10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 2001 OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from                      to

Commission File Number: 1-9824

The McClatchy Company (Exact name of registrant as specified in its charter)
Delaware (State of Incorporation)	52-2080478 (IRS Employer Identification Number)

2100 "Q" Street, Sacramento, CA. 95816
(Address of principal executive offices)

(916) 321-1846
(Registrant's telephone number)

Indicate by check mark whether the registrant has (1) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.           Yes  X                No     

The number of shares of each class of common stock outstanding as of August 10, 2001:

Class A Common Stock	18,366,826
Class B Common Stock	27,159,955

THE McCLATCHY COMPANY INDEX TO FORM 10-Q
Part I - FINANCIAL INFORMATION			Page
	Item 1 - Financial Statements:
			3  5
		Consolidated Balance Sheet - July 1, 2001 and December 31, 2000 (unaudited)
		Consolidated Statement of Income for the Three Months and Six Months Ended July 1, 2001 and June 25, 2000 (unaudited)
		Consolidated Statement of Cash Flows for the Six Months Ended July 1, 2001 and June 25, 2000 (unaudited)	6  7
		Consolidated Statement of Stockholders' Equity for the Period from    December 31, 2000 to July 1, 2001 (unaudited)
		Notes to Consolidated Financial Statements (unaudited)	8
	Item 2 - Management's Discussion and Analysis of Results of Operations and               Financial Condition		9 14
	Item 3 - Quantitative and Qualitative Disclosures about Market Risk
Part II - OTHER INFORMATION			15

PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements

THE McCLATCHY COMPANY
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands)
	July 1,	December 31,
	2001	2000
ASSETS
CURRENT ASSETS
Cash	$           5,804	$ 10,654
Trade receivables (less allowances of $3,971 in 2001 and $4,219 in 2000)	174,073	184,314
Other receivables	1,110	2,252
Newsprint, ink and other inventories	17,451	16,355
Deferred income taxes	15,892	15,815
Other current assets	7,372	6,148
	221,702	235,538
PROPERTY, PLANT AND EQUIPMENT
Buildings and improvements	219,905	211,864
Equipment	503,396	493,392
	723,301	705,256
Less accumulated depreciation	(372,802)	(351,135)
	350,499	354,121
Land	52,843	52,400
Construction in progress	17,714	25,165
	421,056	431,686
INTANGIBLES - NET	1,367,770	1,395,265
OTHER ASSETS	98,337	103,169
TOTAL ASSETS	$        2,108,865	$ 2,165,658

See notes to consolidated financial statements.

THE McCLATCHY COMPANY
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands, except share amounts)
	July 1,	December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY	2001	2000
CURRENT LIABILITIES
Current portion of bank debt	$             21,643	$ 898
Accounts payable	112,701	100,313
Accrued compensation	53,451	58,327
Income taxes	13,218	6,183
Unearned revenue	37,463	35,201
Carrier deposits	3,053	2,961
Other accrued liabilities	18,888	23,452
	260,417	227,335
LONG-TERM BANK DEBT	673,357	778,102
OTHER LONG-TERM OBLIGATIONS	78,177	73,571
DEFERRED INCOME TAXES	120,700	127,799
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock $.01 par value:
Class A - authorized
100,000,000 shares, issued
18,311,759 in 2001 and 18,044,571 in 2000	183	180
Class B - authorized
60,000,000 shares, issued
27,159,955 in 2001 and 27,199,955 in 2000	272	272
Additional paid-in capital	292,052	284,998
Retained earnings	687,189	673,401
Accumulated other comprehensive loss	(3,482)	-
	976,214	958,851
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$        2,108,865	$ 2,165,658

See notes to consolidated financial statements

THE McCLATCHY COMPANY
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
	Three Months Ended		Six Months Ended
	July 1, 2001	June 25, 2000	July 1, 2001	June 25, 2000
REVENUES - NET
Newspapers:
Advertising	$      222,608	$ 233,575	$     433,836	$      446,889
Circulation	42,689	43,284	85,234	87,176
Other	6,979	6,616	13,762	13,205
	272,276	283,475	532,832	547,270
Non-newspapers	3,514	2,883	6,656	5,673
	275,790	286,358	539,488	552,943
OPERATING EXPENSES
Compensation	106,755	104,822	215,577	211,502
Newsprint and supplements	43,319	40,570	85,595	77,904
Depreciation and amortization	27,408	26,884	54,639	53,637
Other operating expenses	49,895	49,927	100,973	98,742
	227,377	222,203	456,784	441,785
OPERATING INCOME	48,413	64,155	82,704	111,158
NON-OPERATING (EXPENSES) INCOME
Interest expense	(11,616)	(16,456)	(25,130)	(33,114)
Partnership income (loss)	270	(85)	270	(560)
Loss on internet investments	(10,556)	-	(10,556)	-
Other - net	240	384	516	1,059
INCOME BEFORE INCOME TAX PROVISION	26,751	47,998	47,804	78,543
INCOME TAX PROVISION	14,408	23,168	24,934	37,913
NET INCOME	$        12,343	$ 24,830	$      22,870	$ 40,630
NET INCOME PER COMMON SHARE:
Basic	$            0.27	$ 0.55	$          0.50	$ 0.90
Diluted	$            0.27	$ 0.55	$          0.50	$ 0.90
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES:
Basic	45,443	45,057	45,379	45,030
Diluted	45,570	45,157	45,522	45,175

