================================================================================
                                                                  EXHIBIT 10 (b)






                               KNIGHT-RIDDER, INC.

                              COMPENSATION PLAN FOR

                              NONEMPLOYEE DIRECTORS






                                                          EFFECTIVE JULY 1, 1997


================================================================================

<PAGE>

                               KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I             PURPOSE AND INTENT OF PLAN...............................1

ARTICLE II            DEFINITIONS............................................. 1

ARTICLE III           ANNUAL RETAINER FEE..................................... 3
   3.1                Time and Form of Payment................................ 3
   3.2                Election to Receive Stock............................... 3
   3.3                Determination of Number of Shares of Stock.............. 3
   3.4                Registration of Stock................................... 4

ARTICLE IV            BOARD MEETING AND COMMITTEE FEES........................ 4
   4.1                Board Meeting Fee....................................... 4
   4.2                Committee Meeting Fee................................... 4
   4.3                Committee Chairperson Fee............................... 4

ARTICLE V             ANNUAL OPTION GRANTS.................................... 5
   5.1                Grant of Options........................................ 5
   5.2                Vesting of Options; Expiration.......................... 5
   5.3                Exercise of Options Following Termination of Service.... 5
   5.4                Time and Manner of Exercise of Options.................. 6
   5.5                Restrictions on Transfer................................ 7

ARTICLE VI            SPECIAL PROVISIONS FOR OUTSIDE DIRECTORS................ 7
   6.1                Outside Directors Eligible for Phantom Share Grant...... 7
   6.2                Outside Directors Eligible for Retirement Plan.......... 8

ARTICLE VII           SHARES AVAILABLE UNDER PLAN............................. 8

ARTICLE VIII          RECAPITALIZATION OR REORGANIZATION...................... 8
   8.1                Authority of the Company and Shareholders............... 8
   8.2                Change in Capitalization................................ 9

ARTICLE IX            TERMINATION AND AMENDMENT OF THE PLAN................... 9
   9.1                Termination............................................. 9
   9.2                General Power of Board.................................. 9
   9.3                When Director Consent Required..........................10

                                        i
<PAGE>

ARTICLE X             ADMINISTRATION OF PLAN..................................10

ARTICLE XI            MISCELLANEOUS...........................................10
   11.1               Tax Withholding.........................................10
   11.2               No Right to Reelection..................................10
   11.3               Unfunded Plan...........................................10
   11.4               Other Compensation Arrangements.........................11
   11.5               Securities Law Restrictions.............................11
   11.6               Compliance with Rule 16b-3..............................11
   11.7               Expenses................................................11
   11.8               Governing Law; Venue....................................11

                                       ii

<PAGE>


                               KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS
                      (AS AMENDED THROUGH JANUARY 26, 1999)


         The KNIGHT-RIDDER,  INC. COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS is
hereby established by Knight-Ridder, Inc. effective July 1, 1997.


                                    ARTICLE I
                           PURPOSE AND INTENT OF PLAN

         The  purpose of the Plan is to  attract  and  retain  the  services  of
qualified  individuals  who are not employees of the Company to serve as members
of the Board.  This Plan sets forth the terms of  compensation to be provided to
such Directors for their services as members of the Board of the Company.

         Articles  III, IV and V provide  for  different  types of  compensation
payable to all Directors.  Article VI provides for grants of Phantom Share Units
to certain Outside Directors and for  participation in the Company's  Retirement
Plan for other Outside Directors.  This Plan and the Retirement Plan reflect all
compensation programs in effect for Directors.


                                   ARTICLE II
                                   DEFINITIONS

         As used in this  Plan,  the  following  terms  shall  have the  meaning
hereinafter set forth:

         2.1   "Annual  Retainer Fee" means the annual fee payable to a Director
for service on the Board.  The Annual  Retainer  Fee  currently in effect is set
forth on Appendix One hereto,  which the Board may amend from time to time.  The
Annual  Retainer Fee shall be pro-rated on a quarterly  basis for a Board member
who serves less than an entire calendar year.

         2.2   "Beneficiary"  means the person  designated  by the  Director  to
receive  benefits  hereunder  following  the  death of the  Director  or, if the
Director fails to so designate, the Director's estate.

         2.3   "Board" means the Board of Directors of the Company.

         2.4   "Code" means the Internal Revenue Code of 1986, as amended.

         2.5   "Common  Stock" means the Common Stock of the Company,  par value
$.02 1/12 per share.

                                       1
<PAGE>

         2.6   "Company" means Knight-Ridder,  Inc., a Florida  corporation,  or
any successor legal entity.

         2.7   "Disability"  means a  Director's  physical  or mental  condition
which is  expected  to render the  Director  unable to perform  his or her usual
duties  or any  comparable  duties  for  the  Company.  The  determination  of a
Director's Disability will be made by the Board in its sole discretion.

         2.8   "Director"  means a member of the Board who is not an employee of
the Company or any of its subsidiaries or affiliates.

         2.9   "Effective Date" means July 1, 1997.

         2.10  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended.

         2.11  "Fair Market Value" means the mean between the highest and lowest
sales  price of a share of Common  Stock on the date in  question as reported on
the  composite  tape for  issues  listed on the New York Stock  Exchange.  If no
transaction was reported on the composite tape in the Common Stock on such date,
the prices used shall be the prices  reported on the nearest day  preceding  the
date in question.  If the Common Stock is not then quoted on the composite tape,
"fair  market  value"  shall be the closing  sales price on the mean between the
closing  bid and  asked  prices  on the  date in  question,  as  applicable,  as
furnished by any member firm of the New York Stock  Exchange  selected from time
to time for that purpose by the Board.

         2.12  "Option"  means an option  to  purchase  shares  of Common  Stock
awarded to a Director  pursuant to the Plan,  which option shall not be intended
to qualify,  and shall not be treated, as an "incentive stock option" within the
meaning of Section 422 of the Code.

         2.13  "Outside  Director" means any Director who is not, and never was,
an employee of the Company or any of its subsidiaries or affiliates.

         2.14  "Phantom Share Unit" means a bookkeeping  unit  representing  one
share of Common Stock.

         2.15  "Plan"  means  this  Knight-Ridder,  Inc.  Compensation  Plan for
Nonemployee Directors.

         2.16  "Retirement" means the Termination of Service of a Director at or
after age sixty-five (65).

         2.17  "Retirement Plan" means the Knight-Ridder,  Inc.  Retirement Plan
for Outside Directors, a copy of which is attached hereto as Appendix Three.

                                       2
<PAGE>

         2.18  "Securities  Act" means the  Securities  Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

         2.19  "Termination  of Service"  shall mean  cessation  of service as a
Director of the Company.


                                   ARTICLE III
                               ANNUAL RETAINER FEE

         3.1   TIME AND FORM OF PAYMENT.  The Annual  Retainer Fee is payable in
equal  quarterly  payments  on the  date  of  the  Board's  regularly  scheduled
quarterly  meeting,  except as  provided in Section  3.3  concerning  payment in
Common  Stock.  Through the date of the first  quarterly  meeting in 1998,  each
Director shall receive his or her quarterly  payment of the Annual  Retainer Fee
entirely in cash.  Effective  with the date of the second  quarterly  meeting in
1998, one-half of the quarterly payment of the Annual Retainer Fee shall be paid
in Common Stock. The balance of the quarterly payment of the Annual Retainer Fee
shall be paid in cash or, if the Director elects, in the manner described below,
in Common Stock or a combination of cash and Common Stock.

