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 March 28, 1999
Commission file number 1-5837
THE NEW YORK TIMES COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1102020
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
229 WEST 43D STREET, NEW YORK, NEW YORK
----------------------------------------
(Address of principal executive offices)
10036
----------
(Zip Code)
Registrant's telephone number, including area code 212-556-1234
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes |X| No |_|.
Number of shares of each class of the registrant's common stock outstanding as
of May 7, 1999 (exclusive of treasury shares):
Class A Common Stock 175,651,480 shares
Class B Common Stock 849,602 shares
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE NEW YORK TIMES COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Dollars and shares in thousands, except per share data)
For the Quarter Ended
-------------------------
March 28, March 29,
1999 1998
-------------------------
(13 Weeks)
Revenues
Advertising ....................................... $522,801 $507,478
Circulation ....................................... 172,557 169,522
Other ............................................. 43,701 45,563
-------- --------
Total ........................................... 739,059 722,563
-------- --------
Production Costs
Raw materials ..................................... 87,320 87,778
Wages and benefits ................................ 142,072 141,233
Other ............................................. 100,404 100,971
-------- --------
Total ........................................... 329,796 329,982
Selling, General and Administrative Expenses ......... 294,022 276,211
-------- --------
Total ........................................... 623,818 606,193
-------- --------
Operating Profit ..................................... 115,241 116,370
Income from Joint Ventures ........................... 4,203 4,371
Interest expense - net ............................... 11,896 10,143
Gain on Disposition of Asset ......................... -- 4,619
-------- --------
Income before income taxes ........................... 107,548 115,217
Income Taxes ......................................... 46,138 50,580
-------- --------
Net Income ........................................... $ 61,410 $ 64,637
======== ========
Average Number of Common Shares Outstanding
Basic .............................................. 179,686 192,591
Diluted ............................................ 183,118 197,153
Per Share of Common Stock
Basic earnings ..................................... $ .34 $ .34
Diluted earnings ................................... $ .34 $ .33
Dividends .......................................... $ .095 $ .085
See Notes to Consolidated Condensed Financial Statements.
2
<PAGE>
THE NEW YORK TIMES COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 28, December 27,
1999 1998
--------------------------
ASSETS (Unaudited)
Current Assets
Cash and short-term investments ................. $ 39,810 $ 35,991
Accounts receivable-net ......................... 321,423 331,933
Inventories
Newsprint and magazine paper .................. 31,061 27,705
Work-in-process and other ..................... 5,764 4,582
---------- ----------
Total inventories .......................... 36,825 32,287
Deferred income taxes ........................... 40,612 40,612
Other current assets ............................ 78,518 76,153
---------- ----------
Total current assets ....................... 517,188 516,976
---------- ----------
Other Assets
Investment in joint ventures .................... 126,110 122,273
Property, plant and equipment (less
accumulated depreciation of $929,658 in
1999 and $897,304 in 1998) .................... 1,305,864 1,326,196
Intangible assets acquired
Cost in excess of net assets acquired (less
accumulated amortization of $248,138
in 1999 and $240,676 in 1998) ................. 955,883 963,347
Other intangible assets acquired (less
accumulated amortization of $69,958
in 1999 and $64,746 in 1998) .................. 359,030 364,226
Miscellaneous assets ............................ 200,044 172,091
---------- ----------
TOTAL ASSETS ....................................... $3,464,119 $3,465,109
========== ==========
See Notes to Consolidated Condensed Financial Statements.
3
<PAGE>
THE NEW YORK TIMES COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 28, December 27,
1999 1998
--------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
Current Liabilities
Commercial paper outstanding .................. $ 186,450 $ 124,100
Accounts payable .............................. 169,459 163,783
Accrued payroll and other related liabilities . 74,898 87,265
Accrued expenses .............................. 192,058 166,761
Unexpired subscriptions ....................... 85,818 81,080
Current portion of long-term debt and
capital lease obligations ................... 1,788 1,867
----------- -----------
Total current liabilities ................... 710,471 624,856
----------- -----------
Other Liabilities
Long-term debt ................................ 513,858 513,695
Capital lease obligations ..................... 83,682 84,123
Deferred income taxes ......................... 165,338 165,268
Other ......................................... 566,785 545,697
----------- -----------
Total other liabilities ..................... 1,329,663 1,308,783
----------- -----------
Total liabilities ........................... 2,040,134 1,933,639
----------- -----------
Stockholders' Equity
Capital stock ................................. 18,760 18,661
Additional paid-in capital .................... 14,533 --
Accumulated other comprehensive loss-
foreign currency translation adjustments .... (2,256) (2,609)
Retained earnings ............................. 1,721,815 1,677,469
Common stock held in treasury, at cost ........ (328,867) (162,051)
----------- -----------
Total stockholders' equity .................. 1,423,985 1,531,470
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $ 3,464,119 $ 3,465,109
=========== ===========
See Notes to Consolidated Condensed Financial Statements.
4
<PAGE>
THE NEW YORK TIMES COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Quarter Ended
-------------------------
March 28, March 29,
1999 1998
-------------------------
(13 Weeks)
OPERATING ACTIVITIES
Net cash provided by operating activities ........ $ 120,959 $ 67,348
--------- ---------
INVESTING ACTIVITIES
Additions to property, plant and equipment ....... (13,583) (20,481)
Net proceeds from disposition .................... -- 9,934
Other-net ........................................ (1,599) 1,576
--------- ---------
Net cash used in investing activities ............ (15,182) (8,971)
--------- ---------
FINANCING ACTIVITIES
Commercial paper borrowings ...................... 62,350 --
Long-term debt reduction ......................... (521) (1,002)
Capital Shares
Issuance ...................................... 4,544 2,302
Repurchase .................................... (151,267) (84,380)
Dividends paid to stockholders ................... (17,064) (16,368)
--------- ---------
Net cash used in financing activities ............ (101,958) (99,448)
--------- ---------
Increase/(decrease) in cash and short-term
investments ................................... 3,819 (41,071)
Cash and short-term investments at the
beginning of the year ......................... 35,991 106,820
--------- ---------
Cash and short-term investments at the
end of the quarter ............................ $ 39,810 $ 65,749
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
NONCASH FINANCING TRANSACTIONS
1. Repurchases of common stock in connection with noncash exercises under the
Company's stock option plans increased treasury stock by $10.0 million in
1999 and $19.1 million in 1998. Additional paid-in capital was increased
by a corresponding amount. The cost of shares reacquired in connection
with taxes due from optionees on noncash exercises under the Company's
stock option plans are included in repurchases in the consolidated
condensed statements of cash flows above and amounted to $5.7 million in
the 1999 first quarter and $11.4 million in the 1998 first quarter.
2. In February 1999 the Company purchased a minority interest in
TheStreet.com for $15.0 million, of which $3.0 million was in cash and
$12.0 million represents an irrevocable credit for services to be used by
TheStreet.com through February 2003. Investment and deferred revenue
accounts were increased by $12.0 million accordingly.
OTHER
Amounts in these statements of cash flows are presented on a cash basis
and may differ from those shown in other sections of the financial
statements.
See Notes to Consolidated Condensed Financial Statements.
5
<PAGE>
THE NEW YORK TIMES COMPANY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. General
The accompanying Notes to Consolidated Condensed Financial Statements
should be read in conjunction with the Consolidated Financial Statements
included in the annual report on Form 10-K for the year ended December 27, 1998,
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 financial position and results of operations, as of
and for the interim period ended, have been included. Due to the seasonal nature
of the Company's business, results for the interim periods are not necessarily
indicative of a full year's operations.
Certain reclassifications have been made to the 1998 Consolidated Condensed
Financial Statements to conform to classifications used for the three months
ended at March 28, 1999.
