-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NrjBAdXrIDp0f+eDvk8ygLunxnLKmBMvkOZMBnA7JZfUubRyMzS4dLwWCUQ9l5Kk KHk1vuql6S4b9ngxJZsO2g== 0001047469-98-018519.txt : 19980508 0001047469-98-018519.hdr.sgml : 19980508 ACCESSION NUMBER: 0001047469-98-018519 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980329 FILED AS OF DATE: 19980507 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW YORK TIMES CO CENTRAL INDEX KEY: 0000071691 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 131102020 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05837 FILM NUMBER: 98612179 BUSINESS ADDRESS: STREET 1: 229 W 43RD ST CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125561234 MAIL ADDRESS: STREET 1: 229 W 43RD STREET CITY: NEW YORK STATE: NY ZIP: 10036 10-Q 1 FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR QUARTER ENDED March 29, 1998 ---------------------- COMMISSION FILE NUMBER 1-5837 ----------------------
------------------------ THE NEW YORK TIMES COMPANY (Exact name of registrant as specified in its charter)
NEW YORK 13-1102020 - --------------------------------------------- --------------------------------------------- (State or other jurisdiction of incorporation (I.R.S. Employer Identification No.) or organization)
229 WEST 43RD STREET, NEW YORK, NEW YORK (Address of principal executive offices) 10036 --------- (Zip Code) Registrant's telephone number, including area code 212-556-1234 ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / /. Number of shares of each class of the registrant's common stock outstanding as of May 3, 1998 (exclusive of treasury shares): Class A Common Stock................................................................................ 95,403,489 shares Class B Common Stock................................................................................ 424,801 shares
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE QUARTER ENDED ---------------------- MARCH 29, MARCH 30, 1998 1997 ---------- ---------- (13 WEEKS) Revenues Advertising............................................................................. $ 507,478 $ 477,378 Circulation............................................................................. 169,522 168,554 Other................................................................................... 45,563 46,529 ---------- ---------- Total............................................................................... 722,563 692,461 ---------- ---------- Production Costs Raw Materials........................................................................... 87,778 74,975 Wages and Benefits...................................................................... 153,722 158,364 Other................................................................................... 121,804 113,147 ---------- ---------- Total............................................................................... 363,304 346,486 Selling, General and Administrative Expenses.............................................. 242,889 244,720 ---------- ---------- Total............................................................................... 606,193 591,206 ---------- ---------- Operating Profit.......................................................................... 116,370 101,255 Income from Joint Ventures................................................................ 4,371 1,315 Interest Expense--net..................................................................... 10,143 8,318 Gain on Disposition of Assets............................................................. 4,619 -- ---------- ---------- Income Before Income Taxes................................................................ 115,217 94,252 Income Taxes.............................................................................. 50,580 42,413 ---------- ---------- Net Income................................................................................ $ 64,637 $ 51,839 ---------- ---------- ---------- ---------- Average Number of Common Shares Outstanding Basic................................................................................... 96,296 97,822 Diluted................................................................................. 98,577 99,604 Per Share of Common Stock Basic Earnings.......................................................................... $ .67 $ .53 Diluted Earnings........................................................................ $ .66 $ .52 Dividends............................................................................... $ .17 $ .15
See notes to condensed consolidated financial statements. 2 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DOLLARS IN THOUSANDS)
MARCH 29, DECEMBER 28, 1998 1997 ------------ ------------ (UNAUDITED) ASSETS Current Assets Cash and short-term investments.................................................... $ 65,749 $ 106,820 Accounts receivable-net............................................................ 341,601 331,287 Inventories Newsprint and magazine paper..................................................... 33,418 27,694 Work-in-process, etc............................................................. 4,728 4,440 ------------ ------------ Total inventories.............................................................. 38,146 32,134 Deferred Income Taxes.............................................................. 60,039 60,039 Other current assets............................................................... 90,001 85,555 ------------ ------------ Total current assets........................................................... 595,536 615,835 ------------ ------------ Other Assets Investment in joint ventures....................................................... 135,744 133,054 Property, plant and equipment (less accumulated depreciation of $890,520 in 1998 and $868,274 in 1997)............................................................ 1,344,408 1,366,931 Intangible assets acquired Cost in excess of net assets acquired (less accumulated amortization of $218,925 in 1998 and $210,815 in 1997).................................................. 985,095 993,206 Other intangible assets acquired (less accumulated amortization of $49,205 in 1998 and $43,975 in 1997)...................................................... 379,269 384,499 Miscellaneous assets............................................................... 155,174 145,493 ------------ ------------ TOTAL ASSETS......................................................................... $ 3,595,226 $3,639,018 ------------ ------------ ------------ ------------
See notes to condensed consolidated financial statements. 3 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DOLLARS IN THOUSANDS)
MARCH 29, DECEMBER 28, 1998 1997 ------------ ------------ (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable................................................................... $ 168,081 $ 189,580 Accrued payroll and other related liabilities...................................... 69,069 103,511 Accrued expenses................................................................... 249,858 217,742 Unexpired subscriptions............................................................ 87,093 82,621 Current portion of long-term debt and capital lease obligations.................... 179,680 104,033 ------------ ------------ Total current liabilities........................................................ 753,781 697,487 ------------ ------------ Other Liabilities Long-term debt..................................................................... 414,759 490,237 Capital lease obligations.......................................................... 44,034 45,191 Deferred income taxes.............................................................. 187,396 186,705 Other.............................................................................. 497,709 491,336 ------------ ------------ Total other liabilities.......................................................... 1,143,898 1,213,469 ------------ ------------ Total Liabilities................................................................ 1,897,679 1,910,956 ------------ ------------ Stockholders' Equity Capital stock...................................................................... 11,467 11,385 Additional paid-in capital......................................................... 793,935 773,367 Earnings reinvested in the business................................................ 1,537,179 1,488,910 Common stock held in treasury, at cost............................................. (645,034) (545,600) ------------ ------------ Total stockholders' equity....................................................... 1,697,547 1,728,062 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................................... $ 3,595,226 $3,639,018 ------------ ------------ ------------ ------------
See notes to condensed consolidated financial statements. 4 THE NEW YORK TIMES COMPANY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (DOLLARS IN THOUSANDS)
FOR THE QUARTER ENDED ---------------------- MARCH 29, MARCH 30, 1998 1997 ---------- ---------- (13 WEEKS) OPERATING ACTIVITIES: Net cash provided by operating activities................................................. $ 74,622 $ 104,607 ---------- ---------- INVESTING ACTIVITIES: Additions to property, plant and equipment................................................ (25,185) (44,746) Net proceeds from disposition............................................................. 9,934 -- Other-net................................................................................. (994) 66 ---------- ---------- Net cash used in investing activities..................................................... (16,245) (44,680) ---------- ---------- FINANCING ACTIVITIES: Commercial paper borrowings............................................................... -- (30,600) Long-term debt reduction.................................................................. (1,002) (973) Capital Shares Issuance................................................................................ 2,302 4,002 Repurchase.............................................................................. (84,380) (10,970) Dividends paid to stockholders............................................................ (16,368) (14,717) ---------- ---------- Net cash used in financing activities..................................................... (99,448) (53,258) ---------- ---------- (Decrease)/increase in Cash and short-term investments.................................... (41,071) 6,669 Cash and short-term investments at the beginning of the year.............................. 106,820 39,103 ---------- ---------- Cash and short-term investments at the end of the quarter................................. $ 65,749 $ 45,772 ---------- ---------- ---------- ----------
NONCASH FINANCING TRANSACTIONS: Repurchases of common stock in connection with certain exercises under the Company's stock option plans increased treasury stock by $17,347 and $23,312 in 1998 and 1997, respectively. Additional paid-in capital increased by a corresponding amount. SUPPLEMENTAL INFORMATION: Amounts in these statements of cash flows are presented on a cash basis and may differ from those shown in other sections of the financial statements. See notes to condensed consolidated financial statements. 5 THE NEW YORK TIMES COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. GENERAL The accompanying Notes to Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in the annual report on Form 10-K for the year ended December 28, 1997 for The New York Times Company (the "Company") filed with the Securities and Exchange Commission. In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations, as of and for the interim period ended, have been included. Due to the seasonal nature of the Company's business, results for the interim periods are not necessarily indicative of a full year's operations. Certain reclassifications have been made to the 1997 Condensed Consolidated Financial Statements to conform with classifications used at March 29, 1998. 2. INCOME TAXES The reasons for the variances between the effective tax rate on income before income taxes and the federal statutory rate are as follows:
MARCH 29, MARCH 30, FOR THE THIRTEEN WEEKS ENDED 1998 1997 - ------------------------------------------------------------ ---------------------- ---------------------- % OF % OF AMOUNT PRETAX AMOUNT PRETAX --------- ----------- --------- ----------- (DOLLARS IN THOUSANDS) Tax at federal statutory rate............................... $ 40,326 35.0% $ 32,988 35.0% State and local taxes-net of federal benefit................ 7,764 6.8% 7,055 7.5% Amortization of nondeductible intangible assets acquired............................................. 2,219 1.9% 2,202 2.3% Other-net................................................... 271 0.2% 168 0.2% --------- --- --------- --- Income Tax Expense.......................................... $ 50,580 43.9% $ 42,413 45.0% --------- --- --------- ---
3. DEBT OBLIGATIONS The Company currently maintains $300,000,000 in revolving credit agreements which require, among other matters, specified levels of stockholders' equity. At March 29, 1998, approximately $905,300,000 of stockholders' equity was unrestricted under these agreements. On April 2, 1998, the Company's tender offer for any and all of its $150,000,000 of outstanding publicly-held 8-1/4 percent debentures due March 15, 2025, expired. The debenture holders tendered $78,100,000 of the outstanding debentures. The amount tendered was reclassified from long-term to current debt in the Company's Condensed Consolidated Balance Sheet at March 29, 1998. In the second quarter of 1998, the Company will record a pretax extraordinary charge of approximately $14,000,000 (approximately $7,900,000 after-tax) relating to the debentures tendered. 4. STOCK REPURCHASE PROGRAM During the first three months of 1998, the Company repurchased approximately 1,100,000 shares of Class A Common Stock at a cost of approximately $70,600,000. The average price of these repurchases was approximately $65 per share. To date, approximately $134,400,000 remain from the December 1997 6 THE NEW YORK TIMES COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 4. STOCK REPURCHASE PROGRAM (CONTINUED) authorization of $215,000,000. Stock repurchases under this program exclude shares reacquired in connection with certain exercises under the Company's stock option plans at a cost of approximately $11,400,000 in the first quarter of 1998. 5. VOLUNTARY STAFF REDUCTIONS In the first quarter of 1997, the Company recorded approximately $2,500,000, or $.01 basic and diluted earnings per share, at corporate headquarters and The New York Times, for pretax charges relating to staff reductions. At March 29, 1998, and December 28, 1997, approximately $15,900,000 and $25,000,000, respectively, of these charges were unpaid. This balance will be principally paid within two years. 6. COMPREHENSIVE INCOME In the first quarter of 1998, the Company adopted the provisions of the Financial Accounting Standards Board's Statement of Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS 130"). Comprehensive Income for the Company includes foreign currency translation adjustments in addition to net income as reported in the Company's Condensed Consolidated Financial Statements. Comprehensive income was the same as net income for the quarters ended March 29, 1998 and March 30, 1997. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Advertising and circulation revenues accounted for approximately 70% and 23%, respectively, of the Company's revenues in the first quarter of 1998. Advertising revenues influence the pattern of the Company's consolidated revenues because they are seasonal in nature. Traditionally, second-quarter and fourth-quarter advertising volume is higher than that which occurs in the first and third quarters since economic activity tends to be lower in the post-holiday season and the summer period. Quarterly trends are also affected by the overall economy and economic conditions that may exist in specific markets served by each of the Company's business segments. Newsprint is the major component of the Company's cost of raw materials. The Company's cost of newsprint was higher in the first quarter of 1998 than in the comparable 1997 quarter. A price increase may occur later in the year which could further increase the Company's cost of newsprint in 1998. The special items that affected the 1998 and 1997 first-quarter results were as follows: 1998 - $4.6 million ($.03 basic and diluted earnings per share) pretax gain from the sale of equipment. 1997 - $2.5 million ($.01 basic and diluted earnings per share) pretax charge for severance and related costs resulting from work force reductions ("buyouts"). 7 RESULTS OF OPERATIONS--FIRST QUARTER OF 1998 COMPARED WITH FIRST QUARTER OF 1997 The 1998 first-quarter net income was $64.6 million or $.67 basic ($.66 diluted) earnings per share compared with net income of $51.8 million or $.53 basic ($.52 diluted) earnings per share in the first quarter of 1997. The higher 1998 net income was principally due to higher advertising revenues, partially offset by higher newsprint costs and depreciation expense related to new production facilities. Revenues for the first quarter of 1998 were $722.6 million, an approximately 4% increase over 1997 first-quarter revenues of $692.5 million. On a comparable basis, adjusted for the 1997 disposition of certain properties, 1998 first-quarter revenues increased by approximately 7% over the 1997 first quarter. Production costs for the first quarter of 1998 were $363.3 million, an approximately 5% increase over the 1997 first-quarter production costs of $346.5 million. The increase was primarily due to higher newsprint costs and depreciation expense associated with the new production facilities; in addition, 1997 costs were higher due to one-time pressmen bonuses. Selling, general and administrative expenses ("SGA expenses") in the first quarter of 1998 were $242.9 million, an approximately 1% decrease over the 1997 first-quarter SGA expenses of $244.7 million. SGA expenses, exclusive of buyouts, were flat in the first quarter of 1998 as compared with the first quarter of 1997. Operating profit in the first quarter of 1998 was $116.4 million compared with $101.3 million in the 1997 first quarter. Operating profit increased to $116.4 million in the first quarter of 1998 from $103.8 million in 1997, excluding buyouts. The improvement in operating profit was principally due to higher advertising revenues at the Newspaper Group and the Broadcast Group. The 1998 first-quarter earnings before interest, income taxes, depreciation and amortization ("EBITDA") rose to $166.6 million from $143.0 million in the comparable 1997 period. EBITDA is presented because it is a widely accepted indicator of funds available to service debt, although it is not a measure of liquidity or of financial performance under generally accepted accounting principles ("GAAP"). The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Income from Joint Ventures increased to $4.4 million in the 1998 first quarter from $1.3 million in 1997. The increase was primarily due to higher income from equity investments in paper mills. Interest expense-net increased to $10.1 million in the 1998 first quarter from $8.3 million in 1997. The increase was due to lower capitalization of interest expense associated with construction, partially offset by higher interest income. Interest income and capitalized interest included in the amounts presented was $1.6 million and $4.1 million in 1998 and 1997, respectively. The effective income tax rate for the first quarter of 1998 was 43.9% compared with an effective income tax rate of 45.0% in the comparable 1997 period. The decrease in the effective income tax rate was primarily related to lower state and local income taxes. 8 SEGMENT INFORMATION
FOR THE QUARTER ENDED ---------------------- MARCH 29, MARCH 30, 1998 1997 ---------- ---------- (13 WEEKS) (DOLLARS IN THOUSANDS) REVENUES Newspapers................................................................................ $ 657,330 $ 620,960 Broadcast................................................................................. 33,298 31,354 Magazines................................................................................. 31,935 40,147 ---------- ---------- Total................................................................................. $ 722,563 $ 692,461 ---------- ---------- ---------- ---------- OPERATING PROFIT (LOSS) Newspapers................................................................................ $ 107,589 $ 98,463 Broadcast................................................................................. 7,284 5,684 Magazines................................................................................. 8,318 5,711 Unallocated Corporate Expenses............................................................ (6,821) (8,603) ---------- ---------- Total................................................................................. $ 116,370 $ 101,255 ---------- ---------- ---------- ---------- DEPRECIATION AND AMORTIZATION Newspapers................................................................................ $ 42,015 $ 36,899 Broadcast................................................................................. 4,456 4,718 Magazines................................................................................. (2,131) (1,737) Corporate................................................................................. 1,409 423 Joint Ventures............................................................................ 88 89 ---------- ---------- Total................................................................................. $ 45,837 $ 40,392 ---------- ---------- ---------- ----------
A discussion of the operating results of the Company's segments follows: NEWSPAPER GROUP: The Newspaper Group consists of The New York Times ("The Times"), The Boston Globe ("The Globe"), 21 regional newspapers, newspaper distributors, a news service, a features 9 syndicate, TimesFax, licensing operations of the New York Times databases and microfilm and New Ventures. New Ventures include, among other things, projects developed in electronic media.
