrative Expenses............... 232,149 207,595 680,509 624,061
Impairment Loss............................................ 126,763 -- 126,763 --
---------- ---------- ------------ ------------
Total.................................................. 692,939 530,371 1,817,525 1,571,250
---------- ---------- ------------ ------------
Operating (Loss) Profit...................................... (63,896) 42,607 79,247 182,751
Income from Joint Ventures................................... 6,395 3,476 13,287 8,010
Interest Expense, Net of Interest Income..................... 7,975 5,577 20,375 19,653
Gain on Dispositions, Net.................................... 25,085 11,291 32,836 11,291
---------- ---------- ------------ ------------
(Loss) Income Before Income Taxes............................ (40,391) 51,797 104,995 182,399
Income Taxes................................................. 7,293 19,591 73,153 79,578
---------- ---------- ------------ ------------
Net (Loss) Income............................................ $ (47,684) $ 32,206 $ 31,842 $ 102,821
---------- ---------- ------------ ------------
---------- ---------- ------------ ------------
Average Number of Common Shares Outstanding.................. 97,008 96,343 97,472 96,983
Per Share of Common Stock
Net (Loss) Income.......................................... $ (0.49) $ .33 $ .33 $ 1.06
Cash Dividends............................................. .14 .14 .42 .42
</TABLE>
See notes to condensed consolidated financial statements.
2
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THE NEW YORK TIMES COMPANY
--------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Dollars in thousands)
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<CAPTION>
September 29, December 31,
1996 1995
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<S> <C> <C>
(Unaudited)
ASSETS
- ------
Current Assets
- --------------
Cash and short-term investments................................................... $ 43,769 $ 91,442
Accounts receivable, net.......................................................... 286,023 277,974
Inventories
Newsprint and magazine paper.................................................... 20,261 36,965
Work-in-process, etc............................................................ 5,679 5,879
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Total inventories............................................................. 25,940 42,844
Other current assets.............................................................. 82,459 47,394
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Total current assets.......................................................... 438,191 459,654
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Other Assets
- ------------
Investment in joint ventures........................................................ 140,222 129,206
Property, plant and equipment (less accumulated depreciation of
$784,890 in 1996 and $740,864 in 1995)............................................ 1,359,967 1,276,066
Intangible assets acquired (less accumulated amortization of
$194,773 in 1996 and $207,489 in 1995)............................................ 1,476,282 1,394,844
Miscellaneous assets................................................................ 104,905 116,960
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TOTAL ASSETS.................................................................. $ 3,519,567 $3,376,730
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</TABLE>
See notes to condensed consolidated financial statements.
3
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THE NEW YORK TIMES COMPANY
--------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Dollars in thousands)
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<CAPTION>
September 29, December 31,
1996 1995
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<S> <C> <C>
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
- -------------------
Accounts and notes payable........................................................ $ 156,262 $ 156,722
Accrued payroll and other related liabilities..................................... 82,219 74,560
Accrued expenses.................................................................. 236,137 200,576
Unexpired subscriptions........................................................... 90,854 81,919
Current portion of capital lease obligations...................................... 3,397 3,139
------------- ------------
Total current liabilities..................................................... 568,869 516,916
------------- ------------
Other Liabilities
- -----------------
Long-term debt.................................................................... 743,463 589,193
Capital lease obligations......................................................... 47,591 48,680
Deferred income taxes............................................................. 130,508 168,715
Other............................................................................. 460,321 441,124
------------- ------------
Total other liabilities....................................................... 1,381,883 1,247,712
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Stockholders' Equity
- --------------------
Capital shares.................................................................... 12,774 12,705
Additional capital................................................................ 633,271 618,570
Earnings reinvested in the business............................................... 1,252,903 1,262,022
Common stock held in treasury, at cost............................................ (330,133) (281,195)
------------- ------------
Total stockholders' equity.................................................... 1,568,815 1,612,102
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......................................... $ 3,519,567 $3,376,730
------------- ------------
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</TABLE>
See notes to condensed consolidated financial statements.
4
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THE NEW YORK TIMES COMPANY
--------------------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
(Unaudited)
(Dollars in thousands)
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<CAPTION>
For the Nine Months Ended
----------------------------
<S> <C> <C>
September 29, September 30,
1996 1995
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<CAPTION>
(39 Weeks)
<S> <C> <C>
OPERATING ACTIVITIES:
- ---------------------
Net cash provided by operating activities........................................... $ 267,683 $ 197,910
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INVESTING ACTIVITIES:
- ---------------------
Acquisitions, net of cash acquired.................................................. (249,620) (71,214)
Net proceeds from dispositions...................................................... 16,893 27,536
Purchases of marketable securities.................................................. -- (39,370)
Proceeds from sale of marketable securities......................................... -- 39,370
Additions to property, plant and equipment.......................................... (157,048) (152,504)
Other-net........................................................................... (1,690) (5,122)
------------- -------------
Net cash used in investing activities............................................... (391,465) (201,304)
------------- -------------
FINANCING ACTIVITIES:
- ---------------------
Long-term obligations
Increase.......................................................................... 153,900 400,000
Reduction......................................................................... (2,558) (274,864)
Capital Shares
Issuance.......................................................................... 582 1,302
Repurchase........................................................................ (34,877) (46,536)
Dividends paid to stockholders...................................................... (40,989) (40,760)
Other-net........................................................................... 51 259
------------- -------------
Net cash provided by financing activities........................................... 76,109 39,401
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(Decrease) increase in cash and short-term investments.............................. (47,673) 36,007
Cash and short-term investments at the beginning of the year........................ 91,442 41,419
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Cash and short-term investments at the end of the quarter........................... $ 43,769 $ 77,426
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</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
THE NEW YORK TIMES COMPANY
--------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
1. GENERAL
a. The accompanying Notes to Condensed Consolidated Financial Statements
should be read in conjunction with the Notes to Consolidated Financial
Statements included in the annual report on Form 10-K for the year ended
December 31, 1995 for The New York Times Company (the "Company") filed
with the Securities and Exchange Commission. In the opinion of
management, all adjustments necessary for a fair presentation of the
results of operations for the interim periods have been included. Because
of the seasonal nature of the business, results for the interim periods
are not necessarily indicative of a full year's operations.
b. Earnings per share is computed after preference dividends and is based
on the weighted average number of Class A and Class B common shares
outstanding during the periods. The dilutive effect of the Company's
common stock equivalents (shares under option) was insignificant or
anti-dilutive, thus, fully-diluted earnings per share is not presented.
c. Certain reclassifications have been made to the 1995 Condensed
Consolidated Financial Statements to conform with classifications used at
September 29, 1996.
2. IMPAIRMENT LOSS
In September 1996, the Company recorded a non-cash accounting charge related
to an impairment of certain long-lived assets as required by the Financial
Accounting Standards Board No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of ("SFAS 121 charge"). As a
result of the Company's recently completed strategic review process, updated
analyses were prepared to determine if there was impairment of any long-lived
asset and certain assets, primarily in the Newspaper Group, met the test for
impairment. These assets were associated with three small regional newspapers,
certain wholesale distribution operations and a printing facility. The revised
carrying values of these assets were generally calculated on the basis of
discounted estimated future cash flow and resulted in the pre-tax non-cash
charge of $126,763,000 ($94,500,000 after-tax or $.97 per share).