2. Income Taxes
Reconciliations between the effective tax rate on income before income
taxes and the federal statutory rate are as follows:
- --------------------------------------------------------------------------------
March 28, March 29,
For the Quarter Ended 1999 1998
- --------------------------------------------------------------------------------
% of % of
(Dollars in thousands) Amount Pretax Amount Pretax
- --------------------------------------------------------------------------------
Tax at federal statutory rate ........ $37,642 35.0% $40,326 35.0%
State and local taxes-net of
federal benefit ...................... 6,174 5.7% 7,764 6.8%
Amortization of nondeductible
intangible assets acquired ........... 1,978 1.8% 2,219 1.9%
Other-net ............................ 344 0.4% 271 0.2%
---------------------------------------
Income Tax Expense ................... $46,138 42.9% $50,580 43.9%
---------------------------------------
3. Stock Repurchase Program
During the first three months of 1999 the Company repurchased 4,747,000
shares of Class A Common Stock at a cost of $151,119,000. The average price of
these repurchases was $31.83 per share. From the end of the first quarter
through May 7, 1999, the Company has repurchased 1,323,000 shares at a cost of
$41,367,000. As of May 7, 1999, the remaining amount of repurchase
authorizations from the Company's Board of Directors is $154,414,000.
4. Voluntary Staff Reductions
Staff reduction accruals included in accrued expenses on the Company's
Consolidated Condensed Balance Sheets amounted to $19,000,000 at March 28, 1999,
and $22,000,000 at December 27, 1998. Most of this balance at March 28, 1999,
will be paid within one year.
6
<PAGE>
5. Comprehensive Income
Comprehensive Income for the Company includes foreign currency translation
adjustments in addition to net income as reported in the Company's Consolidated
Condensed Financial Statements. Comprehensive income was $61,763,000 for the
quarter ended March 28, 1999, and $64,637,000 for the quarter ended March 29,
1998.
6. Segment Statements of Income
- --------------------------------------------------------------------------------
For the Quarter Ended
-----------------------------
March 28, March 29,
(Dollars in thousands) 1999 1998
- --------------------------------------------------------------------------------
(13 Weeks)
REVENUES
Newspapers ................................. $ 678,250 $ 657,330
Broadcast .................................. 33,093 33,298
Magazines .................................. 27,716 31,935
---------------------------
Total .................................... $ 739,059 $ 722,563
===========================
OPERATING PROFIT (LOSS)
Newspapers ................................. $ 112,361 $ 107,589
Broadcast .................................. 6,985 7,284
Magazines .................................. 4,469 8,318
Unallocated Corporate Expenses ............. (8,574) (6,821)
---------------------------
Total .................................... 115,241 116,370
---------------------------
Income from Joint Ventures ................. 4,203 4,371
Interest expense, net ...................... 11,896 10,143
Gain on disposition of asset ............... -- 4,619
---------------------------
Income before income taxes ................. 107,548 115,217
Income taxes ............................... 46,138 50,580
---------------------------
NET INCOME ................................. $ 61,410 $ 64,637
===========================
See Management's Discussion and Analysis of this report on Form 10-Q for more
details on the Company's reportable operating segments.
7. Dividend Rate Increase
On April 15, 1999, the Board of Directors authorized a $.01 increase in
the quarterly dividend payments on both Class A and B Common Stock effective
with the June 1, 1999, record date.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Advertising revenues accounted for 71% and circulation revenues accounted
for 23% of the Company's revenues in the first quarter of 1999. 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 since economic activity tends to be 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.
Newsprint is the major component of the Company's cost of raw materials.
The Company's cost of newsprint was lower in the first quarter of 1999 compared
with the first quarter of 1998. The cost of newsprint during 1999 is expected to
be below that of 1998 for the balance of the year.
The Company's consolidated financial results for the first quarter of 1999
compared with the first quarter of 1998 were as follows:
--------------------------------------------------------------
For the Quarter Ended
------------------------------
(Dollars in thousands, except March 28, March 29,
per share data) 1999 1998 % Change
--------------------------------------------------------------
Revenues $739,059 $722,563 2.3%
--------------------------------------------------------------
Operating profit $115,241 $116,370 -1.0%
--------------------------------------------------------------
Net Income before special item $ 61,410 $ 62,046 -1.0%
Special item -- 2,591 N/A
--------------------------------------------------------------
Net Income $ 61,410 $ 64,637 -5.0%
--------------------------------------------------------------
Diluted earnings per share
before special item $ .34 $ .32 6.3%
Special item -- .01 N/A
--------------------------------------------------------------
Diluted EPS $ .34 $ .33 3.0%
--------------------------------------------------------------
The 1999 first-quarter net income was $61.4 million or $.34 basic ($.34
diluted) earnings per share compared with net income of $64.6 million or $.34
basic ($.33 diluted) earnings per share in the first quarter of 1998.
Revenues for the first quarter of 1999 were $739.0 million, a 2.3%
increase over 1998 first-quarter revenues of $722.6 million. The increase was
primarily due to higher advertising rates and volume in the Newspaper Group.
Operating profit decreased slightly to $115.2 million in the first quarter
of 1999 from $116.4 million in the first quarter of 1998. This slight decrease
is principally related to increased expenses associated with expanding
distribution of The New York Times newspaper, partially offset by higher
revenues.
The Company had a $4.6 million pre-tax gain ($2.6 million after-tax)
($.01 basic and diluted earnings per share) from the sale of equipment in the
first quarter of 1998, reflected as a special item above.
The 1999 first-quarter earnings before interest, income taxes,
depreciation and amortization ("EBITDA") rose to $167.9 million from $166.6
million in the comparable 1998 period. EBITDA is presented because it is a
widely accepted indicator of funds available to service debt, although it is not
a measure of liquidity or of financial performance under generally accepted
accounting principles ("GAAP"). The Company believes that EBITDA, while
providing useful information, should not be considered in isolation or as an
alternative to net income or cash flows as determined under GAAP.
8
<PAGE>
Consolidated operating expenses for 1999 and 1998 were as follows:
---------------------------------------------------------
For the Quarter Ended
------------------------------
(Dollars in March 28, March 29,
thousands) 1999 1998 % Change
---------------------------------------------------------
Production costs
Raw materials $ 87,320 $ 87,778 -0.5%
Wages and benefits 142,072 141,233 0.6%
Other 100,404 100,971 -0.6%
---------------------------------------------------------
Total production costs 329,796 329,982 -0.1%
---------------------------------------------------------
Selling, general and
administrative expenses 294,022 276,211 6.4%
---------------------------------------------------------
Total expenses $623,818 $606,193 2.9%
---------------------------------------------------------
Production costs for the first quarter of 1999 were $329.8 million, a 0.1%
decrease from 1998 first-quarter production costs of $330.0 million.
Selling, general and administrative expenses ("SGA expenses") in the first
quarter of 1999 were $294.0 million, a 6.4% increase over the 1998 first-quarter
SGA expenses of $276.2 million. The higher level of SGA expenses is principally
attributable to increased distribution and promotion costs in the Newspaper
Group.
Other Items
Interest expense-net increased to $11.9 million in the 1999 first quarter
from $10.1 million in the 1998 first quarter due to the Company's funding of its
share repurchase program.
The effective income tax rate for the first quarter of 1999 was 42.9%,
compared with 43.9% in the 1998 first quarter. The decrease in the effective
income tax rate was primarily related to lower state and local income taxes.