         3.2   ELECTION  TO  RECEIVE  STOCK.  On or before  April 1,  1998,  any
Director  who desires to receive  any  portion of the balance of each  quarterly
payment of the Annual Retainer Fee due for the remainder of 1998 in Common Stock
shall so indicate on a written  election  form filed with the  Secretary  of the
Company.  On or before  November  30 of any year,  any  Director  who desires to
receive  any  portion  of the  balance of the  Annual  Retainer  Fee due for the
succeeding calendar year in Common Stock shall so indicate on a written election
form filed with the Secretary of the Company.  A newly elected Director may make
such an  election  with  respect  to  one-half  of his or her  pro-rated  Annual
Retainer Fee for the remainder of the calendar  year within one month  following
his or her election to the Board.  Any such election  shall remain in effect for
each  succeeding  calendar  year unless the  Director has amended or revoked the
election in writing on or before November 30 of the preceding calendar year.

         3.3   DETERMINATION  OF NUMBER OF SHARES OF STOCK. The number of shares
of Common Stock to be paid to each Director  shall be determined by dividing the
amount of the Annual  Retainer Fee to be paid in Common Stock by the Fair Market
Value of a share of Common  Stock on the date of payment,  described in the next
sentence.  The date of payment of that portion of the Annual  Retainer Fee to be
paid in Common  Stock  shall be the fifth  business  day  before the date of the
regularly scheduled quarterly meeting of the Board.

                                       3
<PAGE>

         3.4   REGISTRATION OF STOCK. The appropriate number of shares of Common
Stock shall be  registered in the name of the Director and shall be delivered to
the Director by paperless  transfer  effected through records  maintained by the
Depository Trust Company (the "DTC").  Such registration  shall occur as soon as
possible  after the date for payment of such Common  Stock,  as provided  above.
Upon  registration,  the Director  shall have all the rights and privileges of a
stockholder as to such shares,  including the right to receive dividends and the
right to vote such  shares.  The  shares of Common  Stock  paid to the  Director
hereunder  are  immediately  vested upon  payment,  are not  forfeitable  to the
Company for any reason and shall not be subject to any  restrictions on transfer
(other than those imposed under  applicable  law or under any trading  policy of
the Company).


                                   ARTICLE IV
                        BOARD MEETING AND COMMITTEE FEES

         4.1   BOARD  MEETING FEE.  Each  Director  also shall receive a fee for
attendance,  either in person or by  electronic  medium,  at each meeting of the
Board.  The Board  meeting fee  currently in effect is set forth on Appendix One
hereto, which the Board may amend from time to time. The Board meeting fee shall
be paid in cash on the date of the Board meeting.

         4.2   COMMITTEE MEETING FEE. Each Director also shall receive a fee for
attendance,  either in person or by  electronic  medium,  at each  meeting  of a
committee of the Board on which the Director serves.  The committee  meeting fee
currently  in effect is set forth on Appendix  One  hereto,  which the Board may
amend from time to time. The committee  meeting fee shall be paid in cash on the
date of the committee meeting.

         4.3   COMMITTEE   CHAIRPERSON   FEE.   Each   Director  who  serves  as
chairperson of a committee of the Board shall receive an additional fee for such
service.  The annual committee  chairperson fee currently in effect is set forth
on  Appendix  One  hereto,  which the Board  may  amend  from time to time.  The
committee chairperson fee shall be paid in quarterly installments in cash on the
date of each regularly  scheduled  quarterly meeting of the Board. The committee
chairperson  fee  shall  be  pro-rated  on a  quarterly  basis  for  service  as
chairperson of a committee for less than a full year.

                                       4
<PAGE>

                                    ARTICLE V
                              ANNUAL OPTION GRANTS

         5.1   GRANT OF OPTIONS.  Beginning with December 1997, an annual option
grant will be made by the  Compensation  Committee of the Board to each Director
to  purchase  such  number of shares of Common  Stock of the  Company  as may be
established by the Board. The number of options to be granted on an annual basis
is set forth on  Appendix  One  hereto,  which the Board may amend  from time to
time. Such Option shall have a per share exercise price equal to the Fair Market
Value of the Common Stock on the date of grant, which shall be determined by the
Compensation  Committee  of the  Board,  and  shall be  subject  to the  vesting
schedule provided in Section 5.2 and to the other terms and conditions  provided
for herein.

         5.2   VESTING OF OPTIONS; EXPIRATION.  One-third of the Options granted
in any year  shall vest and become  exercisable  on the first,  second and third
annual  anniversaries of the date of grant.  Each Option granted hereunder shall
expire no later than ten (10) years  after the date the Option is  granted,  but
may expire before such date as provided in Section 5.3.

         5.3   EXERCISE OF OPTIONS FOLLOWING TERMINATION OF SERVICE.

               (a) EXERCISE  FOLLOWING  TERMINATION OF SERVICE DUE TO DISABILITY
OR  RETIREMENT.  If a  Director  ceases to be a member of the Board by reason of
Disability or Retirement,  all Options granted to such Director may be exercised
by the Director at any time within five years after the date of  Termination  of
Service.  Options not exercisable at the beginning of the five-year  period will
become  exercisable  during such  five-year  period as if the  Director  had not
Terminated  Service,  in accordance  with Section 5.2, above. At the end of such
five-year period, all Options not exercised shall expire.

               (b) EXERCISE FOLLOWING  TERMINATION OF SERVICE DUE TO DEATH. If a
Director  ceases to be a member of the Board by reason of death,  or if a former
Director dies during the five-year period  following  Termination of Service due
to  Disability  or  Retirement,  all  Options  granted to such  Director  may be
exercised by such Director's estate, personal representative or beneficiary,  as
the case may be,  at any time  within  the  first  to  expire  of the  following
periods:  (i) three  years after the date of the  Director's  death or (ii) five
years  after the date of the  Director's  Termination  of  Service.  Options not
exercisable  at  the  date  of  death  will  become   exercisable   during  such
post-Termination  period as if the Director  had not died,  in  accordance  with
Section 5.2, above.  At the end of such period,  all Options not exercised shall
expire.

               (c)  EXERCISE  FOLLOWING  OTHER  TERMINATIONS  OF  SERVICE.  If a
Director  ceases  to be a  member  of  the  Board  for  any  reason  other  than
Disability,  Retirement  or Death,  then (i) the Director  shall have the right,
subject to the terms and  conditions  hereof,  to exercise  the  Option,  to the
extent it has vested as of the date of such Termination of Service, at any time

                                       5
<PAGE>

within three months  after the date of such  termination,  and (ii) the unvested
portion of any Options awarded to the Director shall be forfeited as of the date
of Termination of Service.