See notes to consolidated financial statements

THE McCLATCHY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In thousands)
	Six Months Ended
	July 1, 2001	June 25, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$            22,870	$ 40,630
Reconciliation to net cash provided:
Depreciation and amortization	55,878	55,374
Changes in certain assets and liabilities - net	17,359	(1,698)
Loss on internet investments	10,556	-
Other	(4,558)	(2,584)
Net cash provided by operating activities	102,105	91,722
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(17,578)	(17,445)
Other - net	(2,274)	(2,664)
Net cash used by investing activities	(19,852)	(20,109)
CASH FLOW FROM FINANCING ACTIVITIES:
Repayment of long-term debt	(84,000)	(61,000)
Payment of cash dividends	(9,082)	(9,013)
Other - principally stock issuances in employee plans	5,979	3,451
Net cash used by financing activities	(87,103)	(66,562)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(4,850)	5,051
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	10,654	1,241
CASH AND CASH EQUIVALENTS, END OF PERIOD	$             5,804	$ 6,292
OTHER CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes (net of refunds)	$ 21,676	$ 30,243
Interest paid (net of capitalized interest)	$ 28,765	$ 33,345
See notes to consolidated financial statements

THE McCLATCHY COMPANY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
(In thousands, except share and per share amounts)
					Accumulated
			Additional		Other
	Par Value		Paid-In	Retained	Comprehensive
	Class A	Class B	Capital	Earnings	Earnings	Total
BALANCES, DECEMBER 31, 2000	$         180	$      272	$ 284,998	$  673,401		$958,851
Net Income (six months)				22,870		22,870
Fair value of SWAPS Jan 1, 2001					$              (377)
Change in fair value of SWAPS					(3,105)
Other comprehensive loss					(3,482)	(3,482)
Total comprehensive loss						19,388
Dividends paid ($.20) share				(9,082)		(9,082)
Conversion of 40,000 Class B shares
To Class A
Issuance of 227,188 Class A shares
Under stock plans	3		5,976			5,979
Tax benefit from stock plans			1,078			1,078
	$        183	$      272	$  292,052	$  687,189	$           (3,482)	$976,214

THE McCLATCHY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The McClatchy Company (the Company) and its subsidiaries are engaged primarily in the publication of newspapers located in Minnesota, California, Washington State, Alaska and North and South Carolina.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated. In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position, results of operations, and cash flows for the interim periods presented. All adjustments are normal recurring entries, except for a $1.4 million environmental reserve and a $10.6 million writedown of certain Internet investments. Such financial statements are not necessarily indicative of the results to be expected for the full year.

NOTE 2. LONG-TERM BANK DEBT AND DERIVATIVE INSTRUMENTS

The Company's Credit Agreement includes term loans consisting of Tranche A of $404,000,000 bearing interest at the London Interbank Offered Rate (LIBOR) plus 62.5 basis points, payable in increasing quarterly installments through March 21, 2005, and Tranche B of $181,000,000 bearing interest at LIBOR plus 150 basis points and payable in semi-annual installments through September 19, 2007. A revolving credit line of up to $200,000,000 bears interest at LIBOR plus 62.5 basis points and is payable by March 19, 2005. Interest rates applicable to debt drawn down at July 1, 2001, ranged from 4.4% to 6.2%. The debt is unsecured and is pre-payable without penalty.

The terms of the Credit Agreement include certain operating and financial restrictions, such as limits on the Company's ability to incur additional debt, create liens, sell assets, engage in mergers, make investments and pay dividends.

The Company is a party to three interest rate swap agreements, expiring in 2002 to 2003, with aggregate notional amounts totaling $300,000,000. The effect of these agreements is to fix the LIBOR interest rate exposure at approximately 5.9% on that portion of the Company's term loans.

The Company has outstanding letters of credit totaling $8,956,000 securing estimated obligations stemming from workers' compensation claims and other contingent claims.

Long-term debt consisted of (in thousands):

	July 1,	December 31,
	2001	2001
Credit Agreement:
Term loans	$ 585,000	$ 669,000
Revolving credit line	110,000	110,000
Total indebtedness	695,000	779,000
Less current portion	(21,643)	(898)
Long-term indebtedness	$ 673,357	$ 778,102

The Company does not have, nor does it intend to enter into, derivative contracts for trading purposes. The Company has not attempted to hedge fluctuations in the normal purchases of goods and services used to conduct its business operations. Currently there is no intent to hedge or enter into contracts with embedded derivatives for the purchase of newsprint, ink and other inventories, leases of equipment and facilities, or its business insurance contracts.

The Company's three interest rate swap agreements are designated as cash flow hedges and are specifically designed to hedge the variability in the expected cash flows that are attributable to interest rate fluctuations on $200,000,000 of its variable rate bank debt through June 2002, and $100,000,000 through June 2003. The three swap instruments, as well as the related debt, are reset to three-month LIBOR rates quarterly. The swaps were entered into to match the significant terms of the underlying debt to provide highly effective hedges.

No gain or loss has been recorded in net income as a result of ineffectiveness of these hedges. A loss, net of taxes, of $3,482,000 is recorded in comprehensive income related to these hedges - see the Company's Consolidated Statement of Stockholders' Equity

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Recent Events and Trends

The Company's newsprint vendors increased the prices of newsprint in April, and again in September 2000. In addition, a price increase was announced to take effect March 2001. A portion of that increase was implemented but was rolled back on July 1. Still, prices in the second quarter were higher than the Company paid in the same quarter a year earlier. Higher newsprint prices resulted in greater costs to the Company in the second quarter of 2001, but price comparisons are expected to ease in the second half of the year.

During 1998, the FASB issued SFAS 133 (Accounting for Derivative Instruments and Hedging Activities), which requires that all derivatives be carried at fair value on the balance sheet. This statement became effective in the Company's fiscal year 2001. The adoption of this statement did not materially impact the Company's financial results. See note 2 to the consolidated financial statements.

