<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
McClatchy Newspapers, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
MCCLATCHY NEWSPAPERS, INC.
2100 Q STREET
SACRAMENTO, CA 95816
MARCH 30, 1995
To our Stockholders:
You are invited to attend the annual meeting of stockholders to be held at
9:00 a.m. on Wednesday, May 17, 1995 in the California Room of the Holiday Inn,
300 J Street, Sacramento, CA 95814.
At the meeting, you will be asked to (i) elect directors for the coming
year and (ii) ratify the selection of the firm of Deloitte & Touche LLP as
independent auditors of the Company for the 1995 fiscal year.
In addition, the Board of Directors will report on the Company's affairs
and a discussion period will be provided for questions and comments.
Whether or not you plan to attend the meeting, it is important that your
shares be represented. Accordingly, we ask that you sign, date and mail the
enclosed proxy in the envelope provided at your earliest convenience. By doing
so, your right to attend or vote at the meeting will in no way be limited.
Sincerely,
[SIG]
ERWIN POTTS
President and Chief Executive Officer
[SIG]
JAMES B. MCCLATCHY
Chairman of the Board
<PAGE> 3
MCCLATCHY NEWSPAPERS, INC.
2100 Q STREET
SACRAMENTO, CA 95816
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
MCCLATCHY NEWSPAPERS, INC.
TO BE HELD MAY 17, 1995
To the Stockholders:
The annual meeting of stockholders of McClatchy Newspapers, Inc. (the
"Company") will be held in the California Room of the Holiday Inn, 300 J Street,
Sacramento, California 95814, on Wednesday, May 17, 1995, at 9:00 a.m. local
time, for the following purposes:
1. The election of Directors;
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for 1995; and
3. To transact such other business as may properly come before the
meeting and any postponement or adjournment thereof.
All of the above matters are more fully described in the accompanying Proxy
Statement. Stockholders of record on the books of the Company on March 20, 1995
are entitled to notice of and to vote at the meeting or any postponement or
adjournment thereof. A list of stockholders entitled to vote at the meeting will
be available for inspection at the Company's offices, 2100 Q Street, Sacramento,
California, at least 10 days before the meeting.
By Order of the Board of Directors
[SIG]
WILMA C. FLACH,
Secretary
March 30, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. THIS WILL NOT
LIMIT YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.
<PAGE> 4
MCCLATCHY NEWSPAPERS, INC.
2100 Q STREET
SACRAMENTO, CALIFORNIA 95816
----------------------------
PROXY STATEMENT
----------------------------
Your proxy in the form enclosed is solicited by the Board of Directors of
the Company for use in voting at the annual meeting of stockholders to be held
on Wednesday, May 17, 1995. This Proxy Statement and the accompanying form of
proxy are being mailed to stockholders on or about March 30, 1995.
The shares represented by the proxies received, properly dated and
executed, and not revoked will be voted at the meeting. A proxy may be revoked
at any time before it is exercised by delivering to the Company a written notice
of revocation or a duly executed proxy bearing a later date, or by attending the
meeting and voting in person. Subject to any such revocation, all shares
represented by properly executed proxies will be voted in accordance with the
specifications on the enclosed proxy. If no such specifications are made, the
Class A shares will be voted FOR the election of the three nominees for Class A
Directors listed in this Proxy Statement and FOR approval of proposal 2 set
forth in the Notice of Annual Meeting of Stockholders and described in this
Proxy Statement. Similarly, if no specifications are made, the Class B shares
will be voted FOR the election of the nine Class B Directors listed in this
Proxy Statement and FOR approval of proposal 2.
The Company will bear the expense of preparing, printing and mailing this
Proxy Statement and the proxies solicited hereby and will reimburse brokerage
firms and nominees for their reasonable expenses in forwarding solicitation
materials to beneficial owners of shares held of record by such brokerage firms
and nominees. In addition to the solicitation of proxies by mail, officers and
regular employees of the Company may communicate with stockholders either in
person or by telephone or telegraph for the purpose of soliciting such proxies;
no additional compensation will be paid for such solicitation.
OUTSTANDING SHARES AND VOTING RIGHTS
March 20, 1995 has been fixed as the record date for determining the
holders of Class A Common Stock and Class B Common Stock entitled to notice of
and to vote at the annual meeting. As of the close of business on such date, the
Company had outstanding 6,735,997 shares of Class A Common Stock, each of which
is entitled to one vote in the election of the three Class A Directors, no vote
in the election of the nine Class B Directors and one-tenth vote upon other
matters presented at the meeting, and 23,176,789 shares of Class B Common Stock,
each of which is entitled to no vote in the election of the three Class A
Directors, one vote in the election of the nine Class B Directors and one vote
upon other matters presented at the meeting. Election of the Class A and Class B
Directors will be by plurality of the votes cast by each respective class. The
affirmative vote of the holders of a majority of the aggregate voting power of
the shares of Class A Common Stock and Class B Common Stock present or
represented at the meeting is required for the approval of proposal 2. Thus,
abstentions have the same effect as a negative vote; broker non-votes are not
abstentions for this purpose.
ELECTION OF DIRECTORS
(PROPOSAL 1 ON PROXY)
The Restated Certificate of Incorporation of the Company provides that the
holders of Class A Common Stock have the exclusive right as a class to elect 25%
of the Company's directors, or the nearest larger whole number, but no vote with
respect to the election of the other directors. The holders of the Class B
Common Stock have the right to elect the remaining directors. At the meeting,
nine Class B Directors will be elected by the Class B Stockholders and three
Class A Directors will be elected by the Class A Stockholders.
Unless you request on your proxy card that voting of your proxy be withheld
for any one or more of the following nominees for director, proxies of Class A
Common Stock will be voted for the election of the three
1
<PAGE> 5
nominees for Class A Directors named below and proxies of Class B Common Stock
will be voted for the election of the nine nominees for Class B Directors named
below, all to serve until the next annual meeting of stockholders and until
their successors are elected or chosen. In the event any nominee is unable or
declines to serve as a director at the time of the meeting, the proxy will be
voted for any nominee who shall be designated by the present Board to fill such
vacancy.
NOMINEES FOR CLASS A DIRECTORS
Joan F. Lane, 66, has been a Director of the Company since March 1989. From
1982 to 1992, Mrs. Lane served as Special Assistant to the Dean of the School of
Humanities and Sciences of Stanford University. She is currently a Special
Assistant to the Board of Trustees of Stanford University. She has served on the
board of directors of The Brown Group, Inc. from 1985 to the present, as a
director of the James Irvine Foundation from 1990 to the present, and as a
trustee of the San Francisco Foundation from 1984 to November 1991. She was a
member of the board of trustees of Smith College from 1978 to 1985, and chairman
of that board from 1982 to 1985.