The SFAS 121 charge has no impact on the Company's 1996 cash flow or its
ability to generate cash flow in the future. As a result of the SFAS 121 charge,
depreciation and amortization expense related to these assets will decrease in
future periods. However, in conjunction with the review for impairment, the
estimated lives of certain of the Company's long-lived assets were reviewed,
which resulted in the acceleration of amortization expense for certain
intangible assets. In the aggregate, the net effect of the change on
depreciation and amortization expense is not anticipated to have a material
effect on earnings per share in the future.
6
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3. INCOME TAXES
The variances between the effective tax rate on income before income taxes
and the federal statutory rate are as follows:
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<CAPTION>
Three Months Ended Nine Months Ended
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 29, September 30, September 29, September 30,
1996 1995 1996 1995
-------------------- -------------------- -------------------- --------------------
<CAPTION>
% of % of % of % of
(Dollars in thousands) Amount Pre-tax Amount Pre-tax Amount Pre-tax Amount Pre-tax
- --------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pre-tax income*............ $ 61,288 100.0% $ 40,506 100.0% $ 198,923 100.0% $ 171,108 100.0%
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
Tax at federal statutory
rate..................... 21,451 35.0% 14,177 35.0% 69,623 35.0% 59,888 35.0%
State and local income
taxes, net of federal
benefits................. 4,266 7.0% (2,006) (5.0%) 12,551 6.3% 7,181 4.2%
Amortization of
nondeductible intangible
assets acquired.......... 1,807 2.9% 1,485 3.7% 7,140 3.6% 8,010 4.7%
Foreign income............. (427) (0.7%) (184) (0.5%) (1,528) (0.7%) (1,404) (0.8%)
Other net.................. 667 1.1% (215) (0.4%) 2,327 1.1% (431) (0.3%)
--------- --------- --------- --------- --------- --------- --------- ---------
Income taxes at effective
tax rate*................ 27,764 45.3% 13,257 32.8% 90,113 45.3% 73,244 42.8%
SFAS 121 charge............ (32,264) -- (32,264) --
Gain on Dispositions,
Net...................... 11,793 6,334 15,304 6,334
--------- --------- --------- ---------
Income Tax Expense......... $ 7,293 $ 19,591 $ 73,153 $ 79,578
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
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* Exclusive of the 1996 SFAS 121 charge and the Gain on Dispositions, Net in
1996 and 1995.
The variance between the effective tax rate on the SFAS 121 charge and the
Gain on Dispositions, Net and the federal statuory rate is primarily due to the
nondeductibility of certain assets and state and local taxes included in the tax
calculation.
4. ACQUISITIONS/DISPOSITIONS
a. Acquisitions
---------------
In July 1996, the Company acquired KFOR-TV in Oklahoma City, Oklahoma
and WHO-TV in Des Moines, Iowa ("New Television Stations"). The acquisition
was accounted for as a purchase. Accordingly, the operating results have
been included in the consolidated financial statements from the acquisition
date. The aggregate cost of the acquisition was approximately $234,075,000,
of which approximately $232,925,000 was paid in cash with the balance
representing accrued liabilities. The purchases resulted in increases in
intangible assets of approximately $193,272,000 (consisting primarily of
network affiliation agreements, FCC licenses and other intangible assets);
property plant and equipment of $33,532,000 and other assets of $9,468,000.
Net liabilities assumed as a result of the transaction totaled approximately
$2,197,000.
In June 1996, the Company acquired a newspaper distribution business
("Newspaper Distribution Business") that distributes The Times and other
newspapers and periodicals throughout Long Island, Westchester and Fairfield
counties in the New York City metropolitan area. The acquisition was
accounted for as a purchase. Accordingly, the operating results have been
included in the consolidated
7
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financial statements from the acquisition date. The aggregate cost of the
acquisition was $30,673,000, of which $16,695,000 was paid in cash,
$9,915,000 in notes and accounts receivable which were forgiven and the
remainder representing short-term notes and assumed liabilities. The
purchase resulted in increases of intangible assets of approximately
$27,644,000 (consisting primarily of a customer list) and accounts
receivable and equipment of $3,029,000.
In June 1995, the Company acquired WTKR-TV in Norfolk, Virginia. The
acquisition was accounted for as a purchase. Accordingly, the operating
results have been included in the consolidated financial statements from the
acquisition date. The aggregate net cost of the acquisition was $71,301,000,
which was paid in cash. The purchase resulted in increases in intangible
assets of approximately $61,343,000 (which consist of a network affiliation
agreement, FCC licenses and other intangible assets); property, plant and
equipment of $11,189,000, and other assets of $445,000. Net liabilities
assumed as a result of the transaction totaled approximately $1,676,000.
b. Dispositions
---------------
In September 1996, the Company recognized a gain contingency from the
disposition of a paper mill in a prior year. This resulted in a pre-tax gain
of approximately $25,085,000 ($.14 per share).
In June 1996, the Company sold its building at 110 Fifth Avenue, New
York, New York. The sale resulted in a pre-tax gain of approximately
$7,751,000 ($.04 per share).
In the third quarter of 1995, the Company completed the sales of six
small regional newspapers. The sales resulted in a net pre-tax gain of
approximately $11,291,000 ($4,957,000 after taxes, or $.05 per share). In
addition, the Company sold a small regional newspaper in the second quarter
of 1995. The sale did not have a material effect on the Company's
consolidated financial statements.
Had the acquisitions and dispositions occurred at the beginning of each
period presented, the pro forma impact on the results of operations for each
period presented would not have been material. The third quarter and nine months
of 1996 include the results of the New Television Stations, the Newspaper
Distribution Business and WTKR-TV. The third quarter and nine months of 1996 do
not include any operations from the small regional newspapers sold in 1995.
5. DEBT
In July 1996, the Company entered into $100,000,000 and $200,000,000
revolving credit and term loan agreements with a group of banks ("New
Agreements"). The New Agreements replace existing revolving credit and term loan
agreements aggregating $170,000,000. The New Agreements expire in July 1997 and
July 2001, respectively, at which time any outstanding borrowings would be
payable. At the Company's discretion, these facilities may be converted into
term loans at any time. The $100,000,000 agreement provides for an annual
facility fee of 0.0475%. The $200,000,000 agreement provides for an annual
facility fee of 0.0675% based on the Company's current credit rating.
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, plus various margins based on the Company's
credit rating. The New Agreements include provisions which require, among other
matters, minimum specified levels of stockholders' equity. At September 29,
1996, approximately $863,000,000 of stockholders' equity was unrestricted under
the new agreement.
In July 1996, the Company increased its commercial paper facility to
$300,000,000 from $200,000,000. At September 29, 1996, the Company had
approximately $153,900,000 in outstanding commercial paper with maturities
ranging up to 71 days at a weighted average interest rate of approximately 5.4%.