         5.4      TIME AND MANNER OF EXERCISE OF OPTIONS.

                  (a)  NOTICE  OF  EXERCISE.  Subject  to the  other  terms  and
conditions  hereof,  a Director (or other person  exercising  such  options) may
exercise any Options,  to the extent such Options are vested,  by giving written
notice of exercise to the Company; provided,  however, that in no event shall an
Option be exercisable for a fractional  share. The date of exercise of an Option
shall be the later of (i) the date on which the Company  receives  such  written
notice or (ii) the date on which the  conditions  provided in Section 5.4(b) are
satisfied.

                  (b)  PAYMENT.  Payment  for the  shares of Common  Stock to be
received  upon the  exercise of Options  must be made at the date of exercise of
such  Options and may be made in cash or by delivery to the Company of shares of
Common Stock  already  owned by the Director  (or other person  exercising  such
Options)  the Fair Market Value of which on the date of exercise is equal to the
total exercise  price,  or in a combination  of cash and shares.  Payment of the
exercise  price in shares of Common Stock shall be made by (i) delivering to the
Company the share certificate(s) or other evidence of ownership representing the
required  number of shares,  with the Director (or other person  exercising such
Options)  signing his or her name on the back,  (ii)  attaching  executed  stock
powers to such share  certificate(s) or (iii) paperless transfer of the required
number of shares  effected  through  records  maintained by the DTC. Such shares
shall be endorsed to the Company.  The  signature of the Director or other owner
must be guaranteed by a commercial  bank or trust company or by a brokerage firm
having membership on the New York Stock Exchange.  Payment of the purchase price
may also be made through the delivery to the Company of the sale proceeds of all
or part of the shares of common  stock of the  Company  that are the  subject of
this  option;  provided  that the  Optionee  instructs  ChaseMellon  Shareholder
Services ("CMSS") to effect on the date such instruction is given to CMSS (which
shall  be  deemed  to be the  date  of  exercise)  or as  early  as  practicable
thereafter  the sale of such number of such shares "at the market" in a broker's
transaction  (within the meaning of Section 4(4) of the  Securities Act of 1933,
as amended), the proceeds of which shall be at least equal to the purchase price
of this option plus the amount of taxes required to be withheld plus transaction
costs.  In  accordance  with these  instructions,  CMSS shall sell such  shares,
deliver to the Company the portion of the proceeds of such sale which equals the
purchase  price of this option plus the amount of taxes  required to be withheld
and remit  the  remaining  sale  proceeds  (net of  transaction  costs),  to the
Optionee.  [Exercise of any Options shall comply with Rule 16b-3 of the Exchange
Act.]

                  (c) STOCKHOLDER  RIGHTS.  A Director shall have no rights as a
stockholder with respect to any shares of Common Stock issuable upon exercise of
an Option until

                                       6
<PAGE>

the shares have been issued to the Director,  by delivery of stock  certificates
or by paperless  transfer pursuant to Section 5.4(e), and no adjustment shall be
made for dividends or  distributions or other rights in respect of any share for
which the record date is prior to the date upon which the Director  shall become
the holder of record thereof.

                  (d)  LIMITATION  ON EXERCISE.  No Option shall be  exercisable
unless the Common Stock subject thereto has been registered under the Securities
Act and qualified under  applicable state "blue sky" laws in connection with the
offer and sale thereof,  or the Company has  determined  that an exemption  from
registration  under the Securities Act and from  qualification  under such state
"blue sky" laws is available.

                  (e) ISSUANCE OF SHARES.  Subject to the foregoing  conditions,
as soon as is  reasonably  practicable  after its receipt of a proper  notice of
exercise  and  payment  of the  exercise  price of the  Option for the number of
shares with respect to which the Option is exercised,  the Company shall deliver
to the  Director  (or such  other  person  who  exercised  the  Option),  at the
principal  office of the Company or at such other  location as may be acceptable
to the  Company  and the  Director  (or such  other  person),  one or more stock
certificates  for the  appropriate  number of shares of Common  Stock  issued in
connection  with such  exercise.  Alternatively,  the  Company  may effect  such
issuance of Shares by paperless  transfer through records maintained by the DTC.
Such  shares  shall be fully paid and  nonassessable  and shall be issued in the
name of the Director (or such other person).

         5.5  RESTRICTIONS  ON  TRANSFER.  An  Option  may  not be  transferred,
pledged,  assigned,  or otherwise  disposed of, except by will or by the laws of
descent and distribution provided,  however, that the Board may, subject to such
terms and  conditions  as the Board  shall  specify,  permit the  transfer of an
Option to a  Director's  family  members  or to one or more  trusts  established
solely for the benefit of one or more of such family  members.  The Option shall
be exercisable,  during the Director's lifetime,  only by the Director or by the
person to whom the Option has been  transferred in accordance  with the previous
sentence.  A  transferee's  rights  under an Option shall be no greater than the
rights held by the Director under said Option.  No assignment or transfer of the
Option, or of the rights represented thereby,  whether voluntary or involuntary,
by  operation  of law or  otherwise,  except by will or the laws of descent  and
distribution,  or as permitted under this Section, shall vest in the assignee or
transferee any interest or right in the Option, but immediately upon any attempt
to assign or transfer the Option the same shall  terminate and be of no force or
effect.

                                   ARTICLE VI
                    SPECIAL PROVISIONS FOR OUTSIDE DIRECTORS

         6.1  OUTSIDE  DIRECTORS  ELIGIBLE FOR PHANTOM SHARE GRANT. Each Outside
Director  shall  receive  grants of Phantom Share Units as described in Appendix

                                       7
<PAGE>

Two to this Plan  provided  that such  Outside  Director  either (i) was a Board
member  as of July 1, 1996 and was  under  age  sixty-five  on that date or (ii)
began service as a Director of the Company on or after July 1, 1996. The Outside
Directors who are eligible to receive grants of Phantom Share Units are referred
to in the Plan, including Appendix Two, as "Eligible Outside Directors."

         6.2   OUTSIDE  DIRECTORS  ELIGIBLE  FOR  RETIREMENT  PLAN.  An  Outside
Director  who was age  sixty-five  or over on July 1,  1996 is not  eligible  to
receive a grant of a Phantom  Share Unit but is eligible to  participate  in the
Retirement Plan.


                                   ARTICLE VII
                           SHARES AVAILABLE UNDER PLAN

         Subject to the  provisions  of Article  VIII of the Plan,  the  maximum
number of shares of Common  Stock which may be issued  under the Plan in payment
of a Director's  Annual Retainer Fee or upon exercise of Stock Options shall not
exceed 200,000 shares (the "Share Limit"). Either authorized and unissued shares
of Common Stock or treasury  shares may be delivered  pursuant to the Plan.  For
purposes of determining the number of shares that remain  available for issuance
under the Plan, the following rules shall apply:

         (a)      the number of shares  granted under the Plan or subject to any
Option granted under the Plan shall be charged against the Share Limit; and

         (b)      the  Share  Limit  (as  reduced  under  clause  (a))  shall be
increased by:

                  (i)    the number of shares subject to an Option which lapses,
expires or is otherwise terminated without the issuance of such shares,

                  (ii)   the number of shares tendered to pay the exercise price
of an Option, and

                  (iii)  the  number  of  shares  withheld  to  satisfy  any tax
withholding  obligations  of a  Director  with  respect  to any  shares or other
payments hereunder.