FOR THE QUARTER ENDED ---------------------- MARCH 29, MARCH 30, 1998 1997 ---------- ---------- (13 WEEKS) (DOLLARS IN THOUSANDS) REVENUES Newspapers............................................................ $ 651,992 $ 618,690 New Ventures.......................................................... 5,338 2,270 ---------- ---------- Total Revenues........................................................ $ 657,330 $ 620,960 ---------- ---------- EBITDA Newspapers............................................................ $ 150,929 $ 136,657 New Ventures.......................................................... (1,325) (1,295) ---------- ---------- Total EBITDA.......................................................... $ 149,604 $ 135,362 ---------- ---------- OPERATING PROFIT (LOSS) Newspapers............................................................ $ 109,252 $ 99,970 New Ventures.......................................................... (1,663) (1,507) ---------- ---------- Total Operating Profit................................................ $ 107,589 $ 98,463 ---------- ----------
The Newspaper Group's operating profit rose to $107.6 million in the first quarter of 1998 compared with $100.0 million in the 1997 first quarter, excluding buyouts. Revenues were $657.3 million in the first quarter of 1998 compared with $621.0 million in 1997. The 6% increase in the Group's revenues for the quarter was primarily due to higher advertising revenues as a result of higher rates and volume. Continued strength in classified and national advertising was a significant factor. Additionally, first-quarter volume benefited from the timing of Easter, which occurred in April rather than in March as it did in the prior year. Typically, advertising volume declines on Easter Sunday when readership is lower due to observance of the holiday. The improvement in operating profit in the first quarter of 1998 was primarily attributable to the increase in advertising revenues of approximately 8%, offset by higher depreciation expense related to new production facilities and an unfavorable 24% increase in the Company's cost of newsprint compared to the comparable 1997 period. The increase in the cost of newsprint was partially attributable to an increase in newsprint consumption related to higher advertising volume. Advertising volume on a comparable basis for the quarter was as follows:
FOR THE QUARTER ENDED MARCH 29, 1998 ------------------------ % CHANGE VOLUME VS. 1997 --------- ------------- (INCHES IN THOUSANDS) ADVERTISING VOLUME (EXCLUDING PREPRINTS) The New York Times.......................................................................... 939.5 1.2% The Boston Globe............................................................................ 712.2 0.6% Regional Newspapers......................................................................... 3,847.2 2.8%
Advertising volume at The Times for the first quarter of 1998 increased 1.2% over the 1997 first quarter. The national and classified categories showed increases of 5.3% and 5.8%, respectively, while the retail and zoned categories were down 5.8% and 5.2%, respectively. Preprint distribution was up 17.4%. At The Globe, advertising volume for the first quarter of 1998 increased 0.6% over the 1997 first quarter. Advertising volume was higher in the national and classified categories by 13.3% and 1.5%, 10 respectively, while the retail and zoned categories were down 10.2% and 6.7%, respectively. Preprint distribution was up 1.1%. At the Regional Newspapers, advertising volume for the first quarter of 1998 increased 2.8% over the 1997 first quarter. National, classified and legal advertising categories improved by 6.4%, 5.9% and 4.4%, respectively, with the retail category remaining flat. Preprint distribution increased 6.1%. Certain of the advertising volume variances noted above were exacerbated by the timing of Easter Sunday. Average circulation of daily newspapers for the quarter ended March 29, 1998, on a comparable basis, was as follows:
FOR THE QUARTER ENDED MARCH 29, 1998 ---------------------------------------------------- % CHANGE % CHANGE WEEKDAY VS. 1997 SUNDAY VS. 1997 ----------- ------------- --------- ------------- (COPIES IN THOUSANDS) AVERAGE NET PAID CIRCULATION The New York Times.................................................... 1,104.2 1.2% 1,656.2 0.8% The Boston Globe...................................................... 461.9 0.1% 746.1 (0.7)% Regional Newspapers................................................... 777.5 0.9% 833.7 0.2%
BROADCAST GROUP: The Broadcast Group is comprised of eight network-affiliated television stations and two radio stations.
FOR THE QUARTER ENDED ------------------------ MARCH 29, MARCH 30, 1998 1997 ----------- ----------- (13 WEEKS) (DOLLARS IN THOUSANDS) Revenues............................................................... $ 33,298 $ 31,354 ----------- ----------- EBITDA................................................................. $ 11,740 $ 10,402 ----------- ----------- Operating Profit....................................................... $ 7,284 $ 5,684 ----------- -----------
The Broadcast Group's operating profit rose to $7.3 million in the first quarter of 1998 from $5.7 million in 1997, on revenues of $33.3 million and $31.4 million, respectively. The increase in operating profit was primarily attributable to stronger advertising revenues, particularly at the four CBS affiliates due to Winter Olympics advertising. MAGAZINE GROUP: The Magazine Group is comprised of three golf-related publications and related activities in the golf field, and New Ventures, such as on-line magazine services. The revenue for the Group includes the amortization of a $40.0 million non-compete agreement ("Non-Compete"), associated with 11 the divestiture of the Women's Magazine Division, which is being recognized on a straight-line basis over four years ending in July 1998.
FOR THE QUARTER ENDED ------------------------ MARCH 29, MARCH 30, 1998 1997 ----------- ----------- (13 WEEKS) (DOLLARS IN THOUSANDS) REVENUES Magazines.............................................................. $ 29,186 $ 37,377 Non-Compete............................................................ 2,500 2,500 New Ventures........................................................... 249 270 ----------- ----------- Total Revenues......................................................... $ 31,935 $ 40,147 ----------- ----------- EBITDA Magazines.............................................................. $ 6,306 $ 6,158 New Ventures........................................................... (119) (2,184) ----------- ----------- Total EBITDA........................................................... $ 6,187 $ 3,974 ----------- ----------- OPERATING PROFIT (LOSS) Magazines.............................................................. $ 5,937 $ 5,600 Non-Compete............................................................ 2,500 2,500 New Ventures........................................................... (119) (2,389) ----------- ----------- Total Operating Profit................................................. $ 8,318 $ 5,711 ----------- -----------
The Magazine Group's first-quarter operating profit was $8.3 million in 1998 compared with $5.7 million in 1997 on revenues of $31.9 million and $40.1 million, respectively. The improvement in operating profit was principally attributable to the Company's exit from the tee time reservation business in the fourth quarter of 1997. The Group's revenues decreased as a result of the sale of the Company's tennis, sailing and ski magazine businesses in the fourth quarter of 1997. The results of the sold magazines were included in the Group's results for the first eleven months of 1997. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $74.6 million in the 1998 first quarter compared with $104.6 million in 1997. The decrease of $30.0 million in 1998 was primarily due to an increase in working capital partially offset by an improvement in earnings. Net cash used in investing activities was $16.2 million in the first quarter of 1998 compared with $44.7 million in 1997. The decrease of $28.4 million in 1998 was primarily due to lower capital expenditures. Net cash used in financing activities was $99.4 million in the first quarter of 1998 compared with $53.3 million in the first quarter of 1997. The increase of $46.1 million in 1998 was primarily related to higher stock repurchases. The Company believes that cash generated from its operations and the availability of funds from external sources should be adequate to cover working capital needs, stock repurchases, planned capital expenditures, dividend payments to stockholders and other cash requirements. The ratio of current assets to current liabilities was .79 and .73 at March 29, 1998, and March 30, 1997, respectively. The ratio of long-term debt and capital lease obligations as a percentage of total capitalization was 21% at March 28, 1998 (see Recent Developments below), compared with 28% at March 30, 1997. FINANCING: The Company currently maintains $300.0 million in revolving credit agreements, which require, among other matters, specified levels of stockholders' equity. Approximately $905.3 million and $930.0 million of stockholders' equity was unrestricted under these agreements at March 29, 1998, and March 30, 1997, respectively. The Company plans to renew $100.0 million of the revolving credit 12 agreements which expire in July 1998. The Company's long-term debt, including capital leases, was $458.8 million and $636.5 million at March 29, 1998, and March 30, 1997, respectively. CAPITAL EXPENDITURES: The Company currently estimates that capital expenditures for 1998 will range from $90.0 million to $110.0 million. The Company currently anticipates that depreciation and amortization expense will approximate $190.0 million to $195.0 million for 1998 compared with $173.9 million in 1997. OTHER: The Company has evaluated the potential impact of the situation commonly referred to as the "Year 2000 problem." The Year 2000 problem, which is common to most corporations, concerns the inability of information systems, primarily computer software programs, to properly recognize and process date sensitive information related to the Year 2000. Preliminary assessment indicates that solutions will involve a mix of purchasing new systems, modifying existing systems, retiring obsolete systems and confirming vendor compliance. The Company currently anticipates that incremental capital expenditures associated with the Year 2000 problem will be modest. In addition, incremental expenses expected to be incurred in 1998 and 1999 to remediate existing systems are currently expected to range between $10.0 million and $15.0 million. RECENT DEVELOPMENTS: The Company's tender offer for any and all of its $150.0 million of outstanding publicly-held 8-1/4 percent debentures due March 15, 2025, expired on April 2, 1998. The debenture holders tendered $78.1 million of the outstanding debentures. The amount tendered was reclassified from long-term debt to current debt in the Company's Condensed Consolidated Balance Sheet at March 29, 1998. The Company financed the purchase of the debentures with available cash and through its existing commercial paper facility. By replacing higher rate long-term borrowings with lower-rate short-term alternatives, the Company expects to reduce interest expense and generate a positive return on a net present value basis. In the second quarter of 1998, the Company will record a pretax extraordinary charge of approximately $14.0 million (approximately $7.9 million after-tax) relating to the debentures tendered. In the second quarter of 1998, the Company will record a pretax gain of approximately $8.0 million due to the satisfaction of a post-closing requirement related to the sale of the tennis, sailing and ski magazine businesses in the fourth quarter of 1997. NEW ACCOUNTING PRONOUNCEMENTS: In February 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 132, Employer's Disclosures about Pensions and Other Postretirement Benefits ("SFAS 132"), which is effective for fiscal years beginning after December 15, 1997. SFAS 132 standardizes the disclosure requirements for pension and other postretirement benefits, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures. SFAS 132 does not change the measurement or recognition of pension or other postretirement benefits. The adoption of SFAS 132 will not have a material effect on the Company's Consolidated Financial Statements. In April 1998, the American Institute of Certified Public Accountants ("AICPA") issued Statement of Position ("SOP") No. 98-5, Reporting on the Costs of Start-Up Activities ("SOP 98-5"). SOP 98-5 requires that entities expense start-up costs and organization costs as they are incurred. The Company's accounting practices are currently in compliance with SOP 98-5. In March 1998, the AICPA issued SOP No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides guidance on expensing versus capitalization of software costs incurred for internal use, as well as the amortization of capitalized software costs. SOP 98-1 requires computer software costs that are incurred in the preliminary project stage to be expensed as incurred. The adoption of SOP 98-1 is not expected to have a material effect on the Company's Consolidated Financial Statements. SOP 98-5 and SOP 98-1 are effective for fiscal years beginning after December 15, 1998. 13 FACTORS THAT COULD AFFECT OPERATING RESULTS Except for the historical information contained herein, the matters discussed in this quarterly report are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. Such risks and uncertainties include national and local conditions that could influence the levels of retail, national and classified advertising revenue as well as circulation revenue, the impact of competition that could affect levels (rate and volume) of advertising and circulation generated by the markets served by the Company's business segments, material increases in newsprint and magazine paper prices, and other risks detailed from time to time in the Company's publicly-filed documents, including its Annual Report on Form 10-K for the period ended December 28, 1997. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS (a) The Company's annual meeting of stockholders was held on April 16, 1998. (b) The following matters were voted on at the annual meeting: 1. The stockholders (with Class A and Class B stockholders voting separately) elected all of management's nominees for election as Class A Directors and Class B Directors. The results of the vote taken were as follows:
CLASS A DIRECTORS: FOR WITHHELD - ------------------------------------------------------------------- ------------ ---------- A. Leon Higginbotham............................................... 79,706,535 2,788,359 Robert A. Lawrence................................................. 81,829,784 665,110 Charles H. Price II................................................ 81,828,920 665,974 Donald M. Stewart.................................................. 81,836,389 658,505 William O. Taylor.................................................. 81,837,644 657,250 CLASS B DIRECTORS: - ------------------------------------------------------------------- John F. Akers...................................................... 416,141 0 Brenda C. Barnes................................................... 416,141 0 Richard L. Gelb.................................................... 416,141 0 Michael Golden..................................................... 416,141 0 Russell T. Lewis................................................... 416,141 0 Ellen R. Marram.................................................... 416,141 0 George L. Shinn.................................................... 416,141 0 Arthur Ochs Sulzberger............................................. 416,141 0 Arthur O. Sulzberger, Jr........................................... 416,141 0 Judith P. Sulzberger............................................... 416,141 0
2. The stockholders (with Class A and B stockholders voting together) ratified the amendments to the Company's 1991 Executive Cash Bonus Plan and 1991 Executive Stock Incentive Plan. The result of the vote taken was as follows: For:............................................................ 78,715,486 Against:........................................................ 3,591,442 Abstain:........................................................ 604,107 Broker Non-Vote................................................. 0 Total Against, Abstain and Broker Non-Vote*..................... 4,195,549
3. The stockholders (with Class A and Class B stockholders voting together) ratified the selection, by the Audit Committee of the Board of Directors, of Deloitte & Touche LLP, independent certified public 14 accountants, as auditors of the Company for the year ending December 27, 1998. The result of the vote taken was as follows: For:............................................................ 82,630,824 Against:........................................................ 151,719 Abstain:........................................................ 128,492 Broker Non-Vote................................................. 0 Total Against, Abstain and Broker Non-Vote*..................... 280,211
- ------------------------ * An abstention had the same effect as a vote against this matter. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 10.2 The Company's 1991 Executive Stock Incentive Plan, as amended through April 16, 1998. 10.3 The Company's 1991 Executive Cash Bonus Plan, as amended through April 16, 1998. 10.4 The Company's Non-Employee Directors' Stock Option Plan, as amended through February 19, 1998. (This version supersedes the version filed with the Company's Form 10-K dated March 2, 1998.) (b) REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the period for which this report is filed.
