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EXHIBIT 10.2
THE WASHINGTON POST COMPANY
LONG-TERM INCENTIVE COMPENSATION PLAN
Amended and Restated
Effective June 30, 1995
1. Purposes
The purposes of this Long-Term Incentive Compensation Plan
(hereinafter called the Plan) of The Washington Post Company, a Delaware
corporation (hereinafter called the Company), are (a) to provide greater
incentives to key employees to increase the profitability of the Company and
its subsidiaries and (b) to strengthen the ability of the Company and its
subsidiaries to attract, motivate and retain persons of merit and competence
upon which, in large measure, continued growth and profitability depend.
2. Administration of the Plan
The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Company (hereinafter called the Committee) as
constituted from time to time by the Board of Directors. No member of the
Committee shall be eligible to participate in the Plan. The Committee shall
have full power and authority to make all decisions and determinations with
respect to the Plan, including without limitation the power and authority to
interpret and adminis-
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ter the Plan, adopt rules and regulations and establish terms and conditions,
not contrary to the provisions of the Plan, for the administration of its
business and the implementation of the Plan.
3. Participation
(a) Participation in the Plan shall be extended to senior
executives, key managers and key personnel of the Company and its subsidiaries
who, in the opinion of the Committee, are mainly responsible for the management
of the operations of the Company and its subsidiaries or who are otherwise in a
position to make substantial contributions to the management, growth and
success of the business of the Company.
(b) Directors as such shall not participate in the Plan, but
the fact that an employee is also a Director of the Company or a subsidiary
shall not prevent his participation.
(c) As used in the Plan, the term "Company" shall mean The
Washington Post Company and any subsidiary thereof.
(d) The Plan shall not be deemed to preclude the making of
any award pursuant to any other compensation, incentive, bonus or stock option
plan which may be in effect from time to time.
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4. Duration of Plan; Award Cycles; Awards
(a) The Plan shall remain in effect until terminated by the
Board of Directors; provided, however, that the termination of the Plan shall
not affect the delivery or payment of any award made prior to the termination
of the Plan.
(b) During the term of the Plan the Committee shall from time
to time establish Award Cycles, each of which shall commence on the first day
of a fiscal year of the Company and shall consist of not less than three nor
more than four fiscal years of the Company. At least two such fiscal years
shall elapse between the beginning of consecutive Award Cycles, except that
Award Cycles may begin on the first days of the Company's fiscal years 1982 and
1983.
(c) For each Award Cycle the Committee shall
(i) designate the participants who are to receive awards of
Restricted Stock for such Award Cycle and, subject to paragraph 5(a),
the number of shares of Restricted Stock awarded to each such
participant,
(ii) designate, subject to paragraph 6(a), the participants
who are to receive awards of Performance Units for such Award Cycle
and the number of Performance Units awarded to each such participant,
and
(iii) establish, subject to paragraph 6(b), the method for
determining at the end of such Award
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Cycle the value of a Performance Unit awarded at the beginning of such
Award Cycle.
5. Restricted Stock
(a) To each participant designated to receive an award of
Restricted Stock for an Award Cycle there shall be issued (subject to
subparagraph (b) below) a stock certificate, registered in the name of such
participant, representing such number of restricted shares of Class B Common
Stock of the Company (hereinafter called Common Stock) as the Committee shall
determine (hereinafter called Restricted Stock); provided, however, that such
number of shares shall not exceed the lesser of (A) the number (rounded to the
nearest whole share) determined by dividing (i) 25% of the mid-point of such
participant's salary grade at the beginning of such Award Cycle by (ii) the
market value of the Common Stock or (B) 10,000. For purposes of the preceding
clause (ii), the "market value" of Common Stock to be awarded as Restricted
Stock shall mean the closing price of the Common Stock on the principal
securities exchange on which the Common Stock is traded on the last trading day
preceding the date on which the Committee makes such award.