S. Donley Ritchey, 61, has been a Director of the Company since July 1985.
He retired from Lucky Stores in 1986, where he was chief executive officer and
chairman of its board of directors. Mr. Ritchey is a director of Pacific Telesis
Group, Spreckels Industries, Inc., Hughes Markets, Inc., De La Salle Institute
and the Rosenberg Foundation. He was elected to the city council of the town of
Danville, California in 1987 and has twice served as mayor of Danville.
Frederick R. Ruiz, 51, has been a Director of the Company since July 1993.
He is Chairman and chief executive officer of Ruiz Foods, Inc., a family-owned
frozen food manufacturer, having been a co-founder with his father of that
business in 1964. He has served on the board of directors of Gottschalks, Inc.
since 1992. In 1992, Mr. Ruiz' company received the U.S. Small Business
Association's National Entrepreneurial Success Award and was inducted into the
SBA Hall of Fame in Washington, D.C. Mr. Ruiz is a member of the board of the
College of the Sequoias Foundation; a member of the President's Advisory Board,
Business Advisory Council of the School of Business, and Board of Governor's
Foundation, and past chairman of the Valley Business Center, School of Business,
all at California State University, Fresno. He is a member of the board of
trustees of Valley Children's Hospital, Fresno, and serves on the boards of the
American Frozen Food Institute, California Hispanic Business College Fund, and
is a review board member for the U.S. Military Academy.
NOMINEES FOR CLASS B DIRECTORS
William K. Coblentz, 72, has been a Director of the Company since March
1979. He is a senior partner in the San Francisco law firm of Coblentz, Cahen,
McCabe & Breyer. He was a member of the board of directors of Pacific Telesis
Group from 1976 to 1992 and is a member of the boards of directors of the Koret
Foundation and The Central Valley Foundation. From 1964 through 1980 Mr.
Coblentz was a member of the University of California Board of Regents and was
its chairman for two years.
William L. Honeysett, 57, has been a Director of the Company since July
1993 and its Executive Vice President since February 1994. Prior to that date,
he had been Vice President, Operations since October 1991. Until October 1991 he
was publisher of The (Tacoma, Washington) News Tribune. Mr. Honeysett was a
regional president for Gannett Co., Inc. before becoming publisher in Tacoma. He
is a former director of the Pacific Northwest Newspaper Association.
Betty Lou Maloney(1), 74, has been a Director of the Company since July
1975 and Assistant Secretary of the Company since August 1980.
James B. McClatchy(1), 74, is Chairman of the Company's Board of Directors,
having been elected to that position in April 1989; he also held that position
from August 1980 through July 1987. He has served as the Company's Publisher
from July 1987 to the present. Mr. McClatchy was a Director of the Company from
1943 through 1965, was again elected a Director in March 1976 and has served in
that capacity since that time. He is a former owner and publisher of several
weekly newspapers in California and Nevada. He is a
2
<PAGE> 6
board member and past president of the Inter-American Press Association, board
chairman and director of the French American International School, and a
director and president of The Central Valley Foundation.
William Ellery McClatchy(1), 70, has been a Director of the Company since
March 1976 and Assistant Secretary since August 1980.
Erwin Potts, 62, has been the President of the Company since 1987, its
chief executive officer since 1989 and its chief operating officer since 1985.
He was the Company's Executive Vice President from 1985 to 1987, and a Vice
President from 1979 to 1985. In addition, Mr. Potts has been a Director of the
Company since 1976. He has served on the board of directors of The News and
Observer Publishing Company since 1990. He is a member of the advisory board of
the John S. Knight Fellowship at Stanford University, and from 1989 to 1992 was
a member of the advisory board of the University of North Carolina School of
Journalism. He is a member of the Newspaper Association of America board of
governors, a director of the Sacramento Regional Foundation, a member of the
California Business Roundtable, and a former director of the California
Newspaper Publishers Association.
William M. Roth, 78, has been a Director of the Company since September
1980. He was chief financial officer for Matson Navigation Company from 1952 to
1961, chairman of the board of Pacific Life Assurance Company from 1960 to 1963,
and U. S. Ambassador and Special Trade Representative from 1963 to 1969. He was
a member of the University of California Board of Regents for 16 years. Mr. Roth
is President of Roth Properties, a family controlled investment management
company.
James P. Smith, 57, is Vice President, Finance and Treasurer of the
Company. He has been a Director of the Company since March 1982. He was named
Vice President, Finance in December 1985 and Treasurer in July 1980. Prior to
that time he had served as Assistant Treasurer. Mr. Smith served as Secretary
from July 1980 through January 1987. Mr. Smith has been the Company's chief
financial officer since 1980.
H. Roger Tatarian, 78, has been a Director of the Company since March 1982.
He was employed by United Press International from 1938 through 1972, and was
its vice president and editor-in-chief from 1963 through 1972. From 1972 until
1987 he was a professor of journalism and since 1987 he has been professor
emeritus of journalism at California State University, Fresno. He was a trustee,
New York Correspondents Fund, 1969 through 1972; member, Board of Governors,
Overseas Press Club, 1968 through 1969; member, Western Region Advisory Board,
American Press Institute, 1981 through 1984; and Consultant to the U. S.
National Commission for UNESCO, 1978 through 1982.
OTHER EXECUTIVE OFFICERS
Peter M. CaJacob, 51, has been Vice President, Human Resources of the
Company since December 1993. He joined the Company as its Director of Human
Resources in February 1990. From 1989 to February 1990 he was director of human
resources for the GenCorp Automotive Group and prior to that time held
management positions in human resources with Aerojet General Corporation and
Whirlpool Corporation. Mr. CaJacob served on the board of directors of the
Industrial Relations Bureau of the California Newspaper Publishers Association
in 1990 and 1991.
Gregory E. Favre, 59, has been Vice President, News of the Company since
January 1990 and Executive Editor of The Sacramento Bee since 1984. Prior to
that he was managing editor of the Chicago Sun Times and managing editor of the
Chicago Daily News. Mr. Favre is the President and a director of the American
Society of Newspaper Editors and a board member of the Inter-American Press
Association. He was named California Newspaper Executive of the Year by the
California Newspaper Publishers Association in 1993. He served as President of
the California Society of Newspaper Editors during the 1988-1989 term.
Gary B. Pruitt, 37, has been Vice President, Operations and Technology of
the Company since May 1994. Prior to that time he was Publisher of The Fresno
Bee from October 1991 to May 1994. He served the
---------------
(1) James B. McClatchy and William Ellery McClatchy are brothers. Betty Lou
Maloney is their cousin by marriage.
3
<PAGE> 7
Company as Secretary and General Counsel from 1987 to 1991 and Counsel from 1984
to 1987. Mr. Pruitt also held the position of Assistant to the Vice President of
Operations from March 1991 to October 1991, and Assistant to the President of
The Sacramento Bee from April 1990 to March 1991.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings and one organizational meeting
during 1994. The Board of Directors of the Company has the following standing
committees: Compensation Committee, Audit Committee, Pension and Savings Plans
Committee, and Committee on the Board. The Board has no nominating committee.
