Document:

AMENDED & RESTATED 2006 STOCK INCENTIVE PLAN

 Exhibit 10.6 
 VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC. 
 AMENDED AND RESTATED 2006 STOCK INCENTIVE PLAN

  

	1.	Purpose 

 The purpose of this 2006 Stock Incentive
Plan (the “Plan”) of Varian Semiconductor Equipment Associates, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract,
retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to align their interests with those of
the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of
the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a
controlling interest, as determined by the Board of Directors of the Company (the “Board”). 
  

	2.	Eligibility 

 All of the Company’s employees,
officers, directors, consultants and advisors are eligible to receive stock options (“Options”), stock appreciation rights (“SARs”), restricted stock, restricted stock units and other stock-based awards (each, an
“Award”) under the Plan. Each person who receives an Award under the Plan is deemed a “Participant.” 
  

	3.	Administration and Delegation 

 (a)
Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines, and practices relating to the Plan, as it
shall deem advisable. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. Notwithstanding the foregoing,
only the Compensation Committee of the Board shall be responsible for the determination of Awards that may be granted to directors who are not employees of the Company at the time of grant. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith. 
 (b)
Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in
the Plan to the “Board” shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or
officers. 
 (c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of
the Company the power to grant Awards to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the
terms of the Awards to be granted by such officers (including the exercise price of such Awards, which may include a formula by which the exercise 

 price will be determined) and the maximum number of shares subject to Awards that the officers may grant; provided
further, however, that no officer shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any
“officer” of the Company (as defined by Rule 16a-1 under the Exchange Act). 
  

	4.	Stock Available for Awards 

 (a) Number of
Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 5,500,000 shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”). If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Common Stock not being issued, the unused Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as
hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. 
 (b) Sub-limits. Subject to adjustment under Section 9, the following sub-limits on the number of shares of Common Stock subject to Awards
shall apply: 
 (1) Section 162(m) Per-Participant Limit. The maximum number of shares of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall be 1,000,000 per fiscal year. For purposes of the foregoing limit, the combination of an Option in tandem with an SAR (as each is hereafter defined) shall be treated
as a single Award. The per-Participant limit described in this Section 4(b)(1) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section
162(m)”). 
 (2) Limit on Awards to Directors. The maximum number of shares with respect to which Awards under
this Plan may be granted to directors who are not employees of the Company at the time of grant shall be not more than 18,000 per fiscal year to any such director. 
 (c) Share Counting. An Award that is an Option or an SAR shall be counted against the share limit in Section 4(a) as one (1) share for each share of Common Stock subject to such Award, and an Award
that is not an Option or an SAR (a “Full Value Award”) shall be counted against the share limit specified in Section 4(a) as one and seventy-six hundredths (1.76) shares for each share of Common Stock subject to such Full Value
Award. 
  

	5.	Stock Options 

 (a) General. The Board may
grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of
each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as hereinafter defined) shall be designated a
“Nonqualified Stock Option.” 
 (b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock
option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of the Company, any of the Company’s present or future parent or subsidiary corporations as defined in 

  

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Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and
shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an
Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board, including without limitation the conversion of an Incentive Stock Option to a Nonqualified Stock Option. 
 (c) Exercise Price. The Board shall establish the exercise price of each Option and specify such exercise price in the applicable option
agreement; provided, however, that the exercise price shall not be less than 100% of the Fair Market Value (as defined below) at the time the Option is granted. 
 (d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement; provided, however, that no Option
will be granted for a term in excess of 8 years. 
 (e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares for which the Option
is exercised. Shares of Common Stock subject to the Option will be delivered by the Company following exercise either as soon as practicable or, subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at the time or times specified by the Board). 
 (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows: 
 (1) in cash or by check, payable to the order of the Company; 
 (2) except as the Board may
otherwise provide in an option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding,
or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax
withholding; 
 (3) when the Common Stock is registered under the Exchange Act, by delivery of shares of Common Stock owned
by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board (“Fair Market Value”), provided (i) such method of payment is then permitted under applicable law; (ii) such Common
Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion; and (iii) such Common Stock is not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements; 
 (4) to the extent permitted by applicable law and by the Board, by
(i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment of such other lawful consideration as the Board may determine; or 
 (5) by any combination of the above permitted forms of payment. 
 (g) Substitute Options. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property
or stock of an entity, the Board may grant 

  

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Options in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Options may be
granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Options contained in the other sections of this Section 5 or in Section 2. Substitute Options shall not count against the overall
share limit set forth in Section 4(a), except as may be required by reason of Section 422 and related provisions of the Code. 
  

