EXHIBIT 10.14

 

 

 

 

 

 

 

 

 

 

__________________________________________________________________

THE MCCLATCHY COMPANY

2004 STOCK INCENTIVE PLAN

__________________________________________________________________

 

 

 

TABLE OF CONTENTS

Page

1. PURPOSE *

2. DEFINITIONS *

3. ADMINISTRATION OF THE PLAN *

3.1. Board. *

3.2. Committee. *

3.3. Terms of Awards. *

3.4. Deferral Arrangement. *

3.5. No Liability. *

4. STOCK SUBJECT TO THE PLAN *

5. DURATION AND AMENDMENTS *

5.1. Term. *

5.2. Amendment and Termination of the Plan *

6. AWARD eligibility AND LIMITATIONS *

6.1. Designated Participants and Other Persons *

6.2. Successive Awards. *

6.3. Limitation on Shares of Stock Subject to Awards. *

6.4. Limitations on Incentive Stock Options. *

6.5. Stand-Alone, Additional, Tandem, and Substitute Awards. *

7. AWARD AGREEMENT *

8. TERMS AND CONDITIONS OF OPTIONS *

8.1. Option Price. *

8.2. Vesting. *

8.3. Term. *

8.4. Termination of Service. *

8.5. Limitations on Exercise of Option. *

8.6. Method of Exercise. *

8.7. Rights of Holders of Options *

8.8. Delivery of Stock Certificates. *

9. NON-TRANSFERABILITY OF OPTION *

10. Stock Appreciation Rights *

10.1. Right to Payment. *

10.2. Other Terms. *

11. RESTRICTED STOCK and stock units *

11.1. Grant and Purchase of Restricted Stock or Stock Units. *

11.2. Restrictions. *

11.3. Restricted Stock Certificates. *

11.4. Rights of Holders of Restricted Stock. *

11.5. Rights of Holders of Stock Units. *

11.5.1. Voting and Dividend Rights. *

11.5.2. Creditor's Rights. *

11.6. Termination of Service. *

11.7. Delivery of Stock. *

12. UNRESTRICTED STOCK AWARDS *

13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK *

13.1. General Rule. *

13.2. Surrender of Stock. *

13.3. Cashless Exercise. *

13.4. Other Forms of Payment. *

14. Dividend Equivalent RIGHTS *

14.1. Dividend Equivalent Rights. *

14.2. Termination of Service. *

15. Performance and Annual Incentive Awards *

15.1. Performance Conditions *

15.2. Performance or Annual Incentive Awards Granted to Designated Covered
Employees *

15.2.1. Performance Goals Generally. *

15.2.2. Business Criteria. *

15.2.3. Timing For Establishing Performance Goals. *

15.2.4. Performance or Annual Incentive Award Pool. *

15.2.5. Settlement of Performance or Annual Incentive Awards; Other Terms. *

15.3. Written Determinations. *

15.4. Status of Section 15.2 Awards Under Code Section 162(m). *

16. REQUIREMENTS OF LAW *

16.1. General. *

16.2. Rule 16b-3. *

17. EFFECT OF CHANGES IN CAPITALIZATION *

17.1. Changes in Stock. *

17.2. Reorganization in Which the Company Is the Surviving Entity Which does not
Constitute a Change of Control. *

17.3. Change of Control. *

17.4. Adjustments. *

17.5. No Limitations on Company. *

18. general provisions *

18.1. Disclaimer of Rights. *

18.2. Nonexclusivity of the Plan. *

18.3. Withholding Taxes. *

18.4. Captions *

18.5. Other Provisions *

18.6. Number And Gender *

18.7. Severability *

18.8. Governing Law *

 

THE MCCLATCHY COMPANY

2004 STOCK INCENTIVE PLAN

 

The McClatchy Company, a Delaware corporation (the "Company"), sets forth herein
the terms of its 2004 Stock Incentive Plan (the "Plan"), as follows:

 1. PURPOSE

    The Plan is intended to enhance the Company's and its Affiliates' (as
    defined herein) ability to attract and retain highly qualified officers,
    directors, and employees to motivate such officers, directors, and employees
    to serve the Company and its Affiliates and to expend maximum effort to
    improve the business results and earnings of the Company, by providing to
    such persons an opportunity to acquire or increase a direct proprietary
    interest in the operations and future success of the Company. To this end,
    the Plan provides for the grant of stock options, stock appreciation rights,
    restricted stock, stock units, unrestricted stock and dividend equivalent
    rights. Any of these awards may, but need not, be made as performance
    incentives to reward attainment of annual or long-term performance goals in
    accordance with the terms hereof. Stock options granted under the Plan may
    be non-qualified stock options or incentive stock options, as provided
    herein.

 2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

"Affiliate"
means, with respect to the Company, any company or other trade or business that
controls, is controlled by or is under common control with the Company within
the meaning of Rule 405 of Regulation C under the Securities Act, including,
without limitation, any Subsidiary.

"Annual Incentive Award"
means an Award made subject to attainment of performance goals (as described in
Section 15
) over a performance period of up to one year (the fiscal year, unless otherwise
specified by the Committee).
"Award"
means a grant of an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Stock Unit or Dividend Equivalent Rights under the Plan.
"Award Agreement"
means the written agreement between the Company and a Grantee that evidences and
sets out the terms and conditions of an Award.
"Board"
means the Board of Directors of the Company.
"Cause"

means, as determined by the Board and unless otherwise provided in an applicable
agreement with the Company or an Affiliate, (i) gross negligence or willful
misconduct in connection with the performance of duties; (ii) conviction of a
criminal offense (other than minor traffic offenses); or (iii) material breach
of any term of any employment, consulting or other services, confidentiality,
intellectual property or non-competition agreements, if any, between the
Designated Participant and the Company or an Affiliate.
"Change of Control"
means the occurrence of any of the following: (i) the sale, lease, conveyance or
other disposition of all or substantially all of the Company's assets to any
"person" (as such term is used in Section 13(d) of the Securities Exchange Act
of 1934, as amended), entity or group of persons acting in concert; (ii) any
"person" or group of persons (other than any member of the McClatchy family or
any entity or group controlled by one or more members of the McClatchy family)
becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then outstanding voting
securities; (iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its controlling entity) at
least 50% of the total voting power represented by the voting securities of the
Company or such surviving entity (or its controlling entity) outstanding
immediately after such merger or consolidation; (iv) a contest for the election
or removal of members of the Board that results in the removal from the Board of
at least 50% of the incumbent members of the Board, or (v) the occurrence of a
"Rule 13e-3 transaction" as such term is defined in Rule 13e-3 promulgated under
the Securities Exchange Act of 1934, as amended, or any similar successor rule.
"Code"
means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended.
"Committee"
means the Compensation Committee which has been designated by the Board to make
decisions with regard to the Plan.
"Company"
means The McClatchy Company, a Delaware corporation.
"Covered Employee"
means a Grantee who is a Covered Employee within the meaning of Section
162(m)(3) of the Code.
"Designated Participant"
means an employee, officer or director of the Company or an Affiliate.
"Disability"
means the Grantee is unable to perform each of the essential duties of such
Grantee's position by reason of a medically determinable physical or mental
impairment which is potentially permanent in character or which can be expected
to last for a continuous period of not less than 12 months;
provided
,
however
, that, with respect to rules regarding expiration of an Incentive Stock Option
following termination of the Grantee's Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
"Dividend Equivalent"
means a right, granted to a Grantee under
Section 14
hereof, to receive cash, Stock, other Awards or other property equal in value to
dividends paid with respect to a specified number of shares of Stock, or other
periodic payments.
"Effective Date"