Mr. Coblentz, Chairperson, Mrs. Lane, Mr. Ritchey and Mr. Tatarian are the
members of the Compensation Committee. The Compensation Committee adopts and
administers the following compensation plans for executive officers and certain
other employees of the Company: the Management By Objective Plan, the Executive
Performance Plan, the Employee Stock Purchase Plan, the 1987 Stock Option Plan
and the 1994 Stock Option Plan. The Compensation Committee held four meetings in
1994.
Mr. Ritchey, Chairperson, Mr. Coblentz, Mrs. Lane and Mr. Ruiz are the
members of the Audit Committee. The Audit Committee recommends selection of the
independent auditors for the Company to the Board, reviews the scope and results
of the annual audit, approves the services to be performed by the independent
auditors, and reviews the independence of the auditors, the performance and fees
of the independent auditors, the effectiveness and adequacy of the systems of
financial reporting and internal accounting controls, and the scope and results
of internal auditing procedures. The Audit Committee held three meetings during
1994.
Mrs. Lane, Chairperson, Mr. Coblentz, Mr. Ritchey, Mr. Roth, Mr. Ruiz and
Mr. Tatarian are the members of the Committee on the Board. The Committee on the
Board develops criteria for Board membership and advises the Board with respect
to such other matters relating to directors as may be deemed appropriate. The
Committee on the Board held two meetings in 1994.
Mr. Ritchey, Chairperson, Mr. Coblentz, Mrs. Lane and Mr. Smith are the
members of the Pension and Savings Plans Committee. The Pension and Savings
Plans Committee reviews the Company's pension funding policy and objectives,
monitors the investment of the assets in the Plans, and recommends appropriate
related action to the Board of Directors. The Pension and Savings Plans
Committee held one meeting in 1994.
All Board and Committee members attended more than 75% of the meetings of
the Board and/or Committees on which he or she served.
STOCK OWNERSHIP
CLASS B COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Company's Class B Common Stock as of March 20, 1995 by (i)
certain of the Company's Directors and nominees for Director, (ii) all executive
officers and Directors of the Company as a group, and (iii) each person known by
the Company to own beneficially more than 5% of the outstanding shares of its
Class B Common Stock.
4
<PAGE> 8
<TABLE>
<CAPTION>
CERTAIN DIRECTORS, DIRECTORS NUMBER OF SHARES
AND EXECUTIVE OFFICERS AS A GROUP, OF CLASS B
AND 5% STOCKHOLDERS(2) COMMON STOCK PERCENT
------------------------------------------------------------------ ---------------- -------
<S> <C> <C>
James B. McClatchy................................................ 13,112,198(3) 56.6%
William K. Coblentz............................................... 11,215,240(4) 48.4%
William Ellery McClatchy.......................................... 11,078,865(5) 47.8%
Erwin Potts....................................................... 10,000,000(6) 43.1%
William M. Roth................................................... 10,000,000(6) 43.1%
Molly Maloney Evangelisti......................................... 3,050,000 13.0%
Brown McClatchy Maloney........................................... 2,984,600(7) 12.9%
Betty Lou Maloney................................................. 1,480,000 6.4%
All executive officers and directors as a group (15 persons)...... 14,728,573 63.5%
</TABLE>
---------------
(2) All addresses: c/o McClatchy Newspapers, Inc., P.O. Box 15779, Sacramento,
CA 95852-0779.
(3) Includes: (i) 10,000,000 shares held under five separate trusts each with
2,000,000 shares and different income beneficiaries. James B. McClatchy,
William Ellery McClatchy, William K. Coblentz, William M. Roth and Erwin
Potts share joint voting and investment control with respect to these
trusts. James B. McClatchy disclaims beneficial ownership of all but the
2,000,000 shares in one such trust as to which he has a present income
interest, (ii) 1,078,865 shares over which James B. McClatchy, William
Ellery McClatchy and William K. Coblentz share joint voting and investment
control as co-executors under the will of Charles K. McClatchy, deceased.
James B. McClatchy disclaims beneficial ownership of these shares.
(4) Includes (i) 10,000,000 shares held under five separate trusts each with
2,000,000 shares and different income beneficiaries. James B. McClatchy,
William Ellery McClatchy, William K. Coblentz, William M. Roth and Erwin
Potts share joint voting and investment control with respect to these
trusts. William K. Coblentz disclaims beneficial ownership of these shares.
(ii) 1,078,865 shares over which James B. McClatchy, William Ellery
McClatchy and William K. Coblentz share joint voting and investment control
as co-executors under the will of Charles K. McClatchy, deceased. William K.
Coblentz disclaims beneficial ownership of these shares. (iii) 136,375
shares with regard to which William K. Coblentz acts as co-trustee under one
trust agreement with voting and investment control shared with other
trustees. William K. Coblentz and his co-trustees disclaim beneficial
ownership of these shares.
(5) Includes: (i) 10,000,000 shares held under five separate trusts each with
2,000,000 shares and different income beneficiaries. James B. McClatchy,
William Ellery McClatchy, William K. Coblentz, William M. Roth and Erwin
Potts share joint voting and investment control with respect to these
trusts. William Ellery McClatchy disclaims beneficial ownership of all but
the 2,000,000 shares in one such trust as to which he has a present income
interest. (ii) 1,078,865 shares over which James B. McClatchy, William
Ellery McClatchy and William K. Coblentz share joint voting and investment
control as co-executors under the will of Charles K. McClatchy, deceased.
William Ellery McClatchy disclaims beneficial ownership of these shares.
(6) These shares are held under five separate trusts each with 2,000,000 shares
and different income beneficiaries. James B. McClatchy, William Ellery
McClatchy, William K. Coblentz, William M. Roth and Erwin Potts share joint
voting and investment control with respect to these trusts. Both Erwin Potts
and William M. Roth disclaim beneficial ownership of these shares.
(7) Includes 86,920 shares held in four trusts for the benefit of each of his
four children, one containing 24,230 shares, a second containing 22,830
shares, a third containing 20,930 shares, and a fourth containing 18,930
shares. Brown McClatchy Maloney has sole voting and investment control with
respect to these trusts. Brown McClatchy Maloney disclaims beneficial
ownership of these shares.
5
<PAGE> 9
CLASS A COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Company's Class A Common Stock as of March 20, 1995 by (i) each
of the Company's Directors and nominees for Director, (ii) each of the Company's
executive officers, (iii) all executive officers and Directors of the Company as
a group, and (iv) each person known by the Company to own beneficially more than
5% of the outstanding shares of its Class A Common Stock. In addition, holders
are deemed to beneficially own shares of Class A Common Stock subject to stock
options which are currently exercisable or exercisable within sixty days of the
record date. A holder of Class B Common Stock is deemed to be the beneficial
owner of the same number of shares of Class A Common Stock under Rule 13d-3
under the Securities Exchange Act of 1934, as amended, on the basis that he or
she has the right, subject to the terms of the Stockholders Agreement discussed
later in this Proxy Statement, to acquire beneficial ownership of Class A Common
Stock by converting Class B Common Stock into Class A Common Stock. In
calculating the percentage of outstanding shares of Class A Common Stock
beneficially owned by each stockholder, the shares of Class A Common Stock which
each stockholder is deemed to own because of such stockholder's ownership of
Class B Common Stock are considered outstanding only with respect to such
stockholder. Consequently, the column which presents the percentage of deemed
beneficial ownership of Class A Common Stock does not reflect the beneficial
ownership of Class A Common Stock which is actually outstanding as of March 20,
1995.