In June 2001, the Financial Accounting Standards Board approved for issuance Statement of Financial Accounting Standard (SFAS) No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 addresses the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination, and SFAS No. 142 addresses the initial recognition and measurement of intangible assets acquired outside of a business combination whether acquired individually or with a group of other assets. SFAS No. 142 also addresses the recognition and measurement of goodwill and other intangible assets subsequent to their acquisition. SFAS No. 141 is applicable to business combinations beginning July 1, 2001. The Company is required to adopt SFAS No. 142 no later than its fiscal year beginning January 1, 2002. The Company does not expect the adoption of SFAS No. 141 to have a material effect on its financial position, results of operations and ca sh flows. The Company expects that the adoption of SFAS No. 142 will reduce the amortization expense anticipated to be recognized by the Company in fiscal year 2002 by approximately $32 million.

Second Quarter 2001 Compared To 2000

The Company reported net income of $12.3 million or 27 cents per share, down 50.9% from the 2000 quarterly earnings of $24.8 million or 55 cents per share. Earnings were affected by weakening advertising, particularly in the employment category, and higher newsprint prices. Earnings were also reduced by a pre-tax charge of $10.6 million to write down certain Internet investments and $1.4 million to reserve for an environmental clean-up. Excluding these items, earnings were $18.3 million or 40 cents per share.

Revenues

Revenues in the second quarter of 2001 were $275.8 million, down 3.7% from 2000, with advertising revenues down 4.7% to $222.6 million and circulation revenues down 1.4% to $42.7 million.

The decrease in advertising revenue is primarily attributable to a 27.6 % decline in classified employment advertising. Advertising revenues would have increased 1.5% if classified employment were excluded from advertising revenue in the second quarter 2001 and 2000.

Operating Revenues by Region (in thousands):

	2001	2000	% Change
Minnesota newspaper	$         92,610	$ 100,300	(7.7)%
California newspapers	91,974	92,475	(0.5)
Carolinas newspapers	46,294	49,381	(6.3)
Northwest newspapers	41,398	41,319	0.2
Non-newspaper operations	3,514	2,883	21.9
	$       275,790	$ 286,358	(3.7)%

Minnesota - The Star Tribune generated 33.6% of second quarter revenues. Total revenues declined 7.7%. Advertising revenues declined 9.4%, primarily due to a 22.9% decline in classified advertising and a 10.0% decline in national advertising. These declines were partially offset by a 3.9% increase in retail advertising. Within the classified category, employment advertising declined 39.0%.

California - California, contributed 33.3% of second quarter revenues. Total revenues were down 0.5%. Advertising revenues declined 0.4% which was attributable to a 9.8% decrease in classified employment advertising. This decrease was partially offset by a 0.4% increase in retail advertising and a 4.6% increase in national advertising.

Carolinas - The Carolinas, which includes four daily and ten community newspapers, generated 16.8% of second quarter revenues. Total revenues declined 6.3%. Total advertising revenue decreased by 7.1%, which was attributable to a 15.8% decline in national advertising and an 18.3% decline in classified advertising at the daily newspapers. These declines were partially offset by a 5.0% increase in retail advertising at the dailies.

The Northwest - The Northwest newspapers generated 15.0% of second quarter revenues. Total revenues increased 0.2%. Advertising revenues increased 0.3% which was attributable to a 3.5% increase in retail advertising. This increase was offset by a 4.0% decline in national advertising and a 4.5% decline in classified advertising.

Non-Newspaper Operations - Revenues were up $631,000, primarily attributable to growth in sales at The Newspaper Network, the Company's national sales and marketing company, and Nando Media, the Company's national on-line publishing operation.

Operating Expenses:

Total operating expenses were up 2.3% due largely to higher newsprint costs and a $1.4 million environmental reserve. Newsprint expense was up 6.7% with prices up 14.0% while consumption declined by 6.7% for the quarter. All other operating expenses increased by 1.5%, with a 1.8% increase in compensation costs and a 1.1% increase in all other operating expenses. The increase in other operating expenses reflects higher energy costs, higher bad debt expense, and the environmental reserve.

Non-Operating (Expenses) Income - Net:

Interest expense was $11.6 million for the second quarter 2001. This is a 29.4% decrease from the second quarter 2000 and reflects lower debt balances and falling interest rates. Non-operating expenses included a pre-tax charge of $10.6 million to write down certain Internet investments. The Company recorded $270,000 as its share of The Ponderay Newsprint Mill's income versus an $85,000 loss in 2000.

Income Taxes:

The Company's effective income tax rate is 53.9% versus 48.3% in 2000. The higher rate in 2001 primarily reflects lower income before tax relative to a set amount of non-deductible expenses.

SIX-MONTH COMPARISONS

Earnings in the first half of 2001 were $22.9 million or 50 cents per share, down 44.4% from 2000 earnings of $40.6 million, or 90 cents per share. Generally, the same factors that drove the second quarter results also affected the six-month period, with notable differences discussed below.

Revenues:

Total revenues were $539.5 million in the first six months of 2001, down 2.4% from the first half of 2000. Advertising revenues declined 2.9% to $433.8 million and circulation revenues declined 2.2% to $85.2 million. In general, the Company experienced weaker revenue performance in the second quarter of 2001 due primarily to weakening in the employment category.