The September 29, 1996 amount is included in long-term debt since the Company
has the intention and ability, supported by the Company's New Agreements, to
refinance these obligations for at least one year.
8
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The New Agreements and commercial paper facility will be used for
acquisitions and general corporate purposes. In July 1996, the Company utilized
approximately $143,000,000 of the commercial paper facility to finance its
acquisition of the New Television Stations.
6. STOCK REPURCHASE PROGRAM
During the first nine months of 1996, the Company spent approximately
$34,900,000 to repurchase approximately 1,150,000 shares of Class A Common Stock
at an average price of $30.33 under the February 1995 authorization of
$50,000,000 and the May 1996 authorization of $32,000,000. Subsequent to
September 29, 1996, the Company spent approximately $3,100,000 to repurchase
approximately 86,500 shares of Class A Common Stock at an average price of
$35.56. To date, approximately $12,000,000 remain from the May 1996
authorization.
7. EQUITY PUT OPTIONS
In addition to the Company's stock repurchase program (see Note 6), the
Company sold put options in two private placements that entitle the holder, upon
exercise, to sell one share of Class A Common Stock to the Company at a
specified price. At September 29, 1996, approximately $1,200,000 was included in
other liabilities on the accompanying Condensed Consolidated Balance Sheets,
which represents the amount that the Company would be obligated to pay if all
the options were exercised. The proceeds from the sale of put options are
accounted for as additional paid-in capital. All put options that were
outstanding at September 29, 1996 expired in October 1996.
8. STAFF REDUCTIONS
In the nine months ended September 1996, the Company recorded approximately
$12,600,000, or $.07 per share, of pre-tax charges relating to additional staff
reductions primarily at The New York Times ("The Times") and corporate
headquarters. In the year ended 1995, the Company recorded pre-tax charges of
approximately $10,100,000, or $.06 per share, for workforce reductions at The
Times, The Boston 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 for staff reductions at The Times.
At September 29, 1996 and December 31, 1995, approximately $18,014,000 and
$17,472,000, respectively, were included in accrued expenses on the accompanying
Condensed Consolidated Balance Sheets, which represent the unpaid balance of
these pre-tax charges. The remaining cash outflows associated with these charges
are expected to occur over the next three years due to the timing of certain
union pension and welfare fund contributions.
9
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Item 2. Management's Discussion and Analysis
- --------------------------------------------
Advertising and circulation revenues accounted for approximately 68% and 23%,
respectively, of the Company's revenues in the first nine months of 1996.
Advertising revenues influence the pattern of the Company's consolidated
revenues because they are seasonal in nature. Traditionally, second-quarter and
fourth-quarter advertising volume is higher than that which occurs in the first
and third quarters. Advertising volume tends to be less in these quarters
because economic activity is lower in the post-holiday season and the summer
period. 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.
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 and into 1996. However, paper prices have
begun to decline and prices in the 3rd quarter of 1996 were lower than those in
1995. The lower prices are expected to continue through the end of 1996. The
Company currently expects that in the fourth quarter of 1996 these lower prices
will reduce the cost of raw materials in the Newspaper and Magazine Groups and
will result in slightly lower Income from Joint Ventures.
Beginning with the 1996 first quarter, equity ownership interests in
investments of between 20% and 50% held by the Company are reported on a pre-tax
basis and are included in the line "Income from Joint Ventures" in the Condensed
Consolidated Statements of Operations. These equity ownership interests include
investments in two paper mills, the International Herald Tribune S.A.S. ("IHT")
and a new venture. The 1995 amounts have been reclassified to conform with this
presentation.
The 1996 third-quarter and nine-month results were affected by the following
special factors:
- $126.8 million pre-tax non-cash accounting charge ($.97 per share for the
quarter and nine months) related to the measurement for impairment of
long-lived assets as required by Financial Accounting Standards Board No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of ("SFAS 121 charge").
- $25.1 million pre-tax gain ($.14 per share for the quarter and nine
months) resulting from the recognition of a gain contingency from the
disposition of a paper mill in a prior year.
- $7.0 million pre-tax charge for the quarter ($.04 per share) and $12.6
million pre-tax charge for the nine months ($.07 per share) for severance
and related costs resulting from work force reductions ("buyouts").
- $7.8 million pre-tax gain ($.04 per share for the nine months) from the
sale of the 110 Fifth Avenue building.
The 1995 third-quarter and nine-month results were affected by the following
special factor:
- $11.3 million pre-tax gain ($.05 per share for the quarter and nine
months) resulting from a sale of six small regional newspapers.
It is likely that the Company will continue to have severance and related
costs due to workforce reductions in 1996 and subsequent years, as the Company
responds to competitive conditions and changes in technology by reducing its
cost structure and streamlining its operations.
RESULTS OF OPERATIONS
- ---------------------
The 1996 third-quarter net loss was $47.7 million, or $.49 per share, compared
with net income of $32.2 million, or $.33 per share, in 1995. For the first nine
months of 1996, net income was $31.8 million, or $.33 per share compared, with
$102.8 million, or $1.06 per share, in 1995. Exclusive of the special factors
described above, 1996 third-quarter and nine-month net income would have been
$37.4 million, or $.38 per share, and $115.7 million, or $1.19 per share,
compared to 1995 third-quarter and nine-month net income, which would have been
$27.2 million, or $.28 per share, and $97.8 million, or $1.01 per share,
respectively. The increase in 1996 net income (exclusive of special factors) of
37.3% for the quarter and 18.3% for the nine months is principally due to
improved operations in the Newspaper and Broadcast Groups and higher earnings
from paper mills in which the Company has investments.
10
<PAGE>
Revenues for the third quarter of 1996 were $629.0 million compared with
$573.0 million in the 1995 quarter, an increase of 9.8%. Revenues for the first
nine months of 1996 were $1.90 billion, an increase of 8.1% over the first
nine-month revenues of $1.75 billion in 1995. On a comparable basis, adjusted
for acquisitions and dispositions of certain properties, 1996 third-quarter
revenues increased by approximately 8.5% over 1995 and nine-month revenues
increased by approximately 7.8% over 1995.
Production costs and expenses for the third quarter of 1996 increased to
$334.0 million in 1996 from $322.8 million in 1995. The increase was due to
higher wage and benefit expenses, offset in part by lower newsprint and magazine
paper prices. Production costs and expenses for the first nine months of 1996
were $1.01 billion compared with $947.2 million in 1995. The increase was due to
higher newsprint and magazine paper prices in the first half of the year, higher
wages and benefits, and increased depreciation expenses associated with new
equipment.
Selling, general and administrative expenses for the third quarter and nine
months of 1996 were $232.1 million and $680.5 million compared with $207.6
million and $624.1 million in the 1995 comparable periods. The increases were
primarily due to buyout charges, increased salary and benefit expenses, and
increased amortization costs associated with acquisitions.
In September 1996, the Company recorded the SFAS 121 charge of $126.8
million (See Note 2 of the Notes To Condensed Financial Statements).
