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EXHIBIT 10.3
THE WASHINGTON POST COMPANY
STOCK OPTION PLAN
(As Amended and Restated through June 29, 1995)
1. Purpose of the Plan
The purpose of this Stock Option Plan (hereinafter called the
Plan) of The Washington Post Company, a Delaware corporation (hereinafter
called the Company), is to secure for the Company and its stockholders the
benefits of incentive inherent in the ownership of Class B Common Stock of the
Company by employees of the Company and its subsidiaries who will be
responsible for its future growth and continued success. It is generally
recognized that stock option plans aid in retaining and encouraging key
employees of ability and in attracting other able employees.
2. Stock Subject to the Plan
There are hereby authorized and reserved for issuance upon the
exercise of options to be granted from time to time under the Plan an aggregate
of 1,900,000 shares* of the Company's Class B Common Stock, which shares may be
in whole or in part, as the Board of Directors shall from time to time
determine, issued shares which shall have been reacquired by the Company or
authorized but unissued shares, whether now or hereafter authorized. If any
option granted under the Plan shall expire, terminate or be canceled for any
reason without having been exercised in full, the corresponding number of
unpurchased shares which were reserved for issuance upon exercise thereof shall
again be available for the purposes of the Plan. To the extent that options
provide that the exercise of one shall reduce the number of shares purchasable
under the other, then, for purposes of the Plan, the Company shall be deemed to
have awarded options only for the aggre-
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* Adjusted to give effect to stock splits in 1971, 1976 and 1978.
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gate number of shares which in fact may be purchased under such options (and
not for the number of shares covered by both such options).
3. Administration of the Plan
The Plan shall be administered by the Committee referred to in
paragraph 4 (hereinafter called the Committee). Subject to the express
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, options shall be granted and the number of shares to be subject to each
option; provided, however, that the aggregate fair market value of the shares
(determined as of the time the option is granted) for which incentive stock
options (as defined in Section 422 of the Internal Revenue Code of 1986, as it
may be amended from time to time) granted to an employee, under all plans of
the Company and its subsidiaries providing for the grant of incentive stock
options, may first become exercisable in any calendar year after 1986 shall not
exceed $100,000. In making such determinations, the Committee may take into
account the nature of the services rendered or expected to be rendered by the
respective employees, their present and potential contributions to the
Company's success, the anticipated number of years of effective service
remaining and such other factors as the Committee in its discretion shall deem
relevant. Subject to the express provisions of the Plan, the Committee shall
also have plenary authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, to determine the terms and
provisions of the respective options (which terms and provisions need not be
the same in each case), and to make all other determinations deemed necessary
or advisable in administering the Plan. The determinations of the Committee on
the matters referred to in this paragraph 3 shall be conclusive.
4. The Committee
The Committee shall consist of not less than three members of
the Board of Directors, each of whom shall be a "disinterested" person within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(or any successor rule or regulation). No member of the Committee shall be
eligible to receive an option under the Plan. The Committee shall be appointed
by the Board of Directors, which may from time to time appoint members to the
Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee; the Board of
Directors shall also designate one of the members of the Committee as its
Chairman. The Committee
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shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the members shall be fully
as effective as if it had been made by a majority vote at a meeting duly called
and held. The Committee may appoint a secretary (who need not be a member of
the Committee) and may make such rules and regulations for the conduct of its
business as it shall deem advisable. No member of the Committee shall be
liable, in the absence of bad faith, for any act or omission with respect to
his service on the Committee. Service on the Committee shall constitute
service as a Director of the Company so that the members of the Committee shall
be entitled to indemnification and reimbursement as Directors of the Company
pursuant to its Certificate of Incorporation.
5. Time of Granting of Options
Nothing contained in the Plan or in any resolution adopted or
to be adopted by the Board of Directors or by the stockholders of the Company
shall constitute the granting of any option hereunder. The action of the
Committee with respect to the granting of an option shall take place on such
date as a majority of the members of the Committee at a meeting shall make a
determination with respect to the granting of an option or, in the absence of a
meeting, on such date as a written Designation covering such option shall have
been executed by all the members of the Committee. The effective date of the
grant of an option (hereinafter called the Granting Date) shall be the date
specified by the Committee in its determination or Designation relating to the
award of such option.