15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE NEW YORK TIMES COMPANY (Registrant) Date: May 7, 1998 /s/ JOHN M. O'BRIEN ----------------------------------------- John M. O'Brien SENIOR VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER (PRINCIPAL FINANCIAL OFFICER)
16 EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q QUARTER ENDED MARCH 29, 1998
EXHIBIT NO. EXHIBIT - ------------- ----------------------------------------------------------------------------------------------------- 10.2 The Company's 1991 Executive Stock Incentive Plan, as amended through April 16, 1998 10.3 The Company's 1991 Executive Cash Bonus Plan, as amended through April 16, 1998. 10.4 The Company's Non-Employee Directors' Stock Option Plan, as amended through February 19, 1998. (This version supersedes the version filed with the Company's Form 10-K dated March 2, 1998.) 27 Financial Data Schedule
17 EX-10.2 2 EXHIBIT 10.2 EXHIBIT 10.2 THE NEW YORK TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN AS AMENDED 1. NAME AND GENERAL PURPOSE The name of this plan is The New York Times Company 1991 Executive Stock Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to enable the Company (as hereinafter defined) to retain and attract executives who enhance its tradition and contribute to its success by their ability, ingenuity and industry, and to enable them to participate in the long-term success and growth of the Company. 2. DEFINITIONS (a) "Awards"--has the meaning specified in Section 12 hereof. (b) "Board"--means the Board of Directors of the Company. (c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan. (d) "Code"--means the Internal Revenue Code of 1986, as amended. (e) "Committee"--means the Committee referred to in Section 3 of the Plan. If at any time no Committee shall be in office then the functions of the Committee specified in the Plan shall be exercised by those members of the Board who are Non-Employee Directors. (f) "Common Stock"--means shares of the Class A Common Stock of the Company. (g) "Company"--means The New York Times Company, a corporation organized under the laws of the State of New York (or any successor corporation), and, unless the context otherwise requires, its subsidiaries (as hereinafter defined) and other non-corporate entities in which it owns directly or indirectly 20% or more of the equity interests. A "subsidiary" means any corporation in which the Company possesses directly or indirectly 50% or more of the combined voting power of all classes of stock. (h) "Consolidated Statement of Income"--means the consolidated statement of income (or any comparable statement, however designated) of the Company, audited by the independent certified public accountants of the Company and contained in the Company's annual report to stockholders or proxy statement. (i) "Disability"--means total disability as defined under the Company's long-term disability plan, whether or not the Participant is covered by such plan, as determined by the Committee. (j) "Fair Market Value"--means the arithmetic mean of the highest and lowest sales prices of the Common Stock as reported in the Consolidated Transactions of the American Stock Exchange ("AMSE") (or such other national securities exchange on which the Common Stock may be listed at the time of determination, and if the Common Stock is listed on more than one exchange, then on the one located in New York or if the Common Stock is listed only on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), then on such system) on the date of the grant or other date on which the Common Stock is to be valued hereunder. If no sale shall have been made on the AMSE, such other exchange or the NASDAQ on such date or if the Common Stock is not then listed on any exchange or on the NASDAQ, Fair Market Value shall be determined by the Committee in accordance with Treasury Regulations applicable to incentive stock options. (k) "Income Before Income Taxes"--means the amount designated as Income Before Income Taxes for the applicable year and shown separately on the Consolidated Statement of Income for such year. 1 (l) "Non-Employee Director"--means any Director of the Company who at the time of acting is a "Non-Employee Director" under Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (m) "Participant"--means a key employee of the Company who is selected by the Committee to participate in any one or more parts of the Plan from among persons who in the judgment of the Committee are key employees of the Company. In general, key employees are those employees who have principal responsibility for, or who contribute substantially to, the management efficiency, editorial achievement or financial success of the Company. Only employees of The New York Times Company, its subsidiaries and other non-corporate entities in which it owns directly or indirectly 40% or more of the equity interests are eligible to participate in the Plan. (n) "Retirement"--means retirement as defined by the terms of "The New York Times Companies Pension Plan" which became effective December 31, 1988, or any successor retirement plan, whether or not the Participant is a member of such retirement plan, and, in the case of employees of Affiliated Publications, Inc., or any subsidiary thereof, who retire under the terms of the Globe Newspaper Company Retirement Plan, which became effective January 1, 1994 (the "Globe Pension Plan") or any successor retirement plan, "Retirement" shall also mean retirement as defined by the terms of the Globe Pension Plan or any successor plan. 3. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Board or the Committee appointed by it and composed of two or more directors all of whom shall be Non-Employee Directors. The membership of the Committee shall be constituted so as to comply at all times with the applicable requirements of Rule 16b-3, and with the administration requirements of Section 162(m)(4)(C) of the Code. The Committee shall serve at the pleasure of the Board and shall have such powers as the Board may from time to time confer upon it. 4. OPTIONS AND AWARDS UNDER THE PLAN Options, which include "Non-Qualified Options" and "Incentive Stock Options" or combinations thereof, are rights to purchase Common Stock. Non-Qualified Options and Incentive Stock Options are subject to the terms, conditions and restrictions provided in Part I of the Plan. Awards under the Plan may include one or more of the following types, either alone or in any combination thereof: (i) "Stock Awards," (ii) "Restricted Stock Awards," (iii) "Retirement Unit Awards," (iv) "Annual Performance Awards," (v) "Performance Awards" or "Other Awards" and (vi) "Long-Term Performance Awards." Stock Awards are granted under Part IIA of the Plan. Restricted Stock Awards are granted under Part IIB of the Plan. Retirement Unit Awards are granted under Part IIC of the Plan. Annual Performance Awards are granted under Part IID of the Plan. Performance Awards or Other Awards are granted under Part IIE of the Plan. Awards are subject to the terms, conditions and restrictions provided in the respective subparts of Part II of the Plan. Annual Performance Awards will be based exclusively on the criteria set forth in Section 27A. Long-Term Performance Awards are granted under Part IIF of the Plan. Long-Term Performance Awards will be based exclusively on the criteria set forth in Section 28A. PART I STOCK OPTIONS 5. PURPOSE The purpose of the Stock Option portion of the Plan is to provide an added incentive for effective service and high levels of performance to Participants by affording them an opportunity, under the terms of the Plan, to acquire Common Stock and thereby to increase their proprietary interest in the continued progress and success of the Company. 2 6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS (a) The Committee may grant options to purchase Common Stock ("Options") to Participants in such amounts as the Committee may determine, subject to the conditions and limitations set forth in the Plan. Options may be granted in combination with Awards made under the Plan, and Options may be granted to any Participant whether or not he or she was eligible for, or received, an Award. (b) The number of shares of Common Stock with respect to which Options may be granted to any key employee during any calendar year shall not exceed 200,000 (subject to adjustment as provided in Sections 28 and 29 hereof). (c) There may be issued under the Plan pursuant to the exercise of Options, an aggregate of not more than 20,000,000 shares of Common Stock, subject to adjustment as provided in Sections 28 and 29 hereof. Shares of Common Stock issued pursuant to Options may be either authorized but unissued shares, treasury shares, reacquired shares, or any combination thereof. Any shares subject to an Option which expires without being exercised shall be available for issuance under new Options. 7. OPTION PRICE The exercise price of Common Stock subject to Options granted pursuant to the Plan shall be the Fair Market Value thereof at the time the Option is granted. If a Participant owns or is deemed to be the owner of, by reason of the attribution rules under Section 425(d) of the Code, more than 10% of the combined voting power of all classes of the stock of the Company or any subsidiary of the Company and an Option granted to such Participant is intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code, the option price shall be no less than 110% of the Fair Market Value of the Common Stock on the date the Option is granted. 8. PAYMENT OF OPTION PRICE The purchase price is to be paid in full when the Option is exercised and stock certificates will be delivered only against such payment. Such purchase price may be paid in such form as the Committee may determine. Payment of the option price may be made (i) in cash, (ii) by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price, (iii) by delivering to the Company shares of Common Stock previously owned, (iv) by electing to have the Company retain Common Stock which would be otherwise issued on exercise of the Option, or (v) any combination of the foregoing forms, all subject to the approval of the Committee and to such rules as the Committee may adopt. In determining the number of shares of Common Stock necessary to be delivered to or retained by the Company, such Common Stock shall be valued at Fair Market Value. 9. TYPES OF STOCK OPTIONS (a) Options granted under the Plan may be two types, an incentive stock option ("Incentive Stock Option") and a non-qualified stock option ("Non-Qualified Option"). It is intended that Incentive Stock Options granted hereunder shall constitute incentive stock options within the meaning of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, (i) no provision of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify either the Plan or any Incentive Stock Option granted under such provisions of the Code, and (ii) no Option designated by the Committee as a Non-Qualified Option shall constitute an Incentive Stock Option. In furtherance of the foregoing and not by way of limitation, no Incentive Stock Option shall be granted to a Participant who is not an employee of The New York Times Company or one of its subsidiaries. (b) If the aggregate Fair Market Value of the Common Stock (determined as of the date of grant) for which any optionee may for the first time exercise Incentive Stock Options in any calendar year under the 3 Plan and any other stock option plan of the Company, considered in the aggregate, exceeds $100,000, such excess Incentive Stock Options will be treated as Non-Qualified Options. 10. TERMS OF STOCK OPTIONS (a) Each Option will be for a term of not more than ten years from the date of grant, except that if a Participant owns or is deemed to be the owner of, by reason of the attribution rules of Section 425(d) of the Code, more than 10% of the combined voting power of all classes of stock of the Company or any subsidiary of the Company and an Incentive Stock Option is granted to such Participant, the term of such Option shall be no more than five years from the date of grant. (b) An Option may not be exercised within one year after the date of grant except in the case of the death of the optionee or upon termination of active employment with the Company by reason of the Disability or Retirement of the optionee during such period. Thereafter, an Option shall be exercisable in such installments, if any, as the Committee may specify, and shall be exercisable during the optionee's lifetime only by the optionee (or, if the optionee is disabled, by any guardian or other legal representative appointed to represent him or her) and, except as provided in subsections (c) and (d) below, shall not be exercisable by the optionee unless at the time of exercise such optionee is an employee of the Company. (c) Upon termination of active employment with the Company by reason of Disability or Retirement, an optionee (or, if the optionee is disabled, any guardian or legal representative appointed to represent him or her) may exercise all Options otherwise exercisable by him or her at the time of such termination of employment (subject to the provisions of subsection (e) below) until the expiration thereof. In the event an optionee dies while employed by the Company or after termination of employment by reason of Disability or Retirement, the person who acquired the right to exercise his or her Options by reason of the death of the optionee, as provided in Section 30 hereof, may exercise such Options otherwise exercisable at the time of death (subject to the provisions of subsection (e) below) at any time until the expiration thereof. (d) Upon termination of employment with the Company for any reason other than death, Retirement or Disability, the optionee may exercise all Options otherwise exercisable by him or her at the time of such termination of employment for an additional one year after such termination of employment. In the event such optionee dies within such one-year period, the person who acquired the right to exercise his or her Options by reason of the death of the optionee, as provided in Section 30 hereof, may exercise such Options at any time within the period of the greater of (i) the remainder of the one-year period described in the foregoing sentence, or (ii) three months from the date of the optionee's death. For purposes of this Section 10(d), in the event that any optionee is rehired by the Company within one year of such optionee's termination of employment with the Company, such optionee shall be deemed not to have terminated employment for purposes of determining the expiration date of all unexpired non-qualified stock options held by such individual on the date of rehire, with the effect that such options shall continue to be exercisable at any time until the expiration thereof (subject to the terms thereof and the provisions of this Section 10). (e) Notwithstanding any of the foregoing, no Option shall be exercisable in whole or in part after the expiration date provided in the Option. In the event of the death of the optionee while employed by the Company, or the Disability or Retirement of the optionee, the Committee shall have the discretion to provide for the acceleration of the exercisability of Options exercisable over a period of time, or alternatively, to provide for all or any part of such Options to continue to become exercisable in such installments as originally specified by the Committee, or such revised installments as specified by the Committee at the time of termination of employment (but in no event beyond the original expiration date), in either case subject to such conditions as determined by the Committee in its discretion. (f) No Option shall be transferable otherwise than by will or by the laws of descent and distribution. Notwithstanding the foregoing sentence, the Committee may determine that Options granted to a Participant or a specified group of Participants may be transferred by the Participant to one or more 4 members of the Participant's immediate family, to a partnership or limited liability company whose only partners or members are members of the Participant's immediate family, or to a trust established by the Participant for the benefit of one or more members of the Participant's immediate family; provided, however, that no Incentive Stock Options may become transferable if inconsistent with Section 422 of the Code, unless the Participant consents. For this purpose, "immediate family" means the Participant's spouse, parents, children (including adopted and step-children), grandchildren and the spouses of such parents, children (including adopted and step-children) and grandchildren. A transferee described in this subsection may not further transfer an Option. An Option transferred pursuant to this subsection shall remain subject to the provisions of the Plan and shall be subject to such other rules as the Committee shall determine. 