means May 19, 2004, the date the Plan was approved by the shareholders of the
Company.
"Exchange Act"
means the Securities Exchange Act of 1934, as now in effect or as hereafter
amended.
"Fair Market Value"
means the value of a share of Stock, determined as follows: if on the Grant Date
or other determination date the Stock is listed on an established national or
regional stock exchange, is admitted to quotation on The Nasdaq Stock Market,
Inc. or is publicly traded on an established securities market, the Fair Market
Value of a share of Stock shall be the closing price of the Stock on such
exchange or in such market (if there is more than one such exchange or market
the Board shall determine the appropriate exchange or market) on the Grant Date
or such other determination date (or if there is no such reported closing price,
the Fair Market Value shall be the mean between the highest bid and lowest asked
prices or between the high and low sale prices on such trading day) or, if no
sale of Stock is reported for such trading day, on the next preceding day on
which any sale shall have been reported. If the Stock is not listed on such an
exchange, quoted on such system or traded on such a market, Fair Market Value
shall be the value of the Stock as determined by the Board in good faith.
"Grant Date"
means, as determined by the Board, the latest to occur of

(i) the date as of which the Board approves an Award, (ii) the date on which the
recipient of an Award first becomes eligible to receive an Award under
Section 6
hereof, or (iii) such other date as may be specified by the Board.
"Grantee"
means a person who receives or holds an Award under the Plan.
"Incentive Stock Option"
means an "incentive stock option" within the meaning of Section 422 of the Code,
or the corresponding provision of any subsequently enacted tax statute, as
amended from time to time.
"Non-qualified Stock Option"
means an Option that is not an Incentive Stock Option.
"Option"
means an option to purchase one or more shares of Stock pursuant to the Plan.
"Option Price"
means the exercise price for each share of Stock subject to an Option.
"Outside Director"
means a member of the Board who is not an officer or employee of the Company.
"Performance Award"
means an Award made subject to the attainment of performance goals (as described
in
Section 15
) over a performance period of up to ten (10) years.
"Plan"
means this The McClatchy Company 2004 Stock Incentive Plan.
"Purchase Price"
means the purchase price for each share of Stock pursuant to a grant of
Restricted Stock or Unrestricted Stock.
"Reporting Person"
means a person who is required to file reports under Section 16(a) of the
Exchange Act.
"Restricted Stock"
means shares of Stock, awarded to a Grantee pursuant to
Section 11
hereof.
"SAR Exercise Price"
means the per share exercise price of an SAR granted to a Grantee under
Section 10
hereof.

"Securities Act"
means the Securities Act of 1933, as now in effect or as hereafter amended.
"Service"
means service qualifying the individual as a Designated Participant in the
Company or an Affiliate. Unless otherwise stated in the applicable Award
Agreement, a Grantee's change in position or duties shall not result in
interrupted or terminated Service, so long as such Grantee continues to qualify
as a Designated Participant in the Company or an Affiliate, or becomes a
consultant or independent contractor providing material services to the Company.
Subject to the preceding sentence, whether a termination of Service shall have
occurred for purposes of the Plan shall be determined by the Board, which
determination shall be final, binding and conclusive.
"Stock"
means the Class A Common Stock, par value $0.01 per share, of the Company.
"Stock Appreciation Right"
or
"SAR"
means a right granted to a Grantee under
Section 10
hereof.

"Stock Unit"
means a bookkeeping entry representing the equivalent of shares of Stock,
awarded to a Grantee pursuant to
Section 11
hereof.
"Subsidiary"
means any "subsidiary corporation" of the Company within the meaning of Section
424(f) of the Code.
"Termination Date"
means the date upon which an Option shall terminate or expire, as set forth in
Section 8.3
hereof.
"Ten Percent Shareholder"
means an individual who owns more than ten percent (10%) of the total combined
voting power of all classes of outstanding stock of the Company, its parent or
any of its Subsidiaries. In determining stock ownership, the attribution rules
of Section 424(d) of the Code shall be applied.
"Unrestricted Stock"
means an Award pursuant to
Section 12
hereof.

 1. ADMINISTRATION OF THE PLAN
     1. Board.
    
        The Board shall have such powers and authorities related to the
        administration of the Plan as are consistent with the Company's
        certificate of incorporation and by-laws and applicable law. The Board
        shall have full power and authority to take all actions and to make all
        determinations required or provided for under the Plan, any Award or any
        Award Agreement, and shall have full power and authority to take all
        such other actions and make all such other determinations not
        inconsistent with the specific terms and provisions of the Plan that the
        Board deems to be necessary or appropriate to the administration of the
        Plan, any Award or any Award Agreement. All such actions and
        determinations shall be by the affirmative vote of a majority of the
        members of the Board present at a meeting or by unanimous consent of the
        Board executed in writing in accordance with the Company's certificate
        of incorporation and by-laws and applicable law. The interpretation and
        construction by the Board of any provision of the Plan, any Award or any
        Award Agreement shall be final, binding and conclusive.
    
     2. Committee.
    
        The Board has delegated to the Committee the powers and authorities
        related to the administration and implementation of the Plan, as set
        forth in Section 3.1 above and other applicable provisions, consistent
        with the certificate of incorporation and by-laws of the Company and
        applicable law.
    
        (i) Except as provided in Subsection (ii) and except as the Board may
        otherwise determine, the Committee shall consist of two or more Outside
        Directors of the Company who: (a) qualify as "outside directors" within
        the meaning of Section 162(m) of the Code and who (b) meet such other
        requirements as may be established from time to time by the Securities
        and Exchange Commission for plans intended to qualify for exemption
        under Rule 16b-3 (or its successor) under the Exchange Act.
    
        (ii) The Board may also appoint one or more separate committees of the
        Board, each composed of one or more directors of the Company who need
        not be Outside Directors, who may administer the Plan with respect to
        employees or other Designated Participants who are not officers or
        directors of the Company, may grant Awards under the Plan to such
        employees or other Designated Participants, and may determine all terms
        of such Awards.
    