Operating profit before special factors, rose to $69.9 million for the third
quarter of 1996 from the operating profit of $42.6 million in 1995 and rose to
$218.6 million for the first nine months of 1996 from $182.8 million in 1995.
The improvement in operating profit in the Newspaper and Broadcast Groups was
partially offset by incremental corporate expenses associated with the Company's
reengineering program and a decrease in operating profit at the Magazine Group.
Income from Joint Ventures increased to $6.4 million for the third quarter
of 1996 from $3.5 million in 1995 and increased to $13.3 million in the first
nine months of 1996 from $8.0 million in 1995. The increases were primarily a
result of higher selling prices for paper at the mills in which the Company has
investments offset by losses incurred from a new venture.
The 1996 third-quarter earnings, excluding the SFAS 121 charge and Gains on
Dispositions, Net and before interest, income taxes, depreciation and
amortization ("EBITDA") rose to $108.3 million from $80.6 million in the 1995
quarter; EBITDA for the first nine months of 1996 rose to $330.2 million from
$292.6 million in the comparable 1995 period. Depreciation and amortization
expense was $39.0 million in the third quarter of 1996 compared with $34.5
million in 1995 and $110.9 million for the first nine months of 1996 compared
with $101.9 million in 1995.
Interest expense, net of interest income, increased to $8.0 million and
$20.4 million for the 1996 third quarter and nine months, respectively, from
$5.6 million and $19.7 million in the comparable 1995 periods. The increase was
due principally to the financing cost associated with the acquisition of the New
Television Stations in July 1996.
Gain on Dispositions, Net increased to $25.1 million for the third quarter
of 1996 from $11.3 million in 1995 and increased to $32.8 million in the first
nine months of 1996 from $11.3 million in 1995. The third quarter and nine
months include a $25.1 million gain from the recognition of a gain contingency
and a $7.8 million gain from the sale of a building (see special factors
described above). The 1995 third quarter and nine months included a $11.3
million gain resulting from a sale of six small newspapers (see special factors
described above).
The Company utilized an effective tax rate, exclusive of the taxes related
to the special factors, of 45.3% for the quarter and first nine months of 1996,
compared with an effective tax rate of 32.7% and 42.8% in the comparable 1995
periods. The variations in the rates for both periods primarily related to a
favorable state tax ruling in the third quarter of 1995.
11
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SEGMENT INFORMATION
- -------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
September 29, September 30, September 29, September 30,
(Dollars in thousands) 1996 1995 1996 1995
- ----------------------------------------------------- ------------- ------------- ------------- -------------
REVENUES
Newspapers........................................... $ 557,208 $ 507,334 $ 1,694,723 $ 1,566,569
Magazines............................................ 40,217 43,430 122,636 127,261
Broadcasting......................................... 31,618 22,214 79,413 60,171
------------- ------------- ------------- -------------
Total............................................ $ 629,043 $ 572,978 $ 1,896,772 $ 1,754,001
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OPERATING (LOSS) PROFIT
Newspapers........................................... $ (61,281) $ 36,085 $ 82,237 $ 158,458
Magazines............................................ 6,287 7,466 19,821 28,589
Broadcasting......................................... 7,331 4,397 18,703 13,369
Unallocated Corporate Expenses....................... (16,233) (5,341) (41,514) (17,665)
------------- ------------- ------------- -------------
Total............................................ $ (63,896) $ 42,607 $ 79,247 $ 182,751
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
DEPRECIATION AND AMORTIZATION
Newspapers........................................... $ 34,780 $ 32,633 $ 102,901 $ 98,835
Magazines............................................ (1,929) (2,113) (5,518) (5,973)
Broadcasting......................................... 5,447 3,503 12,021 7,859
Corporate............................................ 651 421 1,252 857
Joint Ventures....................................... 96 95 288 285
------------- ------------- ------------- -------------
Total............................................ $ 39,045 $ 34,539 $ 110,944 $ 101,863
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
12
<PAGE>
A discussion of the operating results of the Company's segments follows:
NEWSPAPER GROUP: The Newspaper Group consists of The New York Times ("The
Times"), The Boston Globe ("The Globe"), 21 Regional Newspapers, newspaper
wholesalers, and Information Services (which includes a news service, a features
syndicate, TimesFax, licensing operations of The 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.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
September 29, September 30, September 29, September 30,
(Dollars in thousands) 1996 1995 1996 1995
- ----------------------------------------------------- ------------- ------------- ------------- -------------
REVENUES
Newspapers........................................... $ 555,471 $ 506,944 $ 1,689,187 $ 1,566,088
New Ventures......................................... 1,737 390 5,536 481
------------- ------------- ------------- -------------
Total Revenues....................................... $ 557,208 $ 507,334 $ 1,694,723 $ 1,566,569
------------- ------------- ------------- -------------
EBITDA
Newspapers........................................... $ 102,191 $ 71,963 $ 317,654 $ 261,444
New Ventures......................................... (3,000) (3,245) (6,824) (4,151)
------------- ------------- ------------- -------------
Total EBITDA......................................... $ 99,191 $ 68,718 $ 310,830 $ 257,293
------------- ------------- ------------- -------------
OPERATING (LOSS) PROFIT
Newspapers........................................... $ (54,895) $ 39,457 $ 93,026 $ 162,759
New Ventures......................................... (6,386) (3,372) (10,789) (4,301)
------------- ------------- ------------- -------------
Total Operating Profit............................... $ (61,281) $ 36,085 $ 82,237 $ 158,458
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
The Group's third-quarter 1996 operating profit, excluding buyouts and the
SFAS 121 charge, rose to $62.7 million from $36.1 million in the 1995 third
quarter on revenues of $557.2 million and $507.3 million respectively. Operating
profit for the first nine months of 1996, excluding buyouts and the SFAS 121
charge, rose to $211.5 million from $158.5 million in 1995 on revenues of $1.69
billion and $1.57 billion respectively. The increase in the Group's revenues for
both the quarter and nine months was due primarily to higher advertising and
circulation revenues as a result of higher rates offset by softness in
advertising and circulation volume. The improvement in operating profit for the
third quarter included the favorable effect of a 4% decrease in the Company's
average cost of newsprint over the 1995 third quarter. Operating profit for the
nine months improved despite a 20% increase in the Company's average cost of
newsprint over the comparable 1995 period.
13
<PAGE>
Average circulation for the three and nine months, 1996 on a comparable
basis were as follows:
<TABLE>
<CAPTION>
Three Months Ended September 29, 1996
------------------------------------------------
<S> <C> <C> <C> <C>
(Copies in thousands) Weekday % Change Sunday % Change
- ---------------------------------------------------------------------- ----------- ----------- --------- -----------
AVERAGE CIRCULATION
The New York Times.................................................... 1,050.5 (1.1%) 1,635.7 (0.7%)
The Boston Globe...................................................... 472.0 (5.4%) 767.5 (4.0%)
Regional Newspapers................................................... 696.8 (2.9%) 756.8 (1.4%)
<CAPTION>
Nine Months Ended September 29, 1996
------------------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
- ---------------------------------------------------------------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
AVERAGE CIRCULATION
The New York Times.................................................... 1,096.2 (1.0%) 1690.8 (0.7%)
The Boston Globe...................................................... 472.7 (5.5%) 766.1 (3.2%)
Regional Newspapers................................................... 729.7 (3.8%) 788.3 (2.1%)
</TABLE>
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.