11. OPTION AGREEMENTS In consideration of any Options granted to a Participant under the Plan, if requested by the Committee, such Participant shall enter into an Option Agreement with the Company providing, in addition to such other terms as the Committee may deem advisable, that the optionee must remain in the employ of the Company for one year before such optionee will be entitled to exercise the Option, except as provided in Section 10 hereof with respect to death, Disability and Retirement, and specifying the installments, if any, in which such Option shall become exercisable. PART II AWARDS 12. FORM OF AWARDS The Award portion of the Plan is designed to provide incentives for Participants by the making of awards of supplemental compensation ("Awards"). The Committee, subject to the terms and conditions hereof, may make Awards to a Participant in any one, or in any combination, of the following forms: (a) Common Stock as provided in Part IIA of the Plan ("Stock Awards"); (b) Restricted Stock as provided in Part IIB of the Plan ("Restricted Stock Awards"); (c) Retirement Units as provided in Part IIC of the Plan ("Retirement Unit Awards"); (d) Annual Performance Awards as provided in Part IID of the Plan ("Annual Performance Awards"); (e) Performance Awards ("Performance Awards") or other forms of Awards ("Other Awards"), as provided in Part IIE of the Plan; and (f) Long-Term Performance Awards as provided in Part IIF of the Plan ("Long-Term Performance Awards"). Awards may be made to a Participant whether or not he or she is receiving an Option grant under Part I of the Plan for the year and whether or not he or she receives an award under the Cash Plan. Awards will be based on a Participant's performance in those areas for which the Participant is directly responsible. Performance for this purpose may be measured by the achievement of specific management goals such as, but not limited to, an increase in earnings or the operating cash flow of the Company, outstanding initiative or achievement in any department of the Company, or any other standards specified by the Committee. Annual Performance Awards will be based exclusively on the criteria set forth in Section 27A. Long-Term Performance Awards will be based exclusively on the criteria set forth in Section 28A. 13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER PART II OF THE PLAN FOR ANY YEAR (a) No accrual for Awards shall be made hereunder (or under the Cash Plan) for any year unless cash dividends of not less than ten cents ($.10) per share (subject to adjustment as provided in Sections 28 and 5 29 hereof) have been declared on the outstanding Class A and Class B Common Stock of the Company during such year. (b) In the event that the above condition is met for any year during the continuance of this Plan, the maximum aggregate amount that may be accrued for Awards under the Plan and the Cash Plan for such year shall be 4% of Income Before Income Taxes. The Committee, in its sole discretion, may make adjustments in Income Before Income Taxes to take account of extraordinary, unusual or infrequently occurring events and transactions, changes in accounting principles that substantially affect the foregoing, or such other circumstances as the Committee may determine warrant such adjustment. (c) As soon as feasible after the close of each year, the independent certified public accountants of the Company shall report the maximum amount that may be accrued for Awards for such year under the formula described in Section 13(b), subject to the second sentence of such Section. (d) If amounts are accrued in any year under the formula described in this Section 13 and are not awarded in full in such year under the Plan and the Cash Plan, such unawarded amounts may, in the discretion of the Committee, be carried forward and be available for Awards under the Plan and under the Cash Plan in any future year without regard to the provisions of Sections 13(a) or (b) of the Plan applicable to Awards made in such year. (e) Awards under the Plan for any year may not exceed the sum of (i) the amount accrued for such year under Section 13(b) above plus (ii) unawarded accrued amounts carried forward from previous years under Section 13(d) above plus (iii) amounts that may become available for Awards pursuant to the last sentence of Sections 15(c) and 27A hereof, minus (x) the amount of interest or dividend equivalents set aside during such year pursuant to Sections 15(c) and 27A hereof and the amount of dividend equivalents allocated to Retirement Unit Accounts during such year pursuant to Section 24 hereof, and minus (y) the amount of awards made for such year under the Cash Plan (and any interest equivalents allocated during such year pursuant to Section 10(b), 11(f) and 12(b) thereof). For this purpose, the amount of Awards of Common Stock under the Plan shall be based on the Fair Market Value of the Common Stock subject to Awards as of the date of grant of such Awards. (f) Subject to Sections 28 and 29 hereof, the aggregate number of shares of Common Stock for which Stock, Restricted Stock, Retirement Units, Annual Performance Awards, and Performance and Other Awards may be made under the Plan shall not exceed 1,000,000 shares, which shall be treasury shares reserved for issuance of Awards under the Plan. Shares of Common Stock subject to, but not issued under, any deferred Award which has been discontinued by the Committee pursuant to the provisions hereof or any Restricted Stock which is forfeited by any Participant shall again be available for Awards under the Plan. 14. DETERMINATION OF AWARDS AND PARTICIPANTS (a) As promptly as practicable after the end of each year, the Committee may make Awards (other than Annual Performance Awards and Long-Term Performance Awards, which are to be made exclusively as set forth in Sections 27A and 28A, respectively) for such year and determine the amounts to be carried forward for Awards in future years. The Committee may also, in its discretion, make Awards (other than Annual Performance Awards and Long-Term Performance Awards, which are to be made exclusively as set forth in Sections 27A and 28A, respectively) prior to the end of the year based on the amounts available under clauses (ii) and (iii) of Section 13(e) and reasonable estimates of the accrual for the year in question. (b) The Committee shall have absolute discretion to determine the key employees who are to receive Awards (other than Annual Performance Awards, which are to be made exclusively as set forth in Sections 27A and 28A, respectively) under the Plan for any year and to determine the amount of such Awards based on such criteria and factors as the Committee in its sole discretion may determine, such as the Company's operating cash flow and overall financial performance. Recommendations as to the key employees who are to receive Awards (including Annual Performance Awards and Long-Term Performance Awards) under 6 the Plan for any year and as to the amount and form of such Awards shall, however, be made to the Committee by the chief executive officer of the Company. The fact that an employee is selected as eligible for an Award shall not mean, however, that such employee will necessarily receive an Award. (c) A person whose employment terminates during the year or who is granted a leave of absence during the year may, in the discretion of the Committee and under such rules as the Committee may from time to time prescribe, be given an Award with respect to the period of such person's service during such year. 15. METHOD AND TIME OF PAYMENT OF AWARDS (a) Awards shall be paid in full as soon as practicable after the Award is made; provided, however, that the payment of Annual Performance Awards and Long-Term Performance Awards shall be subject to the provisions of Sections 27A and 28A, respectively, and provided further, that the payment of any or all Awards may be deferred, divided into annual installments, or made subject to such other conditions as the Committee in its sole discretion may authorize under such rules and regulations as may be adopted from time to time by the Committee. (b) The Committee's rules and regulations may include procedures by which a Participant expresses a preference to the Committee as to the form of Award or method of payment of an Award but the final determination as to the form and the terms and conditions of any Award shall rest solely with the Committee. (c) Awards deferred under the Plan shall become payable to the Participant or, in the event of the Participant's death, as specified in Section 30 hereof, in such manner, at such time or times (which may be either before or after Retirement or other termination of service), and subject to such conditions as the Committee in its sole discretion shall determine. In any year the Committee shall have the discretion to set aside, for payment in such year or any future year, interest on any deferred Award payable partly in cash, and amounts equivalent to dividends on any deferred Award payable wholly or partly in stock; provided, however, that the total amount of such interest and dividend equivalents shall be deducted from the maximum amount available for Awards under Section 13(e) of the Plan. Any forfeited deferred Awards (including any forfeited stock at its Award value) shall be carried forward and be available for Awards in any future year without regard to the provisions of Sections 13(a) or (b) of the Plan. 16. INDIVIDUAL AGREEMENTS (a) The Committee may in its discretion require that each Participant receiving an Award enter into an agreement with the Company which shall contain such terms and conditions as the Committee in its discretion may require. (b) The Committee may cancel any unexpired, unpaid or deferred Award at any time if the Participant is not in compliance with all applicable provisions of the agreement referred to above, if any, and the Plan. 17. STATUS OF PARTICIPANTS No Participant in this Plan shall be deemed to be a stockholder of the Company, or to have any interest in any stock or any specific assets of the Company by reason of the fact that deferred Stock Awards, Retirement Unit Awards, Annual Performance Awards, Long-Term Performance Awards, Performance Awards, Other Awards or dollar credits are to be recorded as being held for such Participant's account to be paid in installments in the future. The interest of all Participants shall derive from and be determined solely by the terms and provisions of the Plan set forth herein. 7 18. [INTENTIONALLY LEFT BLANK] PART IIA STOCK AWARDS 19. DETERMINATION OF STOCK AWARDS (a) Each year the Committee shall designate those Participants who shall receive Stock Awards under this part of the Plan. Stock Awards are made in the form of grants of Common Stock, which may be delivered immediately, in installments or on a deferred date, as the Committee, in its discretion, may provide. (b) If the Committee determines that some portion of a Stock Award to a Participant shall be treated as a deferred Stock Award and payable in annual or other periodic installments, then the Participant will be notified in writing when such deferred Stock Awards shall be paid and over what period of time. As soon as feasible after the granting of such a Stock Award, there shall be reserved out of the treasury shares of the Company, a number (which may include a fraction) of shares of Common Stock equal to the number of shares of Common Stock so awarded. In each year at the discretion of the Committee there may also be allocated or credited to each Participant a dollar amount equal to the cash dividends declared and paid by the Company on its Common Stock which the Participant would have received had such Participant been the owner of the number of shares of any Common Stock deferred for future payment. Any amounts provided for pursuant to the preceding sentence shall become payable in such manner, at such time or times, and subject to such conditions (which may include provision for an amount equivalent to interest on such dividend equivalents at rates fixed by the Committee) as the Committee in its sole discretion shall determine; provided, however, that the total value of such dividend equivalents (and any interest thereon) shall be deducted from the amount available for Awards under the provisions of Section 13(e) of the Plan. The Committee in its discretion may make appropriate equitable adjustments to such deferred Stock Award to account for any dividends of property (other than cash) declared and paid by the Company on its Common Stock, or to account for any other event described in Sections 28 and 29 hereof. PART IIB RESTRICTED STOCK AWARDS 20. DETERMINATION OF RESTRICTED STOCK AWARDS Each year the Committee shall designate the Participants who shall receive Restricted Stock Awards. Shares awarded under this part of the Plan, while subject to the restrictions hereinafter set forth, are referred to as "Restricted Stock." 21. TERMS OF RESTRICTED STOCK AWARDS Any Award of Restricted Stock shall be subject to the following terms and conditions and to any other terms and conditions not inconsistent with the Plan as shall be prescribed by the Committee in its sole discretion and which may be contained in the agreement, if any, referred to in Section 16 above (or in any amendment thereto): (a) DELIVERY OF RESTRICTED STOCK. Unless otherwise determined by the Committee, the Company shall transfer treasury shares to each Participant to whom an Award of Restricted Stock has been made equal to the number of shares of Restricted Stock specified in the Award, and hold the certificates representing such shares of Restricted Stock for the Participant for the period of time during which such shares shall remain subject to the restrictions set forth in the Award (the "Restricted Period"). Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered by a Participant during the Restricted Period, except as hereinafter provided. Except for the restrictions set forth herein and unless otherwise determined by the Committee, a Participant shall have all the rights of a stockholder with respect to the shares of Restricted Stock comprising his or her Award, including, but not limited to, the right to vote and the 8 right to receive dividends (which if in shares of Common Stock shall be Restricted Stock under the same terms and conditions). (b) LAPSE OF RESTRICTED PERIOD. The Restricted Period shall commence upon the date of the Award (which unless otherwise specified by the Committee shall be the date the Restricted Stock is transferred to the Participant) and, unless sooner terminated as otherwise provided herein, shall continue for such period of time as specified by the Committee in the Award, which shall in no event be less than one year, and thereafter shall lapse in such installments, if any, as provided by the Committee in the Award. (c) LEGEND. Each certificate issued in respect of shares of Restricted Stock transferred or issued to a Participant under an Award shall be registered in the name of the Participant and shall bear the following (or a similar) legend: "THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE "PLAN") APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK AGREEMENT DATED (THE "AGREEMENT"), AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY MANNER DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY." (d) DEATH OR DISABILITY. Unless the Committee shall otherwise determine in the Award, if a Participant ceases to be employed by the Company by reason of death or Disability, the Restricted Period covering all shares of Restricted Stock transferred or issued to such Participant under the Plan shall immediately lapse. (e) RETIREMENT. Unless the Committee shall otherwise determine in the Award, the Restricted Period covering all shares of Restricted Stock transferred to a Participant under the Plan shall immediately lapse upon such Participant's Retirement, whether early or not. (f) TERMINATION OF EMPLOYMENT. Unless the Committee shall otherwise determine in the Award or otherwise determine at or after the date of grant, if a Participant ceases to be employed by the Company other than due to a condition described in Sections 21(d) or (e) above, all shares of Restricted Stock owned by such Participant for which the Restricted Period has not lapsed shall revert back to the Company upon such termination. Authorized leave of absence or absence in military service shall constitute employment for the purposes of this Section 21(f). Whether absence in government service may constitute employment for the purposes of the Plan shall be conclusively determined by the Committee. (g) WAIVER OF FORFEITURE PROVISIONS. The Committee, in its sole and absolute discretion, may waive the forfeiture provisions in respect of all or some of the Restricted Stock awarded to a Participant. (h) ISSUANCE OF NEW CERTIFICATES. Upon the lapse of the Restricted Period with respect to any shares of Restricted Stock, such shares shall no longer be subject to the restrictions imposed in the Award and shall no longer be considered Restricted Stock for the purposes of the Award and the Plan, and the Company shall issue new share certificates respecting such shares registered in the name of the Participant without the legend described in Section 21(c) in exchange for those previously issued. 9 PART IIC RETIREMENT UNIT AWARDS 22. DETERMINATION OF RETIREMENT UNIT AWARDS Each year the Committee shall designate those Participants who shall receive Retirement Unit Awards under the Plan. The Company shall create and maintain appropriate records of account for each Participant which shall be designated as the Participant's Retirement Unit Account. 23. CREDITS TO RETIREMENT UNIT ACCOUNTS The Committee shall allocate to each Participant selected to receive a Retirement Unit Award for that year such dollar amount as the Committee shall determine, taking into account the value of the Participant's services to the Company. Such dollar amount shall thereupon be converted into Retirement Units or fractions of Units and credited to each such Participant's Retirement Unit Account in a number equal to the quotient obtained by dividing such allocated dollar amount by the Fair Market Value of one share of Common Stock as of the date the allocation is made. 24. DIVIDEND CREDITS At the discretion of the Committee there may also be allocated in each year to each Participant a dollar amount equal to the cash dividends declared and paid by the Company on the Common Stock which the Participant would have received had such Participant been the owner of the number of shares of Common Stock equal to the number of the whole Retirement Units (but not fractional Units) credited to the Participant's Retirement Unit Account; provided, however, that the total value of such dividend equivalents shall be deducted from the amount available for Awards under Section 13 of the Plan. The dollar amounts allocated shall be converted into and credited to the Participant's Retirement Unit Account as Retirement Units or fractions thereof as set forth in Section 23 above as of the date on which such dividends were paid by the Company. No interest shall be paid on the dollar amount so allocated to the Retirement Unit Account of any Participant. The Committee in its discretion may make appropriate equitable adjustments to such Retirement Unit Accounts to account for any dividends of property (other than cash) declared and paid by the Company on its Common Stock, or to account for any other event described in Sections 28 and 29 hereof. 25. RESERVATION OF STOCK AND ACCOUNTING RECORDS The Company shall keep records of the Participant's Retirement Unit Account. At the time of any allocation to a Participant's account under Sections 23 or 24 hereof, there shall be reserved out of treasury shares of the Company a number (which may include a fraction) of shares of Common Stock equal to the number of Units or fraction thereof so allocated. 