                                  ARTICLE VIII
                       RECAPITALIZATION OR REORGANIZATION

         8.1  AUTHORITY OF THE COMPANY AND  SHAREHOLDERS.  The  existence of the
Plan shall

                                       8
<PAGE>

not  affect  or  restrict  in any way the right or power of the  Company  or the
shareholders   of  the   Company   to  make   or   authorize   any   adjustment,
recapitalization,  reorganization  or  other  change  in the  Company's  capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of  options,  warrants  or  rights  to  purchase  stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are  convertible  into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or  transfer  of all or any part of its assets or  business,  or any
other corporate act or proceeding, whether of a similar character or otherwise.

         8.2 CHANGE IN CAPITALIZATION. Notwithstanding any other provision of
the Plan, in the event of any change in the  outstanding  Common Stock by reason
of a stock dividend,  recapitalization,  reorganization,  merger, consolidation,
stock  split,  combination  or  exchange  of  shares  or any  other  significant
corporate  event affecting the Common Stock,  the Board in its  discretion,  may
make (i) such proportionate adjustments as it considers appropriate (in the form
determined  by the  Board in its  sole  discretion)  to  prevent  diminution  or
enlargement  of the  rights of  Directors  under the Plan  with  respect  to the
aggregate  number of shares of Common  Stock  authorized  for  payment as Annual
Retainer Fee under the Plan, for grants of Options under the Plan, the number of
shares of Common  Stock  covered by each  outstanding  Option  and the  exercise
prices in  respect  thereof,  the  number of shares of Common  Stock  covered by
future  Option  grants and the  number of  Phantom  Share  Units  credited  to a
Director's  Phantom Share Account and/or (ii) such other adjustments as it deems
appropriate.  The Board's determination as to what, if any, adjustments shall be
made shall be final and binding on the Company and all Directors.


                                   ARTICLE IX
                      TERMINATION AND AMENDMENT OF THE PLAN

         9.1  TERMINATION.  The Plan shall terminate at such date as determined
by the Board in its sole discretion.  Termination of the Plan will not result in
accelerated  vesting  of  Options  previously  granted  or payment of an Outside
Director's  Phantom Share Account  before the date provided for in Appendix Two.
Vesting of Options  shall  continue as described in Article V and payment of the
Phantom Share Account will occur as provided in Appendix Two.

         9.2 GENERAL  POWER OF BOARD.  Notwithstanding  anything  herein to the
contrary,  the Board may at any time and from  time to time  terminate,  modify,
suspend or amend the Plan in whole or in part; provided,  however,  that no such
termination,  modification,  suspension or amendment shall be effective  without
shareholder  approval if such approval is required to comply with any applicable
law or stock exchange rule.

                                       9
<PAGE>


         9.3 WHEN DIRECTOR CONSENT  REQUIRED.  The Board may not alter,  amend,
suspend, or terminate the Plan without the consent of any Director to the extent
that such action would adversely affect his or her rights with respect to Common
Stock or Options that have previously been granted or with respect to the amount
then credited to the Outside  Director's  Phantom Share  Account,  including the
right to continued crediting of dividend equivalents.


                                    ARTICLE X
                             ADMINISTRATION OF PLAN

         The Board will be  responsible  for  administering  the Plan. The Board
will have authority to adopt such rules as it may deem  appropriate to carry out
the purposes of the Plan, and shall have authority to interpret and construe the
provisions of the Plan and any agreements and notices under the Plan and to make
determinations   pursuant   to  any   Plan   provision.   Each   interpretation,
determination  or other  action made or taken by the Board  pursuant to the Plan
shall be final and binding on all persons.


                                   ARTICLE XI
                                  MISCELLANEOUS

         11.1 TAX WITHHOLDING. The Company shall have the right to withhold from
payments made to a Director or Beneficiary (under the Plan or otherwise),  or to
cause a Director or Beneficiary to pay or make arrangements  satisfactory to the
Company for the payment of any federal,  state,  local or foreign taxes required
to be withheld with respect to any award or payment under the Plan.

         11.2 NO RIGHT TO  REELECTION.  Nothing  in the Plan  shall be deemed to
create any  obligation  on the part of the Board to nominate  any of its members
for reelection by the Company's  stockholders,  nor confer upon any Director the
right  to  remain  a member  of the  Board  for any  period  of time,  or at any
particular rate of compensation.

         11.3 UNFUNDED PLAN.  This Plan is unfunded.  Amounts  payable under the
Plan will be satisfied  solely out of the general assets of the Company  subject
to the claims of the Company's creditors. No Director,  Beneficiary or any other
person  shall  have any  interest  in any fund or in any  specific  asset of the
Company  by  reason  of any  amount  credited  to him  hereunder,  nor shall any
Director,  Beneficiary  or any  other  person  have  any  right to  receive  any
distribution under the Plan except as, and to the extent,  expressly provided in
the Plan.

                                       10
<PAGE>

         11.4 OTHER COMPENSATION  ARRANGEMENTS.  Payments received by a Director
under  any  grant  made  pursuant  to the  provisions  of the Plan  shall not be
included  in, nor have any effect on, the  determination  of benefits  under any
other arrangement provided by the Company, including the Retirement Plan.

         11.5 SECURITIES LAW RESTRICTIONS. The Company may require each Director
purchasing  or acquiring  shares of Common  Stock  pursuant to the Plan to agree
with the  Company in writing  that such  Director  is  acquiring  the shares for
investment and not with a view to the distribution thereof. All certificates for
shares  of  Common  Stock  delivered  under the Plan  shall be  subject  to such
stock-transfer  orders and other  restrictions as the Company may deem advisable
under the rules,  regulations,  and other  requirements  of the  Securities  and
Exchange  Commission or any exchange upon which the Common Stock is then listed,
and any applicable  federal or state securities law, and the Company may cause a
legend  or  legends  to be put on any  such  certificates  to  make  appropriate
reference  to such  restrictions.  No  shares of  Common  Stock  shall be issued
hereunder  unless the Company  shall have  determined  that such  issuance is in
compliance  with, or pursuant to an exemption  from, all applicable  federal and
state securities laws.

         11.6  COMPLIANCE  WITH RULE 16B-3.  The Plan is intended to comply with
Rule 16b-3 under the Exchange Act and the Company shall interpret and administer
the provisions of the Plan in a manner consistent therewith.

         11.7 EXPENSES.  The costs and expenses of administering  the Plan shall
be borne by the Company.

         11.8  GOVERNING LAW;  VENUE.  The Plan shall be construed in accordance
with the laws of the State of Florida.  Any legal action or proceeding hereunder
may be initiated only in Santa Clara County, California.