        In the event that the Plan, any Award or any Award Agreement entered
        into hereunder provides for any action to be taken by or determination
        to be made by the Board, such action may be taken or such determination
        may be made by the Committee if the power and authority to do so remains
        delegated to the Committee by the Board. Unless otherwise expressly
        determined by the Board, any such action or determination by the
        Committee shall be final, binding and conclusive. To the extent
        permitted by law, the Committee may delegate its authority under the
        Plan to a member of the Board, or to the Chief Executive Officer of the
        Company for actions or determinations regarding non-officer employees.
    
        Terms of Awards.
    
        For the duration of the Board's delegation to the Committee under
        Section 3.2, the Committee shall have full and final authority to:
    
        (i) designate Grantees,
    
        (ii) determine the type or types of Awards to be made to a Grantee,
    
        (iii) determine the number of shares of Stock to be subject to an Award,
    
        (iv) establish the terms and conditions of each Award (including, but
        not limited to, the exercise price of any Option, the nature and
        duration of any restriction or condition (or provision for lapse
        thereof) relating to the vesting, exercise, transfer, or forfeiture of
        an Award or the shares of Stock subject thereto, and any terms or
        conditions that may be necessary to qualify Options as Incentive Stock
        Options),
    
        (v) prescribe the form of each Award Agreement evidencing an Award, and
    
        (vi) amend, modify, or supplement the terms of any outstanding Award.
        Such authority specifically includes the authority, in order to
        effectuate the purposes of the Plan but without amending the Plan, to
        modify Awards to eligible individuals who are foreign nationals or are
        individuals who are employed outside the United States to recognize
        differences in local law, tax policy, or custom.
    
        As a condition to any subsequent Award, the Committee shall have the
        right, at its discretion, to require Grantees to return to the Company
        Awards previously made under the Plan. Subject to the terms and
        conditions of the Plan, any such new Award shall be upon such terms and
        conditions as are specified by the Committee at the time the new Award
        is made. The Committee shall have the right, in its discretion, to make
        Awards in substitution or exchange for any other award under another
        plan of the Company, any Affiliate, or any business entity to be
        acquired by the Company or an Affiliate. The Company may retain the
        right in an Award Agreement to cause a forfeiture of the gain realized
        by a Grantee on account of actions taken by the Grantee in violation or
        breach of or in conflict with any employment agreement, non-competition
        agreement, any agreement prohibiting solicitation of employees or
        clients of the Company or any Affiliate thereof or any confidentiality
        obligation with respect to the Company or any Affiliate thereof or
        otherwise in competition with the Company or any Affiliate thereof, to
        the extent specified in such Award Agreement applicable to the Grantee.
        Furthermore, the Company may annul an Award if the Grantee is an
        employee of the Company or an Affiliate thereof and is terminated for
        Cause as defined in the applicable Award Agreement or the Plan, as
        applicable. The grant of any Award shall be contingent upon the Grantee
        executing the appropriate Award Agreement.
    
     3. Deferral Arrangement.
    
        The Board may permit or require the deferral of any award payment into a
        deferred compensation arrangement, subject to such rules and procedures
        as it may establish, which may include provisions for the payment or
        crediting of interest or dividend equivalents, including converting such
        credits into deferred Stock equivalents and restricting deferrals to
        comply with hardship distribution rules affecting 401(k) plans.
    
     4. No Liability.

    No member of the Board or of the Committee shall be liable for any action or
    determination made in good faith with respect to the Plan or any Award or
    Award Agreement.

 2. STOCK SUBJECT TO THE PLAN

    Subject to adjustment as provided in Section 17 hereof, the number of shares
    of Stock available for issuance under the Plan shall be three million
    (3,000,000). Stock issued or to be issued under the Plan shall be authorized
    but unissued shares; or, to the extent permitted by applicable law, issued
    shares that have been reacquired by the Company. If any shares covered by an
    Award are not purchased or are forfeited, or if an Award otherwise
    terminates without delivery of any Stock subject thereto, then the number of
    shares of Stock counted against the aggregate number of shares available
    under the Plan with respect to such Award shall, to the extent of any such
    forfeiture or termination, again be available for making Awards under the
    Plan. If the Option Price of any Option that is not an Incentive Stock
    Option granted under the Plan, or if pursuant to Section 18.3 the
    withholding obligation of any Grantee with respect to an Option that is not
    an Incentive Stock Option, is satisfied by tendering shares of Stock to the
    Company (by either actual delivery or by attestation) or by withholding
    shares of Stock, the total number of shares of Stock issued net of shares
    tendered or withheld shall be deemed delivered for purposes of determining
    the maximum number of shares of Stock available for delivery under the Plan;
    provided, however, that this rule does not apply to Incentive Stock Options,
    as to which the total number of shares of stock issued shall be deemed
    delivered without any offset.

    DURATION AND AMENDMENTS
     1. 

    Term.

    The Plan shall terminate automatically ten (10) years after its adoption by
    the Board and may be terminated on any earlier date as provided in
    Section 5.2.

 3. Amendment and Termination of the Plan

The Board may, at any time and from time to time, amend, suspend, or terminate
the Plan as to any shares of Stock as to which Awards have not been made. An
amendment shall be contingent on approval of the Company's shareholders to the
extent stated by the Board, required by applicable law or required by applicable
stock exchange listing requirements. No Awards shall be made after termination
of the Plan. No amendment, suspension, or termination of the Plan shall, without
the consent of the Grantee, impair rights or obligations under any Award
theretofore awarded under the Plan.

AWARD eligibility AND LIMITATIONS
 1. Designated Participants and Other Persons

    Subject to this Section 6, Awards may be made under the Plan to: (i) any
    Designated Participant in the Company or in any Affiliate, including any
    Designated Participant who is an officer or director of the Company, or of
    any Affiliate, as the Board shall determine and designate from time to time,
    and (ii) any Outside Director.

 2. Successive Awards.

    An eligible person may receive more than one Award, subject to such
    restrictions as are provided herein.

 3. Limitation on Shares of Stock Subject to Awards.

    During any time when the Company has a class of equity security registered
    under Section 12 of the Exchange Act,

    (i) the maximum number of shares of Stock subject to Options that can be
    awarded under the Plan to any person eligible for an Award under Section 6
    hereof is three hundred thousand (300,000) per calendar year; and

    (ii) the maximum number of shares that can be awarded under the Plan, other
    than pursuant to an Option, to any person eligible for an Award under
    Section 6 hereof is three hundred thousand (300,000) per calendar year

    The preceding limitations in this Section 6.3 are subject to adjustment as
    provided in Section 17 hereof; however, during the term of the Plan no
    Designated Participant shall be awarded an amount in excess of the maximum
    number of shares set forth in this Section.

    Limitations on Incentive Stock Options.