26. MATURITY AND PAYMENT AFTER MATURITY (a) The Retirement Unit Account of each Participant shall mature upon such Participant's death, Retirement or other termination of employment. (b) After maturity, the Company shall deliver to the Participant (or in the event of the death of the Participant, as specified in Section 30 hereof) in ten approximately equal annual installments, shares of Common Stock equal in the aggregate to the number of Retirement Units credited to the Participant's Retirement Unit Account. Any fraction of a Unit credited to the Participant's account at maturity shall be paid in cash with the first installment, the fractional Unit being converted into cash at the Fair Market Value of the Common Stock on such first payment date. The first such installment shall be paid within 90 days after maturity. However, the Committee in its discretion at or any time after maturity may, with the consent of the Participant (or the beneficiary of a deceased Participant as specified in Section 30 hereof), (i) defer the commencement of such distribution or defer any installment, (ii) deliver full payment of the shares of Common Stock equal to the aggregate number of Retirement Units credited to the Participant's 10 Retirement Unit Account and the dollar amount credited thereto, or (iii) reduce or increase the number of annual installments in which the payments are to be made. (c) So long as Retirement Units remain credited to the Retirement Unit Account of a Participant subsequent to maturity, such account shall be credited with the dollar amount allocated to the account as dividends as provided for in Section 24 hereof. Any dollar amount so credited may be paid in cash with the next succeeding annual installment made under Section 26(b) above, or in such manner, at such time or times, and subject to such conditions as the Committee in its sole discretion shall determine; provided, however, that in the case of any dollar amount credited to an account after maturity in respect of a dividend declared prior to maturity, such dollar amounts shall be converted to Retirement Units as of the date of payment and the remaining installments of Common Stock shall be increased accordingly. PART IID ANNUAL PERFORMANCE AWARDS 27A. DETERMINATION OF ANNUAL PERFORMANCE AWARDS (a) GENERAL. Each year the Committee may make Annual Performance Awards under this part of the Plan; provided that no Participant may be eligible to receive an Annual Performance Award hereunder and under the Cash Plan in the same year. (b) CERTAIN DEFINITIONS. For the purposes of this Section 27A, the following terms shall have the meanings specified: "Affected Officers" shall mean those executive officers of the Company whose compensation is required to be disclosed in the Company's annual proxy statement relating to the election of directors. "Code Section 162(m)" shall mean Section 162(m) of the Code (or any successor provision), and "Regulations" shall mean the regulations promulgated thereunder, as from time to time in effect. "Eligible Participants" shall have the meaning set forth in subsection (c) below. "Performance Adjustment" means, for any year, a factor ranging from 0% to 200%, based upon the achievement of Performance Goal Targets established by the Committee, that, when multiplied by an Eligible Participant's Target Award, determines the amount of such Eligible Participant's Annual Performance Award for such year. "Performance Goal" means, for any year, the business criteria selected by the Committee to measure the performance during such year of the Company (or of a division, subsidiary or group thereof) from one or more of the following: (i) earnings per share of the Company for the year; (ii) net income of the Company for the year; (iii) return on assets of the Company for the year (net income of the Company for the year divided by average total assets during such year); (iv) return on stockholders' equity of the Company for the year (net income of the Company for the year divided by average stockholders' equity during such year); (v) operating profit of the Company or of a division, subsidiary or group thereof for the year; (vi) operating cash flow of the Company or of a division, subsidiary or group thereof for the year; and (vii) increase in shareholder value as determined at the end of each year. 11 "Performance Goal Target" means, for any Performance Goal, the levels of performance during a year under such Performance Goal established by the Committee to determine the Performance Adjustment to an Eligible Participant's Target Award for such year. "Target Award" means, for any year, with respect to an Eligible Participant, the dollar amount set by the Committee that, when multiplied by the applicable Performance Adjustment, determines the dollar amount of such Eligible Participant's Annual Performance Award. (c) ELIGIBILITY. Annual Performance Awards are available each year only to Plan Participants who are designated by the Committee, prior to March 31 of such year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), as likely to be Affected Officers for such year, whose annual salary and bonus for such year are expected to exceed $1,000,000 and who are not designated by the Committee as eligible for an annual performance award under the Cash Plan for such year ("Eligible Participants"). (d) DETERMINATION OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), the Committee will determine the Eligible Participants for such year, will designate those Eligible Participants who will be entitled to earn an Annual Performance Award for such year under this Plan, and will establish for each such Eligible Participant for such year: (i) a Target Award, (ii) one or more Performance Goals, and (iii) for each such Performance Goal, a Performance Goal Target, the method by which achievement thereof will be measured and a schedule of Performance Adjustment factors corresponding to varying levels of Performance Goal Target achievement. In the event more than one Performance Goal is established for any Eligible Participant, the Committee shall at the same time establish the weighting of each such Performance Goal in determining such Eligible Participant's Annual Performance Award. Notwithstanding anything in this Section 27A to the contrary, the Annual Performance Award payable to any Eligible Participant in any year may not exceed $1.5 million. (e) PAYMENT OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f) below, Annual Performance Awards will be paid as soon as practicable after the end of the year to which it relates and after the Committee certifies the extent to which the Performance Goal Target or Targets under the Performance Goal or Goals have been met or exceeded. In the discretion of the Committee, an Annual Performance Award may be paid in cash, shares of Common Stock, shares of Restricted Stock (subject to the provisions of Section 21 hereof), Retirement Units (subject to the provisions of Sections 23-26 hereof) or any combination thereof. For this purpose, shares of Common Stock shall be valued at Fair Market Value, and Restricted Stock and Retirement Units shall be deemed to have a value equal to the Fair Market Value of the underlying Common Stock, in each case as of the date of the Committee's determination to pay such Annual Performance Award in such form or forms. If permitted by the Regulations and Code Section 162(m), the Committee may determine to pay a portion of an Annual Performance Award in December of the year to which it relates. The Committee may not increase the amount of an Annual Performance Award that would otherwise be payable upon achievement of the Performance Target or Targets, but it may reduce any Eligible Participant's Annual Performance Award in its discretion. Subject to Section 14(c) above, no Annual Performance Award will be payable to any Eligible Participant who is not an employee of the Company on the last day of the year to which such Annual Performance Award relates. (f) DEFERRAL OF ANNUAL PERFORMANCE AWARDS. If the Committee determines that some portion of an Annual Performance Award to an Eligible Participant shall be treated as a deferred Annual Performance Award and be payable in annual or other periodic installments, the Eligible Participant will be notified in writing when such deferred Annual Performance Award shall be paid and over what period of time. A deferred Award in the form of shares of Common Stock shall be subject to the provisions of Section 19(b) hereof. In the case of a deferred Award in the form of cash, in each year the Committee shall have the discretion to provide for the payment of an amount equivalent to interest, at such rate or rates fixed by the Committee, on such deferred cash Annual Performance Award. Any amounts provided for pursuant to the preceding sentence shall become payable in such a manner, at such time or times, and subject to such 12 conditions as the Committee shall in its sole discretion determine; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under the formula described in Section 13 of the Plan. (g) CODE SECTION 162(m). It is the intent of the Company that Annual Performance Awards satisfy, and this Section 27A be interpreted in a manner that satisfies, the applicable requirements of Code Section 162(m) and the Regulations so that the Company's tax deduction for Annual Performance Awards to Affected Officers is not disallowed in whole or in part by operation of Code Section 162(m). If any provision of this Plan or of any Annual Performance Award would otherwise frustrate or conflict with such intent, that provision shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any irreconcilable conflict with such intent, such provision shall be deemed void as applicable to Eligible Participants. PART IIE PERFORMANCE OR OTHER AWARDS 27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS (a) Each year the Committee in its sole discretion may authorize other forms of Awards such as, but not limited to, Performance Awards, if the Committee deems it appropriate to do so in order to further the purposes of the Plan. (b) A "Performance Award" shall mean an Award which entitles the Participant to receive Common Stock, Restricted Stock, Retirement Units, Options under Part I of the Plan or other compensation (which may include cash), or any combination thereof, in an amount which depends upon the financial performance of the Company during a stated period of more than one year. Performance for this purpose may be measured by the growth in book value of the Common Stock, an increase in per share earnings of the Company, an increase in operating cash flow, or any other indicators specified by the Committee. The Committee shall also fix the period during which such performance is to be measured, the value of a Performance Award for purposes of providing for the accrual pursuant to Section 13 of the Plan and the form of payment to be made in respect of the Performance Award. PART IIF LONG-TERM PERFORMANCE AWARDS 28A. DETERMINATION OF LONG-TERM PERFORMANCE AWARDS (a) GENERAL. Each year the Committee shall designate those Participants who shall be eligible to receive Long-Term Performance Awards under this part of the Plan. (b) CERTAIN DEFINITIONS. For purposes of this Section 28A, the following terms shall have the meanings specified: "Code Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code of 1986, as amended (or any successor provision), and "Regulations" shall mean the regulations promulgated thereunder, as from time to time in effect. "Eligible Participants" shall mean certain key business leaders and senior management of the Company as determined in the discretion of the Committee. "Long-Term Performance Goal" means, for any Performance Period, the business criteria selected by the Committee to measure the performance during such Performance Period of the Company (or a division, subsidiary or group thereof) from one or more of the following: (i) earnings per share of the Company for the Performance Period; (ii) net income of the Company for the Performance Period; 13 (iii) return on assets of the Company for the Performance Period (net income of the Company for the Performance Period divided by average total assets during such Performance Period); (iv) return on stockholder's equity of the Company for the Performance Period (net income of the Company for the Performance Period divided by average stockholder's equity for such Performance Period); (v) operating profit of the Company or of a division, subsidiary or group thereof for such Performance Period; (vi) operating cash flow of the Company or of a division, subsidiary or group thereof for the Performance Period; and (vii) increase in shareholder value as determined at the end of the Performance Period. "Long-Term Performance Goal Target" means, for any Long-Term Performance Goal, the levels of performance during a Performance Period under such Long-Term Performance Goal established by the Committee to determine an Eligible Participant's maximum Long-Term Performance Award. "Performance Period" means the period in excess of one year commencing on January 1 of the year in which the Committee makes the Long-Term Performance Award to an Eligible Participant. (c) ELIGIBILITY. Long-Term Performance Awards are available each year to Eligible Participants who are designated by the Committee, prior to March 31 of such year (or prior to such later date as permitted by Code Section 162(m) and the Regulations). (d) DETERMINATION OF LONG-TERM PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), the Committee will designate the Eligible Participants who will be entitled to earn a Long-Term Performance Award for such Performance Period under this Plan, and will establish for each such Eligible Participant for such Performance Period (i) one or more Long-Term Performance Goals, and (ii) for each such Long-Term Performance Goal, a Long-Term Performance Goal Target and the method by which achievement thereof will be measured. In the event that more than one Long-Term Performance Goal is established for any Eligible Participant, the Committee shall at the same time establish the weighting of each such Long-Term Performance Goal in determining such Eligible Participant's Long-Term Performance Award. Notwithstanding anything in this Section 28A to the contrary, the Long-Term Performance Award payable to any Eligible Participant in any Performance Period may not exceed $1.5 million. (e) PAYMENT OF LONG TERM PERFORMANCE AWARDS. Subject to subsection (g) below, Long-Term Performance Awards will be paid in cash as soon as practicable after the end of the Performance Period to which it relates and after the Committee certifies the extent to which the Long-Term Performance Goal Target or Targets under the Long-Term Performance Goal or Goals have been met or exceeded. If permitted by the Regulations and Code Section 162(m), the Committee may determine to pay a portion of a Long-Term Performance Award in December of the last year of the Performance Period to which it relates. The Committee may not increase the amount of a Long-Term Performance Award that would otherwise be payable upon the achievement of the Long-Term Performance Goal Target or Targets, but it may reduce any Eligible Participant's Long-Term Performance Award in its discretion. Subject to Sections 14(c) and 28A(g), no Long-Term Performance Award will be payable to any Eligible Participant who is not an employee of the Company on the last day of the Performance Period to which such Long-Term Performance Award relates. (f) TERMINATION OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR RETIREMENT. In the event that an Eligible Participant terminates employment because of death, Disability or Retirement, such Eligible Participant, or in the event of death such person as determined in accordance with Section 30, shall be paid a pro rata portion of such Eligible Participant's Long-Term Performance Award that would otherwise be payable upon the achievement of the Long-Term Performance Goal Target or Targets had the Participant continued 14 employment until the end of the Performance Period. Such pro rata Long-Term Performance Award shall not be paid until the end of the Performance Period to which such Long-Term Award relates. (g) DEFERRAL AND ALTERNATIVE FORM OF PAYMENT OF LONG-TERM PERFORMANCE AWARDS. If the Committee determines that some portion of a Long-Term Performance Award to an Eligible Participant shall be treated as a deferred Long-Term Performance Award and payable in annual or other periodic installments, the Eligible Participant will be notified in writing when such deferred Long-Term Performance Award shall be paid and over what period of time. In each year the Committee shall have the discretion to provide for the payment of an amount equivalent to interest, at such rate or rates fixed by the Committee, on any deferred Long-Term Performance Award. Any amounts provided for pursuant to the preceding sentence shall become payable in such manner, at such time or times, and subject to such conditions as the Committee shall in its sole discretion determine; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under the formula described in Section 5 of the Plan. Furthermore, the Committee may, in its sold discretion, determine that such Long-Term Performance Award shall be paid in shares of Common Stock or in the form of Retirement Units (subject to the provisions of Sections 23-26 hereof). For this purpose, shares of Common Stock shall be valued at Fair Market Value, and Retirement Units shall be deemed to have a value equal to the Fair Market Value of the underlying Common Stock, in each case as of the date of the Committee's determination to pay such Long-Term Performance Award in such form. (h) CODE SECTION 162(m). It is the intent of the Company that Long-Term Performance Awards satisfy, and this Section 28A be interpreted in a manner that satisfies, the applicable requirement of Code Section 162(m) and the Regulations so that the Company's tax deduction for Long-Term Performance Awards to Eligible Participants is not disallowed in whole or in part by operation of Code Section 162(m). If any provision of this Plan or of any Long-Term Performance Award would otherwise frustrate or conflict with such intent, that provision shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any irreconcilable conflict with such intent, such provision shall be deemed void as applicable to any Participant whose compensation is subject to Code Section 162(m). PART III GENERAL PROVISIONS 28. STOCK DIVIDEND OR STOCK SPLIT If at any time the Company shall take any action whether by stock dividend, stock split, combination of shares, or otherwise, which results in a proportionate