9
<PAGE>
Consolidated revenues, EBITDA, depreciation and amortization and operating
profit by business segment were as follows:
--------------------------------------------------------------------
For the Quarter Ended
-----------------------------------
March 28, March 29,
(Dollars in thousands) 1999 1998 % Change
--------------------------------------------------------------------
(13 Weeks)
REVENUES
Newspapers ................... $ 678,250 $ 657,330 3.2%
Broadcast .................... 33,093 33,298 -0.6%
Magazines .................... 27,716 31,935 -13.2%
----------------------------------
Total ...................... $ 739,059 $ 722,563 2.3%
==================================
EBITDA
Newspapers ................... $ 153,541 $ 149,604 2.6%
Broadcast .................... 11,355 11,740 -3.3%
Magazine ..................... 4,800 6,187 -22.4%
Unallocated Corporate Expenses (6,083) (5,412) -12.4%
Joint Ventures ............... 4,291 4,459 -3.8%
----------------------------------
Total ...................... $ 167,904 $ 166,578 0.8%
==================================
DEPRECIATION AND AMORTIZATION
Newspapers ................... $ 41,180 $ 42,015 -2.0%
Broadcast .................... 4,370 4,456 -1.9%
Magazine ..................... 331 (2,131) N/A
Corporate .................... 2,491 1,409 N/A
Joint Ventures ............... 88 88 --
----------------------------------
Total ...................... $ 48,460 $ 45,837 5.7%
==================================
OPERATING PROFIT (LOSS)
Newspapers ................... $ 112,361 $ 107,589 4.4%
Broadcast .................... 6,985 7,284 -4.1%
Magazines .................... 4,469 8,318 -46.3%
Unallocated Corporate Expenses (8,574) (6,821) -25.7%
----------------------------------
Total ...................... $ 115,241 $ 116,370 -1.0%
==================================
Newspaper Group: The Newspaper Group consists of The New York Times ("The
Times"), The Boston Globe ("The Globe"), 21 regional newspapers, newspaper
distributors, a news service, a features syndicate, TimesFax, licensing
operations of the New York Times databases and microfilm and New Ventures. New
Ventures include, among other things, projects developed in electronic media.
---------------------------------------------------
For the Quarter Ended
-----------------------
March 28, March 29,
(Dollars in thousands) 1999 1998
---------------------------------------------------
(13 Weeks)
Revenues $678,250 $657,330
---------------------------------------------------
EBITDA $153,541 $149,604
---------------------------------------------------
Operating Profit $112,361 $107,589
---------------------------------------------------
10
<PAGE>
Internet-related revenue and operating profit in the Newspaper Group were
as follows:
--------------------------------------------------------
For the Quarter Ended
-------------------------------
March 28, March 29,
Dollars in thousands) 1999 1998 % Change
--------------------------------------------------------
Revenues
Advertising $ 3,866 $ 2,996 29.0%
Circulation and Other 846 971 -12.9%
-------------------------------
Total $ 4,712 $ 3,967 18.8%
===============================
Operating Loss $(3,389) $(1,212) N/A
===============================
Internet-related revenue and operating profit includes The New York Times
on the Web, New York Today, boston.com and the Regional Newspapers' Web sites.
In July 1998, The New York Times on the Web stopped charging users outside the
U.S. for subscription fees.
Total Newspaper Group revenues were $678.3 million in the first quarter of
1999 compared with $657.3 million in the 1998 first quarter. The 3.2% increase
in the Group's revenues for the quarter was primarily due to higher advertising
rates and volume. In the first quarter of 1999, the Company's average cost of
newsprint decreased 3.0% and consumption increased 0.8% compared with the 1998
first quarter. At The New York Times and the Regional Newspaper Group
advertising revenues increased 5.4% and 6.7%, while at The Boston Globe help
wanted advertising continued to soften. Circulation revenue at The New York
Times increased 3.8% over the 1998 first quarter, reflecting substantial gains
in daily and Sunday circulation. First-quarter operating profit for the
Newspaper Group increased 4.4% to $112.4 million from $107.6 million in the 1998
first quarter.
Advertising, circulation and other revenue, by major product of the
Newspaper Group, were as follows:
----------------------------------------------------------
For the Quarter Ended
------------------------------------
March 28, March 29,
(Dollars in thousands) 1999 1998 % Change
----------------------------------------------------------
The New York Times
Advertising $275,553 $261,348 5.4%
Circulation 113,618 109,415 3.8%
Other 34,104 34,226 -0.4%
----------------------------------------------------------
Total 423,275 404,989 4.5%
----------------------------------------------------------
The Boston Globe
Advertising 108,510 111,295 -2.5%
Circulation 32,325 32,862 -1.6%
Other 2,169 1,983 9.4%
----------------------------------------------------------
Total 143,004 146,140 -2.1%
----------------------------------------------------------
Regional Newspapers
Advertising 87,894 82,355 6.7%
Circulation 20,234 20,409 -0.9%
Other 3,843 3,437 11.8%
----------------------------------------------------------
Total 111,971 106,201 5.4%
----------------------------------------------------------
Total Newspaper Group
Advertising $471,957 $454,998 3.7%
Circulation 166,177 162,686 2.1%
Other 40,116 39,646 1.2%
----------------------------------------------------------
Total $678,250 $657,330 3.2%
==========================================================
11
<PAGE>
Advertising volume on a comparable basis for the quarter was as follows:
----------------------------------------------------------------------
For the Quarter Ended
-------------------------------------
(Inches in thousands, preprints March 28, March 29,
in thousands of copies) 1999 1998 % Change
----------------------------------------------------------------------
The New York Times
Retail 125.3 124.0 1.0%
National 349.4 340.7 2.6%
Classified 255.0 254.7 0.1%
Zoned 223.8 222.5 0.6%
----------------------------------------------------------------------
Total 953.5 941.9 1.2%
----------------------------------------------------------------------
Preprints 96,509.0 74,899.0 28.9%
----------------------------------------------------------------------
The Boston Globe
Retail 138.6 139.3 -0.5%
National 173.3 168.4 2.9%
Classified 337.3 343.0 -1.7%
Zoned 55.7 61.5 -9.4%
----------------------------------------------------------------------
Total 704.9 712.2 -1.0%
----------------------------------------------------------------------
Preprints 186,362.0 170,481.0 9.3%
----------------------------------------------------------------------
Regional Newspaper
Retail 1,848.8 1,903.5 -2.9%
National 68.5 69.4 -1.3%
Classified 1,917.8 1,792.0 7.0%
Zoned 84.0 82.3 2.1%
----------------------------------------------------------------------
Total 3,919.1 3,847.2 1.9%
----------------------------------------------------------------------
Preprints 270,222.0 261,532.0 3.3%
----------------------------------------------------------------------
Average circulation of newspapers for The Times, The Globe and the
Regional Newspapers (excluding non-dailies) for the quarter ended March 28, 1999
(compared with the quarter ended March 29, 1998) was as follows:
-------------------------------------------------------------------
For the Quarter Ended March 28, 1999
--------------------------------------
(Copies in thousands) Weekday % Change Sunday % Change
-------------------------------------------------------------------
Average Net Paid Circulation
The New York Times 1,128.5 2.2% 1,705.8 3.0%
The Boston Globe 462.4 0.1% 726.1 -2.7%
Regional Newspapers 774.9 -0.3% 826.3 -0.9%
-------------------------------------------------------------------
Circulation growth for The New York Times newspaper was primarily due to
improved availability in major markets across the nation and its continuing
programs to improve the quality and levels of its home-delivery circulation
base. Additionally, The Times and The Globe have continued to make improvements
in delivery service to attract new readers and retain existing ones.
12
<PAGE>
Broadcast Group: The Broadcast Group is comprised of eight network-affiliated
television stations and two radio stations.
----------------------------------------------------
For the Quarter Ended
------------------------
March 28, March 29,
(Dollars in thousands) 1999 1998
----------------------------------------------------
(13 Weeks)
Revenues $33,093 $33,298
----------------------------------------------------
EBITDA $11,355 $11,740
----------------------------------------------------
Operating Profit $ 6,985 $ 7,284
----------------------------------------------------
First-quarter revenues and operating profit for the Broadcast Group were
$33.1 million and $7.0 million in 1999 compared with $33.3 million and $7.3
million in the 1998 first quarter. Revenues and operating profit in the 1998
first quarter were favorably affected by the Winter Olympics, which were
broadcast from four of the Company's eight television stations.