    An Option shall constitute an Incentive Stock Option only (i) if the Grantee
    of such Option is an employee of the Company or any Subsidiary of the
    Company; (ii) to the extent specifically provided in the related Award
    Agreement; and (iii) to the extent that the aggregate Fair Market Value
    (determined at the time the Option is granted) of the shares of Stock with
    respect to which all Incentive Stock Options held by such Grantee become
    exercisable for the first time during any calendar year (under the Plan and
    all other plans of the Grantee's employer and its Affiliates) does not
    exceed $100,000. This limitation shall be applied by taking Options into
    account in the order in which they were granted.

 4. Stand-Alone, Additional, Tandem, and Substitute Awards.

Awards granted under the Plan may, in the discretion of the Board, be granted
either alone or in addition to, in tandem with, or in substitution or exchange
for, any other Award or any award granted under another plan of the Company, any
Affiliate, or any business entity to be acquired by the Company or an Affiliate,
or any other right of a Grantee to receive payment from the Company or any
Affiliate. Such additional, tandem, and substitute or exchange Awards may be
granted at any time. If an Award is granted in substitution or exchange for
another Award, the Board shall require the surrender of such other Award in
consideration for the grant of the new Award. In addition, Awards may be granted
in lieu of cash compensation, including in lieu of cash amounts payable under
other plans of the Company or any Affiliate, in which the value of Stock subject
to the Award is equivalent in value to the cash compensation (for example, Stock
Units or Restricted Stock), or in which the Option Price, grant price or
purchase price of the Award in the nature of a right that may be exercised is
equal to the Fair Market Value of the underlying Stock minus the value of the
cash compensation surrendered (for example, Options granted with an Option Price
"discounted" by the amount of the cash compensation surrendered).

AWARD AGREEMENT

Each Award granted pursuant to the Plan shall be evidenced by an Award
Agreement, in such form or forms as the Board shall from time to time determine.
Award Agreements granted from time to time or at the same time need not contain
similar provisions but shall be consistent with the terms of the Plan. Each
Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-qualified Stock Options or Incentive Stock
Options, and in the absence of such specification such options shall be deemed
Non-qualified Stock Options.

TERMS AND CONDITIONS OF OPTIONS
 1. Option Price.

    The Option Price of each Option shall be fixed by the Board and stated in
    the Award Agreement evidencing such Option; provided, however, that in the
    event that a Grantee is a Ten Percent Shareholder, the Option Price of an
    Option granted to such Grantee that is intended to be an Incentive Stock
    Option shall be not less than 110 percent of the Fair Market Value of a
    share of Stock on the Grant Date. In no case shall the Option Price of any
    Option be less than the par value of a share of Stock.

 2. Vesting.

    Subject to Sections 8.3 and 17.3 hereof, each Option granted under the Plan
    shall become exercisable at such times and under such conditions as shall be
    determined by the Board and stated in the Award Agreement. For purposes of
    this Section 8.2, fractional numbers of shares of Stock subject to an Option
    shall be rounded down to the next nearest whole number. The Board may
    provide, for example, in the Award Agreement for (i) accelerated
    exercisability of the Option in the event the Grantee's Service terminates
    on account of death, Disability or another event, (ii) expiration of the
    Option prior to its term in the event of the termination of the Grantee's
    Service, (iii) immediate forfeiture of the Option in the event the Grantee's
    Service is terminated for Cause or (iv) unvested Options to be exercised
    subject to the Company's right of repurchase with respect to unvested shares
    of Stock. No Option shall be exercisable in whole or in part prior to the
    Effective Date.

 3. Term.

    Each Option granted under the Plan shall terminate, and all rights to
    purchase shares of Stock thereunder shall cease, upon the expiration of ten
    years from the date such Option is granted, or under such circumstances and
    on such date prior thereto as is set forth in the Plan or as may be fixed by
    the Board and stated in the Award Agreement relating to such Option (the
    "Termination Date"); provided, however, that in the event that the Grantee
    is a Ten Percent Shareholder, an Option granted to such Grantee that is
    intended to be an Incentive Stock Option shall not be exercisable after the
    expiration of five years from its Grant Date.

 4. Termination of Service.

    Each Award Agreement shall set forth the extent to which the Grantee shall
    have the right to exercise the Option following termination of the Grantee's
    Service. Such provisions shall be determined in the sole discretion of the
    Board, need not be uniform among all Options issued pursuant to the Plan,
    and may reflect distinctions based on the reasons for termination of
    Service.

 5. Limitations on Exercise of Option.

    Notwithstanding any other provision of the Plan, in no event may any Option
    be exercised, in whole or in part, prior to the date the Plan is approved by
    the shareholders of the Company as provided herein, or after ten years
    following the Grant Date, or after the occurrence of an event referred to in
    Section 17 hereof which results in termination of the Option.

 6. Method of Exercise.

    An Option that is exercisable may be exercised by the Grantee's delivery to
    the Company of written notice of exercise on any business day, at the
    Company's principal office, on the form specified by the Company. Such
    notice shall specify the number of shares of Stock with respect to which the
    Option is being exercised and shall be accompanied by payment in full of the
    Option Price of the shares for which the Option is being exercised. The
    minimum number of shares of Stock with respect to which an Option may be
    exercised, in whole or in part, at any time shall be the lesser of (i) 100
    shares or such lesser number set forth in the applicable Award Agreement and
    (ii) the maximum number of shares available for purchase under the Option at
    the time of exercise.

 7. Rights of Holders of Options

    Unless otherwise stated in the applicable Award Agreement, an individual
    holding or exercising an Option shall have none of the rights of a
    shareholder (for example, the right to receive cash or dividend payments or
    distributions attributable to the subject shares of Stock or to direct the
    voting of the subject shares of Stock ) until the shares of Stock covered
    thereby are fully paid and issued to him. Except as provided in Section 17
    hereof, no adjustment shall be made for dividends, distributions or other
    rights for which the record date is prior to the date of such issuance.

 8. Delivery of Stock Certificates.

Promptly after the exercise of an Option by a Grantee and the payment in full of
the Option Price, such Grantee shall be entitled to the issuance of a stock
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option. Notwithstanding any other provision of this Plan to
the contrary, the Company may elect to satisfy any requirement under this Plan
for the delivery of stock certificates through the use of book-entry.

NON-TRANSFERABILITY OF OPTION

During the lifetime of a Grantee, only the Grantee (or, in the event of legal
incapacity or incompetency, the Grantee's guardian or legal representative) may
exercise an Option. No Option shall be assignable or transferable by the Grantee
to whom it is granted, other than by will or the laws of descent and
distribution.

Stock Appreciation Rights

The Board is authorized to grant Stock Appreciation Rights ("SARs") to Grantees
on the following terms and conditions:

 1. Right to Payment.

    A SAR shall confer on the Grantee to whom it is granted a right to receive,
    upon exercise thereof, the excess of (A) the Fair Market Value of one share
    of Stock on the date of exercise over (B) the grant price of the SAR as
    determined by the Board. The Award Agreement for an SAR shall specify the
    grant price of the SAR, which may be fixed at the Fair Market Value of a
    share of Stock on the date of grant or may vary in accordance with a
    predetermined formula while the SAR is outstanding.