increase or decrease in the number of shares of Common Stock theretofore issued and outstanding, (i) the number of shares of Common Stock then subject to deferred Awards, credited to Retirement Unit Accounts (matured or unmatured) or set aside for Performance or Other Awards, (ii) the number of outstanding Options, the number of shares of Common Stock for which such Options are exercisable and the exercise price thereof, (iii) the number of shares of Common Stock reserved for Awards, (iv) the number of shares of Common Stock reserved for Options, and (v) the maximum number of shares with respect to which Options may be granted to any key employee in any calendar year under Section 6(b), shall be increased or decreased in the same proportion. The Committee shall make an appropriate equitable adjustment to the provisions of Section 13(a) to take account of such increase or decrease in issued and outstanding shares. The Committee in its discretion may make appropriate equitable adjustments respecting deferred Stock Awards, Retirement Units, Annual Performance Awards, Long-Term Performance Awards, Performance or Other Awards and outstanding Options to take account of a dividend by the Company of property other than cash. All such adjustments shall be made by the Committee whose determination shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 29. RECLASSIFICATION OR MERGER If at any time the Company reclassifies or otherwise changes its issued and outstanding Common Stock (other than in par value) or the Company and one or more corporations merge and the Company is 15 the surviving corporation of such merger, then each Stock Award, Retirement Unit (matured or unmatured), Annual Performance Award, Performance or Other Award which at the time of such reclassification or merger is credited as a Stock Award, Retirement Unit, Annual Performance Award, Long-Term Performance Award, Performance or Other Award shall thereafter be deemed to be the equivalent of (and all Units thereafter credited to a Retirement Unit Account shall be computed with reference to), and outstanding Options shall be exercisable for, the shares of stock or other securities of the Company which pursuant to the terms of such reclassification or merger are issued with respect to each share of Common Stock. The Committee shall also make an appropriate equitable adjustment to the provisions of Sections 6(b) and 13(a) to take account of such event. All such adjustments shall be made by the Committee whose determination shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 30. NON-ALIENATION OF BENEFITS Except as herein specifically provided, no right or unpaid benefit under this Plan shall be subject to alienation, assignment, pledge or charge and any attempt to alienate, assign, pledge or charge the same shall be void. If any Participant or person entitled to the benefits hereunder should attempt to alienate, assign, pledge or charge any benefit hereunder, then such benefit shall, in the discretion of the Committee, cease. Notwithstanding the foregoing, rights and benefits hereunder shall pass by will or the laws of descent and distribution in the following order: (i) to beneficiaries so designated by the Participant; if none, then (ii) to a legal representative of the Participant; if none, then (iii) to the persons entitled thereto as determined by a court of competent jurisdiction. Awards so passing shall be made at such times and in such manner as if the Participant were living. 31. WITHHOLDING OR DEDUCTION FOR TAXES If at any time specified herein for the making of any payment or delivery of any Common Stock to any Participant or beneficiary, any law or regulation of any governmental authority having jurisdiction in the premises shall require the Company to withhold, or to make any deduction for, any taxes or take any other action in connection with the payment or delivery then to be made, such payment or delivery shall be deferred until such withholding or deduction shall have been provided for by the Participant or beneficiary, or other appropriate action shall have been taken. The Participant or beneficiary may satisfy the obligation for such withholding or deduction in whole or in part by electing to deliver shares of Common Stock already owned or to have the Company retain from the distribution shares of Common Stock, in each case having a Fair Market Value equal to the amount to be withheld or deducted. 32. ADMINISTRATION EXPENSES The entire expense of administering this Plan shall be borne by the Company. 33. GENERAL CONDITIONS (a) The Board in its discretion may from time to time amend, suspend or terminate any or all of the provisions of this Plan, provided that no change may be made which would prevent Incentive Stock Options granted under the Plan from being Incentive Stock Options as described therein without the consent of the optionees concerned, and further provided that the Board may not make any amendment which (1) changes the class of persons eligible for Incentive Stock Options, or (2) increases the total number of shares for which Options may be granted under Section 6(b), or (3) materially affects the provisions of Sections 13(a) or (b) of the Plan, or (4) increases the total number of shares authorized under Section 13(f) for which Awards may be granted, without the consent and approval of the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon, voting together as one class. The foregoing provisions shall not be construed to prevent the Committee from exercising its discretion, or to limit such discretion, to increase the total number of shares for which Options may be granted under Section 6(b) or the total number of shares authorized under Section 13(f) for which Awards may be granted, as expressly permitted by Sections 28 and 29 hereof, or to 16 adjust the provisions of Sections 13(a) and (b) hereof as expressly permitted by Sections 13(b), 28 and 29 hereof, or otherwise to exercise any discretion to the extent expressly authorized hereunder. (b) Nothing contained in the Plan shall prohibit the Company from establishing incentive compensation arrangements in addition to this Plan and the Cash Plan. Payments made under any such separate arrangements shall not be included in or considered a part of the maximum dollar amount available for Awards under the Plan and Cash Plan, or number of shares available for Awards or Options under the Plan, and shall not be charged against the dollar or share amounts available for Awards under the Plan and Cash Plan or Options under the Plan. In the discretion of the Committee, employees shall be eligible to participate in such other arrangements, as well as the Plan and Cash Plan, in the same year. (c) Nothing in this Plan shall be deemed to limit in any way the right of the Company to terminate a Participant's employment with the Company at any time. (d) The Committee may promulgate rules and regulations relating to the administration and interpretation of, and procedures under, the Plan. Any decision or action taken by the Company, the Board or the Committee arising out of or in connection with the construction, administration, interpretation and effect of the Plan shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. (e) No member of the Board or of the Committee shall be liable for any act or action, whether of commission or omission, taken by any other member or by any officer, agent or employee, nor for anything done or omitted to be done by such Director except in circumstances involving actual bad faith. (f) Notwithstanding any other provision of this Plan, the Company shall not be obligated to make any Award, issue any shares of Common Stock, or grant any Option with respect thereto, unless it is advised by counsel of its selection that it may do so without violation of the applicable Federal and State laws pertaining to the issuance of securities, and may require any stock so issued to bear a legend, may give its transfer agent instructions, and may take such other steps, as in its judgment are reasonably required to prevent any such violation. (g) It is the intent of the Company that transactions involving Options or Awards granted under the Plan be entitled to the exemption from Section 16 of the Exchange Act provided by Rule 16b-3, that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be deemed null and void to the extent required to permit any such transaction to comply with Rule 16b-3. The Committee may adopt rules and regulations under, and amend, the Plan in furtherance of the intent of the foregoing. 34. TRANSITION Upon the effectiveness of this Plan, as provided below, and the Cash Plan, such plans replaced the Company's Executive Incentive Compensation Plan ("EICP"), except that the EICP shall continue to govern options and awards of restricted stock outstanding under the EICP. No further awards will be made under the EICP, and all amounts accrued for awards under the EICP and unawarded were carried forward and made available for Awards under the Plan and awards under the Cash Plan. All unmatured and matured but undistributed retirement units and all performance awards respecting current performance cycles awarded under the EICP became Retirement Units and Performance Awards hereunder and any payments or distributions in respect thereof shall be made hereunder; provided, however, that the number of shares of Common Stock available for Awards pursuant to Section 13(f) hereof shall not be reduced by the number of such retirement units previously awarded under the EICP and paid subsequently under the Plan. 35. EFFECTIVE DATES The Plan became effective for periods beginning after January 1, 1991 upon approval by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual Meeting of Stockholders, in person or by proxy, voting together as a single class. No Options may be granted or Awards made under the Plan after December 31, 2000, or such earlier expiration date as may be designated by resolution of the Board. 17 EX-10.3 3 EXHIBIT 10.3 EXHIBIT 10.3 THE NEW YORK TIMES COMPANY 1991 EXECUTIVE CASH BONUS PLAN AS AMENDED 1. NAME AND GENERAL PURPOSE The name of this plan is The New York Times Company 1991 Executive Cash Bonus Plan (hereinafter called the "Plan"). The purpose of the Plan is to enable the Company (as hereinafter defined) to retain and attract executives who enhance its tradition and contribute to its success by their ability, ingenuity and industry, and to enable them to participate in the long-term success and growth of the Company. 2. DEFINITIONS (a) "Awards"--has the meaning specified in Section 4 hereof. (b) "Board"--means the Board of Directors of the Company. (c) "Committee"--means the Committee referred to in Section 3 of the Plan. If at any time no Committee shall be in office then the functions of the Committee specified in the Plan shall be exercised by the non-employee members of the Board. (d) "Company"--means The New York Times Company, a corporation organized under the laws of the State of New York (or any successor corporation), and, unless the context otherwise requires, its subsidiaries (as hereinafter defined) and other non-corporate entities in which it owns directly or indirectly 20% or more of the equity interests. A "subsidiary" means any corporation in which the Company possesses directly or indirectly 50% or more of the combined voting power of all classes of stock. (e) "Consolidated Statement of Income"--means the consolidated statement of income (or any comparable statement, however designated) of the Company, audited by the independent certified public accountants of the Company and contained in the Company's annual report to stockholders or proxy statement. (f) "Income Before Income Taxes"--means the amount designated as Income Before Income Taxes for the applicable year and shown separately on the Consolidated Statement of Income for such year. (g) "Participant"--means a key employee of the Company who is selected by the Committee to participate in any part of the Plan from among persons who in the judgment of the Committee are key employees of the Company. In general, key employees are those employees who have principal responsibility for, or who contribute substantially to, the management efficiency, editorial achievement or financial success of the Company. Only employees of The New York Times Company, its subsidiaries and other non-corporate entities in which it owns directly or indirectly 40% or more of the equity interests are eligible to participate in the Plan. (h) "Stock Plan"--means the Company's 1991 Executive Stock Incentive Plan. 3. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Board or the Committee appointed by it and composed of two or more directors who are not employees of the Company. The Committee shall be constituted so as to enable the Plan to comply with the administration requirements of Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended. The Committee shall serve at the pleasure of the Board and shall have such powers as the Board may from time to time confer upon it. 1 PART I AWARDS 4. FORM OF AWARDS The Plan is designed to provide incentives for Participants by the making of awards of supplemental compensation ("Awards"). The Committee, subject to the terms and conditions hereof, may make Awards to a Participant in any one, or in any combination, of the following forms: (a) Cash Awards as provided in Part IA of the Plan ("Cash Awards"); (b) Annual Performance Awards as provided in Part IB of the Plan ("Annual Performance Awards"); (c) Performance Awards ("Performance Awards") or other forms of Awards as provided in Part IC of the Plan; and (d) Long-Term Performance Awards as provided in Part ID of the Plan ("Long-Term Performance Awards"). Awards may be made to a Participant whether or not he or she receives an award or option under the Stock Plan. Cash Awards, Performance Awards and other forms of Awards pursuant to Part IC will be based on a Participant's performance in those areas for which the Participant is directly responsible. Performance for this purpose may be measured by the achievement of specific management goals such as, but not limited to, an increase in earnings or the operating cash flow of the Company, outstanding initiative or achievement in any department of the Company, or any other standards specified by the Committee. Annual Performance Awards will be based exclusively on the criteria set forth in Part IB. Long-Term Performance Awards will be based exclusively on the criteria set forth in Part ID. No Award under the Plan is payable in common stock or preferred stock of the Company. 5. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS FOR ANY YEAR (a) No accrual for Awards shall be made hereunder (or under the Stock Plan) for any year unless cash dividends of not less than ten cents ($.10) per share (as adjusted as hereafter provided) have been declared on the outstanding Class A and Class B Common Stock of the Company during such year. If at any time the Company shall take any action, whether by stock dividend, stock split, combination of shares, or otherwise, which results in an increase or decrease in the number of shares of Class A and/or Class B Common Stock theretofore issued and outstanding, or the Company reclassifies or otherwise changes its issued and outstanding Class A and/or Class B Common Stock (other than in par value) or the Company and one or more corporations merge and the Company is the surviving corporation of such merger, then the Committee shall make an equitable adjustment to the provisions of this Section 5(a) to take account of such event. (b) In the event that the above condition is met for any year during the continuance of this Plan, the maximum aggregate amount that may be accrued for Awards under the Plan and the Stock Plan for such year shall be 4% of Income Before Income Taxes. The Committee, in its sole discretion, may make adjustments in Income Before Income Taxes to take account of extraordinary, unusual or infrequently occurring events and transactions, changes in accounting principles that substantially affect the foregoing, or such other circumstances as the Committee may determine warrant such adjustment. (c) As soon as feasible after the close of each year, the independent certified public accountants of the Company shall determine and report the maximum amount that may be accrued for Awards for such year under the formula described in Section 5(b), subject to the second sentence of such Section. (d) If amounts are accrued in any year under the formula described in this Section 5 and are not awarded in full in such year under the Plan and the Stock Plan, such unawarded amounts may, in the 2 discretion of the Committee, be carried forward and be available for Awards under this Plan and under the Stock Plan in any future year without regard to the provisions of Sections 5(a) or (b) of the Plan applicable to Awards made in such year. (e) Awards under the Plan for any year may not exceed the sum of (i) the amount accrued for such year under Section 5(b) above plus (ii) unawarded accrued amounts carried forward from previous years under Section 5(d) above plus (iii) amounts that may become available for Awards pursuant to the last sentence of Section 7(c) hereof, minus (x) the amount of interest equivalents allocated during such year pursuant to Section 10(b) hereof, and minus (y) the amount of awards made for such year under the Stock Plan valued as set forth in Section 13(e) of the Stock Plan (and any interest or dividend equivalents allocated during such year pursuant to Sections 15(c), 24 and 27A thereof). 