14
<PAGE>
Advertising volume on a comparable basis for the quarter and nine months was
as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
(Inches in thousands) September 29, September 29,
- --------------------------------------------------------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
1996 % Change 1996 % Change
--------- ----------- --------- -----------
ADVERTISING VOLUME (EXCLUDING PREPRINTS)
The New York Times................................................... 848.2 (2.4)% 2,705.8 (2.1)%
The Boston Globe..................................................... 698.5 (0.4)% 2,131.9 (0.6)%
Regional Newspapers.................................................. 3,711.0 (0.1)% 11,382.4 (0.4)%
</TABLE>
Advertising volume at The Times for the third quarter of 1996 decreased 2.4%
from the 1995 third quarter. The retail and zoned categories showed decreases of
5.3% and 9.0%, respectively, while national and classified showed increases of
2.9% and 0.8%. For the 1996 nine months, advertising volume decreased 2.1%. All
categories, except national, experienced declines, with retail being the most
significant with a 7.9% decrease from the 1995 nine months.
At The Globe, advertising volume for the 1996 third quarter decreased 0.4%
over the 1995 third quarter. The decrease was primarily attributable to lower
volume in the retail and national categories of 9.1% and 3.5% respectively. For
the 1996 nine months, advertising volume decreased 0.6% as a result of decreases
in the retail, national and zoned categories of 7.3%, 5.2%, and 0.3%,
respectively, offset by increased advertising in the classified category of
5.1%. Preprint distribution was down 3.5% for the quarter and 6.9% for the nine
months from 1995.
Advertising volume at the Regional Newspapers decreased 0.1% and 0.4% for
the third-quarter and nine-month periods from the 1995 comparable periods
respectively. The decreases were a result of lower volume in the retail and
national advertising categories, offset by an increase in the legal and
classified categories over 1995. Preprint distribution increased 2.0% and 1.1%
for the third-quarter and nine-month periods over 1995 respectively.
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 fields.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
September 29, September 30, September 29, September 30,
(Dollars in thousands) 1996 1995 1996 1995
- ----------------------------------------------------- ------------- ------------- ------------- -------------
REVENUES
Sports/Leisure Magazines............................. $ 37,412 $ 40,930 $ 114,402 $ 119,761
Non-Compete.......................................... 2,500 2,500 7,500 7,500
New Ventures......................................... 305 -- 734 --
------------- ------------- ------------- -------------
Total Revenues....................................... $ 40,217 $ 43,430 $ 122,636 $ 127,261
------------- ------------- ------------- -------------
EBITDA
Sports/Leisure Magazines............................. $ 6,982 $ 5,432 $ 19,438 $ 22,695
New Ventures......................................... (1,553) (79) (4,064) (79)
------------- ------------- ------------- -------------
Total EBITDA......................................... $ 5,429 $ 5,353 $ 15,374 $ 22,616
------------- ------------- ------------- -------------
OPERATING PROFIT (LOSS)
Sports/Leisure Magazines............................. $ 5,525 $ 5,045 $ 16,921 $ 21,168
Non-Compete.......................................... 2,500 2,500 7,500 7,500
New Ventures......................................... (1,738) (79) (4,600) (79)
------------- ------------- ------------- -------------
Total Operating Profit............................... $ 6,287 $ 7,466 $ 19,821 $ 28,589
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
The Magazine Group's third-quarter operating profit, excluding the SFAS 121
charge, was $7.4 million in 1996, compared with $7.5 million in 1995 on revenues
of $40.2 million and $43.4 million respectively. Operating profit for the first
nine months, excluding the SFAS 121 charge, was $20.9 million in 1996, compared
with $28.6 million in 1995 on revenues of $122.6 million and $127.3 million
respectively. The decreases were primarily due to lower advertising revenues in
both the third quarter and nine months and an increase in paper costs for the
nine months of 1996 over 1995.
BROADCASTING GROUP: The Broadcasting Group is comprised of eight
network-affiliated television stations and two radio stations.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
September 29, September 30, September 29, September 30,
(Dollars in thousands) 1996 1995 1996 1995
- ----------------------------------------------------- ------------- ------------- ------------- -------------
Revenues............................................. $ 31,618 $ 22,214 $ 79,413 $ 60,171
------------- ------------- ------------- -------------
EBITDA............................................... $ 12,778 $ 7,900 $ 30,724 $ 21,228
------------- ------------- ------------- -------------
Operating Profit..................................... $ 7,331 $ 4,397 $ 18,703 $ 13,369
------------- ------------- ------------- -------------
</TABLE>
15
<PAGE>
The Broadcasting Group's third-quarter operating profit, was $7.3 million in
the 1996 compared with $4.4 million in 1995 on revenues of $31.6 million and
$22.2 million respectively. Operating profit, excluding buyouts, was $18.9
million for the first nine months of 1996 compared with $13.4 million in 1995 on
revenues of $79.4 million and $60.2 million respectively. The revenue and
operating profit increases were principally attributable to the operations of
WTKR-TV, Norfolk, Virginia, which was acquired in June 1995, and two NBC
affiliates acquired in July 1996, KFOR-TV, Oklahoma City, Oklahoma and WHO-TV,
Des Moines, Iowa. (See Note 4 of the Notes to Condensed Consolidated Financial
Statements.)
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operating activities was $267.7 million in the 1996
third quarter compared with $197.9 million in 1995. Such cash in addition to the
utilization of funds from external sources, were primarily used to modernize
facilities and equipment, pay dividends to stockholders and for acquisitions.
The Company believes that cash generated from its operations and the
availability of funds from external sources, as discussed below, should be
adequate to cover working capital needs, planned capital expenditures, dividend
payments to stockholders and other cash requirements. The ratio of current
assets to current liabilities was .77 at September 29, 1996, and .89 at December
31, 1995, and long-term debt and capital lease obligations as a percentage of
total capitalization was 34% at September 29, 1996, and 28% at December 31,
1995.
ACQUISITIONS: In July 1996, the Company acquired KFOR-TV in Oklahoma City,
Oklahoma and WHO-TV in Des Moines, Iowa ("New Television Stations"). The
acquisition was accounted for as a purchase. Accordingly, the operating results
have been included in the consolidated financial statements from the acquisition
date. The aggregate cost of the acquisition was approximately $234.1 million, of
which approximately $232.9 million was paid in cash and the balance representing
accrued liabilities.