Operating Revenues By Region (in thousands):

	2001	2000	% Change
Minnesota newspaper	$           185,122	$ 197,635	(6.3)%
California newspapers	177,938	178,189	(0.1)
Carolinas newspapers	90,281	93,100	(3.0)
Northwest newspapers	79,491	78,346	1.5
Non-newspaper operations	6,656	5,673	17.3
	$          539,488	$ 552,943	(2.4)%

Minnesota and Carolina Newspapers - The (Minneapolis, MN) Star Tribune and Carolina newspapers generated 34.3% and 16.7%, respectively, of total revenues. Advertising revenues declined by 7.4% and 4.6% at the Star Tribune and Carolina daily newspapers. These declines were primarily attributable to an $18.0 million decrease in employment advertising at these two newspapers.

California and Northwest Newspapers - The Company's California newspapers and Northwest newspapers generated 33.0% and 14.7%, respectively, of total revenues. Advertising revenues increased by 0.3% and 2.6% respectively in the California and Northwest regions. Retail and national gains at these newspapers offset lower classified advertising.

Non-Newspaper Operations - Revenues increased 17.3%, with revenues at TNN up 21.2%. This increase was offset by a 5.9% decline of total revenues at Nando Media.

Operating Expenses:

Total operating expenses were up 3.4% largely due to higher newsprint prices and a $1.4 million environmental reserve. Newsprint expenses increased by 10.7% with prices up 15.3%, while consumption was down 4.0%. All other operating expenses increased by 2.1%, with a 1.9% increase in compensation and a 2.3% increase in all other operating expenses, which was partially attributable to the environmental reserve.

Non-Operating (Expense) Income - Net:

Interest expense decreased 24.1% to $25.1 million compared to $33.1 million in 2000. Lower debt balances and falling interest rates contributed to the decline. The Company recorded $270,000 as its share of The Ponderay Newsprint Mill's income versus a $560,000 loss in 2000.

Income Taxes:

The Company's effective income tax rate was 52.2% as discussed in the second quarter comparisons above.

Liquidity & Capital Resources

Operations generated $102.1 million in cash through June 2001. Cash was used primarily to repay debt, pay for capital expenditures and pay dividends. Capital expenditures are projected to be between $35 million and $37 million in 2001.

See footnote 2 to the consolidated financial statements for a description of the Company's $695 million of bank debt and derivative instruments. The Company has outstanding letters of credit totaling $9.0 million securing estimated obligations stemming from workers' compensation claims, and other contingent claims. The Company had $81.0 million of available credit under its Credit Agreement at July 1, 2001.

While the Company expects that most of its free cash flow generated from operations in 2001 and in the foreseeable future will be used to repay debt, management is of the opinion that operating cash flow and its present and future credit lines as described above are adequate to meet the liquidity needs of the Company, including currently planned capital expenditures and other investments.

Forward Looking Information

Management has made forward-looking statements in this document that are subject to risks and uncertainties. Forward-looking statements include the information concerning possible or assumed future results of operations of McClatchy. Forward-looking statements are generally preceded by, followed by or are a part of sentences that include the words believes, expects, anticipates, projects or similar expressions. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors, in addition to those discussed elsewhere in this document, could affect the future results of McClatchy, and could cause those future results to differ materially from those expressed in the forward-looking statements: general economic, market or business conditions; increases in newsprint prices and/or printing and distribution costs over anticipated levels; increases in interest ra tes; increases in energy costs; competition from other forms of media in our principal markets; increased consolidation among major retailers in our newspaper markets or other events depressing the level of advertising; an economic downturn in the economies of Minnesota, California's Central Valley, the Carolinas, Washington State and Alaska; changes in the Company's ability to negotiate and obtain favorable terms under collective bargaining arrangements with its employees; competitive actions by other companies; other occurrences leading to decreased circulation and diminished revenues from both display and classified advertising; and other factors, many of which are beyond management's control. Consequently, there can be no assurance that the actual results or developments anticipated will be realized or that these results or developments will have the expected consequences.

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In addition to normal business risks discussed above, the Company utilizes interest rate protection agreements to help maintain the overall interest rate parameters set by management. None of these agreements were entered into for trading purposes. (See note 2 to the consolidated financial statements.) As a result of this interest rate mix, a hypothetical 10 percent change in interest rates would have an approximate $.02 per share increase or decrease in the Company's annual results of operations. It would also impact the fair values of its market risk sensitive financial instruments, but would not materially affect the Company's financial position taken as a whole.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings - None
Item 2.	Changes in Securities - None
Item 3.	Default Upon Senior Securities - None
Item 4.	Submission of Matters to a Vote of Security Holders:

The Company held its annual shareholders meeting on May 16, 2001 to vote on four proposals. Shareholders approved all of the proposals by voting as follows:

1. Election of Directors of the Board

	VOTES
	FOR	WITHHELD
Nominees for Class A Directors voted by Class A Stockholders
Elizabeth Ballantine	14,902,509	47,540
Leroy Barnes, Jr.	14,900,704	49,345
S. Donley Ritchey, Jr.	14,901,395	48,654
Maggie Wilderotter	14,897,781	52,268
Nominees for Class B Directors voted by Class B Stockholders
William K. Coblentz	25,007,465	0
Molly Maloney Evangelisti	25,007,465	0
Larry Jinks	25,007,465	0
Joan F. Lane	25,007,465	0
James B. McClatchy	25,007,465	0
Kevin S. McClatchy	25,007,465	0
William Ellery McClatchy	25,007,465	0
Erwin Potts	25,007,465	0
Gary B. Pruitt	25,007,465	0
Frederick R. Ruiz	25,007,465	0

		FOR	AGAINST	ABSTAIN	BROKER NON-VOTES
2.	Approval and Ratification of Amended and Restated 1994 Stock Option Plan	25,778,895	522,393	4,247	196,934
3.	Approval and Ratification of the 2001 Director Option Plan	26,194,288	106,604	4,643	196,934
4.	Ratification of Deloitte & Touche as Auditors for 2001	26,484,025	13,428	5,016	0

Item 5.	Other Information - None
Item 6.	Exhibits and Reports on Form 8-K:
	(a) Exhibit:
	10.14	2001 Director Option Plan
	10.15	Amended and Restated 1994 Stock Option Plan

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 thereto duly authorized.