 2. Other Terms.

The Board shall determine at the date of grant or thereafter, the time or times
at which and the circumstances under which a SAR may be exercised in whole or in
part (including based on achievement of performance goals and/or future service
requirements), the time or times at which SARs shall cease to be or become
exercisable following termination of Service or upon other conditions, the
method of exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Stock will be delivered or deemed to be
delivered to Grantees, whether or not a SAR shall be in tandem or in combination
with any other Award, and any other terms and conditions of any SAR.

RESTRICTED STOCK and stock units
 1. Grant and Purchase of Restricted Stock or Stock Units.

    The Board may from time to time grant Restricted Stock or Stock Units to
    persons eligible to receive Awards under Section 6 hereof, subject to such
    restrictions, conditions and other terms, if any, as the Board may
    determine. The Grantee shall be required, to the extent required by
    applicable law, to purchase the Restricted Stock from the Company at a
    Purchase Price equal to the greater of (i) the aggregate par value of the
    shares of Stock represented by such Restricted Stock or (ii) the Purchase
    Price, if any, specified in the Award Agreement relating to such Restricted
    Stock. The Purchase Price shall be payable in a form described in Section 13
    or, in the discretion of the Board, in consideration for past Services
    rendered to the Company or an Affiliate, such that no monetary price is
    required actually to be paid for the Restricted Stock Award.

 2. Restrictions.

    At the time a grant of Restricted Stock or Stock Units is made, the Board
    may, in its sole discretion, establish a period of time (a "restricted
    period") applicable to such Restricted Stock or Stock Units. Each Award of
    Restricted Stock or Stock Units may be subject to a different restricted
    period. The Board may, in its sole discretion, at the time a grant of
    Restricted Stock or Stock Units is made, prescribe restrictions in addition
    to or other than the expiration of the restricted period, including the
    satisfaction of corporate or individual performance objectives, which may be
    applicable to all or any portion of the Restricted Stock or Stock Units in
    accordance with Section 15.1 and 15.2. Neither Restricted Stock nor Stock
    Units may be sold, transferred, assigned, pledged or otherwise encumbered or
    disposed of during the restricted period or prior to the satisfaction of any
    other restrictions prescribed by the Board with respect to such Restricted
    Stock or Stock Units.

 3. Restricted Stock Certificates.

    The Company shall issue, in the name of each Grantee to whom Restricted
    Stock has been granted, stock certificates representing the total number of
    shares of Restricted Stock granted to the Grantee, as soon as reasonably
    practicable after the Grant Date. The Board may provide in an Award
    Agreement that either (i) the Secretary of the Company shall hold such
    certificates for the Grantee's benefit until such time as the Restricted
    Stock is forfeited to the Company or the restrictions lapse, or (ii) such
    certificates shall be delivered to the Grantee, provided, however, that such
    certificates shall bear a legend or legends that comply with the applicable
    securities laws and regulations and makes appropriate reference to the
    restrictions imposed under the Plan and the Award Agreement.

 4. Rights of Holders of Restricted Stock.

    Unless the Board otherwise provides in an Award Agreement, holders of
    Restricted Stock shall have the right to vote such Stock and the right to
    receive any dividends declared or paid with respect to such Stock. The Board
    may provide that any dividends paid on Restricted Stock must be reinvested
    in shares of Stock, which may or may not be subject to the same vesting
    conditions and restrictions applicable to such Restricted Stock. All
    distributions, if any, received by a Grantee with respect to Restricted
    Stock as a result of any stock split, stock dividend, combination of shares,
    or other similar transaction shall be subject to the restrictions applicable
    to the original Grant.

 5. Rights of Holders of Stock Units.
    Voting and Dividend Rights.
    
    Unless the Board otherwise provides in an Award Agreement, holders of Stock
    Units shall have no rights as shareholders of the Company. The Board may
    provide in an Award Agreement evidencing a grant of Stock Units that the
    holder of such Stock Units shall be entitled to receive, upon the Company's
    payment of a cash dividend on its outstanding Stock, a cash payment for each
    Stock Unit held equal to the per-share dividend paid on the Stock. Such
    Award Agreement may also provide that such cash payment will be deemed
    reinvested in additional Stock Units at a price per unit equal to the Fair
    Market Value of a share of Stock on the date that such dividend is paid.
    
    Creditor's Rights.

    A holder of Stock Units shall have no rights other than those of a general
    creditor of the Company. Stock Units represent an unfunded and unsecured
    obligation of the Company, subject to the terms and conditions of the
    applicable Award Agreement.

 6. Termination of Service.

    Unless the Board otherwise provides in an Award Agreement or in writing
    after the Award Agreement is issued, upon the termination of a Grantee's
    Service, any Restricted Stock or Stock Units held by such Grantee that have
    not vested, or with respect to which all applicable restrictions and
    conditions have not lapsed, shall immediately be deemed forfeited. Upon
    forfeiture of Restricted Stock or Stock Units, the Grantee shall have no
    further rights with respect to such Award, including but not limited to any
    right to vote Restricted Stock or any right to receive dividends with
    respect to shares of Restricted Stock or Stock Units.

    Delivery of Stock.

Upon the expiration or termination of any restricted period and the satisfaction
of any other conditions prescribed by the Board, the restrictions applicable to
shares of Restricted Stock or Stock Units settled in Stock shall lapse, and,
unless otherwise provided in the Award Agreement, a stock certificate for such
shares shall be delivered, free of all such restrictions, to the Grantee or the
Grantee's beneficiary or estate, as the case may be.

UNRESTRICTED STOCK AWARDS

The Board may, in its sole discretion, grant (or sell at par value or such other
higher purchase price determined by the Board) an Unrestricted Stock Award to
any Grantee pursuant to which such Grantee may receive shares of Stock free of
any restrictions ("Unrestricted Stock") under the Plan; provided, however, that
the total number of shares of Unrestricted Stock granted under the Plan may not
exceed 100,000 in the aggregate. Unrestricted Stock Awards may be granted or
sold as described in the preceding sentence in respect of past services and
other valid consideration, or in lieu of, or in addition to, any cash
compensation due to such Grantee.

FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
 1. General Rule.

    Payment of the Option Price for the shares purchased pursuant to the
    exercise of an Option or the Purchase Price for Restricted Stock shall be
    made in cash or in cash equivalents acceptable to the Company.

 2. Surrender of Stock.

    To the extent the Award Agreement so provides, payment of the Option Price
    for shares purchased pursuant to the exercise of an Option or the Purchase
    Price for Restricted Stock may be made all or in part through the tender to
    the Company of shares of Stock, which shares, if acquired from the Company,
    shall have been held for at least six months at the time of tender and which
    shall be valued, for purposes of determining the extent to which the Option
    Price or Purchase Price has been paid thereby, at their Fair Market Value on
    the date of exercise.