Magazine Group: The Magazine Group is comprised of three golf publications and
related activities in the golf field, and New Ventures, such as on-line magazine
services.
----------------------------------------------------
For the Quarter Ended
------------------------
March 28, March 29,
(Dollars in thousands) 1999 1998
----------------------------------------------------
(13 Weeks)
Revenues
Magazines $27,716 $29,435
Non-Compete -- 2,500
----------------------------------------------------
Total Revenues $27,716 $31,935
----------------------------------------------------
EBITDA $ 4,800 $ 6,187
----------------------------------------------------
Operating Profit (Loss)
Magazines $ 4,469 $ 5,818
Non-Compete -- 2,500
----------------------------------------------------
Total Operating Profit $ 4,469 $ 8,318
----------------------------------------------------
The Magazine Group's first-quarter revenues and operating profit were
$27.7 million and $4.5 million compared with $31.9 million and $8.3 million in
the 1998 first quarter. First-quarter revenue and operating profit in 1998
included $2.5 million from the amortization of a non-compete agreement that
ended last July. Consolidation in the golf equipment industry and a competitive
rate environment also adversely affected the Group's revenues.
Liquidity and Capital Resources
Net cash provided by operating activities was $121.0 million in the 1999
first quarter, compared with $67.3 million in the 1998 first quarter. The
increase of $53.7 million in 1999 was primarily due to a reduction in accounts
receivable and an increase in accounts payable, which resulted in an improvement
in cash flow. Net cash used in investing activities was $15.2 million in the
first quarter of 1999, compared with $9.0 million in the 1998 first quarter. The
increase of $6.2 million in 1999 was primarily due to the proceeds from the
disposition of equipment in 1998. Net cash used in financing activities was
$102.0 million in the first quarter of 1999, compared with $99.4 million in the
first quarter of 1998. The increase of $2.6 million in 1999 was primarily
related to increased funding of the Company's stock repurchase program.
The Company believes that cash generated from its operations and the
availability of funds from external sources should be adequate to cover working
capital needs, stock repurchases, planned capital expenditures, dividend
13
<PAGE>
payments to stockholders and other cash requirements. The ratio of current
assets to current liabilities was 73% at March 28, 1999, and 79% at March 29,
1998. This decrease is principally due to an increase in commercial paper
outstanding at March 28, 1999, mostly resulting from the funding of stock
repurchases. The ratio of long-term debt and capital lease obligations as a
percentage of total capitalization was 30% at March 28, 1999, compared with 21%
at March 29, 1998. This increase was principally due to the funding of stock
repurchases.
Financing: The Company's total debt, including commercial paper and
capital leases, was $785.8 million at March 28, 1999, and $638.5 million at
March 29, 1998. The Company currently maintains $300.0 million in revolving
credit agreements, which require, among other matters, specified levels of
stockholders' equity. The Company had $186.5 million in commercial paper
outstanding at March 28, 1999, which obligations are supported by these
revolving credit agreements. No commercial paper was outstanding at March 29,
1998. Approximately $583.2 million of stockholders' equity was unrestricted
under these agreements at March 28, 1999, and $905.3 million was unrestricted at
March 29, 1998. This decrease was principally due to the funding of stock
repurchases.
Capital Expenditures: The Company currently estimates that capital
expenditures for 1999 will range from $90.0 million to $110.0 million. The
Company currently anticipates that depreciation and amortization expense will
approximate $195.0 million for 1999 compared with $188.2 million in 1998.
Year 2000 Readiness: The Company has evaluated the potential impact of the
situation commonly known as the "Year 2000 problem." The Year 2000 problem,
which is common to most corporations, concerns the ability of information
systems, primarily computer software programs, to properly recognize and process
date-sensitive information related to the Year 2000.
In April 1997 the Company began to identify all of its Year 2000 concerns
for all facets of its operations. A Year 2000 Program Office was established,
and a detailed inventory of all systems issues required to be addressed in
connection with the Year 2000 was created. Information was gathered for each
system including:
o type of system and its relative importance
o probable method and cost of remediation and
o targeted start and end dates for addressing Year 2000 issues.
This inventory includes systems to:
o create the Company's publications
o operate the Company's production and distribution facilities
o operate the Company's broadcast stations
o operate the Company's business and financial applications and
o control facility and infrastructure areas (building systems,
utilities, security systems, etc.).
The systems identified in the inventory were further categorized into five
priority classifications:
o Shutdown - highest priority. If these systems (e.g., editorial
systems, presses, and utilities) were to fail, the Company's ability
to continue its operations would be seriously impaired.
Approximately 9% of the identified systems are in this category.
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o Impractical Workaround - If these systems were to fail, the
available alternatives are too expensive to implement. Approximately
9%.
o Costly Workaround - If these systems were to fail, a feasible but
costly alternative exists. Approximately 28%.
o Additional But Manageable Cost - If these systems fail, an
alternative solution exists at a moderate cost. Approximately 22%.
o No Impact - Little if any consequence to the business if these
systems fail. Approximately 32%.
By October 1997 the Company had completed the inventory phase and turned
its attention to the remediation phase. Target dates for each item in the
inventory were identified and are continually monitored to ensure timely
resolution of the issues. The remediation strategy involves a mix of purchasing
new systems, modifying existing systems, retiring obsolete systems and
confirming vendor compliance. As of March 31, 1999, 90% of all systems had been
remediated and tested. Testing systems for Year 2000 compliance includes the use
of dates that simulate transactions and environments, both prior and subsequent
to the Year 2000, including specific testing for leap year.
The Company has communicated with most of its suppliers and other vendors,
and is contacting its significant advertisers, seeking assurances that they will
be Year 2000 compliant. Although there is no certainty that any major business
partner will function without disruption in the Year 2000, the Company's goal is
to obtain detailed information about its advertisers' and suppliers' Year 2000
plans and to identify those companies that could pose a significant risk of
failure. The Company will make alternate arrangements where necessary.
Generally, the Company is not dependent on a single source for any
products or services, except for products or services supplied by public
utilities. In the event a significant supplier or other vendor is unable to
provide products or services to the Company due to a Year 2000 failure, the
Company believes it has adequate alternate sources for such products or
services. There is no guarantee, however, that such alternate products or
services would be available at the same terms and conditions or that the Company
would not experience some adverse effects as a result of switching to alternate
sources.
To date, the Company has identified total estimated costs in connection
with the Year 2000 problem of between $15 million and $20 million. This estimate
does not include systems previously scheduled for replacement without regard to
the Year 2000 issue. Of this amount, approximately $10 million will be for
systems replacements involving capital outlays (which are not deducted as an
expense on the Company's Consolidated Statements of Income). The remaining
amount is being deducted as an expense on the Company's Consolidated Statements
of Income through 1999. Approximately 75% of this expense total is attributable
to the use of currently available internal resources. The cost of the Company's
Year 2000 remediation efforts is being funded with cash flows from operations.
With respect to its internal operations, those over which the Company has
direct control, the Company believes that all of its critical systems (i.e.,
those categorized in the shutdown or impractical workaround categories described
above) will be remediated and tested by the end of the second quarter of 1999.
Like most large business enterprises, the Company is reliant upon certain
critical vendors. Certain of these vendors have yet to provide a Year 2000
compliant product, while services that are provided by certain other vendors
cannot be tested (i.e., power and telecommunications). The Company
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believes the possibility of critical vendor failures to be remote based on the
information supplied to date by such critical vendors.
The Company's Year 2000 strategies include contingency planning,
encompassing business continuity both within the Company and in the external
business environment. The planning effort encompasses all critical Company
areas. The Company's contingency planning for the Year 2000 will address a
variety of scenarios that could occur.
Because of the Company's extensive efforts to formulate and carry out an
effective Year 2000 remediation program, the Company believes that such
remediation will be completed on a timely basis and should effectively minimize
any disruption to the Company's operations due to Year 2000 issues. The Company
does not expect Year 2000 issues to have a material effect on its results of
operations, liquidity or financial condition.