In June 1996, the Company acquired a newspaper distribution business that
distributes The Times and other newspapers and periodicals throughout Long
Island, Westchester and Fairfield counties in the New York City metropolitan
area. The acquisition was accounted for as a purchase. Accordingly, the
operating results have been included in the consolidated financial statements
from the acquisition date. The aggregate cost of the acquisition was $30.7
million, of which $16.7 million was paid in cash, $9.9 million in notes and
accounts receivable which were forgiven and the remainder representing
short-term notes and assumed liabilities.
FINANCING: In July 1996, the Company entered into $100.0 million and $200.0
million revolving credit and term loan agreements with a group of banks ("New
Agreements"). The New Agreements replaced existing revolving credit and term
loan agreements aggregating $170.0 million. The New Agreements expire in July
1997 and July 2001, respectively, at which time any outstanding borrowings would
be payable. At the Company's discretion, these facilities may be converted into
term loans at any time. Interest is payable on a quarterly basis for both
agreements.
In July 1996, the Company increased the commercial paper facility to $300.0
million from $200.0 million. At September 29, 1996, the Company had
approximately $153.9 million in outstanding commercial paper with maturities
ranging up to 71 days at a weighted average interest rate of approximately 5.4%.
The outstanding commercial paper is supported by the Company's New Agreements.
The New Agreements and commercial paper facility will be used for
acquisitions and general corporate purposes. In July 1996, the Company utilized
approximately $143.0 million of the commercial paper facility to finance the
acquisition of the New Television Stations.
Subsequent to September 29,1996, a former jointly-owned affiliate, Spruce
Falls Power and Paper Company Limited, repaid a $26.5 million loan receivable.
The loan repayment period was not scheduled to commence until December 1997.
16
<PAGE>
LOSS IMPAIRMENT: The $126.8 million SFAS 121 charge has no impact on the
Company's 1996 cash flow or its ability to generate cash flow in the future. As
a result of the SFAS 121 charge, depreciation and
amortization expense related to these assets will decrease in future periods. In
conjunction with the review for impairment, the estimated useful lives of
certain of the Company's long-lived assets were reviewed. This review resulted
in the acceleration of amortization expense for certain intangible assets. In
the aggregate, the net effect of the change on depreciation and amortization
expense is not anticipated to have a material effect on earnings per share in
the future.
STOCK REPURCHASE PROGRAM: At January 1, 1996, approximately $18.0 million
remained under a $50 million authorization pursuant to a stock repurchase plan
announced in February 1995. In May 1996, the Board of Directors authorized
additional expenditures of up to $32.0 million. During the first nine months of
1996, the Company spent approximately $34.9 million under these authorizations.
Under the programs, purchases may be made from time to time either in the open
market or through private transactions. Purchases may be suspended from time to
time or discontinued. Subsequent to September 29, 1996, the Company spent
approximately $3.1 million under the May authorization noted above. To date,
approximately $12.0 million remain from the May 1996 authorization.
CAPITAL EXPENDITURES: The Company is constructing 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. At September 29, 1996, approximately $248.9
million has been incurred. Construction began in August 1994 and completion is
expected in the middle of 1997.
The Company currently estimates that, inclusive of the College Point
facility, capital expenditures for 1996 will range from $235.0 million to $250.0
million. The Company currently anticipates that depreciation and amortization
will be approximately $150.0 million to $160.0 million for 1996 compared with
$138.9 million in 1995.
OTHER: At September 29, 1996, approximately $18.0 million of payments
remain from charges associated with staff reductions. The 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 expects to fund the amounts through internally-generated funds.
FACTORS THAT COULD AFFECT OPERATING RESULTS
- -------------------------------------------
Except for the historical information contained herein, the matters
discussed in this quarterly report are forward-looking statements that involve
risks and uncertainties, including the price of newsprint and magazine paper
prices that differ from levels anticipated by the Company, national and local
economic conditions that could influence the level of retail, national and
classified advertising revenue and circulation revenue, the impact of competing
products and pricing that could affect levels (rate and volume) of advertising
and circulation generated by the markets served by the Company's business
segments, and other risks detailed from time to time in the Company's
publicly-filed documents, including its Quarterly Reports on Form 10-Q for the
period ended March 31, 1996.
17
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) EXHIBITS
------------
<TABLE>
<C> <S>
10.1 The Company's 1991 Executive Stock Incentive Plan, as amended
through September 19, 1996
10.2 The Company's 1991 Executive Cash Bonus Plan, as amended through
September 19, 1996
10.3 The Company's Non-Employee Director's Stock Option Plan, as amended through
September 19, 1996
11. Statements re: Computation of earnings per share
27. Financial Data Schedule
</TABLE>
(b) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the period for which this
report is filed.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NEW YORK TIMES COMPANY
--------------------------
(Registrant)
Date: November 12, 1996
-----------------
<TABLE>
<S> <C>
/s/ Diane P. Baker
--------------------------------------------
Diane P. Baker
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
</TABLE>
18
<PAGE>
Exhibit Index to Quarterly Report Form 10-Q
-------------------------------------------
Quarter Ended September 29, 1996
-------------------------------
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
10.1 The Company's 1991 Executive Stock Incentive Plan, as amended through September 19, 1996
10.2 The Company's 1991 Executive Cash Bonus Plan, as amended through September 19, 1996
10.3 The Company's Non-Employee Director's Stock Option Plan, as amended through September 19, 1996
11. Statements of Computation of Primary and Fully-Diluted Net Income Per Share
27. Financial Data Schedule
</TABLE>
19
<PAGE>
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE STOCK INCENTIVE PLAN EXHIBIT 10.1
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 Non-Employee Directors.
(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,
unless the context otherwise requires, its subsidiaries (as hereinafter defined)
and other non-corporate entities in which it owns directly or indirectly 20% 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) "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 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.
(k) "Income Before Income Taxes"--means the amount designated as Income
Before Income Taxes for the applicable year and shown separately on the
Consolidated Statement of Income for such year.
<PAGE>
(l) "Non-Employee Director"--means any Director of the Company who at the
time of acting is a "Non-Employee Director" under Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(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. Only employees of The New York
Times Company, its subsidiaries and other non-corporate entities in which it
owns directly or indirectly 40% or more of the equity interests are eligible to
participate in the Plan.
(n) "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 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 Non-Employee
Directors. 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.
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 Participants
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.
2
<PAGE>
6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS
(a) The Committee may grant options to purchase Common Stock ("Options") to
Participants 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 20,000,000 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.
(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
3
<PAGE>
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. 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 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 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. No Option shall be transferable otherwise than by
will or by the laws of descent and distribution.
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11. OPTION AGREEMENTS
In consideration of any Options granted to a Participant under the Plan, if
requested by the Committee, 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
Participants 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 Income
Before Income Taxes. The Committee, in its sole discretion, may make adjustments
in Income Before Income Taxes 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
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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 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.
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(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. [INTENTIONALLY LEFT BLANK]
PART IIA STOCK AWARDS
19. DETERMINATION OF STOCK AWARDS
(a) Each year the Committee shall designate those Participants 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
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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 Participants 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).
(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
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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, 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, 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, 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.