6. DETERMINATION OF AWARDS AND PARTICIPANTS (a) As promptly as practicable after the end of each year, the Committee may make Awards (other than Annual Performance Awards and Long-Term Performance Awards, which are to be made exclusively as set forth in Parts IB and ID, respectively) for such year and determine the amounts to be carried forward for Awards in future years. The Committee may also, in its discretion, make Awards (other than Annual Performance Awards and Long-Term Performance Awards, which are to be made exclusively as set forth in Parts IB and ID, respectively) prior to the end of the year based on amounts available under clauses (ii) and (iii) of Section 5(e) and reasonable estimates of the accrual for the year in question. (b) The Committee shall have absolute discretion to determine the key employees who are to receive Awards (other than Annual Performance Awards and Long-Term Performance Awards, which are to be made exclusively as set forth in Parts IB and ID, respectively) under the Plan for any year and to determine the amount of such Awards based on such criteria and factors as the Committee in its sole discretion may determine, such as the Company's operating cash flow and overall financial performance. Recommendations as to the key employees who are to receive Awards (including Annual Performance Awards and Long-Term Performance Awards) under the Plan for any year and to the amount and form of such Awards shall, however, be made to the Committee by the chief executive officer of the Company. The fact that an employee is selected as eligible for an Award shall not mean, however, that such employee will necessarily receive an Award. (c) A person whose employment terminates during the year or who is granted a leave of absence during the year may, in the discretion of the Committee and under such rules as the Committee may from time to time prescribe, be given an Award with respect to the period of such person's service during such year. 7. METHOD AND TIME OF PAYMENT OF AWARDS (a) Awards shall be paid in full as soon as practicable after the Award is made; provided, however, that payment of Annual Performance Awards and Long-Term Performance Awards shall be subject to the provisions of Parts IB and ID, respectively; and provided further, that the payment of any or all Awards may be deferred, divided into annual installments, or made subject to such other conditions as the Committee in its sole discretion may authorize under such rules and regulations as may be adopted from time to time by the Committee. (b) The Committee's rules and regulations may include procedures by which a Participant expresses a preference to the Committee as to the form of Award or method of payment of an Award but the final determination as to the form and the terms and conditions of any Award shall rest solely with the Committee. (c) Awards deferred under the Plan shall become payable to the Participant or, in the event of the Participant's death, as specified in Section 14 hereof, in such manner, at such time or times (which may be 3 either before or after termination of service), and subject to such conditions as the Committee in its sole discretion shall determine. In any year the Committee shall have the discretion to set aside, for payment in such year or any future year, interest on any deferred Award; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under Section 5 of the Plan. Any forfeited deferred Awards shall be carried forward and be available for Awards in any future year without regard to the provisions of Sections 5(a) or (b) of the Plan. 8. INDIVIDUAL AGREEMENTS (a) The Committee may in its discretion require that each Participant receiving an Award enter into an agreement with the Company which shall contain such terms and conditions as the Committee may in its discretion request. (b) The Committee may cancel any unexpired, unpaid or deferred Award at any time if the Participant is not in compliance with all applicable provisions of the agreement referred to above, if any, and the Plan. 9. STATUS OF PARTICIPANTS No Participant in the Plan shall have any interest in any specific assets of the Company by reason of the fact that deferred Awards are to be recorded as being held for such Participant's account to be paid in installments in the future. The interest of all Participants shall derive from and be determined solely by the terms and provisions of the Plan set forth herein. PART IA CASH AWARDS 10. DETERMINATION OF CASH AWARDS (a) Each year the Committee shall designate those Participants who shall receive Cash Awards under this part of the Plan. Cash Awards may be paid immediately, in installments or on a deferred date, as the Committee, in its discretion, may provide. (b) If the Committee determines that some portion of a Cash Award to a Participant shall be treated as a deferred Cash Award and be payable in annual or other periodic installments, the Participant will be notified in writing when such deferred Cash Award shall be paid and over what period of time. In each year the Committee shall have discretion to provide for the payment of an amount equivalent to interest, at such rate or rates fixed by the Committee, on any deferred Cash Award. Any amounts provided for pursuant to the preceding sentence shall become payable in such manner, at such time or times, and subject to such conditions as the Committee shall in its sole discretion determine; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under the formula described in Section 5 of the Plan. PART IB ANNUAL PERFORMANCE AWARDS 11. DETERMINATION OF ANNUAL PERFORMANCE AWARDS (a) GENERAL. Each year the Committee may make Annual Performance Awards under this part of the Plan; provided that no Participant may be eligible to receive an Annual Performance Award hereunder and under the Stock Plan in the same year. (b) CERTAIN DEFINITIONS. For the purposes of this Part IB, the following terms shall have the meanings specified: 4 "Affected Officers" shall mean those executive officers of the Company whose compensation is required to be disclosed in the Company's annual proxy statement relating to the election of directors. "Code Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code of 1986, as amended (or any successor provision), and "Regulations" shall mean the regulations promulgated thereunder, as from time to time in effect. "Eligible Participants" shall have the meaning set forth in subsection (c) below. "Performance Adjustment" means, for any year, a factor ranging from 0% to 200%, based upon the achievement of Performance Goal Targets established by the Committee, that, when multiplied by an Eligible Participant's Target Award, determines the amount of such Eligible Participant's Annual Performance Award for such year. "Performance Goal" means, for any year, the business criteria selected by the Committee to measure the performance during such year of the Company (or of a division, subsidiary or group thereof) from one or more of the following: (i) earnings per share of the Company for the year; (ii) net income of the Company for the year; (iii) return on assets of the Company for the year (net income of the Company for the year divided by average total assets during such year); (iv) return on stockholders' equity of the Company for the year (net income of the Company for the year divided by average stockholders' equity during such year); (v) operating profit of the Company or of a division, subsidiary or group thereof for the year; (vi) operating cash flow of the Company or of a division, subsidiary or group thereof for the year; and (vii) increase in shareholder value as determined at the end of each year. "Performance Goal Target" means, for any Performance Goal, the levels of performance during a year under such Performance Goal established by the Committee to determine the Performance Adjustment to an Eligible Participant's Target Award for such year. "Target Award" means, for any year, with respect to an Eligible Participant, the dollar amount set by the Committee that, when multiplied by the applicable Performance Adjustment, determines such Eligible Participant's Annual Performance Award. (c) ELIGIBILITY. Annual Performance Awards are available each year only to Plan Participants who are designated by the Committee, prior to March 31 of such year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), as likely to be Affected Officers for such year, whose annual salary and bonus for such year are expected to exceed $1,000,000 and who are not designated by the Committee as eligible for an Annual Performance Award under the Stock Plan for such year ("Eligible Participants"). (d) DETERMINATION OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), the Committee will determine the Eligible Participants for such year, will designate those Eligible Participants who will be entitled to earn an Annual Performance Award for such year under this Plan, and will establish for each such Eligible Participant for such year: (i) a Target Award, (ii) one or more Performance Goals, and (iii) for each such Performance Goal, a Performance Goal Target, the method by which achievement thereof will be 5 measured and a schedule of Performance Adjustment factors corresponding to varying levels of Performance Goal Target achievement. In the event more than one Performance Goal is established for any Eligible Participant, the Committee shall at the same time establish the weighting of each such Performance Goal in determining such Eligible Participant's Annual Performance Award. Notwithstanding anything in this Part IB to the contrary, the Annual Performance Award payable to any Eligible Participant in any year may not exceed $1.5 million. (e) PAYMENT OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f) below, Annual Performance Awards will be paid in cash as soon as practicable after the end of the year to which it relates and after the Committee certifies the extent to which the Performance Goal Target or Targets under the Performance Goal or Goals have been met or exceeded. If permitted by the Regulations and Code Section 162(m), the Committee may determine to pay a portion of an Annual Performance Award in December of the year to which it relates. The Committee may not increase the amount of an Annual Performance Award that would otherwise be payable upon achievement of the Performance Target or Targets, but it may reduce any Eligible Participant's Annual Performance Award in its discretion. Subject to Section 6(c) above, no Annual Performance Award will be payable to any Eligible Participant who is not an employee of the Company on the last day of the year to which such Annual Performance Award relates. (f) DEFERRAL OF ANNUAL PERFORMANCE AWARDS. If the Committee determines that some portion of an Annual Performance Award to an Eligible Participant shall be treated as a deferred Annual Performance Award and be payable in annual or other periodic installments, the Eligible Participant will be notified in writing when such deferred Annual Performance Award shall be paid and over what period of time. In each year the Committee shall have discretion to provide for the payment of an amount equivalent to interest, at such rate or rates fixed by the Committee, on any deferred Annual Performance Award. Any amounts provided for pursuant to the preceding sentence shall become payable in such a manner, at such time or times, and subject to such conditions as the Committee shall in its sole discretion determine; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under the formula described in Section 5 of the Plan. (g) CODE SECTION 162(m). It is the intent of the Company that Annual Performance Awards satisfy, and this Part IB be interpreted in a manner that satisfies, the applicable requirements of Code Section 162(m) and the Regulations so that the Company's tax deduction for Annual Performance Awards to Affected Officers is not disallowed in whole or in part by operation of Code Section 162(m). If any provision of this Plan or of any Annual Performance Award would otherwise frustrate or conflict with such intent, that provision shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any irreconcilable conflict with such intent, such provision shall be deemed void as applicable to Eligible Participants. PART IC PERFORMANCE AND OTHER AWARDS 12. DETERMINATION OF PERFORMANCE AND OTHER AWARDS (a) Each year the Committee in its sole discretion may authorize other forms of Awards such as, but not limited to, Performance Awards, if the Committee deems it appropriate to do so in order to further the purposes of the Plan. (b) A "Performance Award" shall mean an Award which entitles the Participant to receive cash or other compensation, or any combination thereof, in an amount which depends upon the financial performance of the Company during a stated period of more than one year. Performance for this purpose may be measured by the growth in book value of the common stock of the Company, an increase in per share earnings of the Company, an increase in operating cash flow or any other indicators specified by the Committee. The Committee shall also fix the period during which such performance is to be measured, the 6 value of a Performance Award for purposes of providing for the accrual pursuant to Section 5 of the Plan and the form of payment to be made in respect of the Performance Award. PART ID LONG-TERM PERFORMANCE AWARDS 13. DETERMINATION OF LONG-TERM PERFORMANCE AWARDS (a) GENERAL. Each year the Committee shall designate those Participants who shall be eligible to receive Long-Term Performance Awards under this part of the Plan. (b) CERTAIN DEFINITIONS. For purposes of this Part ID, the following terms shall have the meanings specified: "Code Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code of 1986, as amended (or any successor provision), and "Regulations" shall mean the regulations promulgated thereunder, as from time to time in effect. "Eligible Participants" shall mean certain key business leaders and senior management of the Company as determined in the discretion of the Committee. "Long-Term Performance Goal" means, for any Performance Period, the business criteria selected by the Committee to measure the performance during such Performance Period of the Company (or of a division, subsidiary or group thereof) from one or more of the following: (i) earnings per share of the Company for the Performance Period; (ii) net income of the Company for the Performance Period; (iii) return on assets of the Company for the Performance Period (net income of the Company for the Performance Period divided by average total assets during such Performance Period); (iv) return on stockholder's equity of the Company for the Performance Period (net income of the Company for the Performance Period divided by average stockholder's equity during such Performance Period); (v) operating profit of the Company or of a division, subsidiary or group thereof for the Performance Period; (vi) operating cash flow of the Company or of a division, subsidiary or group thereof for the Performance Period; and (vii) increase in shareholder value as determined at the end of the Performance Period. "Long-Term Performance Goal Target" means, for any Long-Term Performance Goal, the levels of performance during a Performance Period under such Long-Term Performance Goal established by the Committee to determine an Eligible Participant's maximum Long-Term Performance Award. "Performance Period" means the period in excess of one year commencing on January 1 of the year in which the Committee makes the Long-Term Performance Award to an Eligible Participant. (c) ELIGIBILITY. Long-Term Performance Awards are available each year to Eligible Participants who are designated by the Committee, prior to March 31 of such year (or prior to such later date as permitted by Code Section 162(m) and the Regulations). (d) DETERMINATION OF LONG-TERM PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to such later date as permitted by Code Section 162(m) and the Regulations), the Committee will designate 7 the Eligible Participants who will be entitled to earn a Long-Term Performance Award for such Performance Period under this Plan, and will establish for each such Eligible Participant for such Performance Period (i) one or more Long-Term Performance Goals, and (ii) for each such Long-Term Performance Goal, a Long-Term Performance Goal Target and the method by which achievement thereof will be measured. In the event that more than one Long-Term Performance Goal is established for any Eligible Participant, the Committee shall at the same time establish the weighting of each such Long-Term Performance Goal in determining such Eligible Participant's Long-Term Performance Award. Notwithstanding anything in this Section 13 to the contrary, the Long-Term Performance Award payable to any Eligible Participant in any Performance Period may not exceed $1.5 million. (e) PAYMENT OF LONG-TERM PERFORMANCE AWARDS. Subject to subsection (f) below, Long-Term Performance Awards will be paid in cash as soon as practicable after the end of the Performance Period to which it relates and after the Committee certifies the extent to which the Long-Term Performance Goal Target or Targets under the Long-Term Performance Goal or Goals have been met or exceeded. If permitted by the Regulations and Code Section 162(m), the Committee may determine to pay a portion of a Long-Term Performance Award in December of the last year of the Performance Period to which it relates. The Committee may not increase the amount of a Long-Term Performance Award that would otherwise be payable upon the achievement of the Long-Term Performance Goal Target or Targets, but it may reduce any Eligible Participant's Long-Term Performance Award in its discretion. Subject to Sections 6(c) and 13(g), no Long-Term Performance Award will be payable to any Eligible Participant who is not an employee of the Company on the last day of the Performance Period to which such Long-Term Performance Award relates. (f) DEFERRAL OF LONG-TERM PERFORMANCE AWARDS. If the Committee determines that some portion of a Long-Term Performance Award to an Eligible Participant shall be treated as a deferred Long-Term Performance Award and payable in annual or other periodic installments, the Eligible Participant will be notified in writing when such deferred Long-Term Performance Award shall be paid and over what period of time. In each year the Committee shall have the discretion to provide for the payment of an amount equivalent to interest, at such rate or rates fixed by the Committee, on any deferred Long-Term Performance Award. Any amounts provided for pursuant to the preceding sentence shall become payable in such manner, at such time or times, and subject to such conditions as the Committee shall in its sole discretion determine; provided, however, that the total amount of such interest shall be deducted from the maximum amount available for Awards under the formula described in Section 5 of the Plan. (g) TERMINATION OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR RETIREMENT. In the event that an Eligible Participant terminates employment because of death, Disability or Retirement, such Eligible Participant, or in the event of death such person as determined in accordance with Section 14, shall be paid a pro rata portion of such Eligible Participant's Long-Term Performance Award that would otherwise be payable upon the achievement of the Long-Term Performance Goal Target or Targets had the Participant continued employment until the end of the Performance Period. Such pro rata Long-Term Performance Award shall not be paid until the end of the Performance Period to which such Long-Term Performance Award relates. (h) CODE SECTION 162(m). It is the intent of the Company that Long-Term Performance Awards satisfy, and this Section 13 be interpreted in a manner that satisfies, the applicable requirement of Code Section 162(m) and the Regulations so that the Company's tax deduction for Long-Term Performance Awards to Eligible Participants is not disallowed in whole or in part by operation of Code Section 162(m). If any provision of this Plan or of any Long-Term Performance Award would otherwise frustrate or conflict with such intent, that provision shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any irreconcilable conflict with such intent, such provision shall be deemed void as applicable to any Participant whose compensation is subject to Code Section 162(m). 