THE MCCLATCHY COMPANY
1990 DIRECTORS' STOCK OPTION PLAN
(As Amended and Restated March 19, 1998)
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was established in 1990. It offers the Nonemployee Directors
of the Corporation an opportunity to acquire a proprietary interest in the
success of the Corporation, or to increase such interest, by purchasing Shares
of the Corporation's Class A Common Stock. To achieve this purpose, the Plan
provides for the grant of Nonstatutory Options to purchase such Shares.
SECTION 2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(b) "CODE" shall mean the Internal Revenue Code of
1986, as amended.
(c) "COMMITTEE" shall mean the Compensation Committee
of the Board.
(d) "CORPORATION" shall mean the McClatchy Company, a
Delaware corporation.
(e) "EXERCISE PRICE" shall mean the amount for which
one Share may be purchased upon exercise of an Option, as
specified in the applicable Stock Option Agreement.
(f) "FAIR MARKET VALUE" shall mean the market price of
a Share, determined by the Board as follows:
(i) If the Share was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite-transactions report for such
date;
(ii) If the Share was traded over-the-counter on the date in
question and was classified as a national market issue, then the Fair
Market Value shall be equal to the last-transaction price quoted by the
NASDAQ system for such date;
(iii) If the Share was traded over-the-counter on the date in
question but was not classified as a national market issue, then the
Fair Market Value shall be equal to the mean between the last reported
representative bid and
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asked prices quoted by the NASDAQ system for such date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Board in good faith on
such basis as it deems appropriate.
(g) "NONEMPLOYEE DIRECTOR" shall mean a member of the Board who is not
an employee (within the meaning of section 3401(c) of the Code and the
regulations thereunder) of the Corporation or of a subsidiary of the
Corporation.
(h) "NONSTATUTORY OPTION" shall mean a stock option not described in
section 422(b) of the Code.
(i) "OPTION" shall mean a Nonstatutory Option granted under the Plan
and entitling the holder to purchase Shares.
(j) "OPTIONEE" shall mean an individual who holds an Option.
(k) "PLAN" shall mean this McClatchy Company 1990 Directors' Stock
Option Plan, as it may be amended from time to time.
(l) "SERVICE" shall mean service as a member of the Board, whether or
not as a Nonemployee Director.
(m) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 7 (if applicable).
(n) "STOCK" shall mean, prior to March 19, 1998, the Class A Common
Stock of McClatchy Newspapers, Inc. Effective March 19, 1998, "Stock" shall mean
the Class A Common Stock of the Corporation.
(o) "STOCK OPTION AGREEMENT" shall mean the agreement between the
Corporation and an Optionee which contains the terms, conditions and
restrictions pertaining to his or her Option.
(p) "TOTAL AND PERMANENT DISABILITY" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which has lasted, or can be expected
to last, for a continuous period of not less than six months or which can be
expected to result in death.
SECTION 3. ADMINISTRATION.
(a) PLAN ADMINISTRATOR. The Plan shall be admini- stered by the Board.
The Board may act on the recommendation of the Committee, which consists of one
or more members of the Board.
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(b) BOARD RESPONSIBILITIES. Subject to the provisions of the Plan, the
Board shall have full authority and discretion to take the following actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan;
(iii) To authorize any person to execute, on behalf of the
Corporation, any instrument required to carry out the purposes of the
Plan;
(iv) To grant Options in accordance with the terms of the Plan;
and
(v) To take any other actions deemed necessary or advisable for
the administration of the Plan.
All decisions, interpretations and other actions of the Board shall be final and
binding on all Optionees and all other persons deriving their rights from an
Optionee. No member of the Board shall be liable for any action that he or she
has taken or has failed to take in good faith with respect to the Plan or any
Option.
SECTION 4. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan shall be treasury
Shares or authorized but unissued Shares. The aggregate number of Shares that
may be issued under the Plan shall not exceed 187,500 Shares, subject to
adjustment pursuant to Section 7. The number of Shares that are subject to
Options at any time shall not exceed the number of Shares that then remain
available for issuance under the Plan. The Corporation, during the term of the
Plan, shall at all times reserve and keep available sufficient Shares to satisfy
the purposes of the Plan.
(b) ADDITIONAL SHARES. In the event that any outstanding Option for any
reason expires or is canceled or otherwise terminated, the Shares allocable to
the unexercised portion of such Option shall again be available for the purposes
of the Plan.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option shall be evidenced
by a Stock Option Agreement between the Optionee and the Corporation. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions that are not inconsis-
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tent with the Plan and that the Board deems appropriate for inclusion in a Stock
Option Agreement.
(b) ELIGIBILITY AND TIME OF GRANT. Only Nonemployee Directors shall be
eligible for the grant of Options. As of the conclusion of each regular annual
meeting of the Corporation's stockholders, each individual who then is a
Nonemployee Director shall receive an Option. (An individual whose service as a
Nonemployee Director ends at a regular annual meeting of the Corporation's
stockholders shall not receive an Option at such annual meeting.)
(c) NUMBER OF SHARES AND TAX STATUS. Each Option shall cover 2,500
Shares. Such number shall be subject to adjustment in accordance with Section 7.
All Options shall be Nonstatutory Options.
(d) EXERCISE PRICE. The Exercise Price under each Option shall be equal
to 100% of the Fair Market Value of the Shares subject to such Option on the
date when such Option is granted. The entire Exercise Price of Shares issued
under the Plan shall be payable in cash when such Shares are purchased, except
as follows:
(i) Payment may be made with Shares that have already been owned
by the Optionee for more than 12 months and that are surrendered to the
Corporation in good form for transfer. Such Shares shall be valued at
their Fair Market Value when the new Shares are purchased under the
Plan.