 3. Cashless Exercise.

    With respect to an Option only (and not with respect to Restricted Stock),
    to the extent the Award Agreement so provides, payment of the Option Price
    for shares purchased pursuant to the exercise of an Option and any
    withholding taxes described in Section 18.3 may be made all or in part (a)
    by delivery (on a form acceptable to the Board) of an irrevocable direction
    to a licensed securities broker acceptable to the Company to sell shares of
    Stock and to deliver all or part of the sales proceeds to the Company, or
    (b) by proceeds secured from a licensed securities broker acceptable to the
    Company even if secured by the shares underlying the Option.

 4. Other Forms of Payment.

To the extent the Award Agreement so provides, payment of the Option Price for
shares purchased pursuant to exercise of an Option or the Purchase Price for
Restricted Stock may be made in any other form that is consistent with
applicable laws, regulations and rules.

Dividend Equivalent RIGHTS
 1. Dividend Equivalent Rights.

    A Dividend Equivalent Right is an Award entitling the recipient to receive
    credits based on cash distributions that would have been paid on the shares
    of Stock specified in the Dividend Equivalent Right (or other award to which
    it relates) if such shares had been issued to and held by the recipient. A
    Dividend Equivalent Right may be granted hereunder to any Grantee as a
    component of any other Award. The terms and conditions of Dividend
    Equivalent Rights shall be specified in the grant. Dividend Equivalents
    credited to the holder of a Dividend Equivalent Right may be paid currently
    or may be deemed to be reinvested in additional shares of Stock, which may
    thereafter accrue additional equivalents. Any such reinvestment shall be at
    Fair Market Value on the date of reinvestment. Dividend Equivalent Rights
    may be settled in cash or Stock or a combination thereof, in a single
    installment or installments, all determined in the sole discretion of the
    Board. A Dividend Equivalent Right granted as a component of another Award
    may provide that such Dividend Equivalent Right shall be settled upon
    exercise, settlement, or payment of, or lapse of restrictions on, such other
    award, and that such Dividend Equivalent Right shall expire or be forfeited
    or annulled under the same conditions as such other award. Although granted
    as a component of another Award, a Dividend Equivalent Right may be subject
    to terms and conditions different from such other award.

 2. Termination of Service.

Except as may otherwise be provided by the Board either in the Award Agreement
or in writing after the Award Agreement is issued, a Grantee's rights in all
Dividend Equivalent Rights or interest equivalents shall automatically terminate
upon the Grantee's termination of Service for any reason.

Performance and Annual Incentive Awards
 1. Performance Conditions

    The right of a Grantee to exercise or receive a grant or settlement of any
    Award, and the timing thereof, may be subject to such performance conditions
    as may be specified by the Board. The Board may use such business criteria
    and other measures of performance as it may deem appropriate in establishing
    any performance conditions, and may exercise its discretion to reduce the
    amounts payable under any Award subject to performance conditions, except as
    limited under Sections 15.2 hereof in the case of a Performance Award or
    Annual Incentive Award intended to qualify under Code Section 162(m). If and
    to the extent required under Code Section 162(m), any power or authority
    relating to a Performance Award or Annual Incentive Award intended to
    qualify under Code Section 162(m), shall be exercised by the Committee and
    not the Board.

 2. Performance or Annual Incentive Awards Granted to Designated Covered
    Employees

    If and to the extent that the Committee determines that a Performance or
    Annual Incentive Award to be granted to a Grantee who is designated by the
    Committee as likely to be a Covered Employee should qualify as
    "performance-based compensation" for purposes of Code Section 162(m), the
    grant, exercise and/or settlement of such Performance or Annual Incentive
    Award shall be contingent upon achievement of pre-established performance
    goals and other terms set forth in this Section 15.2.

     1. Performance Goals Generally.
    
        The performance goals for such Performance or Annual Incentive Awards
        shall consist of one or more business criteria and a targeted level or
        levels of performance with respect to each of such criteria, as
        specified by the Committee consistent with this Section 15.2.
        Performance goals shall be objective and shall otherwise meet the
        requirements of Code Section 162(m) and regulations thereunder including
        the requirement that the level or levels of performance targeted by the
        Committee result in the achievement of performance goals being
        "substantially uncertain." The Committee may determine that such
        Performance or Annual Incentive Awards shall be granted, exercised
        and/or settled upon achievement of any one performance goal or that two
        or more of the performance goals must be achieved as a condition to
        grant, exercise and/or settlement of such Performance or Annual
        Incentive Awards. Performance goals may differ for Performance or Annual
        Incentive Awards granted to any one Grantee or to different Grantees.
    
        Business Criteria.
    
        One or more of the following business criteria for the Company, on a
        consolidated basis, and/or specified subsidiaries or business units of
        the Company (except with respect to the total shareholder return and
        earnings per share criteria), shall be used exclusively by the Committee
        in establishing performance goals for such Performance or Annual
        Incentive Awards: (1) operating cash flow, (2) operating cash flow as a
        percentage of revenue, (3) revenue, (4) operating income, (5) operating
        income as a percentage of revenue, (6) pretax income, (7) pretax income
        as a percentage of net income, (8) net income as a percentage of revenue
        and/or circulation, (9) total shareholder return; (10) such total
        shareholder return as compared to total return (on a comparable basis)
        of a publicly available index such as, but not limited to, the Standard
        & Poor's 500 Stock Index; (10) earnings per share; (11) return on
        equity; (12) pretax earnings per share; (13) return on capital; (14)
        return on investment; (15) working capital; and (16) ratio of debt to
        shareholders' equity.
    
        Timing For Establishing Performance Goals.
    
        Performance goals shall be established not later than 90 days after the
        beginning of any performance period applicable to such Performance or
        Annual Incentive Awards, or at such other date as may be required or
        permitted for "performance-based compensation" under Code Section
        162(m).
    
     2. Performance or Annual Incentive Award Pool.
    
        The Committee may establish a Performance or Annual Incentive Award
        pool, which shall be an unfunded pool, for purposes of measuring Company
        performance in connection with Performance or Annual Incentive Awards.
    
     3. Settlement of Performance or Annual Incentive Awards; Other Terms.

    Settlement of such Performance or Annual Incentive Awards shall be in cash,
    Stock, other Awards or other property, in the discretion of the Committee.
    The Committee may, in its discretion, reduce the amount of a settlement
    otherwise to be made in connection with such Performance or Annual Incentive
    Awards. The Committee shall specify the circumstances in which such
    Performance or Annual Incentive Awards shall be paid or forfeited in the
    event of termination of Service by the Grantee prior to the end of a
    performance period or settlement of Performance Awards.