The McClatchy Company

Registrant

Date: August 10, 2001 /s/ Patrick J. Talamantes____________________ Patrick J. Talamantes Vice President, Finance, Treasurer and Chief Financial Officer

EX-1

EXHIBIT 10.14

THE McCLATCHY COMPANY

2001 DIRECTOR OPTION PLAN

1. Purposes of the Plan. The purposes of this 2001 Director Option Plan are to attract and retain the best available personnel for service as Non-employee Directors (as defined herein) of the Company, to provide additional incentive to the Non-employee Directors of the Company to serve as Directors, and to encourage their continued service on the Board.

All Options granted hereunder shall be nonstatutory stock options.

2. Definitions. As used herein, the following definitions shall apply:
1. "Board" means the Board of Directors of the Company.
2. "Change of Control" means (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company's assets to any "person" (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended), entity or group of persons acting in concert; (ii) any "person" or group of persons (other than any member of the McClatchy/Maloney family or any entity or group controlled by one or more members of the McClatchy/Maloney family) becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; (iii) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its controlling entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity (or its controlling entity) outstanding immediately after such merger or consolidation; (iv) a contest for the election or removal of members of the Board that results in the removal from the Board of at least 50% of the incumbent members of the Board, or (v) the occurrence of a "Rule 13e-3 transaction" as such term is defined in Rule 13e-3 promulgated under the Securities Exchange Act of 1934, as amended, or any similar successor rule.
3. "Code" means the Internal Revenue Code of 1986, as amended.
4. "Common Stock" means the Class A Common Stock of the Company.
5. "Company" means The McClatchy Company, a Delaware corporation.
6. "Director" means a member of the Board.
7. "Disability" means that an Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than six (6) months or which can be expected to result in death.
8. "Employee" means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a Director's fee by the Company shall not be sufficient in and of itself to constitute "employment" by the Company.
9. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
10. "Fair Market Value" means, as of any date, the value of Common Stock determined as follows:
1. If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
2. If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or
3. In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board.
11. "Non-employee Director" means a Director who is not an Employee.
12. "Option" means a stock option granted pursuant to the Plan.
13. "Optioned Stock" means the Common Stock subject to an Option.
14. "Optionee" means a Director who holds an Option.
15. "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.
16. "Plan" means this 2001 Director Option Plan.
17. "Share" means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan.
18. "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Internal Revenue Code of 1986.
3. Stock Subject to the Plan. Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is 500,000 Shares (the "Pool"). The Shares may be authorized, but unissued, or reacquired Common Stock.

If an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the Plan.

4. Administration and Grants of Options under the Plan.
1. Procedure for Grants. All grants of Options to Non-employee Directors under this Plan shall be automatic and nondiscretionary and shall be made strictly in accordance with the following provisions; provided, however, that the Board shall have the authority to adjust the size of the Annual Option (defined below) as it deems appropriate in light of all surrounding circumstances:
1. No person shall have any discretion to select which Non-employee Directors shall be granted Options.
2. Each Non-employee Director shall be automatically granted an Option to purchase 2,500 Shares (an "Annual Option") on the date of the Company's annual stockholder meeting each year.
3. Notwithstanding the provisions of subsections (ii) and (iii) hereof, any exercise of an Option granted before the Company has obtained shareholder approval of the Plan in accordance with Section 16 hereof shall be conditioned upon obtaining such shareholder approval of the Plan in accordance with Section 16 hereof.
4. The terms of an Annual Option granted hereunder shall be as follows:
1. the term of the Annual Option shall be ten (10) years.
2. the Annual Option shall be exercisable only while the Non-employee Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof.
3. the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Annual Option.
4. subject to Section 10 hereof, the Annual Option shall become exercisable as to 25% of the Shares subject to the Annual Option on the March 1 following its date of grant and 25% of the Shares subject to the Annual Option shall vest on each March 1 thereafter, provided that the Optionee continues to serve as a Director on such dates.
5. Notwithstanding the foregoing vesting provisions, if an Optionee's service as a Director terminates due to death, Disability or retirement after attaining the age of 65, then 100% of the shares subject to each outstanding Option granted hereunder to such Optionee shall immediately vest and become exercisable.
6. In the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased under Options to exceed the Pool, then the remaining Shares available for Option grant shall be granted under Options to the Non-employee Directors on a pro rata basis. No further grants shall be made until such time, if any, as additional Shares become available for grant under the Plan through action of the Board or the shareholders to increase the number of Shares which may be issued under the Plan or through cancellation or expiration of Options previously granted hereunder.
5. Eligibility. Options may be granted only to Non-employee Directors. All Options shall be automatically granted in accordance with the terms set forth in Section 4 hereof.

The Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way with any rights which the Director or the Company may have to terminate the Director's relationship with the Company at any time.

6. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company as described in Section 16 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 11 of the Plan.
7. Form of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than twelve (12) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (iv) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (v) any combination of the foregoing methods of payment.
8. Exercise of Option.
1. Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable at such times as are set forth in Section 4 hereof; provided, however, that no Options shall be exercisable until shareholder approval of the Plan in accordance with Section 16 hereof has been obtained.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may consist of any consideration and method of payment allowable under Section 7 of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment shall be made for a dividend or other right for which the record d ate is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

2. Termination of Continuous Status as a Director. Subject to Section 10 hereof, in the event an Optionee's status as a Director terminates (other than upon the Optionee's death, Disability or retirement after the age of 65), the Optionee may exercise his or her Option, but only within ninety (90) days following the date of such termination, and only to the extent that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option on the date of such termination, and to the extent that the Optionee does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.
3. Retirement. In the event Optionee's status as a Director terminates as a result of Optionee retiring after attaining the age of 65, the Optionee may exercise his or her Option, but only within three years following the date of such termination, and only to the extent that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option on the date of termination, or if he or she does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.
4. Disability of Optionee. In the event Optionee's status as a Director terminates as a result of Disability, the Optionee may exercise his or her Option, but only within three years following the date of such termination, and only to the extent that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option on the date of termination, or if he or she does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.
5. Death of Optionee. In the event of an Optionee's death, the executors or administrators of the Optionee's estate or a person who acquired the right to exercise the Option by bequest, inheritance or beneficiary designation may exercise the Option, but only within three years following the date of death, and only to the extent that the Optionee was entitled to exercise it on the date of death (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not entitled to exercise an Option on the date of death, and to the extent that the Optionee's estate or a person who acquired the right to exercise such Option does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.

In the event that an Optionee dies after the termination of his or her status as a Director as provided in Sections 8(b), (c) and (d), but before the expiration of his or her Option(s), all or part of such Option(s) may be exercised (prior to the expiration) by the executors or administrators of the Optionee's estate or by any person who has acquired such Option(s) directly from him or her by bequest, inheritance or beneficiary designation under the Plan, but only to the extent that such Option(s) had become exercisable before his or her service as a Director terminated or became exercisable as a result of the termination.

9. Non-Transferability of Options. The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.
1. Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Option, the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per Share covered by each such outstanding Option, and the number of Shares issuable pursuant to the automatic grant provisions of Section 4 hereof shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected w ithout receipt of consideration." Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option.
2. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, to the extent that an Option has not been previously exercised, it shall terminate immediately prior to the consummation of such proposed action.
3. Change of Control. In the event of a Change of Control, all outstanding and unexpired Options shall become fully vested and exercisable, including as to Shares for which it would not otherwise be exercisable.

Outstanding Options may be assumed or equivalent options may be substituted by the successor corporation or a Parent or Subsidiary thereof (the "Successor Corporation") or they may be settled for cash. If an Option is assumed or substituted for, the Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof for so long as the Optionee serves as a Director or a director of the Successor Corporation. Following such assumption or substitution, if the Optionee's status as a Director or director of the Successor Corporation, as applicable, is terminated, the Option or option shall remain exercisable in accordance with Sections 8(b) through (e) above. If the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option or the Option is not settled for cash, the Board shall notify the Optionee at least thirty (30) days from the date of such notice, and upon the expiration of such period the Option shall terminate.

For the purposes of this Section 10(c), an Option shall be considered assumed if, following the Change of Control, the Option confers the right to purchase or receive, for each Share of Optioned Stock immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares). If such consideration received in the Change of Control is not solely common stock of the Successor Corporation or its Parent, the Board may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock, to be solely common stock of the Successor Corporation or its Parent equal in fair market value to the per share con sideration received by holders of Common Stock in the Change of Control.

11. Amendment and Termination of the Plan.
1. Amendment and Termination. The Board may at any time amend, alter, suspend, or discontinue the Plan, but no amendment, alteration, suspension, or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required.
2. Effect of Amendment or Termination. Any such amendment or termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated.
12. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date determined in accordance with Section 4 hereof.
13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.

Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

14. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
15. Option Agreement. Options shall be evidenced by written option agreements in such form as the Board shall approve.
16. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under applicable state and federal law and any stock exchange rules.

G:\shared\legal\generalcounsel\karole\wpdocs\stock\2001 director option plan 060401

EX-2

EXHIBIT 10.15

THE McCLATCHY COMPANY

AMENDED AND RESTATED 1994 STOCK OPTION PLAN

(effective February 1, 2001)

1. ESTABLISHMENT AND PURPOSE.

The Plan was established in 1994 to offer selected employees of the Company or of a Subsidiary an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company's Class A Common Stock. The Plan provides for the grant of Options to purchase Shares, which may include Nonstatutory Options as well as ISOs intended to qualify under section 422 of the Code. Effective as of February 1, 2001, the Plan is amended and restated as set forth herein.