                                       11

<PAGE>

                               KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                  APPENDIX ONE

                   AMOUNTS OF COMPENSATION AS OF JULY 1, 1997



PLAN SECTION NUMBER         FORM OF COMPENSATION                 AMOUNT
-------------------         --------------------                 ------

        2.1                 Annual Retainer Fee                  $ 30,000

        4.1                 Board Meeting Fee                    $  1,500

        4.2                 Committee Meeting Fee                $  1,000

        4.3                 Committee Chairperson Annual Fee     $  5,000

        5.1                 Annual Option Grant                  2,000 Options

        Appendix Two,       Annual Phantom Share Grant,
        Section C           Outside Directors                    600 Share Units

<PAGE>

                               KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                  APPENDIX TWO

               PHANTOM SHARE UNITS FOR ELIGIBLE OUTSIDE DIRECTORS


         A. ESTABLISHMENT OF PHANTOM SHARE ACCOUNTS.  There shall be established
on the records of the Company for each Eligible Outside Director a Phantom Share
Account  to which  shall be  credited  that  number of  Phantom  Share  Units as
provided  herein.  The crediting of Phantom  Share Units to an Eligible  Outside
Director  shall not  confer on the  Eligible  Outside  Director  any rights as a
shareholder of the Company.

         B. CREDITING OF PHANTOM SHARE UNITS; STATEMENTS.  As of the date of the
Board's regularly  scheduled quarterly meeting for the last quarter of 1997, the
Phantom Share Account of each Eligible  Outside Director who also was a Director
on July 1, 1996 will be credited  with nine hundred  (900)  Phantom Share Units.
The  Phantom  Share  Account  of each  Eligible  Outside  Director  who became a
Director  after July 1, 1996 will be  credited  with seven  hundred  fifty (750)
Phantom  Share  Units.  As of the  date of each  regularly  scheduled  quarterly
meeting of the Board  thereafter,  the Phantom  Share  Account of each  Eligible
Outside  Director  shall be credited  with  one-quarter  of the number of annual
Phantom Share Units to be credited to Eligible Outside Directors, as established
by the Board.  The number of annual  Phantom Share Units  currently in effect is
set forth on Appendix  One to the Plan,  which the Board may amend from to time.
The Company will, on a quarterly  basis,  furnish each Eligible Outside Director
with a statement  setting  forth the number of Phantom Share Units then credited
to such Eligible Outside  Director's Phantom Share Account and the value of such
account as of the end of the preceding  calendar quarter and all credits made to
the Phantom Share Account during such quarter.

         C. DIVIDEND  EQUIVALENTS ON PHANTOM SHARE UNITS.  In the event that the
Company  pays any cash or other  dividend  or makes  any other  distribution  in
respect of the Common Stock,  the Phantom Share Account of each Eligible Outside
Director  will be  credited  with an  additional  number of Phantom  Share Units
(including  fractions  thereof)  determined by multiplying the number of Phantom
Share Units then credited to such Account by the result obtained by dividing (i)
the amount of cash, or the value (as  determined by the Board) of any securities
or other property,  paid or distributed in respect of one  outstanding  share of
Common  Stock by (ii) the Fair  Market  Value of a share of Common  Stock on the
date of such payment or distribution.  Such credit shall be made effective as of
the date of  payment of the  dividend  or other  distribution  in respect of the
Common Stock. In addition, as of the date of the

<PAGE>


Board's regularly  scheduled quarterly meeting for the last quarter of 1997, the
Phantom Share Account of each Eligible Outside Director will be credited with an
additional  number of Phantom  Share  Units  determined  as if (a) the  Eligible
Outside  Director's  Phantom Share Account were  established  as of the later of
July 1, 1996 or the date the Eligible  Outside Director became a Director of the
Company,  (b) there had been credited to such Account 150 Phantom Share Units on
July 1, 1996 and on the date of each quarterly  meeting of the Board  thereafter
through  September  30, 1997 during all of which  quarter the  Eligible  Outside
Director  served as a Director of the Company and (c)  dividend  equivalents  as
described  in this  Section had been  credited  on the date of each  dividend on
Common Stock beginning July 1, 1996 and through September 30, 1997.

         D. PAYMENT OF PHANTOM SHARE ACCOUNT.  The value of an Eligible  Outside
Director's  Phantom  Share  Account  shall  be paid in a lump sum in cash to the
Eligible  Outside  Director as soon as practicable (but in no event more than 60
days) after the Eligible Outside Director's Termination of Service. The value of
the Eligible  Outside  Director's  Phantom Share Account shall be the product of
the number of Phantom Share Units  credited to the Eligible  Outside  Director's
Phantom Share Account on the date of payment multiplied by the Fair Market Value
of the Common Stock on such date.

                  1.  DEATH.  In the event of the death of an  Eligible  Outside
Director  before payment of his or her Phantom Share  Account,  the value of the
Eligible Outside Director's Phantom Share Account, determined as provided above,
will be  distributed  in a lump sum in cash to the Eligible  Outside  Director's
Beneficiary  or  Beneficiaries  (or, in the absence of any  Beneficiary,  to the
Eligible Outside Director's estate).

                  2. DESIGNATION OF BENEFICIARY.  Each Eligible Outside Director
may designate a  Beneficiary  to receive the Phantom Share Account due under the
Plan upon the  Eligible  Outside  Director's  death by  executing a  Beneficiary
designation form. An Eligible Outside Director may change an earlier Beneficiary
designation  by executing a later  Beneficiary  designation  form. A Beneficiary
designation  is not  binding  on the  Company  until the  Company  receives  the
Beneficiary  designation  form.  If no  designation  is  made  or no  designated
Beneficiary  is alive (or in the case of an entity  designated as a Beneficiary,
in existence) at the time of the death of the Eligible Outside Director, payment
due under the Plan will be made to the Eligible Outside Director's estate.

         E.  RESTRICTIONS  ON TRANSFER.  The Company  shall pay the value of the
Phantom Share Account only to the Eligible Outside Director or his or her estate
or the Beneficiary  designated under the Plan to receive such amount. Neither an
Eligible  Outside  Director nor his or her  Beneficiary  shall have any right to
anticipate,  alienate,  sell, transfer,  assign, pledge,  encumber or change any
benefits to which he or she may become  entitled under the Plan, and any attempt
to do so shall be void.  The value of the Eligible  Outside  Director's  Phantom
Share Account shall not be subject to attachment, execution by levy, garnishment
or other  legal or  equitable  process  for an Eligible  Outside  Director's  or
Beneficiary's debts or other obligations.

<PAGE>

                               KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                 APPENDIX THREE

                                (SEE ATTACHMENT)


<PAGE>

                                           APPENDIX THREE TO KNIGHT-RIDDER, INC.
                                     COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

================================================================================






                               KNIGHT-RIDDER, INC.