	6.	Stock Appreciation Rights. 

 (a) General. A
Stock Appreciation Right, or SAR, is an Award entitling the holder, upon exercise, to receive an amount in Common Stock or cash or a combination thereof (such form to be determined by the Board) determined in whole or in part by reference to
appreciation, from and after the date of grant, in the fair market value of a share of Common Stock. SARs may be based solely on appreciation in the fair market value of Common Stock or on a comparison of such appreciation with some other measure of
market growth such as (but not limited to) appreciation in a recognized market index. The date as of which such appreciation or other measure is determined shall be the exercise date unless another date is specified by the Board in the SAR Award.

 (b) Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan. 
 (c) Exercise. SARs may be exercised by delivery to the Company of a written notice of exercise signed by the proper person, or by any other form of
notice (including electronic notice) approved by the Board, together with any other documents required by the Board. 
  

	7.	Restricted Stock; Restricted Stock Units. 

 (a)
General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered at the time such shares of Common Stock vest
(“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”). 
 (b) Limitation on Vesting. 
 (1) Restricted Stock Awards that vest based on the
passage of time alone shall be zero percent vested prior to the first anniversary of the date of grant, no more than 43.75% vested prior to the second anniversary of the date of grant, and no more than 68.75% vested prior to the third anniversary of
the date of grant. Restricted Stock Awards that vest upon the passage of time and provide for accelerated vesting based on performance shall not vest prior to the first anniversary of the date of grant. 
 (2) Notwithstanding any other provision of this Plan, the Board may, in its discretion, either at the time a Restricted Stock Award is
made or at any time thereafter, waive its right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify any part or all of the restrictions applicable to the Restricted Stock Award, provided that the Board may only
exercise such rights in extraordinary circumstances which shall include, without limitation, death or disability of the Participant; estate planning needs of the Participant; a merger, consolidation, sale, reorganization, 

  

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recapitalization, or change in control of the Company; or any other nonrecurring significant event affecting the Company, a Participant or the Plan.

 (c) Terms and Conditions. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions
for repurchase (or forfeiture) and the issue price, if any. 
 (d) Stock Certificates. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner
determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a
Participant, “Designated Beneficiary” shall mean the Participant’s estate. 
  

	8.	Other Stock-Based Awards. 

 Other Awards of shares
of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock Unit Awards”), including
without limitation Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as
payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall determine the
conditions of each Other Stock Unit Award, including any purchase price applicable thereto. 
  

	9.	Adjustments for Changes in Common Stock and Certain Other Events. 

 (a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan; (ii) the sub-limits set forth in Section 4(b);
(iii) the number and class of securities and exercise price per share of each outstanding Option; (iv) the share- and per-share provisions of each SAR; (v) the repurchase price per share subject to each outstanding Restricted Stock
Award; and (vi) the share- and per-share-related provisions of each outstanding Other Stock Unit Award, shall be appropriately adjusted by the Company (or substituted Awards may be made, if applicable) to the extent determined by the Board.

 (b) Reorganization Events. 
 (1) Definition. A “Reorganization Event” shall mean: (i) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is
converted into or exchanged for the right to receive cash, securities or other property or is cancelled; (ii) any exchange of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange
transaction; or (iii) any liquidation or dissolution of the Company. 
 (2) Consequences of a Reorganization Event on
Awards Other than Restricted Stock Awards. In connection with a Reorganization Event, the Board shall take any one or more of the following actions as to all or any outstanding Awards on such terms as the Board determines: (i) provide

  