2. DEFINITIONS.
1. "Board" shall mean the Board of Directors of the Company, as constituted from time to time.
2. "Code" shall mean the Internal Revenue Code of 1986, as amended.
3. "Committee" shall mean a committee appointed by the Board, as described in Section 3(a); provided, however, grants of Options to Employees who are nonemployee Directors shall be made by the full Board which shall act as the Committee for that purpose.
4. "Company" shall mean The McClatchy Company, a Delaware corporation.
5. "Employee" shall mean (i) any individual who is an employee (within the meaning of section 3401(c) of the Code and the regulations thereunder) of the Company or a Subsidiary and (ii) directors of the Company, including nonemployee directors.
6. "Exercise Price" shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Committee in the applicable Stock Option Agreement.
7. "Fair Market Value" shall mean the market price of a Share, determined by the Committee as follows:
1. If the Share was traded on a stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price reported by the applicable composite-transactions report for such date;
2. If the Share was traded over-the-counter on the date in question and was traded on the Nasdaq system or the Nasdaq National Market, then the Fair Market Value shall be equal to the last-transaction price quoted for such date by the Nasdaq system or the Nasdaq National Market;
3. If the Share was traded over-the-counter on the date in question but was not traded on the Nasdaq system or the Nasdaq National Market, then the Fair Market Value shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which Stock is quoted or, if the Stock is not quoted on any such system, by the "Pink Sheets" published by the National Quotation Bureau, Inc.; and
4. If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.
8. "ISO" shall mean an employee incentive stock option described in section 422(b) of the Code.
9. "Nonstatutory Option" shall mean a stock option not described in sections 422 or 423 of the Code.
10. "Option" shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.
11. "Optionee" shall mean an individual who holds an Option.
12. "Plan" shall mean this The McClatchy Company Amended and Restated 1994 Stock Option Plan, as it may be amended.
13. "Service" shall mean service as an Employee.
14. "Share" shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable).
15. "Stock" shall mean the Class A Common Stock of the Company.
16. "Stock Option Agreement" shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to his or her Option.
17. "Subsidiary" shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50 percent of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
18. "Total and Permanent Disability" shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than twelve months or which can be expected to result in death.
3. ADMINISTRATION.
1. Committee Membership. The Plan shall be administered by the Committee which shall consist of not less than two directors appointed by the Board each of whom shall satisfy the requirements of Rule 16b-3, as amended of the Securities Exchange Act of 1934, as amended and (b) such requirements as the Internal Revenue service may establish for outside directors acting under plans intended to qualify for exemption under section 162(m)(4)(C) of the Code.
2. Committee Procedures. The Board shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.
3. Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:
1. To interpret the Plan and to apply its provisions;
2. To adopt, amend or rescind rules, procedures and forms relating to the Plan;
3. To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
4. To determine when Options are to be granted under the Plan;
5. To select the Optionees;
6. To determine the number of Shares to be made subject to each Option;
7. To prescribe the terms and conditions of each Option, including (without limitation) the Exercise Price, to determine whether such Option is to be classified as an ISO or as a Nonstatutory Option, to specify the provisions of the Stock Option Agreement relating to such Option, and to determine whether an Option should be settled under Section 7(c) and the form of settlement;
8. To amend any outstanding Stock Option Agreement, subject to applicable legal restrictions and to the consent of the Optionee who entered into such agreement; and
9. To take any other actions deemed necessary or advisable for the administration of the Plan.

All decisions, interpretations and other actions of the Committee shall be final and binding on all Optionees and all persons deriving their rights from an Optionee. No member of the Committee shall be liable for any action that he or she has taken or has failed to take in good faith with respect to the Plan or any Option.

4. ELIGIBILITY.
1. General Rule. Only Employees shall be eligible for designation as Optionees by the Committee.
2. Ten-Percent Shareholders. An Employee who owns more than 10 percent of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price under such ISO is at least 110 percent of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant.
3. Attribution Rules. For purposes of Subsection (b) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for his brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its shareholders, partners or beneficiaries. Stock with respect to which such Employee holds an option shall not be counted.
4. Outstanding Stock. For purposes of Subsection (b) above, "outstanding stock" shall include all stock actually issued and outstanding at the time of the grant of the ISO to the Optionee. "Outstanding stock" shall not include treasury shares or shares authorized for issuance under outstanding options held by the Optionee or by any other person.
5. STOCK SUBJECT TO PLAN.
1. Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares which may be issued under the Plan shall not exceed 3,312,500 Shares, subject to adjustment pursuant to Section 8. The number of Shares which are subject to Options at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.
2. Additional Shares. In the event that any outstanding Option for any reason expires or is canceled or otherwise terminated (except as provided in Section 7(c)), the Shares allocable to the unexercised portion of such Option shall again be available for the purposes of the Plan.
6. TERMS AND CONDITIONS OF OPTIONS.
1. Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
2. Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. Options granted to any Optionee in a single calendar year shall in no event cover more than 187,500 Shares, subject to adjustment in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.
3. Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100 percent of the Fair Market Value of a Share on the date of grant, except as otherwise provided in Section 4(b). Subject to the preceding sentence, the Exercise Price under any Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be payable in accordance with Section 7.
4. Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option. The term shall not exceed 10 years from the date of grant, except as otherwise provided in Section 4(b). Subject to the preceding sentence, the Committee at its sole discretion shall determine when all or any part of an Option is to become exercisable and when such Option is to expire.
5. Nontransferability. During an Optionee's lifetime, and unless his or her Stock Option Agreement otherwise provides, his or her Option(s) shall be exercisable only by him or her and shall not be transferable. In the event of an Optionee's death, his or her nontransferable Option(s) shall not be transferable other than by beneficiary designation, will or by the laws of descent and distribution.
6. Termination of Service (Except by Death). If an Optionee's Service terminates for any reason other than death, then his or her Option(s) shall expire on the earliest of the following occasions:
1. The expiration date determined pursuant to Subsection (d) above;
2. The date three years after the termination of the Optionee's Service, if the termination occurs on or after the earliest date when he or she is eligible for early or normal retirement under the Restated Retirement Plan for Employees of McClatchy Newspapers;
3. The date three years after the termination of the Optionee's Service, if the termination occurs because of his or her Total and Permanent Disability; or
4. The date 90 days after the termination of the Optionee's Service, if the termination is not described in Paragraphs (ii) or (iii) above.

Notwithstanding the above, the Committee may agree to alternative expiration periods in any applicable Stock Option Agreement, so long as such alternative periods do not exceed 10 years from the date of grant as set forth in Subsection (d) above. The Optionee may exercise all or part of his or her Option(s) at any time before the expiration of such Option(s) under the preceding sentence, but only to the extent that such Option(s) had become exercisable before his or her service terminated or became exercisable as a result of the termination. The balance of such Option(s) shall lapse when the Optionee's Service terminates. In the event that the Optionee dies after the termination of his or her Service but before the expiration of his or her Option(s), all or part of such Option(s) may be exercised (prior to expiration) by the executors or administrators of the Optionee's estate or by any person who has acquired such Option(s) directly from him or her by bequest or inheritance, but only to the exten t that such Option(s) had become exercisable before his or her Service terminated or became exercisable as a result of the termination.