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 that could cause actual results to differ materially
from those predicted by such forward-looking statements. These risks and
uncertainties include national and local conditions, as well as competition,
that could influence the levels (rate or volume) of retail, national and
classified advertising and circulation generated by the Company's various
markets and material increases in newsprint and magazine paper prices. They also
include other risks detailed from time to time in the Company's publicly-filed
documents, including the Company's Annual Report on Form 10-K for the period
ended December 27, 1998.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's quantitative and qualitative market risk is principally
associated with market interest rate fluctuations related to its debt
obligations. The Company does not consider such market risk significant.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
(a) The Company's annual meeting of stockholders was held on April 15,
1999.
(b) The following matters were voted on at the annual meeting:
1. The stockholders (with Class A and Class B stockholders voting
separately) elected all of management's nominees for election as Class A
Directors and Class B Directors. The results of the vote taken were as follows:
Class A Directors: For Withheld
- ------------------ --- --------
Raul E. Cesan 152,536,691 3,532,371
Robert A. Lawrence 155,188,068 880,994
Charles H. Price II 155,218,978 850,084
Henry B. Schacht 152,452,957 3,616,105
Donald M. Stewart 155,211,652 857,410
Class B Directors:
John F. Akers 838,426 0
Brenda C. Barnes 838,426 0
Richard L. Gelb 837,826 600
Michael Golden 838,426 0
Russell T. Lewis 838,426 0
Ellen R. Marram 838,426 0
Arthur Ochs Sulzberger 838,426 0
Arthur O. Sulzberger, Jr. 838,426 0
Judith P. Sulzberger 838,426 0
2. The stockholders (with Class A and B stockholders voting together)
ratified the amendments to the Company's 1991 Executive Cash Bonus Plan and 1991
Executive Stock Incentive Plan. The result of the vote taken was as follows:
For: 151,791,389
Against: 4,158,307
Abstain: 957,792
Broker Non-Vote 0
Total Against, Abstain and Broker Non-Vote* 5,116,099
3. The stockholders (with Class A and Class B stockholders voting
together) ratified the selection, by the Audit Committee of the Board of
Directors, of Deloitte & Touche LLP, independent certified public accountants,
as auditors of the Company for the year ending December 26, 1999. The result of
the vote taken was as follows:
For: 156,149,547
Against: 322,499
Abstain: 435,442
Broker Non-Vote 0
Total Against, Abstain and Broker Non-Vote* 757,941
- -----------
* An abstention had the same effect as a vote against this matter.
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.2 The Company's 1991 Executive Stock Incentive Plan, as amended
through April 15, 1999.
10.3 The Company's 1991 Executive Cash Bonus Plan, as amended
through April 15, 1999.
10.4 The Company's Non-Employee Directors' Stock Option Plan, as
restated as of June 17, 1998.
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the period for which
this report is filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NEW YORK TIMES COMPANY
(Registrant)
Date: May 12, 1999 /S/ John M. O'Brien
-----------------------------
John M. O'Brien
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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Exhibit Index to Quarterly Report on Form 10-Q
Quarter Ended March 28, 1999
Exhibit No. Exhibit
----------- -------
10.2 The Company's 1991 Executive Stock Incentive Plan, as amended
through April 15, 1999
10.3 The Company's 1991 Executive Cash Bonus Plan, as amended
through April 15, 1999.
10.4 The Company's Non-Employee Directors' Stock Option Plan,
restated as of June 17, 1998
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
20
THE NEW YORK TIMES COMPANY
1991 Executive Stock Incentive Plan
As Amended
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Stock
Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to
enable the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 12 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan.
(d) "Code"--means the Internal Revenue Code of 1986, as amended.
(e) "Committee"--means the Committee referred to in Section 3 of the Plan.
If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by those members of the Board
who are 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.
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(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" and (vi) "Long-Term Performance
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.
Long-Term Performance Awards are granted under Part IIF of the Plan. Long-Term
Performance Awards will be based exclusively on the criteria set forth in
Section 28A.
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.
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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 400,000
(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 40,000,000 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 under the
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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.
(f) No Option shall be transferable otherwise than by will or by the laws
of descent and distribution. Notwithstanding the foregoing sentence, the
Committee may determine that Options granted to a Participant or a specified
group of Participants may be transferred by the Participant to one or more
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members of the Participant's immediate family, to a partnership or limited
liability company whose only partners or members are members of the
Participant's immediate family, or to a trust established by the Participant for
the benefit of one or more members of the Participant's immediate family;
provided, however, that no Incentive Stock Options may become transferable if
inconsistent with Section 422 of the Code, unless the Participant consents. For
this purpose, "immediate family" means the Participant's spouse, parents,
children (including adopted and step-children), grandchildren and the spouses of
such parents, children (including adopted and step-children) and grandchildren.
A transferee described in this subsection may not further transfer an Option. An
Option transferred pursuant to this subsection shall remain subject to the
provisions of the Plan and shall be subject to such other rules as the Committee
shall determine.
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");
(e) Performance Awards ("Performance Awards") or other forms of
Awards ("Other Awards"), as provided in Part IIE of the Plan; and
(f) Long-Term Performance Awards as provided in Part IIF of the Plan
("Long-Term Performance Awards").
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. Long-Term
Performance Awards will be based exclusively on the criteria set forth in
Section 28A.
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
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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 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 2,000,000 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 and Long-Term Performance
Awards, which are to be made exclusively as set forth in Sections 27A and 28A,
respectively) 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 and Long-Term Performance Awards, which
are to be made exclusively as set forth in Sections 27A and 28A, respectively)
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 Sections 27A and 28A, respectively)
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 and Long-Term Performance Awards) under
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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 and
Long-Term Performance Awards shall be subject to the provisions of Sections 27A
and 28A, respectively, 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 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, Long-Term 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.
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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 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
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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 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.
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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 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 Account 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
Account. 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
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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.
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 stockholder's equity of the Company for the
year (net income of the Company for the year divided by average
stockholder's equity during such year);
(v) operating profit or operating margins of the Company or of
a division, subsidiary or group thereof for the year;
(vi) cash flow of the Company or of a division, subsidiary or
group thereof for the year;
(vii) increase in shareholder value as determined at the end
of each year;
(viii) revenue growth of the Company or of a division,
subsidiary or group thereof for the year; and
(ix) improved use of capital and/or assets of the Company or
of a division, subsidiary or group thereof for the year.
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"Performance Goal Target" means, for any Performance Goal, the
levels of performance during a year under such Performance Goal
established by the Committee to determine the Performance Adjustment to an
Eligible Participant's Target Award for such year.
"Target Award" means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied
by the applicable Performance Adjustment, determines the dollar amount of
such Eligible Participant's Annual Performance Award.
(c) ELIGIBILITY. Annual Performance Awards are available each year only to
Plan Participants who are designated by the Committee, prior to March 31 of such
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), as likely to be Affected Officers for such year, whose annual
salary and bonus for such year are expected to exceed $1,000,000 and who are not
designated by the Committee as eligible for an annual performance award under
the Cash Plan for such year ("Eligible Participants").
(d) DETERMINATION OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of each
year (or prior to such later date as permitted by Code Section 162(m) and the
Regulations), the Committee will determine the Eligible Participants for such
year, will designate those Eligible Participants who will be entitled to earn an
Annual Performance Award for such year under this Plan, and will establish for
each such Eligible Participant for such year: (i) a Target Award, (ii) one or
more Performance Goals, and (iii) for each such Performance Goal, a Performance
Goal Target, the method by which achievement thereof will be measured and a
schedule of Performance Adjustment factors corresponding to varying levels of
Performance Goal Target achievement. In the event more than one Performance Goal
is established for any Eligible Participant, the Committee shall at the same
time establish the weighting of each such Performance Goal in determining such
Eligible Participant's Annual Performance Award. Notwithstanding anything in
this Section 27A to the contrary, the Annual Performance Award payable to any
Eligible Participant in any year may not exceed $1.5 million.