6. Eligibility
Options may be granted only to key employees (which term shall
be deemed to include officers) who on the Granting Date are in the employ of
the Company or one of its present or future subsidiary corporations, as defined
in Section 424 of the Internal Revenue Code of 1986, as the same shall be
amended from time to time (hereinafter called Subsidiaries). A Director of the
Company or of a Subsidiary who is not also such an employee of the Company or
one of its Subsidiaries shall not be eligible to receive an option. During the
life of the Plan options may be granted to eligible employees whether or not
they hold or have held options under the Plan or other options previously
granted by the Company.
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7. Option Prices
The purchase price of the Class B Common Stock under each
option shall be determined by the Committee, but shall not be less than 100% of
the fair market value of the Class B Common Stock on the Granting Date of such
option, as determined by the Committee. The purchase price of shares purchased
upon the exercise of an option is to be paid in full upon the issuance of such
shares, either in cash or by the surrender of whole shares of Class B Common
Stock having a fair market value, as determined by the Committee, equal to such
purchase price, or by a combination of cash and whole shares. If paid in cash,
the purchase price paid for stock upon the exercise of options shall be added
to the general funds of the Company and used for corporate purposes. If paid
in whole or in part in shares, the shares surrendered shall be held as Treasury
shares.
8. Option Types, Terms and Conditions
Options granted under the Plan shall be in the form of (a)
incentive stock options (as defined in Section 422 of the Internal Revenue Code
of 1986, as it may be amended from time to time) and/or (b) non-qualified stock
options. To the extent that any option that is intended to be an incentive
stock option exceeds the $100,000 limitation set forth in paragraph 3 above, it
shall be deemed to be a non-qualified option.
The term of each option shall be for such period as the
Committee shall determine, but not more than ten years from the Granting Date
in the case of incentive stock options and non-qualified options, subject to
earlier termination as the Committee may determine and as provided in
paragraphs 10 and 11 hereof.
The Committee shall, in its discretion, prescribe the terms
and conditions upon which options may be exercised, which terms and provisions
need not be the same in each case. Except as provided in paragraphs 10 and 11
below, no option may be exercised at any time unless the holder thereof is then
an employee of the Company or of a Subsidiary. An employee shall have none of
the rights of a stockholder with respect to any of the shares subject to option
until such shares shall be issued to him upon the exercise of his option.
The Committee may grant to holders of outstanding options, in
exchange for the surrender and cancellation of such options, new options (which
may be incentive stock
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options and/or non-qualified stock options) having purchase prices lower than
the purchase prices provided in the options so surrendered and canceled and
containing such other terms and conditions as the Committee may prescribe in
accordance with the provisions of the Plan; provided that such new options
shall provide for the purchase of not more than 90% of the number of shares
covered by the options so surrendered and canceled and that the purchase price
under such new options shall be determined in accordance with paragraph 7
hereof.
The maximum number of shares subject to options which may be granted
under this Plan to any individual employee during the life of this Plan shall
not exceed 250,000 in the aggregate.
9. Non-Transferability of Options
No option granted under the Plan shall be transferable
otherwise than by will or the laws of descent and distribution and an option
may be exercised, during the lifetime of the holder thereof, only by him.
10. Termination of Employment
In the event that the employment of an employee to whom an
option has been granted under the Plan shall be terminated (otherwise than by
reason of death), such option may, subject to the provisions of paragraphs 8
and 12, be exercised (only to the extent that the employee was entitled to do
so at the termination of his employment) at any time within three months after
such termination, but in no event after the expiration of the term of the
option. Notwithstanding the foregoing, the Committee may permit any option
granted to an employee whose employment is being terminated (otherwise than by
reason of death) to remain exercisable for such period as the Committee shall
determine, but in no event beyond the expiration of the term of the option. In
the event the Committee so extends the exercise period of an option held by a
terminating employee and such option is exercisable as to additional shares in
installments, such installments shall continue to accrue after the termination
of employment unless the Committee determines that the exercise period shall be
extended only with respect to the number of shares purchasable at the date of
the termination of employment. Options granted under the Plan shall not be
affected by any change of employment so long as the holder continues to be an
employee of the Company or of a Subsidiary. Retirement pursuant to any
retirement plan of the Company or any Subsidiary shall be deemed to be a
termination of employment
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for the purposes of this paragraph. The Committee may specify in the original
terms of an option, or if not so specified shall determine, whether any
authorized leave of absence or absence on military or governmental service or
for any other reason shall constitute a termination of employment for purposes
of this paragraph. Nothing in the Plan or in any option granted pursuant to
the Plan (in the absence of an express provision to the contrary) shall confer
on any individual any right to continue in the employ of the Company or any of
its Subsidiaries or interfere in any way with the right of the Company or any
of its Subsidiaries to terminate his employment at any time.