8 PART II GENERAL PROVISIONS 14. NON-ALIENATION OF BENEFITS Except as herein specifically provided, no right or unpaid benefit under this Plan shall be subject to alienation, assignment, pledge or charge and any attempt to alienate, assign, pledge or charge the same shall be void. If any Participant or person entitled to the benefits hereunder should attempt to alienate, assign, pledge or charge any benefit hereunder, then such benefit shall, in the discretion of the Committee, cease. Notwithstanding the foregoing, rights and benefits hereunder shall pass by will or the laws of descent and distribution in the following order: (i) to beneficiaries so designated by the Participant; if none, then (ii) to a legal representative of the Participant; if none, then (iii) to the persons entitled thereto as determined by a court of competent jurisdiction. Awards so passing shall be made at such times and in such manner as if the Participant were living. 15. WITHHOLDING OR DEDUCTION FOR TAXES If at any time specified herein for the making of any payment to any Participant or beneficiary, any law or regulation of any governmental authority having jurisdiction in the premises shall require the Company to withhold, or to make any deduction for, any taxes or take any other action in connection with the payment then to be made, such payment shall be deferred until such withholding or deduction shall have been provided for by the Participant or beneficiary, or other appropriate action shall have been taken. 16. ADMINISTRATION EXPENSES The entire expense of administering this Plan shall be borne by the Company. 17. GENERAL CONDITIONS (a) The Board in its discretion may from time to time amend, suspend or terminate any or all of the provisions of this Plan, provided that the Board may not make any amendment which materially affects the provisions of Sections 5(a) or (b) of the Plan without the consent and approval of the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon, voting together as one class. The foregoing provisions shall not be construed to prevent the Committee from exercising its discretion, or to limit such discretion, to adjust the provisions of Sections 5(a) and (b) hereof as expressly permitted thereby or otherwise to exercise any discretion to the extent expressly authorized hereunder. (b) Nothing contained in the Plan shall prohibit the Company from establishing incentive compensation arrangements in addition to this Plan and the Stock Plan. Payments made under any such separate arrangements shall not be included in or considered a part of the maximum amount available for Awards under the Plan and Stock Plan and shall not be charged against the amount available for Awards under the Plan and Stock Plan for any year. In the discretion of the Committee, employees shall be eligible to participate in such other arrangements, as well as the Plan and Stock Plan, in the same year. (c) Nothing in this Plan shall be deemed to limit in any way the right of the Company to terminate a Participant's employment with the Company at any time. (d) The Committee may promulgate rules and regulations relating to the administration and interpretation of, and procedures under, the Plan. Any decision or action taken by the Company, the Board or the Committee arising out of or in connection with the construction, administration, interpretation and effect of the Plan shall be conclusive and binding upon all Participants and any person claiming under or through any Participant. 9 (e) No member of the Board or of the Committee shall be liable for any act or action, whether of commission or omission, taken by any other member or by any officer, agent or employee, nor for anything done or omitted to be done by such Director except in circumstances involving actual bad faith. 18. TRANSITION Upon the effectiveness of this Plan, and the Stock Plan, such plans replaced the Company's Executive Incentive Compensation Plan ("EICP"), except that the EICP shall continue to govern options and awards of restricted stock outstanding under the EICP. No further awards will be made under the EICP, and all amounts accrued for awards under the EICP and unawarded were carried forward and made available for Awards under the Plan and awards under the Stock Plan. 19. EFFECTIVE DATES The Plan became effective for periods beginning after January 1, 1991 upon the approval by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual Meeting, in person or by proxy, voting together as a single class. No Awards may be granted under the Plan after December 31, 2000, or such earlier expiration date as may be designated by resolution of the Board. 10 EX-10.4 4 EXHIBIT 10.4 EXHIBIT 10.4 THE NEW YORK TIMES COMPANY NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN AS AMENDED 1. PURPOSE The purpose of The New York Times Company Non-Employee Directors' Stock Option Plan (the "Plan") is to secure for The New York Times Company (the "Company") and its stockholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors (the "Board") of the Company who are not employees of the Company or any of its subsidiaries. 2. ADMINISTRATION The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of the agreement embodying awards of stock options made under the Plan ("Options"). The Board shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by such member or by any other member of the Board in connection with the Plan, except in circumstances involving actual bad faith. 3. AMOUNT OF STOCK The stock which may be issued and sold under the Plan will be the Class A Common Stock of the Company ("Common Stock"), of a total number not exceeding 250,000 shares, subject to adjustment as provided in Section 6 below. The stock to be issued may be either authorized and unissued shares, treasury shares, issued shares acquired by the Company or its subsidiaries or any combination thereof. In the event that Options granted under the Plan shall terminate or expire without being exercised in whole or in part, new Options may be granted covering the shares not purchased under such lapsed Options. 4. ELIGIBILITY Each member of the Board who is not an employee of the Company or any of its subsidiaries (a "Non-Employee Director") shall be eligible to receive an Option in accordance with the specific provisions of Section 5 below. The adoption of this Plan shall be not deemed to give any director any right to be granted an Option to purchase Common Stock except to the extent and upon such terms and conditions consistent with the Plan as may be determined by the Board. 5. TERMS AND CONDITIONS OF OPTIONS Each Option granted under the Plan shall be evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions: (a) The Option exercise price shall be the Fair Market Value of the shares of Common Stock (as defined in Section 7(a) hereof) subject to such Option on the date the Option is granted. (b) Each year, as of the date of the Annual Meeting of Stockholders of the Company, each Non-Employee Director who has been elected or re-elected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive an Option for 2,000 shares of Common Stock. (c) No Option shall be transferable otherwise than by will or by the laws of descent and distribution. Notwithstanding the foregoing sentence, the Board may determine that Options granted to a Participant or a specified group of Participants may be transferred by the Participant to one or more members of the Participant's immediate family, to a partnership or limited liability company whose only partners or members are members of the Partcipant's immediate family, or to a trust established by the Participant for the benefit of one or more members of the Participant's immediate family. For this purpose, "immediate family" means the Participant's spouse, parents, children (including adopted and step-children), grandchildren and the spouses of such parents, children (including adopted and step-children) and grandchildren. A transferee described in this subsection may not further transfer an Option. An Option transferred pursuant to this subsection shall remain subject to the provisions of the Plan and shall be subject to such other rules as the Board shall determine. (d) No Option or any part of an Option shall be exercisable: (i) before the Non-Employee Director has served one term-year as a member of the Board since the date the Option was granted (as used herein, the term "term-year" means that period from one Annual Meeting to the subsequent Annual Meeting), except as provided in subsection 5(d)(iv)(B) below; (ii) after the expiration of ten years from the date the Option was granted; (iii) unless written notice of the exercise is delivered to the Company specifying the number of shares to be purchased and payment in full is made for the shares of Common Stock being acquired thereunder at the time of exercise; such payment shall be made (A) in United States dollars by certified check or bank draft, or (B) by tendering to the Company shares of Common Stock owned by the person exercising the Option and having a Fair Market Value on the date of exercise equal to the cash exercise price applicable to such Option, or (C) by electing to have the Company retain shares of Common Stock which would be otherwise issued on exercise of the Option and having a Fair Market Value on the date of exercise equal to the cash applicable to such Option, or (D) any combination of the foregoing forms; and (iv) unless the person exercising the Option has been, at all times during the period beginning with the date of grant of the Option and ending on the date of such exercise, a Non-Employee Director of the Company, except that (A) if such a person shall cease to be such a Non-Employee Director for reasons other than Retirement (as defined in Section 7(a) hereof) or death, while holding an Option then exercisable that has not expired, such person, at any time within one year after the date he ceases to be such a Non-Employee Director (but in no event after the Option has expired under the provisions of subsection 5(d)(ii) above), may exercise the Option with respect to any shares of Common Stock as to which such person could have but has not exercised the Option on the date the person ceased to be such a Non-Employee Director; (B) if such a person shall cease to be such a Non-Employee Director by reason of Retirement or death while holding an Option (whether or not then exercisable) that has not expired, notwithstanding the provisions of subsection 5(d)(i) above, such person, or in the case of death (either while a Non-Employee Director or after Retirement), his executors, administrators, heirs, legatees or distributees, as the case may be, may, at any time until the expiration of such Option as provided in subsection 5(d)(ii) above, exercise the Option with respect to any shares of 2 Common Stock as to which such person has not exercised the Option on the date the person ceased to be such a Non-Employee Director; and (C) if any person who has ceased to be such a Non-Employee Director for reasons other than death or Retirement shall die holding an Option, such person's executors, administrators, heirs, legatees or distributees, as the case may be, may, at any time within one year after the date of death (but in no event after the Option has expired under the provisions of subsection 5(d)(ii) above), exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of death. In the event any Option is exercised by the executors, administrators, heirs, legatees or distributees of the estate of a deceased optionee or by the guardian or legal representative of a disabled optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof or the duly appointed guardian or legal representative of the disabled optionee. 6. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK In the event of changes in the outstanding Common Stock of the Company by reason of dividends (other than cash dividends), recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, the number, class and the price of shares of Common Stock subject to outstanding Options and the number of shares constituting an Option grant under Section 5(b) hereof, shall be appropriately adjusted by the Board, whose determination shall be conclusive. 7. MISCELLANEOUS PROVISIONS (a) The following terms shall have the meanings specified below: (i) "Fair Market Value" means the arithmetic mean of the highest and lowest sales prices of the Common Stock as reported in the Consolidated Transactions of the American Stock Exchange ("AMSE") (or such other national securities exchange on which the Common Stock may be listed at the time of determination, and if the Common Stock is listed on more than one exchange, then on the one located in New York or if the Common Stock is listed only on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), then on such system) on the date of the grant or other date on which the Common Stock is to be valued hereunder. If no sale shall have been made on the AMSE, such other exchange or the NASDAQ on such date or if the Common Stock is not then listed on any exchange or on the NASDAQ, Fair Market Value shall be determined by the Board in accordance with Treasury Regulations applicable to incentive stock options. (ii) "Retirement" means retirement from the Board at the age of 65 or thereafter or resignation from the Board by reason of disability. (b) Except as expressly provided for in the Plan, no Non-Employee Director or other person shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Non-Employee Director any right to be retained in the service of the Company. (c) An optionee's rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an optionee's death, by will or the laws of descent and distribution), including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any participant in the Plan shall be subject to any obligation or liability of such participant. 3 (d) No shares of Common Stock shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state and other securities laws and regulations. (e) It shall be a condition to the obligation of the Company to issue shares of Common Stock upon exercise of an Option, that the optionee (or any beneficiary or person entitled to act under subsection 5(d)(iv) above) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, the Company may refuse to issue shares of Common Stock. (f) The expenses of the Plan shall be borne by the Company. (g) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares upon exercise of any Option under the Plan and issuance of shares upon exercise of Options shall be subordinate to the claims of the Company's general creditors. (h) By accepting any Option or other benefit under the Plan, each optionee and each person claiming under or through such person shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Board. (i) It is the intent of the Company that the transactions involving options under the Plan comply in all respects with Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended, that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be deemed null and void to the extent required to permit any such transaction to comply with Rule 16b-3. The Board may adopt rules and regulations under, and amend, the Plan in furtherance of the intent of the foregoing. 8. AMENDMENT OF DISCONTINUANCE The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable, including, but not limited to, amendments necessary to qualify for any exemption or to comply with applicable law or regulations; provided, however, that except as provided in Section 6 above, the Board may not, without further approval by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon, voting together as one class, increase the maximum number of shares of Common Stock as to which Options may be granted under the Plan, increase the number of shares subject to an Option, change the Option exercise price described in subsection 5(a) above, extend the period during which Options may be granted or exercised under the Plan or change the class of persons eligible to receive Options under the Plan. Subject to the provision of Section 7(i) hereof relating to Rule 16b-3, no amendment of the Plan shall materially and adversely effect any right of any optionee with respect to any Option theretofore granted without such optionee's written consent. It is intended that the Plan be a "formula plan" under Rule 16b-3 and will comply with all applicable rules, regulations and staff interpretations of the Securities and Exchange Commission. 9. TERMINATION This Plan shall terminate upon the earlier of the following dates or events to occur: (a) upon the adoption of a resolution of the Board terminating the Plan; or (b) ten years from the date the Plan is initially approved and adopted by the stockholders of the Company in accordance with Section 10 below. 4 10. EFFECTIVE DATE OF PLAN The Plan shall become effective as of April 16, 1991 or such later date as the Board may determine, provided that the adoption of the Plan shall have been approved by the holders of a majority of the outstanding shares of Class A and Class B Common Stock of the Company entitled to vote thereon at the 1991 Annual Meeting of Stockholders, in person or by proxy, voting together as a single class. 5 EX-27 5 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-27-1998 MAR-29-1998 65,749 0 367,863 26,262 38,146 595,536 2,234,928 (890,520) 3,595,226 753,781 0 0 0 11,467 1,686,080 3,595,226 0 722,563 0 363,304 0 0 10,143 115,217 50,580 64,637 0 0 0 64,637 .67 .66
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