<TABLE>
<CAPTION>
DEEMED BENEFICIAL
OWNERSHIP
BENEFICIAL OWNERSHIP OF OF CLASS A COMMON STOCK
OUTSTANDING SHARES ------------------------
DIRECTORS, EXECUTIVE OF CLASS A NUMBER OF
OFFICERS, DIRECTORS AND COMMON STOCK SHARES OF
EXECUTIVE OFFICERS AS A GROUP, (INCLUDING SHARES CLASS A
AND 5% STOCKHOLDERS(8) HELD BY SPOUSE) COMMON STOCK PERCENT
----------------------------------------- ----------------------- ------------ -------
<S> <C> <C> <C>
James B. McClatchy....................... 10,000 13,122,198 66.1%
William K. Coblentz...................... 8,250(9) 11,223,490 62.5%
William Ellery McClatchy................. 5,350(9) 11,084,215 62.2%
Erwin Potts.............................. 112,560(10) 10,112,560 60.1%
William M. Roth.......................... 10,450(9) 10,010,450 60.0%
Molly Maloney Evangelisti................ 9,842 3,059,842 31.3%
Brown McClatchy Maloney.................. -- 2,984,600 30.7%
Betty Lou Maloney........................ 5,250(9) 1,485,250 18.1%
Sue Maloney Stiles....................... 18,700 1,050,566 13.5%
Adair Rideout McClatchy.................. -- 386,375 5.4%
Kevin Sorensen McClatchy................. -- 366,375 5.2%
James P. Smith........................... 45,727(11) 45,727 (12)
Gary B. Pruitt........................... 39,957(13) 39,957 (12)
William L. Honeysett..................... 34,396(14) 34,396 (12)
Gregory E. Favre......................... 22,875(15) 22,875 (12)
Peter M. CaJacob......................... 12,959(16) 12,959 (12)
S. Donley Ritchey........................ 7,250(9) 7,250 (12)
Joan F. Lane............................. 6,250(9) 6,250 (12)
H. Roger Tatarian........................ 6,250(9) 6,250 (12)
Frederick R. Ruiz........................ 1,375(17) 1,375 (12)
Wellington Management Company............ 757,310 757,310 11.2%
Vanguard/PrimeCap Fund, Inc. ............ 390,000 390,000 5.8%
All executive officers and directors as a
group
(15 persons as Beneficial
Owners)(18)............................ 328,899 15,057,472 69.3%
</TABLE>
---------------
6
<PAGE> 10
(8) All addresses are c/o McClatchy Newspapers, Inc., P. O. Box 15779,
Sacramento, CA 95852-0779, except as follows:
<TABLE>
<S> <C>
Wellington Management Company Vanguard/PrimeCap Fund, Inc.
75 State Street P. O. Box 2600
Boston, MA 02109 Valley Forge, PA 19482
</TABLE>
(9) Includes 5,250 shares subject to stock options which are currently
exercisable.
(10) Includes 98,150 shares subject to stock options which are currently
exercisable.
(11) Includes 38,150 shares subject to stock options which are currently
exercisable.
(12) Percentage is less than one percent.
(13) Includes 35,500 shares subject to stock options which are currently
exercisable.
(14) Includes 21,850 shares subject to stock options which are currently
exercisable.
(15) These shares are subject to stock options which are currently exercisable.
(16) Includes 12,700 shares subject to stock options which are currently
exercisable.
(17) Includes 375 shares subject to stock options which are currently
exercisable.
(18) Includes 266,350 shares subject to stock options which are currently
exercisable.
AGREEMENT AMONG CLASS B STOCKHOLDERS
The owners of all outstanding shares of Class B Common Stock of the Company
are parties to an agreement which will terminate September 17, 2047 (unless
terminated earlier in accordance with its terms), in which they have agreed, for
themselves, their successors and assigns, that subject to certain exceptions no
one of them may make any transfer of any shares of Class B Common Stock (unless
such shares are, as generally permitted by the agreement, first converted into
Class A Common Stock) except to one or more "Permitted Transferees." For
purposes of the agreement, a Permitted Transferee is any current holder of Class
B Common Stock of the Company; any lineal descendant of Charles K. McClatchy
(1858 -- 1936); or a trust for the exclusive benefit of, or in which all of the
remainder beneficial interests are owned by, one or more of such lineal
descendants.
In the event that a party to the agreement attempts to transfer any shares
of Class B Common Stock or any interest therein in violation of the agreement,
or upon the happening of certain other events enumerated in the agreement as
"Option Events," the remaining parties will acquire options to purchase the
Class B Common Stock of the party attempting to transfer the same or otherwise
affected by the particular Option Event. Such options to purchase will entitle
each remaining party to purchase that number of shares of Class B Common Stock
which is proportionate to that party's respective holdings of Class B Common
Stock prior to such purchase. If all such shares are not purchased by the
remaining parties, the Company will have the option to purchase the remaining
shares. In general, any shares not so purchased pursuant to this procedure may
thereafter be converted into shares of Class A Common Stock and then transferred
freely (unless following such conversion the outstanding shares of Class B
Common Stock would constitute less than 25% of the total number of all
outstanding shares of Common Stock of the Company). The intent of the foregoing
agreement is to preserve family control of the Company. Such agreement may be
terminated by the vote of the holders of 80% of the outstanding shares of Class
B Common Stock who are subject to such agreement.
7
<PAGE> 11
COMPENSATION
DIRECTORS' COMPENSATION
Nonemployee Directors, including for this purpose Betty Lou Maloney and
William Ellery McClatchy, are currently compensated at the rate of $26,000 per
year plus $1,100 per day for meetings of the Board of Directors and $750 per day
for in-person attendance at Committee meetings; attendance at Committee meetings
by teleconference is compensated at the rate of $500 for the first meeting and
$250 for the second meeting on any day. Compensation for attendance at meetings
is subject to a limitation of two meetings in any one day, whether Committee or
Board and Committee and whether by teleconference or in-person attendance.
S. Donley Ritchey and H. Roger Tatarian received additional compensation
for consulting services in connection with special long-range planning projects
completed in 1994. Mr. Ritchey received $11,600 and Mr. Tatarian received $2,800
for such consulting services. In addition, Mr. Tatarian receives $625 per month
for services rendered as an editorial consultant. He was also paid $8,250 in
1994 for columns which were published in The Fresno Bee.