 3. Written Determinations.

    All determinations by the Committee as to the establishment of performance
    goals, the amount of any Performance Award pool or potential individual
    Performance Awards and as to the achievement of performance goals relating
    to Performance Awards, and the amount of any Annual Incentive Award pool or
    potential individual Annual Incentive Awards and the amount of final Annual
    Incentive Awards, shall be made in writing in the case of any Award intended
    to qualify under Code Section 162(m). To the extent required to comply with
    Code Section 162(m), the Committee may delegate any responsibility relating
    to such Performance Awards or Annual Incentive Awards.

 4. Status of Section 15.2 Awards Under Code Section 162(m).

It is the intent of the Company that Performance Awards and Annual Incentive
Awards under Section 15.2 hereof granted to persons who are designated by the
Committee as likely to be Covered Employees within the meaning of Code Section
162(m) and regulations thereunder shall, if so designated by the Committee,
constitute "qualified performance-based compensation" within the meaning of Code
Section 162(m) and regulations thereunder. Accordingly, the terms of Section
15.2, including the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Code Section 162(m)
and regulations thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Grantee will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee, at the time of grant of Performance Awards or an Annual Incentive
Award, as likely to be a Covered Employee with respect to that fiscal year. If
any provision of the Plan or any agreement relating to such Performance Awards
or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements.

REQUIREMENTS OF LAW
 1. General.

    The Company shall not be required to sell or issue any shares of Stock under
    any Award if the sale or issuance of such shares would constitute a
    violation by the Grantee, any other individual exercising an Option, or the
    Company of any provision of any law or regulation of any governmental
    authority, including without limitation any federal or state securities laws
    or regulations. If at any time the Company shall determine, in its
    discretion, that the listing, registration or qualification of any shares
    subject to an Award upon any securities exchange or under any governmental
    regulatory body is necessary or desirable as a condition of, or in
    connection with, the issuance or purchase of shares hereunder, no shares of
    Stock may be issued or sold to the Grantee or any other individual
    exercising an Option pursuant to such Award unless such listing,
    registration, qualification, consent or approval shall have been effected or
    obtained free of any conditions not acceptable to the Company, and any delay
    caused thereby shall in no way affect the date of termination of the Award.
    Specifically, in connection with the Securities Act, upon the exercise of
    any Option or the delivery of any shares of Stock underlying an Award,
    unless a registration statement under such Act is in effect with respect to
    the shares of Stock covered by such Award, the Company shall not be required
    to sell or issue such shares unless the Board has received evidence
    satisfactory to it that the Grantee or any other individual exercising an
    Option may acquire such shares pursuant to an exemption from registration
    under the Securities Act. Any determination in this connection by the Board
    shall be final, binding, and conclusive. The Company may, but shall in no
    event be obligated to, register any securities covered hereby pursuant to
    the Securities Act. The Company shall not be obligated to take any
    affirmative action in order to cause the exercise of an Option or the
    issuance of shares of Stock pursuant to the Plan to comply with any law or
    regulation of any governmental authority. As to any jurisdiction that
    expressly imposes the requirement that an Option shall not be exercisable
    until the shares of Stock covered by such Option are registered or are
    exempt from registration, the exercise of such Option (under circumstances
    in which the laws of such jurisdiction apply) shall be deemed conditioned
    upon the effectiveness of such registration or the availability of such an
    exemption.

 2. Rule 16b-3.

During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
pursuant to the Plan and the exercise of Options granted hereunder will qualify
for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent
that any provision of the Plan or action by the Board does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative to the extent
permitted by law and deemed advisable by the Board, and shall not affect the
validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the
Board may exercise its discretion to modify this Plan in any respect necessary
to satisfy the requirements of, or to take advantage of any features of, the
revised exemption or its replacement.

EFFECT OF CHANGES IN CAPITALIZATION
 1. Changes in Stock.

    If the number of outstanding shares of Stock is increased or decreased or
    the shares of Stock are changed into or exchanged for a different number or
    kind of shares or other securities of the Company on account of any
    recapitalization, reclassification, stock split, reverse split, combination
    of shares, exchange of shares, stock dividend or other distribution payable
    in capital stock, or other increase or decrease in such shares effected
    without receipt of consideration by the Company occurring after the
    Effective Date, the number and kinds of shares for which grants of Options
    and other Awards may be made under the Plan shall be adjusted
    proportionately and accordingly by the Company. In addition, the number and
    kind of shares for which Awards are outstanding shall be adjusted
    proportionately and accordingly so that the proportionate interest of the
    Grantee immediately following such event shall, to the extent practicable,
    be the same as immediately before such event. Any such adjustment in
    outstanding Options or SARs shall not change the aggregate Option Price or
    SAR Exercise Price payable with respect to shares that are subject to the
    unexercised portion of an outstanding Option or SAR, as applicable, but
    shall include a corresponding proportionate adjustment in the Option Price
    or SAR Exercise Price per share. The conversion of any convertible
    securities of the Company shall not be treated as an increase in shares
    effected without receipt of consideration. Notwithstanding the foregoing, in
    the event of any distribution to the Company's shareholders of securities of
    any other entity or other assets without receipt of consideration by the
    Company, the Company may, in such manner as the Company deems appropriate,
    adjust (i) the number and kind of shares subject to outstanding Awards
    and/or (ii) the exercise price of outstanding Options and Stock Appreciation
    Rights to reflect such distribution.

 2. Reorganization in Which the Company Is the Surviving Entity Which does not
    Constitute a Change of Control.

    Subject to Section 17.34 hereof, if the Company shall be the surviving
    entity in any reorganization, merger, or consolidation of the Company with
    one or more other entities which does not constitute a Change of Control,
    any Option or SAR theretofore granted pursuant to the Plan shall pertain to
    and apply to the securities to which a holder of the number of shares of
    Stock subject to such Option or SAR would have been entitled immediately
    following such reorganization, merger, or consolidation, with a
    corresponding proportionate adjustment of the Option Price or SAR Exercise
    Price per share so that the aggregate Option Price or SAR Exercise Price
    thereafter shall be the same as the aggregate Option Price or SAR Exercise
    Price of the shares remaining subject to the Option or SAR immediately prior
    to such reorganization, merger, or consolidation. Subject to any contrary
    language in an Award Agreement evidencing an Award, any restrictions
    applicable to such Award shall apply as well to any replacement shares
    received by the Grantee as a result of the reorganization, merger or
    consolidation.

    
    Change of Control.

