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EXHIBIT 10
THE WASHINGTON POST COMPANY
STOCK OPTION PLAN
(As Amended and Restated effective March 12, 1998)
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 aggregate number of shares which in fact may
be purchased under
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* Adjusted to give effect to stock splits in 1971, 1976 and 1978.
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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.
In the alternative, the Committee may, in its discretion at any
time, determine whether to permit an optionee the right to elect to make a
"cashless exercise" of all or some portion of an option by tendering to the
Company some or all of the vested otherwise exercisable portion of the option in
return for a cash payment from the Company equal to the positive difference, if
any, between the fair market value of the number of shares of Class B Common
Stock covered by such tendered portion of the option and the aggregate option
price attributable to such shares. The Company shall cause appropriate tax
withholding to be made with respect to any such cash payment upon a "cashless
exercise" of an option by withholding the appropriate amount from the aggregate
proceeds made available through the "cashless exercise". Finally, an optionee
may direct, in connection with a "cashless exercise," that some or all of the
cash otherwise payable to the optionee from the Company be instead applied to
the payment of the option price of shares of Class B Common Stock with respect
to which the optionee has a vested currently exercisable option and which are
not the subject of the current "cashless exercise." As such, the optionee would
be using the value inherent in some existing options to create a source for
funding the exercise of other options. The Company shall effectuate appropriate
income tax withholding with respect to any "cashless exercise" used to fund the
purchase of shares of Class B Common Stock by withholding the appropriate amount
from the aggregate proceeds made available through the "cashless exercise"
(including the amount of tax withholding required with respect to the purchase
of such additional shares of
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Class B Common Stock) and applying the remaining amount of consideration to the
purchase of additional shares of Class B Common Stock.
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 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
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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 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.
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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.
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
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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.
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
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assets (in whole or in part) of any person, firm, corporation or association.