Pursuant to the 1990 Directors' Stock Option Plan, each nonemployee
Director receives on the date of each annual meeting of stockholders at which he
or she is elected an automatic grant of an option for 1,500 shares of Class A
Common Stock. The stock options are granted at fair market value, have a
ten-year term and vest equally over four years commencing on March 1 following
the date of award.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee is composed entirely of Directors who are not
employees of the Company. The Compensation Committee sets the compensation of
the Chief Executive Officer and Chairman of the Board and otherwise reviews and
administers the Company's compensation program as it applies to other executive
officers.
The principal elements of the Company's executive compensation program are
(1) annual base salary, (2) annual cash bonus based on assessment of success in
meeting performance objectives on an individual, unit and/or Company-wide basis,
(3) cash compensation under the Executive Performance Plan based upon growth in
earnings per share of the Company's stock and year-over-year improvement in
pretax income, and (4) stock option awards under the stock option plans
providing equity compensation, the value of which will ultimately be determined
by growth over time in the market price of the Company's stock. Together these
elements constitute an integrated compensation program which focuses on both
short-term and long-term performance utilizing a combination of cash and equity
incentives. The program is designed to reward and create incentives for
excellence in individual achievement as well as Company performance.
In evaluating Company performance, the Committee considers improvement in
revenue and earnings, growth in circulation, product excellence and market
acceptance, sound strategic planning, development of new products and services,
and community involvement and good corporate citizenship. In evaluating
individual performance of key executives, the Committee also reviews leadership,
individual achievement and employee morale.
The Committee believes the Company's established compensation program is
vital to the achievement of Company objectives, in that it will:
- Enable the Company to attract and retain key executives essential to the
long-term success of the Company;
- Motivate and reward senior executives for development and achievement of
sound strategic business objectives; and
8
<PAGE> 12
- Provide opportunity to selected executives to acquire a proprietary
interest in the success of the Company through stock ownership under the
Company's stock option plans and employee stock purchase plan.
The Committee sets the salary and annual cash bonus of the Chairman of the
Board and the Chief Executive Officer and, after review, acting on the
recommendation of the CEO, approves the annual cash compensation of other named
executive officers. The Committee also administers the Company's employee stock
option plans and the Executive Performance Plan, and in so doing, designates all
persons who will receive awards and sets the amount, form and other conditions
of the award.
In 1994, the Company submitted for a vote of the stockholders its 1994
Stock Option Plan to maximize the tax deductibility of such awards upon exercise
under Section 162(m) of the Internal Revenue Code, as amended. Although the
Company has not qualified under Section 162(m) salary and cash bonus
compensation paid to its executive officers, historically such compensation has
not exceeded more than $1 million in any tax year for any of the Company's five
highest paid executive officers. In the future, the Company may determine to
qualify such compensation, to the extent it exceeds or is expected to exceed the
$1 million threshold. However, the Company may also determine to pay
compensation to the executive officers that may not be deductible.
COMPENSATION OF EXECUTIVE OFFICERS, 1994
Salary and incentive levels of the Company's executive officers for fiscal
year 1994 were reviewed by the Compensation Committee in late 1993. Bonuses were
subsequently fixed and paid in the same manner based on a year-end assessment of
results versus predetermined objectives.
Salaries. In determining salaries, the Committee reviews publicly
available information on compensation at each company included in the Peer Group
for total stockholder return, with particular emphasis on salary levels on Peer
Group companies with market capitalization comparable to the Company. The
Committee also considers internal pay equity factors, general economic
conditions, financial performance of the Company (growth in revenues, ability to
control operating costs, improvement in operating cash flow and operating
income, and improvement in net income), and individual responsibility,
experience and job performance. No specific weight is assigned to any particular
factor.
Based on the foregoing, the Committee granted 1994 salary increases to
executive officers ranging from 0% to 6.3% over prior year salary. The Committee
considers these increases to be consistent with salary and wage increases
granted throughout the Company, and believes that base salaries for the
Company's executive officers are at or below the median base salaries for the
Peer Group.
Bonus Awards. It is the goal of the Committee to establish bonus
opportunities that are meaningful in relation to the total compensation of a
participant. The bonus opportunity is also related to the participant's level of
responsibility. In general, in evaluating performance, the higher the level of
responsibility, the greater portion of the executive's total compensation is at
risk. Except as to the CEO, awards under the MBO annual bonus plan were based on
full or partial achievement of preestablished performance goals. The performance
objectives applicable to Messrs. Honeysett, Smith, Pruitt and Favre are
achievement of (i) Company-wide financial performance levels against annual
budgets, (ii) predetermined functional operating goals, and (iii) product and
management improvement objectives. Therefore the Compensation Committee in
determining 1994 bonuses for Messrs. Honeysett, Smith and Pruitt considered
operating income and net income level, as well as other financial and operating
performance factors, i.e., earnings per share, circulation growth, capital
expense control, diversity training, marketing, newsprint purchasing, management
development, technological innovation, long-range planning, cash management,
control of receivables, investor relations, litigation management, and internal
audit procedures. Accordingly, in determining Mr. Favre's 1994 bonus, the
Committee considered improvement in the quality of news content consistent with
achievement of the Company's financial objectives.
Each performance objective was weighted to reflect its relative performance
to specific short-term and long-term financial, strategic and/or management
practices goals applicable to the individual. To determine
9
<PAGE> 13
the bonus to which a participant is entitled, a certain number of points up to
100 were awarded to each executive officer based upon his performance during the
year. A certain percentage of total points possible, typically not exceeding
10%, is reserved for subjective evaluation. Points are applied as a percentage,
to an amount equal to a predetermined percent, varying from 25 percent to 50
percent (depending on the particular participant) of his or her base salary
during the year.
Stock Option Awards. Stock option awards are usually granted each year to
selected management personnel, including all executive officers permitted by the
terms of the employee stock option plans to participate. However, no stock
options were awarded in 1993, with the result that the 1994 awards (which would
under prior practice have been made in late 1993) were not made until January
1994. Returning to past practice, stock option awards for 1995 were made in late
1994. Thus awards for both 1994 and 1995 were granted during calendar 1994.
In fixing stock option grants, the Committee through subjective evaluation
processes determines the award for the CEO, and as to the four remaining named
executive officers participating in the stock option plans, considers the
recommendation of the CEO. Elements given weight by the Committee in considering
the number of options to be awarded are individual responsibility and
accountability, anticipated contributions, and long-term value of the
participant to the Company. The process employed by the Committee in determining
individual awards under the Company's employee stock option plans, including
those of executive officers, relates primarily to levels of responsibility but
also includes subjective factors not subject to predetermined specific criteria.