(e) PAYMENT OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f) below,
Annual Performance Awards will be paid as soon as practicable after the end of
the year to which it relates and after the Committee certifies the extent to
which the Performance Goal Target or Targets under the Performance Goal or Goals
have been met or exceeded. In the discretion of the Committee, an Annual
Performance Award may be paid in cash, shares of Common Stock, shares of
Restricted Stock (subject to the provisions of Section 21 hereof), Retirement
Units (subject to the provisions of Sections 23-26 hereof) or any combination
thereof. For this purpose, shares of Common Stock shall be valued at Fair Market
Value, and Restricted Stock and Retirement Units shall be deemed to have a value
equal to the Fair Market Value of the underlying Common Stock, in each case as
of the date of the Committee's determination to pay such Annual Performance
Award in such form or forms. If permitted by the Regulations and Code Section
162(m), the Committee may determine to pay a portion of an Annual Performance
Award in December of the year to which it relates. The Committee may not
increase the amount of an Annual Performance Award that would otherwise be
payable upon achievement of the Performance Target or Targets, but it may reduce
any Eligible Participant's Annual Performance Award in its discretion. Subject
to Section 14(c) above, no Annual Performance Award will be payable to any
Eligible Participant who is not an employee of the Company on the last day of
the year to which such Annual Performance Award relates.
(f) DEFERRAL OF ANNUAL PERFORMANCE AWARDS. If the Committee determines
that some portion of an Annual Performance Award to an Eligible Participant
shall be treated as a deferred Annual Performance Award and be payable in annual
or other periodic installments, the Eligible Participant will be notified in
writing when such deferred Annual Performance Award shall be paid and over what
period of time. A deferred Award in the form of shares of Common Stock shall be
subject to the provisions of Section 19(b) hereof. In the case of a deferred
Award in the form of cash, in each year the Committee shall have the discretion
to provide for the payment of an amount equivalent to interest, at such rate or
rates fixed by the Committee, on such deferred cash Annual Performance Award.
Any amounts provided for pursuant to the preceding sentence shall become payable
in such a manner, at such time or times, and subject to such
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conditions as the Committee shall in its sole discretion determine; provided,
however, that the total amount of such interest shall be deducted from the
maximum amount available for Awards under the formula described in Section 13 of
the Plan.
(g) CODE SECTION 162(m). It is the intent of the Company that Annual
Performance Awards satisfy, and this Section 27A be interpreted in a manner that
satisfies, the applicable requirements of Code Section 162(m) and the
Regulations so that the Company's tax deduction for Annual Performance Awards to
Affected Officers is not disallowed in whole or in part by operation of Code
Section 162(m). If any provision of this Plan or of any Annual Performance Award
would otherwise frustrate or conflict with such intent, that provision shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any irreconcilable conflict with such intent, such provision shall be deemed
void as applicable to Eligible Participants.
PART IIE PERFORMANCE OR OTHER AWARDS
27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other
forms of Awards such as, but not limited to, Performance Awards, if the
Committee deems it appropriate to do so in order to further the purposes of the
Plan.
(b) A "Performance Award" shall mean an Award which entitles the
Participant to receive Common Stock, Restricted Stock, Retirement Units, Options
under Part I of the Plan or other compensation (which may include cash), or any
combination thereof, in an amount which depends upon the financial performance
of the Company during a stated period of more than one year. Performance for
this purpose may be measured by the growth in book value of the Common Stock, an
increase in per share earnings of the Company, an increase in operating cash
flow, or any other indicators specified by the Committee. The Committee shall
also fix the period during which such performance is to be measured, the value
of a Performance Award for purposes of providing for the accrual pursuant to
Section 13 of the Plan and the form of payment to be made in respect of the
Performance Award.
PART IIF LONG-TERM PERFORMANCE AWARDS
28A. DETERMINATION OF LONG-TERM PERFORMANCE AWARDS
(a) GENERAL. Each year the Committee shall designate those Participants
who shall be eligible to receive Long-Term Performance Awards under this part of
the Plan.
(b) CERTAIN DEFINITIONS. For purposes of this Section 28A, the following
terms shall have the meanings specified:
"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 mean certain key business leaders and
senior management of the Company as determined in the discretion of the
Committee.
"Long-Term Performance Goal" means, for any Performance Period, the
business criteria selected by the Committee to measure the performance
during such Performance Period 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 Performance
Period;
(ii) net income of the Company for the Performance Period;
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(iii) return on assets of the Company for the Performance
Period (net income of the Company for the Performance Period divided
by average total assets for such Performance Period);
(iv) return on stockholder's equity of the Company for the
Performance Period (net income of the Company for the Performance
Period divided by average stockholder's equity for such Performance
Period);
(v) operating profit or operating margins of the Company or of
a division, subsidiary or group thereof for the Performance Period;
(vi) cash flow of the Company or of a division, subsidiary or
group thereof for the Performance Period;
(vii) increase in shareholder value as determined at the end
of the Performance Period;
(viii) revenue growth of the Company or of a division,
subsidiary or group thereof for the Performance Period; and
(ix) improved use of capital and/or assets of the Company or
of a division, subsidiary or group thereof for the Performance
Period.
"Long-Term Performance Goal Target" means, for any Long-Term
Performance Goal, the levels of performance during a Performance Period
under such Long-Term Performance Goal established by the Committee to
determine an Eligible Participant's maximum Long-Term Performance Award.
"Performance Period" means the period in excess of one year
commencing on January 1 of the year in which the Committee makes the
Long-Term Performance Award to an Eligible Participant.
(c) ELIGIBILITY. Long-Term Performance Awards are available each year to
Eligible 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).
(d) DETERMINATION OF LONG-TERM 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 designate the Eligible Participants who
will be entitled to earn a Long-Term Performance Award for such Performance
Period under this Plan, and will establish for each such Eligible Participant
for such Performance Period (i) one or more Long-Term Performance Goals, and
(ii) for each such Long-Term Performance Goal, a Long-Term Performance Goal
Target and the method by which achievement thereof will be measured. In the
event that more than one Long-Term Performance Goal is established for any
Eligible Participant, the Committee shall at the same time establish the
weighting of each such Long-Term Performance Goal in determining such Eligible
Participant's Long-Term Performance Award. Notwithstanding anything in this
Section 28A to the contrary, the Long-Term Performance Award payable to any
Eligible Participant in any Performance Period may not exceed $1.5 million.
(e) PAYMENT OF LONG TERM PERFORMANCE AWARDS. Subject to subsection (g)
below, Long-Term Performance Awards will be paid in cash as soon as practicable
after the end of the Performance Period to which it relates and after the
Committee certifies the extent to which the Long-Term Performance Goal Target or
Targets under the Long-Term 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 a Long-Term Performance Award in December of the
last year of the Performance Period to which it relates. The Committee may not
increase the amount of a Long-Term Performance Award that would otherwise be
payable upon the achievement of the Long-Term Performance Goal Target or
Targets, but it may reduce any Eligible Participant's Long-Term Performance
Award in its discretion. Subject to Sections 14(c) and 28A(g), no Long-Term
Performance Award will be payable to any Eligible Participant who is not an
employee of the Company on the last day of the Performance Period to which such
Long-Term Performance Award relates.
(f) TERMINATION OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR RETIREMENT.
In the event that an Eligible Participant terminates employment because of
death, Disability or Retirement, such Eligible Participant, or in the event of
death such person as determined in accordance with Section 30, shall be paid a
pro rata portion of such Eligible Participant's Long-Term Performance Award that
would otherwise be payable upon the achievement of the Long-Term Performance
Goal Target or Targets had the Participant continued
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employment until the end of the Performance Period. Such pro rata Long-Term
Performance Award shall not be paid until the end of the Performance Period to
which such Long-Term Award relates.