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that Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof);
(ii) upon written notice to a Participant, provide that the Participant’s unexercised Options or other unexercised Awards shall become exercisable in full and will terminate immediately prior to the consummation of such Reorganization
Event unless exercised by the Participant within a specified period following the date of such notice; (iii) provide that outstanding Awards shall become realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or
in part prior to or upon such Reorganization Event; (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the
Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to a Participant equal to (a) the Acquisition Price times the number of shares of Common Stock subject to the Participant’s Options or other
Awards (to the extent the exercise price does not exceed the Acquisition Price) minus (b) the aggregate exercise price of all such outstanding Options or other Awards, in exchange for the termination of such Options or other Awards;
(v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof); and (vi) any combination of the
foregoing. 
 For purposes of clause (i) above, an Option shall be considered assumed if, following consummation of the Reorganization
Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a
result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in value to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event. 
 To the extent all or any portion of an Option becomes exercisable solely as a result of clause (ii) above, the Board may provide that upon exercise
of such Option the Participant shall receive shares subject to a right of repurchase by the Company or its successor at the Option exercise price; such repurchase right (a) shall lapse at the same rate as the Option would have become
exercisable under its terms; and (b) shall not apply to any shares subject to the Option that were exercisable under its terms without regard to clause (ii) above. 
 (3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the occurrence of a Reorganization Event other than a liquidation or
dissolution of the Company, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall apply to the cash, securities or other property which the
Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a Reorganization
Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, all
restrictions and conditions on all Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied. 
  

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	10.	General Provisions Applicable to Awards 

 (a)
Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, that the Board may
permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or family partnership established solely for the benefit of the Participant and/or an
immediate family member thereof if, with respect to such proposed transferee, the Company would be eligible to use a Form S-8 for the registration of the sale of the Common Stock subject to such Award under the Securities Act of 1933, as amended;
provided, further, that the Company shall not be required to recognize any such transfer until such time as the Participant and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and
substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized
transferees. 
 (b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall
determine. Such written instrument may be in the form of an agreement signed by the Company and the Participant or a written confirming memorandum to the Participant from the Company. Each Award may contain terms and conditions in addition to those
set forth in the Plan. 
 (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition
or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly. 
 (d)
Termination of Status. The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence, or other change in the employment or other status of a Participant and the extent to which, and the
period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award. 
 (e) Withholding. Each Participant shall pay to the Company, or make provision satisfactory to the Company for payment of, any taxes required by
law to be withheld in connection with an Award to such Participant. Except as the Board may otherwise provide in an Award, for so long as the Common Stock is registered under the Exchange Act, Participants may satisfy such tax obligations in whole
or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding
where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income). Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements. The Company may deduct, to the extent
permitted by law, any such tax obligations from any payment of any kind otherwise due to a Participant. 
 (f) Amendment of Award. The
Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to
a Nonqualified Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely 

  

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affect the Participant. Notwithstanding the foregoing, without approval of the Company’s stockholders, the Board may not (i) amend any outstanding
Option to provide an exercise price per share that is lower than the then-current exercise price per share of such Option or (ii) other than pursuant to Section 5(g), cancel any outstanding Award in connection with the granting of a
substitute Award of the same or different type. 
 (g) Conditions on Delivery of Stock. The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company; (ii) in the
opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and
regulations; and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations. 
 (h) Acceleration. Except as otherwise provided in Section 7, the Board may at any time provide that any Award shall become immediately
exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be. 
 (i) Book Entry. Notwithstanding anything to the contrary in this Plan, the Company may, in lieu of issuing a stock certificate representing any shares of Common Stock issued pursuant to the Plan, have such shares held in book entry
by the Company’s transfer agent in the name of the Participant. 
  

	11.	Miscellaneous 

 (a) No Right To Employment or
Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award. 
 (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as
a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the Common Stock by means
of a stock dividend and the exercise price of and the number of shares subject to such Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an
Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend. 
 (c)
Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board, but no Award may be granted unless and until the Plan has been approved by the Company’s stockholders. No Awards shall be
granted under the Plan after the completion of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board; or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted
may extend beyond that date. 
 (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at
any time, provided that, to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become 

  

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exercisable, realizable or vested, as applicable to such Award, unless and until such amendment shall have been approved by the Company’s stockholders
if required by Section 162(m) (including the vote required under Section 162(m)); and provided further that, without approval of the Company’s stockholders, no amendment may (i) increase the number of shares authorized under the
Plan (other than pursuant to Section 9), (ii) materially increase the benefits provided under the Plan, (iii) materially expand the class of participants eligible to participate in the Plan, (iv) expand the types of Awards
provided under the Plan or (v) make any other changes that require stockholder approval under the rules of the NASDAQ National Market. In addition, if at any time the approval of the Company’s stockholders is required as to any other
modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. No Award shall be made that is
conditioned upon stockholder approval of any amendment to the Plan. 
 (e) Provisions for Foreign Participants. The Board may modify
Awards or Options granted to Participants who are foreign nationals or employed outside the United States or establish sub-plans or procedures under the Plan to recognize differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or other matters. 
 (f) Compliance With Code
Section 409A. No Award shall provide for deferral of compensation that does not comply with Section 409A of the Code, unless the Board, at the time of grant, specifically provides that the Award is not intended to comply with
Section 409A of the Code. 
 (g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state. 
  