Executive Performance Incentive Awards. Awards for 1994 under the
Company's Executive Performance Plan ("EPP") were made in late 1993. These
awards are comprised of EPS Units and Performance Units. An EPS Unit represents
a contingent right to receive cash in an amount equal to the earnings (as
defined in the Plan) attributable to one share of the Company's stock. An
Improvement Unit represents a contingent right to receive cash in an amount
equal to $1 times the number of percentage points not in excess of 25 by which
pretax earnings for the year of grant exceed the pretax earnings for the prior
year. The award vests over a period of four years, commencing March 1 of the
year following the year for which the grant is made. In 1994, a total of
$332,815 was awarded to the Company's executive officers under this Plan.
While EPP compensation is tied to the Company's stock and financial
performance, executives selected as participants and the number of EPS Units and
Improvement Units awarded is set after review, acting on the recommendation of
the CEO. EPP awards contribute to keeping participating executives sharply
focused upon maintenance of strong stockholder value even in challenging
economic environments. The selection of participants and determination of award
units relates primarily to levels of responsibility, but also includes
subjective factors not subject to specific criteria.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER, 1994
The 1994 salary of Erwin Potts, the Company's Chief Executive Officer, was
$503,000, a 3.7% increase over his prior year salary, reflecting the achievement
in 1993 of the Company's goals of maintaining profitability, notwithstanding a
continued weakened economy in the Company's principal markets, and continued
restraint of costs.
A maximum bonus award level was specified in Mr. Potts' employment
contract(19) with the Company but is otherwise unspecified and at the discretion
of the Committee. In determining Mr. Potts' 1994 bonus award the Committee
subjectively assessed overall accomplishments, including the Company's financial
performance. His bonus for 1994, awarded in January 1995, was not based on
specific predetermined financial targets but was based upon a year-end review of
the Company's overall results, taking into account the level of his
responsibility and accountability, and his individual performance as the
Company's Chief Executive Officer. The $300,000 bonus awarded to Mr. Potts by
the Compensation Committee reflected the Company's financial and operational
successes in 1994 under his leadership and direction. The Company had record
---------------
(19) Mr. Potts' employment contract with the Company expired on October 16,
1994.
10
<PAGE> 14
earnings of $46.6 million in 1994, despite lingering effects of the
California recession and the beginning impact of sharply higher prices of
newsprint, the Company's second largest expense item. Company earnings increased
46.5% over 1993, with a resulting increase in earnings per share from $1.10 in
1993 to $1.58 in 1994. Revenues were up 5% while a strict cost control effort
held operating expenses in check in the face of further increases in newsprint
prices during the second half of the year. These successes resulted in a 3.8%
increase in cash flow, for a record cash flow of $94.2 million. The Company's
financial results produced an accrual to Mr. Potts under the fixed formula of
the EPP of cash compensation for 1994 of $90,251(20). Average paid daily
circulation of the Company's twelve daily newspapers grew in 1994 by 1.3%
contrary to a national trend of declining circulation. The Company's management
team was strengthened by the naming of an executive vice president and the
addition of the new positions of vice president, operations and technology and
vice president, human resources. Under the direction of the vice president,
operations and technology, the Company has made clear its commitment to
technological change, particularly in the dissemination of customized
information by electronic means. Another significant accomplishment during the
year was the Company's participation in May in a successful offering of stock
which netted the Company approximately $20 million for general corporate
purposes and expanded its liquidity in the market.
The Committee, in setting Mr. Potts' salary and bonus, and in fixing the
number of stock option awards granted him under the Company's employee stock
option plans, and EPS and Improvement Units awarded him under the EPP, is unable
to assign relative weight to the indicated factors. The process is primarily
subjective in nature. Each committee member may well accord a different weight
to the various factors considered.
The tables which follow, and accompanying narrative, reflect the decisions
covered by the above discussion.
WILLIAM K. COBLENTZ, Chairman
JOAN F. LANE
S. DONLEY RITCHEY
H. ROGER TATARIAN
---------------
(20) These sums are not immediately available to Mr. Potts, but vest at the rate
of 25% annually over a four- year period commencing March 1, 1995.
11
<PAGE> 15
EXECUTIVE COMPENSATION
The following tables set forth the annual compensation paid or accrued by
the Company to or on behalf of the Chief Executive Officer and each of the four
other most highly compensated executive officers of McClatchy Newspapers, Inc.
for the fiscal years December 31, 1992, 1993 and 1994. No executive officer
serves pursuant to an employment contract.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(21) OPTIONS(#) ($)(22)
--------------------------------- ---- --------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Potts, Erwin..................... 1994 503,000 300,000 90,251 44,600 13,629
President & CEO 1993 485,000 220,000 48,843 0 15,792
1992 485,000 200,000 101,532 25,000 16,587
Honeysett, William L............. 1994 335,000 117,244 66,926 26,600 7,669
Executive Vice President 1993 315,016 87,511 38,253 0 8,418
1992 300,000 82,524 70,810 12,000 10,271
Smith, James P................... 1994 263,500 60,601 49,451 19,600 7,669
Vice President, Finance & CFO 1993 253,500 49,433 28,082 0 8,718
1992 245,000 47,673 58,420 10,000 10,283
Pruitt, Gary B.(23).............. 1994 228,497 37,558 177,888(24) 22,000 6,406
Vice President, Operations
& Technology
Favre, Gregory E................. 1994 215,000 50,315 41,891 19,000 8,235
Vice President, News 1993 205,010 47,040 23,822 0 8,714
1992 195,000 42,829 49,360 9,000 10,172
</TABLE>
---------------
(21) Represents earnings accrued under the Company's Executive Performance Plan.
These earnings are vested and paid out in four equal annual installments of
25% each commencing March 1 following the year for which the award is made;
no portion of the amount earned in 1994 was paid to the participants in
1994.
(22) This sum includes (i) Company contributions to the Company's 401(k) Plan on
behalf of each of the named executive officers to match pre-tax elective
deferral contributions (included under Salary) made by each to such Plan,
and (ii) premium payments to continue life insurance coverage under the
Group Executive Life Insurance Plan at a level not otherwise available
under the Company's standard life insurance coverage. The amount of the
contribution to the Company's 401(k) Plan for each named executive officer
for 1994 was $6,000.
(23) Mr. Pruitt became an executive officer on May 18, 1994.
(24) This amount also represents certain perquisites, including $126,089 paid to
Mr. Pruitt as reimbursement of relocation expenses.