PART IIC RETIREMENT UNIT AWARDS
22. DETERMINATION OF RETIREMENT UNIT AWARDS
Each year the Committee shall designate those Participants 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
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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 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.
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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.
"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
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<PAGE>
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
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.
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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.
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.
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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. 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 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,
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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 transactions involving Options or
Awards granted under the Plan be entitled to the exemption from Section 16 of
the Exchange Act provided by 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 any such transaction to comply with Rule 16b-3. The Committee 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 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.
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THE NEW YORK TIMES COMPANY
1991 EXECUTIVE CASH BONUS PLAN EXHIBIT 10.2
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,
unless the context otherwise requires, its subsidiaries (as hereinafter defined)
and other non-corporate entities in which it owns directly or indirectly 20% 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) "Income Before Income Taxes"--means the amount designated as Income
Before Income Taxes for the applicable year and shown separately on 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. Only employees of The New York Times Company,
its subsidiaries and other non-corporate entities in which it owns directly or
indirectly 40% or more of the equity interests are eligible to participate in
the Plan.
(h) "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 Participants 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 Income
Before Income Taxes. The Committee, in its sole discretion, may make adjustments
in Income Before Income Taxes 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 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.
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(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 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.
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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 Participants 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:
"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.
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"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. 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
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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 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
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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.
(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
7
<PAGE>
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
<PAGE>
THE NEW YORK TIMES COMPANY
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN EXHIBIT 10.3
1. PURPOSE
The purpose of the The New York Times Company Non-Employee Directors' Stock
Option Plan (the "Plan") is to secure for The New York Times Company (the
"Company") and its stockholders the benefits of the incentive inherent in
increased common stock ownership by the members of the Board of Directors (the
"Board") of the Company who are not employees of the Company or any of its
subsidiaries.
2. ADMINISTRATION
The Plan shall be administered by the Board. The Board shall have all the
powers vested in it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to prescribe the form of the agreement
embodying awards of stock options made under the Plan ("Options"). The Board
shall, subject to the provisions of the Plan, have the power to construe the
Plan, to determine all questions arising thereunder and to adopt and amend such
rules and regulations for the administration of the Plan as it may deem
desirable. Any decision of the Board in the administration of the Plan, as
described herein, shall be final and conclusive. The Board may act only by a
majority of its members in office, except that the members thereof may authorize
any one or more of their number or the Secretary or any other officer of the
Company to execute and deliver documents on behalf of the Board. No member of
the Board shall be liable for anything done or omitted to be done by such member
or by any other member of the Board in connection with the Plan, except in
circumstances involving actual bad faith.
3. AMOUNT OF STOCK
The stock which may be issued and sold under the Plan will be the Class A
Common Stock of the Company ("Common Stock"), of a total number not exceeding
250,000 shares, subject to adjustment as provided in Section 6 below. The stock
to be issued may be either authorized and unissued shares, treasury shares,
issued shares acquired by the Company or its subsidiaries or any combination
thereof. In the event that Options granted under the Plan shall terminate or
expire without being exercised in whole or in part, new Options may be granted
covering the shares not purchased under such lapsed Options.
4. ELIGIBILITY
Each member of the Board who is not an employee of the Company or any of
its subsidiaries (a "Non-Employee Director") shall be eligible to receive an
Option in accordance with the specific provisions of Section 5 below. The
adoption of this Plan shall be not deemed to give any director any right to be
granted an Option to purchase Common Stock except to the extent and upon such
terms and conditions consistent with the Plan as may be determined by the Board.
5. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under the Plan shall be evidenced by an agreement in
such form as the Board shall prescribe from time to time in accordance with the
Plan and shall comply with the following terms and conditions:
(a) The Option exercise price shall be the Fair Market Value of the
shares of Common Stock (as defined in Section 7(a) hereof) subject to such
Option on the date the Option is granted.
(b) Each year, as of the date of the Annual Meeting of Stockholders of
the Company, each Non-Employee Director who has been elected or re-elected
or who is continuing as a member of the
Board as of the adjournment of the Annual Meeting shall automatically
receive an Option for 1,000 shares of Common Stock.
(c) The Option shall not be transferable by the optionee otherwise
than by will or the laws of descent and distribution, and shall be
exercisable during his lifetime only by him, or if the optionee
1
<PAGE>
is disabled and a guardian or other legal representative is appointed, by
such guardian or representative.
(d) No Option or any part of an Option shall be exercisable:
(i) before the Non-Employee Director has served one term-year as a
member of the Board since the date the Option was granted (as used herein,
the term "term-year" means that period from one Annual Meeting to the
subsequent Annual Meeting), except as provided in subsection 5(d)(iv)(B)
below;
(ii) after the expiration of ten years from the date the Option was
granted;
(iii) unless written notice of the exercise is delivered to the
Company specifying the number of shares to be purchased and payment in full
is made for the shares of Common Stock being acquired thereunder at the
time of exercise; such payment shall be made
(A) in United States dollars by certified check or bank draft, or
(B) by tendering to the Company shares of Common Stock owned by the
person exercising the Option and having a Fair Market Value on the date
of exercise equal to the cash exercise price applicable to such Option,
or
(C) be electing to have the Company retain shares of Common Stock
which would be otherwise issued on exercise of the Option and having a
Fair Market Value on the date of exercise equal to the cash applicable
to such Option, or
(D) any combination of the foregoing forms; and
(iv) unless the person exercising the Option has been, at all times
during the period beginning with the date of grant of the Option and ending
on the date of such exercise, a Non-Employee Director of the Company,
except that
(A) if such a person shall cease to be such a Non-Employee Director
for reasons other than Retirement (as defined in Section 7(a) hereof) or
death, while holding an Option then exercisable that has not expired,
such person, at any time within one year after the date he ceases to be
such a Non-Employee Director (but in no event after the Option has
expired under the provisions of subsection 5(d)(ii) above), may exercise
the Option with respect to any shares of Common Stock as to which such
person could have but has not exercised the Option on the date the
person ceased to be such a Non-Employee Director;
(B) if such a person shall cease to be such a Non-Employee Director
by reason of Retirement or death while holding an Option (whether or not
then exercisable) that has not expired, notwithstanding the provisions
of subsection 5(d)(i) above, such person, or in the case of death
(either while a Non-Employee Director or after Retirement), his
executors, administrators, heirs, legatees or distributees, as the case
may be, may, at any time until the expiration of such Option as provided
in subsection 5(d)(ii) above, exercise the Option with respect to any
shares of Common Stock as to which such person has not exercised the
Option on the date the person ceased to be such a Non-Employee Director;
and
(C) if any person who has ceased to be such a Non-Employee Director
for reasons other than death or Retirement shall die holding an Option,
such person's executors, administrators, heirs, legatees or
distributees, as the case may be, may, at any time within one year after
the date of death (but in no event after the Option has expired under
the provisions of subsection 5(d)(ii) above), exercise the Option with
respect to any shares as to which the decedent could have exercised the
Option at the time of death.