(ii) Payment may be made by delivery (on a form prescribed by the
Corporation) of an irrevocable direction to a securities broker
approved by the Corporation to sell Shares subject to the Option and to
deliver all or part of the sale proceeds to the Corporation in payment
of all or part of the Exercise Price and any withholding taxes.
(e) VESTING. Each Option shall become exercisable in four annual
installments in accordance with the following schedule:
NUMBER OF SHARES FOR
DATE WHICH OPTION IS EXERCISABLE
March 1 of first year after date of grant 625
March 1 of second year after date of grant 1,250
March 1 of third year after date of grant 1,875
March 1 of fourth year after date of grant 2,500
In addition, each Option shall become exercisable in full in the event that the
Optionee's Service terminates not less than six months after such Option was
granted because of death, Total and Permanent Disability or retirement after
attaining age 65.
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(f) TERM OF OPTIONS. Subject to Subsections (g) and (h) below, each
Option shall expire on the 10th anniversary of the date when such Option was
granted.
(g) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's Service
terminates for any reason other than death, then his or her Option(s) shall
expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (f)
above;
(ii) The date 90 days after the termination of the Optionee's
Service, if the termination occurs by reason of retirement after the
Optionee attained age 65;
(iii) The date one year after the termination of the Optionee's
Service, if the termination occurs because of his or her Total and
Permanent Disability; or
(iv) The date 30 days after the termination of the Optionee's
Service, if the termination is not described in Paragraphs (ii) or
(iii) above.
Notwithstanding the above, the Board may grant alternative expiration periods in
any applicable Stock Option Agreement, so long as such alternative periods do
not exceed 10 years from the date of grant as set forth in Subsection (f) above.
The Optionee may exercise all or part of his or her Option(s) at any time before
the expiration of such Option(s) under the preceding sentence, but only to the
extent that such Option(s) had become exercisable before his or her Service
terminated or became exercisable as a result of the termination. The balance of
such Option(s) shall lapse when the Optionee's Service terminates. In the event
that the Optionee dies after the termination of his or her Service but before
the expiration of his or her Option(s), all or part of such Option(s) may be
exercised (prior to expiration) by the executors or administrators of the
Optionee's estate or by any person who has acquired such Option(s) directly from
him or her by bequest, inheritance or beneficiary designation under the Plan,
but only to the extent that such Option(s) had become exercisable before his or
her Service terminated or became exercisable as a result of the termination.
(h) DEATH OF OPTIONEE. If an Optionee dies while he or she is in
Service, then his or her Option(s) shall expire on the earlier of the following
dates:
(i) The expiration date determined pursuant to Subsection (f)
above; or
(ii) The date 12 months after his or her death.
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All or part of the Optionee's Option(s) may be exercised at any time before the
expiration of such Option(s) under the preceding sentence by the executors or
administrators of his or her estate or by any person who has acquired such
Option(s) directly from him or her by bequest, inheritance or beneficiary
designation under the Plan.
(i) NONTRANSFERABILITY. During an Optionee's lifetime, his or her
Option(s) shall be exercisable only by him or her and shall be nontransferable.
In the event of an Optionee's death, his or her Option(s) shall not be
transferable other than by bequest, inheritance or beneficiary designation under
the Plan.
SECTION 6. MISCELLANEOUS PROVISIONS.
(a) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the
limitations of the Plan, the Board may modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) for the granting of new Options in substitution therefor.
The foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, impair his or her rights or increase his or her
obligations under such Option.
(b) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made except as provided in
Section 7.
(c) RESTRICTIONS ON ISSUANCE OF SHARES. Shares shall not be issued
under the Plan unless the issuance and delivery of such Shares complies with (or
is exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, state securities laws and regulations, and the
regulations of any stock exchange on which the Corporation's securities may then
be listed.
(d) NO RETENTION RIGHTS. No provision of the Plan, nor any Option
granted under the Plan, shall be construed as giving any person the right to
become or to be treated as a Nonemployee Director or to remain a Nonemployee
Director.
SECTION 7. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in cash in an amount that has a material effect on the price of Shares, a
combination or consolidation of the outstanding Stock (by reclassification or
otherwise) into a lesser number of Shares, or a similar occurrence, the Board
shall make appropriate adjustments in one
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or more of (i) the number of Options available for future grants under Section
4, (ii) the number of Shares to be covered by each new Option under Section
5(c), (iii) the number of Shares covered by each outstanding Option or (iv) the
Exercise Price under each outstanding Option.
(b) REORGANIZATIONS. In the event that the Corporation is a party to a
merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the surviving
corporation or its parent, for their continuation by the Corporation (if the
Corporation is a surviving corporation) or for settlement in cash.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 7, an
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue by
the Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Exercise Price of Shares
subject to an Option. The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
SECTION 8. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, became effective
on July 25, 1990. The Plan shall terminate automatically on July 24, 2000, and
may be terminated on any earlier date pursuant to Subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board may amend, suspend
or terminate the Plan at any time and for any reason.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Option previously granted under the
Plan.
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SECTION 9. EXECUTION.
To record the adoption of the Plan by the Board on March 19, 1998, the
Corporation has caused its authorized officer to execute the same.
THE McCLATCHY COMPANY
By /s/ Karole Morgan-Prager
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As Its Corporate Secretary
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