11. Death of Holder of Option
Upon the death of the holder of an option granted under the
Plan, such option may be exercised (unless the option otherwise provides) for
the following specified number of shares by a legatee or legatees of such
option under the holder's last will, or by the holder's personal
representatives or distributees, at any time within one year after the holder's
death, but in no event after the expiration of the term of the option: (i) if
death occurs while the holder is employed by the Company or a subsidiary, to
the extent of (a) the shares purchasable by such holder at the date of his
death plus (b) the additional shares covered by the next installment, if any,
of such option, or (ii) if death occurs within three months after the
termination of the holder's employment or during any extension of the
post-termination exercise period permitted by the Committee pursuant to
paragraph 10 hereof, to the extent of the shares purchasable by such holder at
the date of his death.
12. Employee's Agreement to Serve
The recipient of any option exercisable by the optionee within
twelve months of the Granting Date shall agree to serve in the employ of the
Company or, at the election of the Company from time to time, one of its
Subsidiaries, for such period as the Committee shall determine, which shall not
be less than twelve months following the Granting Date. The Committee shall be
authorized in its discretion to grant options not exercisable by the optionee
within twelve months of the Granting Date, in which case the recipient of such
option need not (unless otherwise determined by the Committee) agree to serve
in the employ of the Company or its Subsidiaries.
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13. Adjustments in Class B Common Stock
Notwithstanding any other provision of the Plan, each option
may contain such provisions as the Committee shall determine to be appropriate
for the adjustment of the number and class of shares subject to such option,
the option price and the number of shares as to which the option shall be
exercisable at any time in the event of changes in the outstanding Class B
Common Stock by reason of any stock dividend, split-up, recapitalization,
combination or exchange of shares, merger, consolidation, separation,
reorganization, liquidation and the like. In the event of any such change in
the outstanding Class B Common Stock, the class and aggregate number of shares
available under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive.
14. Amendment and Termination
Incentive stock options may not be granted after March 11,
2003; and unless the Plan shall theretofore have been terminated as hereinafter
provided, the Plan shall terminate on, and no non-qualified option shall be
granted thereunder after, December 31, 2003, provided that the Board of
Directors may at any time prior to that date terminate the Plan. The Board of
Directors shall have complete power and authority to amend the Plan, provided,
however, that the Board of Directors shall not, without the affirmative vote of
the holders of a majority of the voting stock of the Company entitled to vote
thereon, (i) increase the maximum number of shares for which options may be
granted under the Plan, (ii) change the formula as to minimum option prices,
(iii) extend the period during which options may be granted or exercised or
(iv) change the class of employees to whom options may be granted. No
termination or amendment of the Plan may, without the consent of the individual
to whom any option shall theretofore have been granted, adversely affect the
rights of such individual under such option.
15. Government and Other Regulations
The obligation of the Company to sell and deliver shares under
options granted under the Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by any governmental agencies as may be
required, including, but not by way of limitation, the effectiveness of a
Registration Statement under the Securities Act of 1933, as amended, as deemed
necessary or appropriate by counsel for the Company.
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16. Other Actions
Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers,
including, but not by way of limitation, the right of the Company (i) to grant
options for proper corporate purposes otherwise than under the Plan to any
employee or other person, firm, corporation or association or (ii) to grant
options to, or assume the option of, any person in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business and assets (in whole or in part) of any person, firm, corporation or
association.