7. Leaves of Absence. For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on military leave, sick leave or other bona fide leave of absence (as determined by the Committee). The foregoing notwithstanding, in the case of an ISO granted under the Plan, Service shall not be deemed to continue beyond the first 90 days of such leave, unless the Optionee's reemployment rights are guaranteed by statute or by contract.
8. Death of Optionee. If an Optionee dies while he or she is in service, then his or her Option(s) shall expire on the earlier of the following dates:
1. The expiration date determined pursuant to Subsection (d) above; or
2. The date three years after his or her death.

All or part of the Optionee's Option(s) may be exercised at any time before the expiration of such Option(s) under the preceding sentence by the executors or administrators of his or her estate or any person who has acquired such Option(s) directly from him or her by bequest or inheritance.

9. No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder with respect to any Shares covered by his or her Option until the date of the issuance of a stock certificate for such Shares. No adjustment shall be made except as provided in Section 8.
10. Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding Options or may accept the cancellation of outstanding Options (to the extent not previously exercised) for the granting of new Options in substitution therefor. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair his or her rights or increase his or her obligations under such Option.
11. Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.
12. Change of Control. With respect to any unexpired Option that is granted on or after February 1, 2001, and notwithstanding any contrary provision of the Plan or of any Stock Option Agreement, upon a "Change of Control," an Optionee shall be entitled to immediate 100% vesting of such Option.

"Change of Control" means (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company's assets to any "person" (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended), entity or group of persons acting in concert; (ii) any "person" or group of persons (other than any member of the McClatchy family or any entity or group controlled by one or more members of the McClatchy family) becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; (iii) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the su rviving entity or its controlling entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity (or its controlling entity) outstanding immediately after such merger or consolidation; (iv) a contest for the election or removal of members of the Board that results in the removal from the Board of at least 50% of the incumbent members of the Board, or (v) the occurrence of a "Rule 13e-3 transaction" as such term is defined in Rule 13e-3 promulgated under the Securities Exchange Act of 1934, as amended, or any similar successor rule.

7. PAYMENT FOR SHARES.
1. General Rule. The entire Exercise Price of Shares issued under the Plan shall be payable in cash at the time when such Shares are purchased, except as follows:
2. Surrender of Stock. To the extent that the Stock Option Agreement so provides, payment may be made with Shares which have already been owned by the Optionee for more than 12 months and which are surrendered to the Company in good form for transfer. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.
3. Settlement in Cash and/or Shares. To the extent that the Stock Option Agreement so provides, the Committee shall have the authority, in its sole discretion, to settle all or any part of an exercisable Option or installment of any Option by offering payment in Shares or in cash, or in any combination of Shares and cash, in exchange for the surrender of that Option, installment or partial installment of the Option by the Optionee. The amount offered by the Committee shall not exceed the difference between the Exercise Price of the Option and the Fair Market Value of the Shares on the date of the offer. In no event shall Options be settled under this Subsection (c) if the Fair Market Value of the Shares subject to the cancelled Options does not exceed the Exercise Price of such Options. Options shall not be settled for cash under this Subsection (c) unless they have been outstanding for not less than six months. Shares as to which Options have been settled shall not be available for fu rther Option grants under the Plan.
4. Cashless Exercises. Payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price.
8. ADJUSTMENT OF SHARES.
1. General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in cash in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a spinoff or a similar occurrence, the Committee shall make appropriate adjustments in one or more of (i) the number of Options available for future grants under Section 5, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option.
2. Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Options shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Options by the surviving corporation or its parent, for their continuation by the Company (if the Company is a surviving corporation) or for settlement in cash.
3. Reservation of Rights. Except as provided in this Section 8, an Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.
9. LEGAL REQUIREMENTS.

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange on which the Company's securities may then be listed.

10. NO EMPLOYMENT RIGHTS.

No provision of the Plan, nor any Option granted under the Plan, shall be construed as giving any person the right to become or to be treated as an Employee or to remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person's Service at any time and for any reason.

11. DURATION AND AMENDMENTS.
1. Term of the Plan. The Plan, as set forth herein, shall become effective on February 1, 1998, subject to approval of the Company's shareholders. In the event that the Company's Shareholders fail to approve the Plan before February 1, 1999, any Option grants from the increased number of available Shares made prior to such date shall be null and void, and no such additional Option grants shall be made after such date. The Plan shall terminate automatically on January 25, 2004, and may be terminated on any earlier date pursuant to Subsection (b) below.
2. Right to Amend or Terminate the Plan. The Board may amend, suspend or terminate the Plan at any time and for any reason. Shareholder approval shall not be required for any amendment of the Plan, except as may be required by applicable law or regulation.
3. Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Option previously granted under the Plan.
12. WITHHOLDING TAXES.

To the extent required by applicable federal, state, local or foreign law, the recipient of any payment or distribution under the Plan shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of such payment or distribution. The Company shall not be required to make such payment or distribution until such obligations are satisfied.

13. EXECUTION.

To record the adoption of the Plan by the Board on January 21, 1998, as amended and restated effective February 1, 1998 and February 1, 2001, the Company has caused its authorized officer to execute the same.

THE McCLATCHY COMPANY

By: /s/ Karole Morgan-Prager

Karole Morgan-Prager

Vice President and Corporate Secretary

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