                     RETIREMENT PLAN FOR OUTSIDE DIRECTORS'






                                                 RESTATED EFFECTIVE JULY 1, 1996



================================================================================

<PAGE>
<TABLE>
<CAPTION>

                                                      APPENDIX THREE TO KNIGHT-RIDDER, INC.
                                                COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                    KNIGHT-RIDDER, INC.
                           RETIREMENT PLAN FOR OUTSIDE DIRECTORS

                                     TABLE OF CONTENTS

                                                                                      Page

<S>                                                                                     <C>
ARTICLE I      PURPOSE AND INTENT OF PLAN................................................1

ARTICLE II     ORIGINAL EFFECTIVE DATE OF THE PLAN; PARTICIPATE..........................1

ARTICLE III    DEFINITIONS...............................................................1

ARTICLE IV     ELIGIBILITY FOR BENEFITS..................................................2
    4.1        Retirement Benefit........................................................2
    4.2        Disability Benefit........................................................2
    4.3        Limitation on Receipt of Benefit..........................................2

ARTICLE V      AMOUNT OF BENEFIT.........................................................3
    5.1        Retirement Benefit........................................................3
    5.2        Disability Benefit........................................................3

ARTICLE VI     FORM, MANNER AND DURATION OF PAYMENT OF BENEFIT...........................3

ARTICLE VII    ADMINISTRATION............................................................4
    7.1        Administrative Committee..................................................4
    7.2        Action by Committee; Resignation; Vacancies; Compensation.................4
    7.3        Delegation of Authority; Legal, Accounting, Clerical and Other Services...4
    7.4        Interpretation of Provisions..............................................4
    7.5        Liability of Committee....................................................4

ARTICLE VIII   TERMINATION AND AMENDMENT OF THE PLAN.....................................5
    8.1        Amendment of the Plan.....................................................5
    8.2        Termination...............................................................5
    8.3        Effect of Amendment or Termination........................................5

ARTICLE IX     MISCELLANEOUS.............................................................5
    9.1        No Right to Reelection....................................................5
    9.2        Unfunded Plan.............................................................5
</TABLE>

                                             i
<PAGE>
<TABLE>
<CAPTION>

                                                                                      PAGE

<S> <C>                                                                                 <C>
    9.3        Other Compensation Arrangements...........................................5
    9.4        Expenses..................................................................5
    9.5        Governing Law; Venue......................................................5
</TABLE>

                                             ii

<PAGE>

                                           APPENDIX THREE TO KNIGHT-RIDDER, INC.
                                     COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS


                               KNIGHT-RIDDER, INC.
                      RETIREMENT PLAN FOR OUTSIDE DIRECTORS



         The  KNIGHT-RIDDER,  INC.  RETIREMENT  PLAN FOR  OUTSIDE  DIRECTORS  is
restated by Knight-Ridder, Inc. effective July 1, 1996.


                                    ARTICLE I
                           PURPOSE AND INTENT OF PLAN

         This plan shall be known as the Knight-Ridder, Inc. Retirement Plan for
Outside  Directors  (the  "Plan").  The Plan is  intended  to  advance  the best
interests  of  Knight-Ridder,  Inc. by  providing  retirement  income to outside
directors  of  Knight-Ridder,  Inc. who have  satisfied  certain age and service
requirements.


                                   ARTICLE II
               ORIGINAL EFFECTIVE DATE OF THE PLAN; PARTICIPATION

         The Plan was  effective  as of January 1, 1994.  All Outside  Directors
were eligible to participate  in the Plan beginning  January 1, 1994 and through
June 30, 1996. Effective July 1, 1996, however, only those Outside Directors who
were age 65 or older on that date will be eligible to participate in the Plan.

                                   ARTICLE III
                                   DEFINITIONS

         As used in this  Plan,  the  following  terms  shall  have the  meaning
hereinafter set forth:

         3.1  "Annual  Retainer  Fee" means the annual fee payable to an Outside
Director  for  service  on the  Board as in  effect  on the  date of an  Outside
Director's Retirement.

         3.2 "Board" means the Board of Directors of the Company.

         3.3 "Code" means the Internal Revenue Code of 1986, as amended.

         3.4 "Company" means Knight-Ridder,  Inc., a Florida corporation, or any
successor legal entity.

                                       1
<PAGE>

         3.5 "Disability" means a Director's  physical or mental condition which
is expected to render the Director  unable to perform his or her usual duties or
any  comparable  duties  for the  Company.  The  determination  of a  Director's
Disability will be made by the Board in its sole discretion.

         3.6 "Director" means a member of the Board.

         3.7 "Effective Date" means January 1, 1994.

         3.8  "Outside  Director"  means any member of the Board who is not, and
never was, an employee of the Company or any of its  subsidiaries  or affiliates
and, effective July 1, 1996, who is at least age 65 on that date.

         3.9 "Plan" means this  Knight-Ridder,  Inc. Retirement Plan for Outside
Directors.

         3.10  "Retirement"  means the  Termination  of  Service  of an  Outside
Director at or after age sixty-five (65).

         3.11  "Termination of Service" means cessation of service as a Director
of the Company.

         3.12  "Year of  Service"  means  each  12-month  period of service as a
Director,  whether  beginning  before or after the Effective Date. If a Director
Terminates  Service and then  returns to service,  all months of service will be
aggregated  to  determine  the  Director's  Years of  Service  for  purposes  of
eligibility  to receive,  and the amount of, any  retirement  benefit  under the
Plan.


                                   ARTICLE IV
                            ELIGIBILITY FOR BENEFITS

         4.1 RETIREMENT BENEFIT. An Outside Director will be entitled to receive
the annual retirement  benefit described in Section 5.1 upon Retirement if he or
she retires after reaching age 65 and completing five full years of Service.

         4.2 DISABILITY BENEFIT. An Outside Director will be entitled to receive
the annual  disability  benefit  described  in Section 5.2 if he or she incurs a
Termination of Service as the result of Disability after completing at least two
full years of Service.

         4.3 LIMITATION ON RECEIPT OF BENEFIT. Notwithstanding the foregoing, an
Outside  Director  will not be entitled  to benefits  under the Plan if (a) such
Outside  Director is removed from the Board of Directors  for cause (which means
only dishonesty,  conviction of a felony, or wilful  unauthorized  disclosure of
confidential  information,  whether involving the Company or otherwise),  or (b)
the Retirement or Disability of such Outside  Director  occurs before January 1,
1994.

                                       2
<PAGE>

                                    ARTICLE V
                                AMOUNT OF BENEFIT

         5.1 RETIREMENT  BENEFIT.  The retirement benefit payable, to an Outside
Director  under the Plan shall be an annual amount,  payable in accordance  with
Article VI, determined as follows:

                Completed
             Years of Service                               Annual Benefit
             ----------------                               --------------

           less than 5 years                                    No benefit
                           5                    50% of Annual Retainer Fee
                           6                    60% of Annual Retainer Fee
                           7                    70% of Annual Retainer Fee
                           8                    80% of Annual Retainer Fee
                           9                    90% of Annual Retainer Fee
                  10 or more                   100% of Annual Retainer Fee


         5.2 DISABILITY  BENEFIT.  The disability  benefit payable to an Outside
Director who incurs a Termination  of Service as the result of Disability  shall
be an annual  amount,  payable in  accordance  with  Article VI,  determined  as
follows:

                Completed
             Years of Service                               Annual Benefit
             ----------------                               --------------

           less than 2 years                                    No benefit
                   2-5 years                    50% of Annual Retainer Fee
                           6                    60% of Annual Retainer Fee
                           7                    70% of Annual Retainer Fee
                           8                    80% of Annual Retainer Fee
                           9                    90% of Annual Retainer Fee
                  10 or more                   100% of Annual Retainer Fee


                                   ARTICLE VI
                 FORM, MANNER AND DURATION OF PAYMENT OF BENEFIT

         The annual Retirement or Disability  Benefit determined under Article V
shall be paid for the life of the Outside  Director.  Payments  shall be made on
the first business day of each calendar quarter, beginning with the quarter next
following the date of the Outside  Director's  Retirement.  No benefits shall be
payable  under the Plan after the death of a Outside  Director  either before or
after Retirement.