 -9-Commitment Letter by and among Bank of America, N.A, Banc of America Securities

 Exhibit 10.1 
  

			
	 

	 	

 March 9, 2006 
 The McClatchy Company 
 2100 Q Street 
 Sacramento, California 95816-6899 
 Attention: Mr. Patrick J. Talamantes 
  

	 	Re:	$3.75 Billion Senior Credit Facility 

 Dear Mr. Talamantes: 
 You have advised Bank of America, N.A. (“Bank of America”), Banc of America Securities LLC
(“BAS”), JPMorgan Chase Bank, N.A. (“JPMCB”) and J. P. Morgan Securities Inc. (“JPMorgan Securities”) that you intend to acquire (the “Acquisition”)
Knight-Ridder, Inc., a Florida corporation (the “Company”), for not more than $3.75 billion in cash by way of a forward merger of the Company with and into you, with you being the surviving entity. You have also advised
Bank of America, BAS, JPMCB and JPMorgan Securities that you intend to finance a portion of the Acquisition, costs and expenses related thereto and the ongoing working capital and other general corporate purposes of The McClatchy Company (the
“Borrower”) and its subsidiaries from a $3.75 billion senior credit facility. 
 Bank of America is pleased to offer to be the
sole and exclusive administrative agent (in such capacity, the “Administrative Agent”) and JPMCB is pleased to offer to be the sole and exclusive syndication agent (in such capacity, the “Syndication
Agent”) for a $3.75 Billion Senior Credit Facility (the “Senior Credit Facility”) to the Borrower, comprised of (i) a term loan A facility of up to $2.2 billion, (ii) a bridge facility
of up to $550 million and (iii) a revolving credit facility of up to $1.0 billion, and Bank of America and JPMCB are pleased to offer their respective commitments to each provide 50% of the Senior Credit Facility, upon and subject to
the terms and conditions of this letter and the Summary of Terms and Conditions attached hereto (the “Summary of Terms”). Furthermore, BAS and JPMorgan Securities are pleased to advise you of their willingness in connection
with the foregoing commitments, as joint lead arrangers and joint and exclusive book runners (in such capacities, the “Lead Arrangers”) for the Senior Credit Facility, to form a syndicate of financial institutions (the
“Lenders”) acceptable to you for the Senior Credit Facility. 
 Bank of America will act as sole and exclusive Administrative Agent
and JPMCB will act as sole and exclusive Syndication Agent for the Senior Credit Facility and BAS and JPMorgan Securities will act as joint and exclusive Lead Arrangers for the Senior Credit Facility. No additional agents, co-agents or arrangers
will be appointed and no other titles will be awarded without our prior approval or without consultation with you. It is understood that such titles shall be in name only and the Senior Credit Facility shall be arranged by the Lead Arrangers only.
You hereby agree that, effective upon your acceptance of this Commitment Letter and continuing through December 31, 2006, you shall not enter into any agreement with any other bank, investment bank, financial institution, person or entity to
provide, structure, arrange or syndicate the Senior Credit Facility or any other senior financing similar to or as a replacement of the Senior Credit Facility; provided, however, that such prohibition shall not apply in the event Bank
of America and JPMCB fail to perform their duties hereunder in any material respect or terminate their commitments hereunder (other than for failure of any condition to such commitment). 
 The commitments of Bank of America and JPMCB hereunder and the undertaking of BAS and JPMorgan Securities to provide the services described herein are subject to the satisfactions of each of the following conditions
precedent in a manner acceptable to Bank of America, BAS, JPMCB and JPMorgan Securities: (a) [intentionally omitted]; (b) the accuracy and completeness in all material respects of all 