(g) DEFERRAL AND ALTERNATIVE FORM OF PAYMENT OF LONG-TERM PERFORMANCE
AWARDS. If the Committee determines that some portion of a Long-Term Performance
Award to an Eligible Participant shall be treated as a deferred Long-Term
Performance Award and payable in annual or other periodic installments, the
Eligible Participant will be notified in writing when such deferred Long-Term
Performance Award shall be paid and over what period of time. 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 any
deferred Long-Term Performance 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. Furthermore, the Committee may, in its sole
discretion, determine that such Long-Term Performance Award shall be paid in
shares of Common Stock or in the form of Retirement Units (subject to the
provisions of Sections 23-26 hereof). For this purpose, shares of Common Stock
shall be valued at Fair Market Value, 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 Long-Term
Performance Award in such form.
(h) CODE SECTION 162(m). It is the intent of the Company that Long-Term
Performance Awards satisfy, and this Section 28A be interpreted in a manner that
satisfies, the applicable requirement of Code Section 162(m) and the Regulations
so that the Company's tax deduction for Long-Term Performance Awards to Eligible
Participants is not disallowed in whole or in part by operation of Code Section
162(m). If any provision of this Plan or of any Long-Term 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 any Participant whose compensation is subject to Code
Section 162(m).
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, Long-Term 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
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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, Long-Term Performance Award,
Performance or Other Award shall thereafter be deemed to be the equivalent of
(and all Units thereafter credited to a Retirement Unit Account shall be
computed with reference to), and outstanding Options shall be exercisable for,
the shares of stock or other securities of the Company which pursuant to the
terms of such reclassification or merger are issued with respect to each share
of Common Stock. The Committee shall also make an appropriate equitable
adjustment to the provisions of Sections 6(b) and 13(a) to take account of such
event. All such adjustments shall be made by the Committee whose determination
shall be conclusive and binding upon all Participants and any person claiming
under or through any Participant.
30. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the foregoing,
rights and benefits hereunder shall pass by will or the laws of descent and
distribution in the following order: (i) to beneficiaries so designated by the
Participant; if none, then (ii) to a legal representative of the Participant; if
none, then (iii) to the persons entitled thereto as determined by a court of
competent jurisdiction. Awards so passing shall be made at such times and in
such manner as if the Participant were living.
31. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment or delivery
of any Common Stock to any Participant or beneficiary, any law or regulation of
any governmental authority having jurisdiction in the premises shall require the
Company to withhold, or to make any deduction for, any taxes or take any other
action in connection with the payment or delivery then to be made, such payment
or delivery shall be deferred until such withholding or deduction shall have
been provided for by the Participant or beneficiary, or other appropriate action
shall have been taken. 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
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adjust the provisions of Sections 13(a) and (b) hereof as expressly permitted by
Sections 13(b), 28 and 29 hereof, or otherwise to exercise any discretion to the
extent expressly authorized hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this Plan and
the Cash Plan. Payments made under any such separate arrangements shall not be
included in or considered a part of the maximum dollar amount available for
Awards under the Plan and Cash Plan, or number of shares available for Awards or
Options under the Plan, and shall not be charged against the dollar or share
amounts available for Awards under the Plan and Cash Plan or Options under the
Plan. In the discretion of the Committee, employees shall be eligible to
participate in such other arrangements, as well as the Plan and Cash Plan, in
the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right of
the Company to terminate a Participant's employment with the Company at any
time.
(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the Plan. Any
decision or action taken by the Company, the Board or the Committee arising out
of or in connection with the construction, administration, interpretation and
effect of the Plan shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.
(e) No member of the Board or of the Committee shall be liable for any act
or action, whether of commission or omission, taken by any other member or by
any officer, agent or employee, nor for anything done or omitted to be done by
such Director except in circumstances involving actual bad faith.
(f) Notwithstanding any other provision of this Plan, the Company shall
not be obligated to make any Award, issue any shares of Common Stock, or grant
any Option with respect thereto, unless it is advised by counsel of its
selection that it may do so without violation of the applicable Federal and
State laws pertaining to the issuance of securities, and may require any stock
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required to prevent any
such violation.
(g) It is the intent of the Company that 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.
17
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE CASH BONUS PLAN
AS AMENDED
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Cash
Bonus Plan (hereinafter called the "Plan"). The purpose of the Plan is to enable
the Company (as hereinafter defined) to retain and attract executives who
enhance its tradition and contribute to its success by their ability, ingenuity
and industry, and to enable them to participate in the long-term success and
growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 4 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Committee"--means the Committee referred to in Section 3 of the Plan.
If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by the non-employee members
of the Board.
(d) "Company"--means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor corporation), and,
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.
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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");
(c) Performance Awards ("Performance Awards") or other forms of
Awards as provided in Part IC of the Plan; and
(d) Long-Term Performance Awards as provided in Part ID of the Plan
("Long-Term Performance Awards").
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. Long-Term
Performance Awards will be based exclusively on the criteria set forth in Part
ID.
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
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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.
(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 and Long-Term Performance
Awards, which are to be made exclusively as set forth in Parts IB and ID,
respectively) 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 and Long-Term Performance Awards, which
are to be made exclusively as set forth in Parts IB and ID, respectively) 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 and
Long-Term Performance Awards, which are to be made exclusively as set forth in
Parts IB and ID, respectively) 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 and Long-Term 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 and Long-Term
Performance Awards shall be subject to the provisions of Parts IB and ID,
respectively; 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 14 hereof,
in such manner, at such time or times (which may be
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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.
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:
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"Affected Officers" shall mean those executive officers of the
Company whose compensation is required to be disclosed in the Company's
annual proxy statement relating to the election of directors.
"Code Section 162(m)" shall mean Section 162(m) of the Internal
Revenue Code of 1986, as amended (or any successor provision), and
"Regulations" shall mean the regulations promulgated thereunder, as from
time to time in effect.
"Eligible Participants" shall have the meaning set forth in
subsection (c) below.
"Performance Adjustment" means, for any year, a factor ranging from
0% to 200%, based upon the achievement of Performance Goal Targets
established by the Committee, that, when multiplied by an Eligible
Participant's Target Award, determines the amount of such Eligible
Participant's Annual Performance Award for such year.
"Performance Goal" means, for any year, the business criteria
selected by the Committee to measure the performance during such year of
the Company (or of a division, subsidiary or group thereof) from one or
more of the following:
(i) earnings per share of the Company for the year;
(ii) net income of the Company for the year;
(iii) return on assets of the Company for the year (net income
of the Company for the year divided by average total assets during
such year);
(iv) return on stockholder's equity of the Company for the
year (net income of the Company for the year divided by average
stockholder's equity during such year);
(v) operating profit or operating margins of the Company or of
a division, subsidiary or group thereof for the year;
(vi) cash flow of the Company or of a division, subsidiary or
group thereof for the year;
(vii) increase in shareholder value as determined at the end
of each year;
(viii) revenue growth of the Company or of a division,
subsidiary or group thereof for the year; and
(ix) improved use of capital and/or assets 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
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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 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
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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 ID LONG-TERM PERFORMANCE AWARDS
13. DETERMINATION OF LONG-TERM PERFORMANCE AWARDS
(a) GENERAL. Each year the Committee shall designate those Participants
who shall be eligible to receive Long-Term Performance Awards under this part of
the Plan.
(b) CERTAIN DEFINITIONS. For purposes of this Part ID, the following terms
shall have the meanings specified:
"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 mean certain key business leaders and
senior management of the Company as determined in the discretion of the
Committee.