                                       3
<PAGE>

                                   ARTICLE VII
                                 ADMINISTRATION

         7.1  ADMINISTRATIVE  COMMITTEE.  The Plan shall be  administered  by an
Administrative Committee appointed by the Board, which may be the same committee
as serves the Company with respect to other  retirement and benefit  plans.  The
Administrative  Committee shall adopt such rules for the conduct of its business
and the administration of the Plan as it considers to be necessary or desirable,
provided that such rules do not conflict with the provisions of the Plan.

         7.2 ACTION BY  COMMITTEE;  RESIGNATION;  VACANCIES;  COMPENSATION.  The
Administrative  Committee shall act by a majority (or by all members if there be
only  one  or  two   members)  of  the  number  of  members   constituting   the
Administrative  Committee  at the time of such  action,  and such  action may be
taken either by vote at a meeting or in writing without a meeting. Any member of
the Administrative Committee may resign upon giving written notice to the Board.
Each member of the Administrative Committee shall hold office at the pleasure of
the  Board.  Vacancies  arising  in the  Administrative  Committee  from  death,
resignation,  removal  or  otherwise,  shall be  filled  by the  Board,  but the
Administrative  Committee may act  notwithstanding the existence of vacancies so
long as  there is at least  one  member  of the  Administrative  Committee.  The
members of the  Administrative  Committee shall serve without  compensation  for
their services as such, but shall be reimbursed by the Company for all necessary
expenses incurred in the discharge of their duties.

         7.3  DELEGATION OF  AUTHORITY;  LEGAL,  ACCOUNTING,  CLERICAL AND OTHER
SERVICES. The Administrative  Committee may authorize one or more of its members
or any  agent to act on its  behalf  and may  contract  for  legal,  accounting,
clerical and other  services to carry out the purposes of the Plan. All expenses
of the Administrative Committee shall be paid by the Company.

         7.4 INTERPRETATION OF PROVISIONS.  The  Administrative  Committee shall
have the full power and  discretion to interpret the  provisions of the Plan and
decide  all  questions  arising  in  its   administration.   The  decisions  and
interpretations  of the  Administrative  Committee shall be final and binding on
the Company and all other persons.

         7.5 LIABILITY OF COMMITTEE.  No member of the Administrative  Committee
shall be liable for any action  taken in good faith or for the  exercise  of any
power given the Administrative Committee, or for the actions of other members of
the Administrative  Committee. To the extent permitted by law, the Company shall
indemnify and hold harmless each member of the Administrative  Committee against
any and all liability or reasonably expense resulting from or arising out of his
or her  responsibilities in connection with the Plan, provided such person acted
in good faith, in what he or she reasonably believed was the proper discharge of
his or her duties.

                                       4
<PAGE>

                                  ARTICLE VIII
                      TERMINATION AND AMENDMENT OF THE PLAN

         8.1 AMENDMENT OF THE PLAN. The Plan may be amended from time to time by
action of the Board of Directors.

         8.2 TERMINATION.  The Company intends to continue the Plan indefinitely
but  reserves  the right to  terminate  it at any time by action of the Board of
Directors.

         8.3 EFFECT OF AMENDMENT OR TERMINATION.  No amendment or termination of
the Plan may adversely  affect the benefit which would be payable to any Outside
Director  receiving  benefits  under the Plan prior to the effective date of the
amendment or termination, or which would be payable to any Outside Director who,
prior to the effective  date of such amendment or  termination,  was eligible to
retire with an immediate benefit under the Plan.


                                   ARTICLE IX
                                  MISCELLANEOUS

         9.1 NO RIGHT TO  REELECTION.  Nothing  in the Plan  shall be  deemed to
create any  obligation  on the part of the Board to nominate  any of its members
for  reelection  by the  Company's  stockholders,  nor confer  upon any  Outside
Director the right to remain a member of the Board for any period of time, or at
any particular rate of compensation.

         9.2 UNFUNDED  PLAN.  This Plan is unfunded.  Amounts  payable under the
Plan will be satisfied  solely out of the general assets of the Company  subject
to the  claims of the  Company's  creditors.  No Outside  Director  or any other
person  shall  have any  interest  in any fund or in any  specific  asset of the
Company by reason of any amount credited to him hereunder, nor shall any Outside
Director or any other  person have any right to receive any  distribution  under
the Plan except as, and to the extent, expressly provided in the Plan.

         9.3 OTHER  COMPENSATION  ARRANGEMENTS.  Payments received by an Outside
Director  under the Plan  shall  not have any  effect  on the  determination  of
benefits under any other arrangement provided by the Company.

         9.4 EXPENSES. The costs and expenses of administering the Plan shall be
borne by the  Company  and no  contributions  from  Outside  Directors  shall be
required or permitted.

         9.5  GOVERNING  LAW;  VENUE.  The Plan shall be construed in accordance
with the laws of the State of Florida.  Any legal action or proceeding hereunder
may be initiated only in Dade County, Florida.

                                       5

<PAGE>

                               STOCK OPTION GRANT
                            UNDER KNIGHT-RIDDER, INC.
                   COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

                                  -------------

         THIS STOCK  OPTION GRANT dated  ____________________,  _____ is made by
KNIGHT-RIDDER,     INC.,     hereinafter     called    the     "Company,"     to
_______________________, hereinafter called the "Director."

         WITNESSETH, THAT:

         WHEREAS, the Company, by action of its Board of Directors,  adopted and
approved a Compensation Plan for Nonemployee  Directors,  effective July 1, 1997
(the "Plan").

         WHEREAS,  the purpose of the Plan is to attract and retain the services
of  qualified  individuals  who are not  employees  of the  Company  to serve as
members of the Board.

         NOW, THEREFORE,  the Company hereby grants a non-qualified option under
the Plan to the Director on the following terms and conditions:

1.       AMOUNT OF STOCK SUBJECT TO OPTION:

         The Company  hereby grants to the Director the right to purchase  2,000
shares  of  Common  Stock of the  Company,  which  stock is to be  issued by the
Company upon the exercise of this option as hereinafter set forth.

2.       PURCHASE PRICE:

         The purchase  price per share for this option  shall be  ______________
($________),  one hundred percent (100%) of the fair market value (as defined in
the Plan) of the Common Stock at the time the option is granted.

3.       PERIOD OF OPTION AND EXERCISE THEREOF:

          (a) Subject to paragraph 5 below,  one-third of the shares  subject to
this option (rounded up to the nearest whole share) may be purchased at any time
following  the  first  anniversary  of the  date of this  grant,  an  additional
one-third of the shares subject to this option  (rounded up to the nearest whole
share) may be purchased at any time following the second anniversary of the date
of this grant,  and the remaining shares subject to this option may be purchased
at any time following the third anniversary of the date of this grant; provided,
however, that in no event may any part of this option be exercised following the
______ day of ____________________, 200_____.