12
<PAGE> 16
STOCK OPTION AWARDS
The following table contains information concerning stock option awards to
the named executive officers during the year ended December 31, 1994. The two
columns at the right show the hypothetical gains or "option spreads" that would
exist for the respective options based on assumed rates of annual compound stock
price appreciation of 5% and 10% from the date of grant over the full option
term. However, there is no assurance that any particular level of potential
realizable value will actually be earned.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS(25) ASSUMED ANNUAL RATE
------------------------------------------------------------------------------------- OF STOCK PRICE
(B) (C) APPRECIATION FOR
SECURITIES % OF TOTAL (D) OPTION TERM(26)
UNDERLYING OPTIONS EXERCISE -------------------
OPTIONS GRANTED TO OR BASE (E)
(A) GRANTED EMPLOYEES PRICE EXPIRATION (F) (G)
NAME (#) IN FISCAL YEAR ($/SH) DATE 5% 10%
-------------------------- ---------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Potts, Erwin.............. (a) 19,600 8.2% $ 22.625 1-12-2004 $278,883 $706,745
(b) 25,000 10.5% $ 21.625 12-12-2004 380,718 926,460
Honeysett, William L. .... (a) 11,600 4.9% $ 22.625 1-12-2004 165,053 418,277
(b) 15,000 6.3% $ 21.625 12-12-2004 228,431 555,876
Smith, James P. .......... (a) 9,600 4.0% $ 22.625 1-12-2004 136,596 346,161
(b) 10,000 4.2% $ 21.625 12-12-2004 152,287 370,584
Pruitt, Gary B. .......... (a) 9,000 3.8% $ 22.625 1-12-2004 128,058 324,526
(b) 12,000 5.0% $ 21.625 12-12-2004 182,744 444,701
Favre, Gregory E. ........ (a) 9,000 3.8% $ 22.625 1-12-2004 128,058 324,526
(b) 10,000 4.2% $ 21.625 12-12-2004 152,287 370,584
</TABLE>
---------------
(25) Annual stock option grants consist of stock options granted based upon
assessment by the Compensation Committee of the individual's past
performance, level of responsibility and accountability, anticipated future
contributions and long-term value to the Company. Stock options are granted
at fair market value, have a ten-year term and vest equally over four years
commencing on March 1 following the date of award.
(26) In accordance with SEC rules, columns (f) and (g) show gains that might
exist for the respective options over a period of ten years. This valuation
model is hypothetical; if the stock price does not increase above the
exercise price, compensation to the named executives will be zero. Since
the ten-year option terms of the 1994 and 1995 option awards extend beyond
the normal retirement date of certain of the named executive officers and
by the terms of the Company's stock option plans under which options have
been granted cannot then be exercised, the table below illustrates the
option values for these executive officers at their normal retirement
dates:
<TABLE>
<CAPTION>
OPTIONS NORMAL
GRANTED RETIREMENT
NAME (#) DATE 5% 10%
----------------------------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Potts, Erwin................. (a) 19,600 5-1-1997 $ 78,077 $169,464
(b) 25,000 5-1-1997 95,185 206,600
Honeysett, William L. ....... (a) 11,600 9-1-2002 140,322 354,510
(b) 15,000 9-1-2002 151,173 371,633
Smith, James P. ............. (a) 9,600 2-1-2003 123,132 315,018
(b) 10,000 2-1-2003 107,443 267,412
Favre, Gregory E. ........... (a) 9,000 5-1-2000 74,524 175,803
(b) 10,000 5-1-2000 65,937 151,549
</TABLE>
13
<PAGE> 17
In addition to the foregoing table, the following supplemental information
should be considered, using the same ten-year option term applicable to the
respective option grant dates, as follows:
<TABLE>
<CAPTION>
5% 10%
------------- -------------
<S> <C> <C>
Per share value, base price plus appreciation:
(a) January 12, 1994 award........................ $36.85 $58.68
(b) December 12, 1994 award....................... 35.22 56.09
Shareholder value of $1,000 invested................... $1,629 $2,594
McClatchy Newspapers, Inc. Shareholder Value........... $1.1 billion $1.7 billion
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table shows the number of shares of Class A Common Stock
represented by outstanding stock options held by each of the five most highly
compensated executive officers as of December 31, 1994 and the value of such
options based on the closing price of the Company's Class A Common Stock on
Friday, December 30, 1994. The exercise price of shares represented by certain
of these options was higher than the closing price of the stock at year end with
the result that those options were "out of the money" on that date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT OPTIONS AT
FY-END(#) FY-END ($)
------------ -------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
------------------------------------- --------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Potts, Erwin......................... 0 0 76,375/ 1,642,063/
55,225 1,187,338
Honeysett, William L. ............... 1,500 18,375 13,800/ 296,700/
28,600 614,900
Smith, James P. ..................... 2,000 16,250 29,250/ 628,875/
23,350 502,025
Pruitt, Gary B. ..................... 0 0 27,000/ 580,500/
22,500 483,750
Favre, Gregory E. ................... 12,875 139,438 14,500/ 311,750/
21,625 464,938
</TABLE>
14
<PAGE> 18
FIVE-YEAR PERFORMANCE GRAPH
The SEC requires that the Company include in this proxy statement a
line-graph presentation comparing cumulative, five-year stockholder returns on
an indexed basis with (i) a broad equity market index and (ii) an industry index
or peer group. Set forth below is a line graph comparing the percentage change
in the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the S&P Midcap 400 Index and a Peer Group Index
for a period of five fiscal years ended December 31, 1994.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG MCCLATCHY NEWSPAPERS, INC.,
S&P MIDCAP 400 INDEX, AND NEWSPAPER INDUSTRY INDEX
Measurement Period
(Fiscal Year Covered)
McClatchy S&P Peer
Newspapers, Inc. Midcap 400 Group
1989 $100 $100 $100
1990 86 95 79
1991 85 142 93
1992 95 159 106
1993 120 182 123
1994 111 175 117
$100 invested on 12/31/89 in stock or index--including reinvestment of
dividends. Fiscal year ending December 31.
The Peer Group Index is comprised of the following publicly-traded
newspaper publishing companies, and is weighted according to market
capitalization as of the beginning of each year: (1) A. H. Belo Corporation, (2)
Central Newspapers, Inc. (3) Dow Jones & Company, (4) E. W. Scripps Company (5)
Gannett Co., Inc., (6) Harte-Hanks Communications, Inc., (7) Knight-Ridder,
Inc., (8) Lee Enterprises, Inc., (9) McClatchy Newspapers, Inc., (10) Media
General, Inc., (11) The New York Times Company, (12) Pulitzer Publishing
Company, (13) Times Mirror Company, (14) Tribune Company and (15) Washington
Post Company. Harte-Hanks Communications, Inc. became a publicly-traded company
in 1994 and as a result was added to the Peer Group Index. The addition of
Harte-Hanks Communications, Inc. did not change the graph for the Peer Group
Index.