"Long-Term Performance Goal" means, for any Performance Period, the
business criteria selected by the Committee to measure the performance
during such Performance Period 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 Performance
Period;
(ii) net income of the Company for the Performance Period;
(iii) return on assets of the Company for the Performance
Period (net income of the Company for the Performance Period divided
by average total assets for such Performance Period);
(iv) return on stockholder's equity of the Company for the
Performance Period (net income of the Company for the Performance
Period divided by average stockholder's equity for such Performance
Period);
(v) operating profit or operating margins of the Company or of
a division, subsidiary or group thereof for the Performance Period;
(vi) cash flow of the Company or of a division, subsidiary or
group thereof for the Performance Period;
(vii) increase in shareholder value as determined at the end
of the Performance Period;
(viii) revenue growth of the Company or of a division,
subsidiary or group thereof for the Performance Period; and
(ix) improved use of capital and/or assets of the Company or
of a division, subsidiary or group thereof for the Performance
Period.
"Long-Term Performance Goal Target" means, for any Long-Term
Performance Goal, the levels of performance during a Performance Period
under such Long-Term Performance Goal established by the Committee to
determine an Eligible Participant's maximum Long-Term Performance Award.
"Performance Period" means the period in excess of one year
commencing on January 1 of the year in which the Committee makes the
Long-Term Performance Award to an Eligible Participant.
(c) ELIGIBILITY. Long-Term Performance Awards are available each year to
Eligible 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).
(d) DETERMINATION OF LONG-TERM 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 designate
7
<PAGE>
the Eligible Participants who will be entitled to earn a Long-Term Performance
Award for such Performance Period under this Plan, and will establish for each
such Eligible Participant for such Performance Period (i) one or more Long-Term
Performance Goals, and (ii) for each such Long-Term Performance Goal, a
Long-Term Performance Goal Target and the method by which achievement thereof
will be measured. In the event that more than one Long-Term Performance Goal is
established for any Eligible Participant, the Committee shall at the same time
establish the weighting of each such Long-Term Performance Goal in determining
such Eligible Participant's Long-Term Performance Award. Notwithstanding
anything in this Section 13 to the contrary, the Long-Term Performance Award
payable to any Eligible Participant in any Performance Period may not exceed
$1.5 million.
(e) PAYMENT OF LONG-TERM PERFORMANCE AWARDS. Subject to subsection (f)
below, Long-Term Performance Awards will be paid in cash as soon as practicable
after the end of the Performance Period to which it relates and after the
Committee certifies the extent to which the Long-Term Performance Goal Target or
Targets under the Long-Term 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 a Long-Term Performance Award in December of the
last year of the Performance Period to which it relates. The Committee may not
increase the amount of a Long-Term Performance Award that would otherwise be
payable upon the achievement of the Long-Term Performance Goal Target or
Targets, but it may reduce any Eligible Participant's Long-Term Performance
Award in its discretion. Subject to Sections 6(c) and 13(g), no Long-Term
Performance Award will be payable to any Eligible Participant who is not an
employee of the Company on the last day of the Performance Period to which such
Long-Term Performance Award relates.
(f) DEFERRAL OF LONG-TERM PERFORMANCE AWARDS. If the Committee determines
that some portion of a Long-Term Performance Award to an Eligible Participant
shall be treated as a deferred Long-Term Performance Award and payable in annual
or other periodic installments, the Eligible Participant will be notified in
writing when such deferred Long-Term Performance Award shall be paid and over
what period of time. 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 any deferred Long-Term Performance 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.
(g) TERMINATION OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR RETIREMENT.
In the event that an Eligible Participant terminates employment because of
death, disability or retirement, such Eligible Participant, or in the event of
death such person as determined in accordance with Section 14, shall be paid a
pro rata portion of such Eligible Participant's Long-Term Performance Award that
would otherwise be payable upon the achievement of the Long-Term Performance
Goal Target or Targets had the Participant continued employment until the end of
the Performance Period. Such pro rata Long-Term Performance Award shall not be
paid until the end of the Performance Period to which such Long-Term Performance
Award relates.
(h) CODE SECTION 162(m). It is the intent of the Company that Long-Term
Performance Awards satisfy, and this Section 13 be interpreted in a manner that
satisfies, the applicable requirement of Code Section 162(m) and the Regulations
so that the Company's tax deduction for Long-Term Performance Awards to Eligible
Participants is not disallowed in whole or in part by operation of Code Section
162(m). If any provision of this Plan or of any Long-Term 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 any Participant whose compensation is subject to Code
Section 162(m).
8
<PAGE>
PART II GENERAL PROVISIONS
14. 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.
15. 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.
16. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the
Company.
17. 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.
9
<PAGE>
(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.
18. TRANSITION
Upon the effectiveness of this Plan, and the Stock Plan, such plans
replaced the Company's Executive Incentive Compensation Plan ("EICP"), except
that the EICP shall continue to govern options and awards of restricted stock
outstanding under the EICP. No further awards will be made under the EICP, and
all amounts accrued for Awards under the EICP and unawarded were carried forward
and made available for Awards under the Plan and Awards under the Stock Plan.
19. 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.
10
EXHIBIT 10.4
THE NEW YORK TIMES COMPANY
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
AS AMENDED
1. PURPOSE
The purpose of 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
500,000 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 4,000 shares of
Common Stock.
(c) No Option shall be transferable otherwise than by will or by the
laws of descent and distribution. Notwithstanding the foregoing sentence,
the Board may determine that Options granted to a Participant or a specified
group of Participants may be transferred by the Participant to one or more
members of the Participant's immediate family, to a partnership or limited
liability company whose only partners or members are members of the
Partcipant's immediate family, or to a trust established by the Participant
for the benefit of one or more members of the Participant's immediate
family. For this purpose, "immediate family" means the Participant's spouse,
parents, children (including adopted and step-children), grandchildren and
the spouses of such parents, children (including adopted and step-children)
and grandchildren. A transferee described in this subsection may not further
transfer an Option. An Option transferred pursuant to this subsection shall
remain subject to the provisions of the Plan and shall be subject to such
other rules as the Board shall determine.
(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) by 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
2
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.
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.
3
(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.
(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.
4
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.
5
THE NEW YORK TIMES COMPANY
Ratio of Earnings to Fixed Charges
(Dollars in thousands, except ratio)
(Unaudited)
Exhibit 12
<TABLE>
<CAPTION>
------------------------
For the Quarter Ended
------------------------
March 28, March 29,
1999 1998
------------------------
<S> <C> <C>
Earnings from continuing operations before
fixed charges
Income before income taxes and income from joint ventures $ 103,345 $ 110,846
Less net gain on disposition of asset -- (4,219)
Distributed earnings from less than fifty percent owned affiliates 1,475 2,840
------------------------
Adjusted pre-tax earnings from continuing operations 104,820 109,467
Fixed charges 14,910 14,005
------------------------
Earnings from continuing operations before fixed charges $ 119,730 $ 123,472
========================
Fixed charges
Interest expense $ 12,342 $ 11,625
Portion of rentals representative of interest factor 2,568 2,380
------------------------
Total fixed charges $ 14,910 $ 14,005
========================
Ratio of earnings to fixed charges 8.03 8.82
========================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Condensed Financial Statements as of and for the quarter ended
March 28, 1999 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-START> DEC-28-1998
<PERIOD-END> MAR-28-1999
<CASH> 39,810
<SECURITIES> 0
<RECEIVABLES> 360,204
<ALLOWANCES> 38,781
<INVENTORY> 36,825
<CURRENT-ASSETS> 517,188
<PP&E> 2,235,522
<DEPRECIATION> 929,658
<TOTAL-ASSETS> 3,464,119
<CURRENT-LIABILITIES> 710,471
<BONDS> 0
0
0
<COMMON> 18,760
<OTHER-SE> 1,405,225
<TOTAL-LIABILITY-AND-EQUITY> 3,464,119
<SALES> 0
<TOTAL-REVENUES> 739,059
<CGS> 0
<TOTAL-COSTS> 329,796
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,896
<INCOME-PRETAX> 107,548
<INCOME-TAX> 46,138
<INCOME-CONTINUING> 61,410
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,410
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