<PAGE>

         (b) In order to exercise this option or any part thereof,  the Director
shall give  notice in writing to the  Company  of the  Director's  intention  to
purchase all or part of the shares  subject to this  option,  and in said notice
the Director  shall set forth the number of shares as to which he or she desires
to exercise  the option,  and he or she shall pay for such shares in full at the
time of the exercise of such option.  Such payment may be made in cash,  through
the  delivery  to the Company of shares of common  stock of the  Company  with a
value equal to the total  option  price,  or through a  combination  of cash and
shares,  and any shares so delivered  shall be valued at their fair market value
on the date on which the option is exercised.

         Payment of the purchase  price may also be made through the delivery to
the Company of the sale proceeds of all or part of the shares of common stock of
the Company  that are the subject of this  option;  provided  that the  Director
instructs  ChaseMellon  Shareholder Services ("CMSS") to effect on the date such
instruction  is given to CMSS (which shall be deemed to be the date of exercise)
or as early as practicable thereafter the sale of such number of such shares "at
the market" in a broker's transaction (within the meaning of Section 4(4) of the
Securities  Act of 1933,  as  amended),  the proceeds of which shall be at least
equal to the  purchase  price of this  option plus the amount of any taxes which
may be required to be withheld plus transaction  costs. In accordance with these
instructions, CMSS shall sell such shares, deliver to the Company the portion of
the proceeds of such sale which  equals the  purchase  price of this option plus
the amount of any taxes  required to be withheld  and remit the  remaining  sale
proceeds (net of transaction costs), to the Director.

         The notice of exercise must be delivered  or, if mailed,  postmarked on
or before the date on which the right to exercise this option expires. No shares
shall be issued to the  Director  until  final  payment for said shares has been
made, and the Director shall have none of the rights of a shareholder until said
shares are issued to the Director.

4.       RESTRICTIONS ON TRANSFER:

         This Option may not be  transferred,  pledged,  assigned,  or otherwise
disposed  of,  except  by  Will  or by the  laws of  descent  and  distribution;
provided,  however,  that the Board may, subject to such terms and conditions as
the Board shall specify, permit the transfer of an Option to a Director's family
members or to one or more  trusts  established  solely for the benefit of one or
more of such  family  members.  The  Option  shall be  exercisable,  during  the
Director's  lifetime,  only by the  Director or by the person to whom the Option
has been  transferred in accordance with the previous  sentence.  A transferee's
rights under the Option shall be no greater than the rights held by the Director
under said Option.  No  assignment  or transfer of the Option,  or of the rights
represented  thereby,  whether voluntary or involuntary,  by operation of law or
otherwise,  except  by  Will or the  laws of  descent  and  distribution,  or as
permitted  under this  paragraph 4, shall vest in the assignee or transferee any
interest or right in the Option,  but immediately  upon any attempt to assign or
transfer the Option the same shall terminate and be of no force or effect.

<PAGE>

5.       EXERCISE OF OPTIONS FOLLOWING TERMINATION OF SERVICE:

         If a  Director  ceases  to be a  member  of  the  Board  by  reason  of
Disability or Retirement,  this Option shall be exercisable at any time prior to
the expiration of five years after the date of such Termination of Service,  but
in no event  after  the  expiration  of the  term of this  Option  set  forth in
paragraph 3. Options not  exercisable  on the date of Termination of Service due
to Disability or Retirement will become exercisable pursuant to the schedule set
forth in paragraph 3 above during the  five-year  period  after  Termination  of
Service as if the Director had continued to serve on the Board during such time.
At the end of the five-year  period or expiration of the Term of this Option set
forth in paragraph 3, whichever first occurs, the Option shall expire.

         If a Director ceases to be a member of the Board by reason of death, or
if a former Director dies during the five-year period  following  Termination of
Service due to Disability or  Retirement,  this Option may be exercised  only by
such Director's personal  representative or beneficiary,  as the case may be, at
any time within the first to expire of the  following  periods:  (i) three years
after the date of the  Director's  death;  (ii) five years after the date of the
Director's  Termination of Service;  or (iii) the expiration of the Term of this
Option set forth in paragraph 3.  Options not  exercisable  at the date of death
will become  exercisable  during such post-death period pursuant to the Schedule
set forth in Paragraph 3 above as if the Director had  continued to serve on the
Board during such period. At the end of the applicable  period, the Option shall
expire.

         If a Director  ceases to be a member of the Board for any reason  other
than Disability,  Retirement or Death, this Option shall be exercisable,  to the
extent it has vested as of the date of cessation  of service,  only within three
months after such cessation of service,  but in no event after the expiration of
the term of this Option.  The unvested portion of this Option shall be forfeited
as of the date of  cessation  of service for any reason  other than  Disability,
Retirement or Death.

6.       CHANGE IN CAPITAL:

         Notwithstanding  any other  provision of the Plan,  in the event of any
change  in  the  outstanding  Common  Stock  by  reason  of  a  stock  dividend,
recapitalization,    reorganization,   merger,   consolidation,   stock   split,
combination or exchange of shares or any  significant  corporate event affecting
the Common Stock, the Board in its discretion,  may make (i) such  proportionate
adjustments as it considers  appropriate (in the form determined by the Board in
its sole  discretion) to prevent  diminution or enlargement of the rights of the
Director  with respect to the number of shares of Common  Stock  covered by this
Option  and the  exercise  price in  respect  thereof,  and/or  (ii) such  other
adjustments as it deems  appropriate.  The Board's  determination as to what, if
any, adjustments shall be made shall be final and binding on the Company and the
Director.

<PAGE>

7.       REGISTRATION AND OTHER REQUIREMENTS:

         This option is subject to the  requirement  and  condition  that if the
Board of Directors of the Company shall determine that the listing, registration
or qualification upon any securities exchange or under any state or federal law,
or  the  approval  or  consent  of any  governmental  body,  or  the  Director's
satisfaction of any tax withholding obligations or agreement with respect to the
disposition  of the shares  purchased  hereunder  is necessary or desirable as a
condition to the issuance or purchase of any shares subject to this option, then
this  option  may not be  exercised  in whole or in part  unless  or until  such
listing,  registration,   qualification,   approval,  consent,  satisfaction  or
agreement has been obtained,  free of any conditions which are not acceptable to
the  Board of  Directors  of the  Company,  and the sale and  delivery  of stock
hereunder is also subject to the above requirements and conditions.

8.       INTERPRETATION OF STOCK OPTION GRANT:

         All  capitalized  terms used in this stock option grant and not defined
herein shall have the meanings set forth in the Plan. The Board of Directors has
the  authority  to  interpret  the Plan  and  this  stock  option  grant  and to
conclusively  decide all  questions  arising under the Plan or this stock option
grant.  Its  decision  shall be binding on the  Director and any other person to
whom this Option shall have been transferred.





---------------------------                 ------------------------------
Polk Laffoon                                P. Anthony Ridder
Vice President & Secretary                  Chairman and Chief Executive Officer
KNIGHT-RIDDER, INC.                         KNIGHT-RIDDER, INC.






[January 26, 1999]