(b) Within 20 days after the effective date of a Restricted
Stock award, each recipient of such an award shall deliver to the Company (i)
an executed copy of a Restricted Stock Agreement containing the terms and
provisions set forth in subparagraph (c) below and (ii) a stock power exe-
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cuted in blank. Upon receipt of such agreement and stock power executed by the
participant, the Company shall cause the stock certificate referred to in
subparagraph (a) to be issued in the name of the participant and delivered to
the Secretary of the Company in custody for such participant. The failure of a
participant to return such agreement and stock power within such 20-day period
without cause shall result in cancellation of the Restricted Stock Award to
such participant, and no stock certificate therefor shall be issued in his
name.
(c) Each Restricted Stock Agreement accompanying an award of
Restricted Stock made for an Award Cycle shall contain the following
provisions, together with such other provisions as the Committee shall
determine:
(i) Except as hereinafter provided, none of the shares of
Restricted Stock subject thereto may be sold, transferred, assigned,
pledged or otherwise disposed of before the day following the end of
such Award Cycle (hereinafter called the Vesting Date).
(ii) If the participant is continuously employed by the
Company until the end of the Award Cycle, the restriction set forth in
subparagraph (c)(i) above shall terminate on the Vesting Date as to
all the shares of Restricted Stock. Notwithstanding the foregoing, in
the case of a participant who is an officer of the Company at the time
of the award, the Committee shall, prior to the beginning of each
Award Cycle, establish a formula based on cash flow,
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operating income, earnings per share, economic value added (EVA),
return on assets, total return on equity of the Company, operating
margins, cash flow margins, shareholder return, cost control and/or
revenue growth measurements over the period of the Award Cycle, which
will have to be achieved if the restriction set forth in subparagraph
(c)(i) above is to terminate as provided in this subparagraph (c)(ii).
(iii) If the participant's employment by the Company
terminates before the Vesting Date, the restriction set forth in
paragraph (c)(i) shall terminate on the date his employment terminates
(or, if termination is by reason of death or disability, on such later
date as the Committee shall determine but not later than the Vesting
Date) as to a percentage of the number of shares of Restricted Stock
originally awarded (rounded to the nearest whole share) determined as
set forth below (and ownership of all shares of Restricted Stock as to
which such restriction shall not so terminate shall forthwith revert
to the Company):
(A) if termination is by reason of death, disability
or retirement at Normal Retirement Age (as defined in the
Company's Retirement Plan), the percentage determined by
dividing (i) the number of full months elapsed from the
effective
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date of the award to the date of such termination by (ii) the
number of full months from such effective date to the end of
the Award Cycle (such percentage being hereinafter called the
Pro-Rated Percentage);
(B) if termination is by reason of retirement prior
to Normal Retirement Age (as defined in the Company's
Retirement Plan), such percentage (not greater than the
Pro-Rated Percentage) as the Committee may in its sole
discretion determine;
(C) if termination occurs for any other reason
(voluntary or involuntary) more than two years from the
effective date of the award, such percentage (not greater than
the Pro-Rated Percentage) as the Committee may in its sole
discretion determine; and
(D) if termination occurs for any other reason
(voluntary or involuntary) within two years from the effective
date of the award, ownership of all the shares of Restricted
Stock shall revert to the Company.
(iv) Promptly after the restriction set forth in subparagraph
(c)(i) shall terminate as to any
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shares of Restricted Stock, the participant to whom such shares were
awarded (or his estate) shall pay to the Company the amount of all
Federal, state and local withholding taxes payable on the compensation
represented by such shares, and upon receipt of such payment the
Company shall deliver to the participant a stock certificate or
certificates for such shares.
(v) As long as shares of Restricted Stock remain registered
in the name of a participant he shall be entitled to all the
attributes of ownership of such shares (subject to the restriction on
transfer referred to above), including the right to vote such shares
and to receive all dividends declared and paid on such shares.
(d) All shares of Common Stock issued to recipients of
Restricted Stock awards shall be issued from previously issued and outstanding
shares held in the Treasury of the Company.