15
<PAGE> 19
PENSION PLANS
The following table shows the estimated annual pension benefits payable to
the named executive officers at normal retirement age (age 65) under the
Company's qualified defined benefit pension plan, as well as its nonqualified
supplemental pension plan that provides benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on qualified
plan benefits, based on remuneration that is covered under the plans and years
of service with the Company:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
---------------------------------- ------ ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
200,000.......................... 15,000 30,000 45,000 60,000 75,000 90,000 105,000
350,000.......................... 26,250 52,500 78,750 105,000 131,250 157,500 183,750
500,000.......................... 37,500 75,000 112,500 150,000 187,500 225,000 262,500
650,000.......................... 48,750 97,500 146,250 195,000 243,750 292,500 341,250
800,000.......................... 60,000 120,000 180,000 240,000 300,000 360,000 420,000
950,000.......................... 71,250 142,500 213,750 285,000 356,250 427,500 498,750
1,100,000......................... 82,500 165,000 247,500 330,000 412,500 495,000 577,500
</TABLE>
Benefits under the qualified defined pension plan are computed using basic
compensation exclusive of overtime and other compensation; benefits under the
supplemental plan are calculated using basic salary plus any annual cash bonus
awarded. The benefits shown in the foregoing table are not subject to any
deduction for social security or other offset amounts. For single persons,
benefits are computed as straight life annuity amounts. Married persons may
chose between straight life or joint and survivor annuity amounts. Covered
compensation for the named executive officers would consist of the salary and
bonus set forth in the Summary Compensation Table above, and for the named
executive officers as of the end of the last calendar year is: Erwin Potts,
$803,000; William L. Honeysett, $452,244; James P. Smith, $324,101; Gary B.
Pruitt, $266,055; Gregory E. Favre, $265,315.
The estimated credited years of service at December 31, 1994, for each
named executive is as follows: Erwin Potts, 18.67; William L. Honeysett, 8.42;
James P. Smith 20.00; Gary B. Pruitt, 9.67; Gregory E. Favre, 10.17.
RATIFICATION OF INDEPENDENT AUDITORS
(PROPOSAL 2 ON PROXY)
The Board of Directors has appointed Deloitte & Touche LLP as independent
auditors for the current fiscal year ending December 31, 1995. Representatives
of Deloitte & Touche LLP are expected to be present at the annual meeting with
the opportunity to make a statement if they desire to do so and to be available
to respond to appropriate questions.
An affirmative vote of a majority of the aggregate voting power of the
shares of Class A and Class B Common Stock present or represented at the meeting
is required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF DELOITTE &
TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
OTHER MATTERS
The Board of Directors does not know of any business to be presented at the
annual meeting other than the matters set forth above, but if other matters
properly come before the meeting it is the intention of the persons named in the
proxies to vote in accordance with their best judgment on such matters.
Pursuant to SEC regulations, the Company is required to identify the names
of persons who failed to file or filed late a report required under Section 16
of the Securities Exchange Act of 1934. Generally, the
16
<PAGE> 20
reporting regulations under Section 16 require directors, executive officers and
greater than 10% stockholders to report changes in ownership of Company
securities. Sue Maloney Stiles, a holder of more than 10% of the Company's Class
A Common Stock, filed a Form 4, Statement of Changes in Beneficial Ownership,
reporting sales of stock, fifteen days late.
Proposals of stockholders intended to be presented at the Company's 1996
annual meeting of stockholders must be received at the corporate Secretary's
office, 2100 Q Street, Sacramento, California 95816, no later than December 1,
1995, to be considered for inclusion in the proxy statement and form of proxy
for that meeting.
By Order of the Board of Directors
[SIG]
Wilma C. Flach, Secretary
March 30, 1995
17
<PAGE> 21
(LOGO)
Printed on Recycled Paper
<PAGE> 22
McCLATCHY NEWSPAPERS, INC.
CLASS A COMMON PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 1995.
The undersigned hereby appoints James B. McClatchy, Erwin Potts and Wilma C.
Flach, or any of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
herein, all the shares of the Class A Common Stock of McClatchy Newspapers,
Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on May 17, 1995, or any postponement or adjournment
thereof.
This proxy when properly executed will be voted as directed by the undersigned
stockholder. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
----------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK |
COMMENT/ADDRESS CHANGE ON REVERSE SIDE |
|
| (CONTINUED AND TO BE DATED AND SIGNED,
| ON OTHER SIDE)
|
|
|
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 23
<TABLE>
<CAPTION>
/X/ PLEASE MARK YOUR VOTES AS THIS
--------------
CLASS A COMMON
Proposal 1: To elect directors to serve until the next Annual Meeting of Stockholders and until their
successors are elected or chosen.
<S> <C> <C> <C>
FOR all nominees WITHHOLD AUTHORITY Nominees: Joan F. Lane Proposal 2: Ratification of the appointment of
listed below (except (to vote for all S. Donley Ritchey Deloitte & Touche LLP as the
as marked to the nominees listed Frederick R. Ruiz Company's independent auditors
contrary at right) at right for 1995.
/ / / /
FOR AGAINST ABSTAIN
(INSTRUCTION: To withhold authority to vote for any individual / / / / / /
nominee write the nominee's name below.)
-------------------------------------------------------------- I PLAN TO ATTEND MEETING / /
COMMENTS/ADDRESS CHANGE / /
Please mark the box if you have
written comments/address change on
the reverse side.
Please sign exactly as name appears on your stock certificate.
When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If
a partnership, please sign in partnership name by authorized person.
Dated: , 1995
---------------------------------------------------
-------------------------------------------------------------------
Signature
-------------------------------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
MCCLATCHY NEWSPAPERS, INC.
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THIS SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
</TABLE>
<PAGE> 24
McCLATCHY NEWSPAPERS, INC.
CLASS B COMMON PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 1995.
The undersigned hereby appoints James B. McClatchy, Erwin Potts and Wilma C.
Flach, or any of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
herein, all the shares of the Class B Common Stock of McClatchy Newspapers,
Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on May 17, 1995, or any postponement or adjournment
thereof.
This proxy when properly executed will be voted as directed by the undersigned
stockholder. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
----------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK |
COMMENT/ADDRESS CHANGE ON REVERSE SIDE |
|
| (CONTINUED AND TO BE DATED AND SIGNED,
| ON OTHER SIDE)
|
|
|
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 25
<TABLE>
<CAPTION>
/X/ PLEASE MARK YOUR VOTES AS THIS
--------------
CLASS B COMMON
Proposal 1: To elect directors to serve until the next Annual Meeting of Stockholders and until their
successors are elected or chosen.
<S> <C> <C> <C>
FOR all nominees WITHHOLD AUTHORITY Nominees: William K. Coblentz Proposal 2: Ratification of the appointment of
listed below (except (to vote for all William L. Honeysett Deloitte & Touche LLP as the
as marked to the nominees listed Betty Lou Maloney Company's independent auditors
contrary at right) at right James B. McClatchy for 1995.
/ / / / William Ellery McClatchy
Erwin Potts FOR AGAINST ABSTAIN
(INSTRUCTION: To withhold authority to vote for any William M. Roth / / / / / /
individual nominee write the nominee's name below.) James P. Smith
H. Roger Tatarian
--------------------------------------------------- I PLAN TO ATTEND MEETING / /
COMMENTS/ADDRESS CHANGE / /
Please mark the box if you have
written comments/address change on
the reverse side.
Please sign exactly as name appears on your stock certificate.
When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If
a partnership, please sign in partnership name by authorized person.
Dated: , 1995
---------------------------------------------------
-------------------------------------------------------------------
Signature
-------------------------------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
MCCLATCHY NEWSPAPERS, INC.
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THIS SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
</TABLE>