    Subject to the exception set forth in the last sentence of Section 17.4:

    (i) upon the occurrence of a Change of Control, all outstanding Options and
    SARs hereunder and all outstanding shares of Restricted Stock and Stock
    Units shall be deemed to have vested, and all restrictions and conditions
    applicable to such Options and SARs, and shares of Restricted Stock and
    Stock Units shall be deemed to have lapsed, immediately prior to the
    occurrence of such Change of Control, and

    (ii) either of the following two actions shall be taken:

    (A) The Board may elect, in its sole discretion, to cancel any outstanding
    Awards of Options, Restricted Stock, and/or SARs and pay or deliver, or
    cause to be paid or delivered, to the holder thereof an amount in cash or
    securities having a value (as determined by the Board acting in good faith),
    in the case of Restricted Stock, equal to the formula or fixed price per
    share paid to holders of shares of Stock and, in the case of Options or
    SARs, equal to the product of the number of shares of Stock subject to the
    Option or SAR (the "Award Shares") multiplied by the amount, if any, by
    which (I) the formula or fixed price per share paid to holders of shares of
    Stock pursuant to such transaction exceeds (II) the Option Price or SAR
    Exercise Price applicable to such Award Shares. With respect to all
    outstanding Options, in addition to the action taken under the preceding
    sentence, the Board may further elect, in its sole discretion, to give
    Grantees scheduled to become vested in Options upon the Change of Control
    the opportunity to exercise the Options prior to the scheduled consummation
    of the Change of Control contingent on the occurrence of such Change of
    Control.

    (B) The Company may make provision in writing in connection with such Change
    of Control for the assumption and continuation of the Options, SARs,
    Restricted Stock and Stock Units theretofore granted, or for substitution of
    such Options, SARs, Restricted Stock and Stock Units for new common stock
    option and stock appreciation rights and new common stock restricted stock
    and stock units relating to the stock of the successor entity, or a parent
    or subsidiary thereof, with appropriate adjustment as to the number of
    shares (disregarding any consideration that is not common stock) and option
    and stock appreciation right exercise prices.

    

    
    Adjustments.

    Adjustments under this Section 17 related to shares of Stock or securities
    of the Company shall be made by the Board, whose determination in that
    respect shall be final, binding and conclusive. No fractional shares or
    other securities shall be issued pursuant to any such adjustment, and any
    fractions resulting from any such adjustment shall be eliminated in each
    case by rounding downward to the nearest whole share. The Board shall
    determine the effect of a Change of Control upon Awards other than Options,
    SARs, Restricted Stock and Stock Units, and such effect shall be set forth
    in the appropriate Award Agreement. The Board may provide in the Award
    Agreements at the time of grant, or any time thereafter with the consent of
    the Grantee, for different provisions to apply to an Award in place of those
    described in Sections 17.1, 17.2 and 17.3.

 3. No Limitations on Company.

The making of Awards pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.

general provisions
 1. Disclaimer of Rights.

    No provision in the Plan or in any Award or Award Agreement shall be
    construed to confer upon any individual the right to remain in the employ or
    service of the Company or any Affiliate, or to interfere in any way with any
    contractual or other right or authority of the Company either to increase or
    decrease the compensation or other payments to any individual at any time,
    or to terminate any employment or other relationship between any individual
    and the Company. In addition, notwithstanding anything contained in the Plan
    to the contrary, unless otherwise stated in the applicable Award Agreement,
    no Award granted under the Plan shall be affected by any change of duties or
    position of the Grantee, so long as such Grantee continues to be a director,
    officer, consultant or employee of the Company or an Affiliate. The
    obligation of the Company to pay any benefits pursuant to this Plan shall be
    interpreted as a contractual obligation to pay only those amounts described
    herein, in the manner and under the conditions prescribed herein. The Plan
    shall in no way be interpreted to require the Company to transfer any
    amounts to a third party trustee or otherwise hold any amounts in trust or
    escrow for payment to any Grantee or beneficiary under the terms of the
    Plan.

 2. Nonexclusivity of the Plan.

    Neither the adoption of the Plan nor the submission of the Plan to the
    shareholders of the Company for approval shall be construed as creating any
    limitations upon the right and authority of the Board to adopt such other
    incentive compensation arrangements (which arrangements may be applicable
    either generally to a class or classes of individuals or specifically to a
    particular individual or particular individuals) as the Board in its
    discretion determines desirable, including, without limitation, the granting
    of stock options otherwise than under the Plan.

 3. Withholding Taxes.

    The Company or an Affiliate, as the case may be, shall have the right to
    deduct from payments of any kind otherwise due to a Grantee any Federal,
    state, or local taxes of any kind required by law to be withheld with
    respect to the vesting of or other lapse of restrictions applicable to an
    Award or upon the issuance of any shares of Stock upon the exercise of an
    Option or pursuant to an Award. At the time of such vesting, lapse, or
    exercise, the Grantee shall pay to the Company or the Affiliate, as the case
    may be, any amount that the Company or the Affiliate may reasonably
    determine to be necessary to satisfy such withholding obligation. Subject to
    the prior approval of the Company or the Affiliate, which may be withheld by
    the Company or the Affiliate, as the case may be, in its sole discretion,
    the Grantee may elect to satisfy such obligations, in whole or in part,
    (i) by causing the Company or the Affiliate to withhold shares of Stock
    otherwise issuable to the Grantee or (ii) by delivering to the Company or
    the Affiliate shares of Stock already owned by the Grantee. The shares of
    Stock so delivered or withheld shall have an aggregate Fair Market Value
    equal to such withholding obligations. The Fair Market Value of the shares
    of Stock used to satisfy such withholding obligation shall be determined by
    the Company or the Affiliate as of the date that the amount of tax to be
    withheld is to be determined. A Grantee who has made an election pursuant to
    this Section 18.3 may satisfy his or her withholding obligation only with
    shares of Stock that are not subject to any repurchase, forfeiture,
    unfulfilled vesting, or other similar requirements.

 4. Captions

    The use of captions in this Plan or any Award Agreement is for the
    convenience of reference only and shall not affect the meaning of any
    provision of the Plan or such Award Agreement.

 5. Other Provisions

    Each Award granted under the Plan may contain such other terms and
    conditions not inconsistent with the Plan as may be determined by the Board,
    in its sole discretion.

 6. Number And Gender

    With respect to words used in this Plan, the singular form shall include the
    plural form, the masculine gender shall include the feminine gender, etc.,
    as the context requires.

 7. Severability

    If any provision of the Plan or any Award Agreement shall be determined to
    be illegal or unenforceable by any court of law in any jurisdiction, the
    remaining provisions hereof and thereof shall be severable and enforceable
    in accordance with their terms, and all provisions shall remain enforceable
    in any other jurisdiction.

 8. Governing Law

The validity and construction of this Plan and the instruments evidencing the
Award hereunder shall be governed by the laws of the State of Delaware, other
than any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other jurisdiction.

*    *    *

 

To record adoption of the Plan by the Board as of January 28, 2004, and approval
of the Plan by the shareholders on May 19, 2004, the Company has caused its
authorized officer to execute the Plan.

 

 

THE MCCLATCHY COMPANY

By:

/s/ Karole Morgan-Prager

Title:

Vice President and Secretary