(e) The total number of shares of Common Stock that may be
awarded as Restricted Stock under the Plan shall not exceed 275,000 shares;
provided, however, that effective November 1, 1991, shares which revert to the
Company in accordance with paragraph 5(c)(iii) shall be deemed to have been
awarded as Restricted Stock for purposes of determining the number of shares of
Restricted Stock remaining available to be awarded hereunder.
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6. Performance Units
(a) To each participant designated to receive an award of
Performance Units for an Award Cycle there shall be issued a Performance Unit
Certificate representing such number of Performance Units with a nominal value
of $100 each as the Committee shall determine; provided, however, that the
total nominal value of Performance Units awarded to a participant for any Award
Cycle shall not exceed 150% of the mid-point of such participant's salary grade
at the date of such award.
(b) Prior to the beginning of each Award Cycle the Committee
shall establish a method for determining the earned value of a Performance Unit
at the end of such Award Cycle (hereinafter called the Payout Value) based on
performance goals over the period of the Award Cycle related to operating
income, cash flow, shareholder return, return on assets, return on equity,
operating margins, cost control, economic value added (EVA) and/or revenue
growth measurements, which may be in respect of the Company, as a whole, or any
business unit thereof; provided, however, that such method shall provide that
(i) no Payout Value may exceed $200 and (ii) the payment of an award of
Performance Units to any participant at the end of an Award Cycle shall be the
lesser of $4 million or the amount determined by multiplying the Payout Value
times the number of Performance Units granted to such participant.
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(c) If a participant's employment by the Company terminates
before the end of an Award Cycle for which he was granted Performance Units,
after the end of such Award Cycle he shall be entitled to a percentage of the
Payout Value of said Performance Units determined as set forth below:
(A) if termination is by reason of death, disability
or retirement at Normal Retirement Age (as defined in the Company's
Retirement Plan), the Pro-Rated Percentage;
(B) if termination is by reason of retirement prior
to Normal Retirement Age (as defined in the Company's Retirement
Plan), such percentage (not greater than the Pro-Rated Percentage) as
the Committee may in its sole discretion determine;
(C) if termination occurs for any other reason
(voluntary or involuntary) more than two years after the effective
date of the award, such percentage (not greater than the Pro-Rated
Percentage) as the Committee may in its sole discretion determine; and
(D) if termination occurs for any other reason
(voluntary or involuntary) within two years from the effective date of
the award, no percentage of the Payout Value shall be paid.
(d) As promptly as practicable after the end of each Award
Cycle the Payout Value of a Performance Unit awarded at the beginning of such
Award Cycle shall be calcu-
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lated and paid in cash to the recipients awarded such Performance Units after
deduction of all Federal, state and local withholding taxes payable on the
compensation represented thereby.
(e) At the end of each Award Cycle the Committee may, in its
sole discretion, award to those senior executives of the Company and its
subsidiaries who are not officers of the Company and whose performance during
such Award Cycle the Committee believes merits special recognition cash bonuses
in an aggregate amount not to exceed 10% of the aggregate Payout Value of all
Performance Units awarded with respect to such Award Cycle.
7. Expenses
The expenses of administering this Plan shall be borne by the
Company.
8. Adjustments in Class B Common Stock
In the event of any change or changes in the outstanding
shares of Common Stock by reason of any stock dividend, split-up,
recapitalization, combination or exchange of shares, merger, consolidation,
separation, reorganization, liquidation or the like, the class and aggregate
number of shares that may be awarded as Restricted Stock under the Plan after
any such change shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
9. Amendment
The Board of Directors of the Company shall have complete
power and authority to amend the Plan, provided,
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however, that the Board of Directors shall not, without the approval of the
holders of a majority of the voting stock of the Company entitled to vote
thereon, increase either (i) the maximum number of shares of Restricted Stock
that may be awarded under the Plan, (ii) the maximum number of shares of
Restricted Stock or Performance Units that may be awarded to a participant,
(iii) the maximum Payout Value of a Performance Unit, or (iv) the percentage
ceiling on the aggregate amount of bonuses which may be awarded pursuant to
paragraph 6(e).