In the event any Option is exercised by the executors, administrators,
heirs, legatees or distributees of the estate of a deceased optionee or by the
guardian or legal representative of a disabled optionee, the Company shall be
under no obligation to issue stock thereunder unless and until the Company is
satisfied that the person or persons exercising the Option are the duly
appointed legal representatives of the deceased optionee's estate or the proper
legatees or distributees thereof or the duly appointed guardian or legal
representative of the disabled optionee.
2
<PAGE>
6. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK
In the event of changes in the outstanding Common Stock of the Company by
reason of dividends (other than cash dividends), recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
aggregate number and class of shares available under the Plan, the number, class
and the price of shares of Common Stock subject to outstanding Options and the
number of shares constituting an Option grant under Section 5(b) hereof, shall
be appropriately adjusted by the Board, whose determination shall be conclusive.
7. MISCELLANEOUS PROVISIONS
(a) The following terms shall have the meanings specified below:
(i) "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 any exchange or on
the NASDAQ, Fair Market Value shall be determined by the Board in
accordance with Treasury Regulations applicable to incentive stock options.
(ii) "Retirement" means retirement from the Board at the age of 65 or
thereafter or resignation from the Board by reason of disability.
(b) Except as expressly provided for in the Plan, no Non-Employee Director
or other person shall have any claim or right to be granted an Option under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any Non-Employee Director any right to be retained in the service of the
Company.
(c) An optionee's rights and interest under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in the event of an optionee's death, by will or the laws of
descent and distribution), including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no
such right or interest of any participant in the Plan shall be subject to any
obligation or liability of such participant.
(d) No shares of Common Stock shall be issued hereunder unless counsel for
the Company shall be satisfied that such issuance will be in compliance with
applicable federal, state and other securities laws and regulations.
(e) It shall be a condition to the obligation of the Company to issue
shares of Common Stock upon exercise of an Option, that the optionee (or any
beneficiary or person entitled to act under subsection 5(d)(iv) above) pay to
the Company, upon its demand, such amount as may be requested by the Company for
the purpose of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested is not paid, the Company
may refuse to issue shares of Common Stock.
(f) The expenses of the Plan shall be borne by the Company.
(g) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares upon exercise of any Option under the
Plan and issuance of shares upon exercise of Options shall be subordinate to the
claims of the Company's general creditors.
(h) By accepting any Option or other benefit under the Plan, each optionee
and each person claiming under or through such person shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company or the Board.
3
<PAGE>
(i) It is the intent of the Company that the transactions involving options
under the Plan comply in all respects with Rule 16b-3 or any successor rule
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended, 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 any such transaction 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.
8. AMENDMENT OF DISCONTINUANCE
The Plan may be amended at any time and from time to time by the Board as
the Board shall deem advisable, including, but not limited to, amendments
necessary to qualify for any exemption or to comply with applicable law or
regulations; provided, however, that except as provided in Section 6 above, the
Board may not, without further 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, voting together as one class, increase the maximum number of
shares of Common Stock as to which Options may be granted under the Plan,
increase the number of shares subject to an Option, change the Option exercise
price described in subsection 5(a) above, extend the period during which Options
may be granted or exercised under the Plan or change the class of persons
eligible to receive Options under the Plan. Subject to the provision of Section
7(i) hereof relating to Rule 16b-3, no amendment of the Plan shall materially
and adversely effect any right of any optionee with respect to any Option
theretofore granted without such optionee's written consent. It is intended that
the Plan be a "formula plan" under Rule 16b-3 and will comply with all
applicable rules, regulations and staff interpretations of the Securities and
Exchange Commission.
9. TERMINATION
This Plan shall terminate upon the earlier of the following dates or events
to occur:
(a) upon the adoption of a resolution of the Board terminating
the Plan; or
(b) ten years from the date the Plan is initially approved and
adopted by the stockholders of the Company in accordance with
Section 10 below.
10. EFFECTIVE DATE OF PLAN
The Plan shall become effective as of April 16, 1991 or such later date as
the Board may determine, provided that the adoption of the Plan shall have been
approved 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.
4
<PAGE>
EXHIBIT 11
THE NEW YORK TIMES COMPANY
--------------------------
STATEMENTS OF COMPUTATION OF PRIMARY
AND FULLY-DILUTED NET INCOME PER SHARE
(Dollars and shares in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 29, September 29,
--------------------- ---------------------
<S> <C> <C> <C> <C>
1996 1995 1996 1995
---------- --------- --------- ----------
PRIMARY*
- --------
Average shares outstanding.......................................... 97,008 96,343 97,472 96,983
---------- --------- --------- ----------
---------- --------- --------- ----------
Net Income.......................................................... $ (47,684) $ 32,206 $ 31,842 $ 102,821
Less cumulative preference stock dividends........................ (24) (24) (72) (72)
---------- --------- --------- ----------
Total........................................................... $ (47,708) $ 32,182 $ 31,770 $ 102,749
---------- --------- --------- ----------
---------- --------- --------- ----------
Primary earnings per share.......................................... $ (0.49) $ 0.33 $ 0.33 $ 1.06
---------- --------- --------- ----------
---------- --------- --------- ----------
FULLY DILUTED
- -------------
Average shares outstanding.......................................... 97,008 96,343 97,472 96,983
Net effect of dilutive stock options, retirement units and put
options (based on the treasury stock method using the quarter-end
market price which is higher than the average market price)....... 2,305 1,334 2,034 861
---------- --------- --------- ----------
Total fully-diluted average shares outstanding...................... 99,313 97,677 99,506 97,844
---------- --------- --------- ----------
---------- --------- --------- ----------
Net Income.......................................................... $ (47,684) $ 32,206 $ 31,842 $ 102,821
Less cumulative preference stock dividends........................ (24) (24) (72) (72)
---------- --------- --------- ----------
Total........................................................... $ (47,708) $ 32,182 $ 31,770 $ 102,749
---------- --------- --------- ----------
---------- --------- --------- ----------
Fully-diluted earnings per share.................................... $ (0.48) $ 0.33 $ 0.32 $ 1.05
---------- --------- --------- ----------
---------- --------- --------- ----------
</TABLE>
- ------------------------
* Common stock equivalents are excluded from primary earnings per share
because their impact on earnings is less than three percent in the
aggregate.
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> SEP-29-1996
<CASH> 43,769
<SECURITIES> 0
<RECEIVABLES> 315,384
<ALLOWANCES> 29,361
<INVENTORY> 25,940
<CURRENT-ASSETS> 438,191
<PP&E> 2,144,857
<DEPRECIATION> 784,890
<TOTAL-ASSETS> 3,519,567
<CURRENT-LIABILITIES> 568,869
<BONDS> 0
0
1,753
<COMMON> 11,021
<OTHER-SE> 1,556,041
<TOTAL-LIABILITY-AND-EQUITY> 3,519,567
<SALES> 0
<TOTAL-REVENUES> 1,896,772
<CGS> 0
<TOTAL-COSTS> 1,010,253
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,375
<INCOME-PRETAX> 104,995
<INCOME-TAX> 73,153
<INCOME-CONTINUING> 31,842
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,842
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