 The McClatchy Company 
 March 9, 2006 
 Page 2 
 representations that you and your affiliates make to Bank of America, BAS, JPMCB and JPMorgan Securities and your compliance with the terms of this Commitment Letter (including the Summary of Terms) and the Fee Letter as hereinafter
defined; (c) prior to and during the syndication of the Senior Credit Facility, but limited to December 31, 2006, there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of
the Borrower or any of its subsidiaries; (d) the negotiation, execution and delivery of definitive documentation for the Senior Credit Facility consistent with the Summary of Terms and otherwise satisfactory to Bank of America, BAS, JPMCB and
JPMorgan Securities; and (e) no Company Material Adverse Effect (as defined in the Acquisition Agreement) shall have occurred. 
 BAS and JPMorgan
Securities intend to commence syndication efforts promptly upon your acceptance of this Commitment Letter and the Fee Letter and the aggregate commitments of Bank of America and JPMCB hereunder shall be reduced dollar-for-dollar as and when
corresponding commitments are received from the Lenders. You agree to make commercially reasonable efforts to actively assist BAS and JPMorgan Securities in achieving a syndication of the Senior Credit Facility that is satisfactory to them. Such
assistance shall include (a) using commercially reasonable efforts to provide and cause your advisors to provide Bank of America, BAS, JPMCB and JPMorgan Securities and the other Lenders upon request with all information reasonably deemed
necessary by Bank of America, BAS, JPMCB and JPMorgan Securities to complete syndication; (b) your assistance in the preparation of an Information Memorandum to be used in connection with the syndication of the Senior Credit Facility;
(c) using commercially reasonable efforts to ensure that the syndication efforts of BAS and JPMorgan Securities benefit materially from your existing banking relationships; and (d) otherwise assisting Bank of America, BAS, JPMCB and
JPMorgan Securities in their syndication efforts, including using commercially reasonable efforts to make your senior management and advisors reasonably available from time to time to attend and make presentations regarding the business and
prospects of the Borrower and its subsidiaries, as appropriate, at one or more meetings of prospective Lenders. It is understood and agreed that you shall not access the Increase Option described in the Summary of Terms until the commitments of each
of Bank of America and JPMCB have been reduced to the target hold level specified in paragraph 5 of the hereinafter-described Fee Letter. 
 It is understood
and agreed that BAS and JPMorgan Securities will manage and control all aspects of the syndication in consultation with you, including decisions as to the selection of prospective Lenders and any titles offered to proposed Lenders, when commitments
will be accepted and the final allocations of the commitments among the Lenders. It is understood that no Lender, other than Bank of America and JPMCB participating in the Senior Credit Facility will receive compensation from you in order to obtain
its commitment, except on the terms contained herein, in the Summary of Terms and in the Fee Letter. It is also understood and agreed that the amount and distribution of the fees among the Lenders will be at the sole discretion of Bank of America,
BAS, JPMCB and JPMorgan Securities. 
 You hereby represent, warrant and covenant that (a) all information, other than Projections (defined below),
which has been or is hereafter made available to Bank of America, BAS, JPMCB, JPMorgan Securities or the Lenders by you or any of your representatives (or on your or their behalf) in connection with the transactions contemplated hereby (when taken
together with your and the Company’s filings with the SEC) (the “Information”) is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein not misleading, and (b) all financial projections concerning the Borrower and its subsidiaries that have been or are hereafter made available to Bank of America,
BAS, JPMCB, JPMorgan Securities or the Lenders by you or any of your representatives (the “Projections”) have been or will be prepared in good faith based upon assumptions that were reasonable at the date of preparation. You
agree to furnish us with such Information and Projections as we may reasonably request and to supplement the Information and the Projections from time to time until the closing date for the Senior Credit Facility (the “Closing
Date”) so that the representation, warranty and covenant in the preceding sentence is correct on the Closing Date. In issuing this commitment and in arranging and syndicating the Senior Credit Facility, Bank of America, BAS, JPMCB and
JPMorgan Securities are and will be using and relying on the Information and the Projections (collectively, the “Pre-Commitment Information”) without independent verification thereof. 

 The McClatchy Company 
 March 9, 2006 
 Page 3 
 You hereby
acknowledge that (a) BAS, Bank of America, JPMCB and/or JPMorgan Securities will make available Information and Projections (collectively, “Borrower Materials”) to the proposed syndicate of Lenders by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the proposed Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities or the Company or its securities) (each, a “Public Lender”). You hereby agree that, (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” you shall be deemed to have authorized BAS, Bank of America, JPMCB, JPMorgan Securities and the proposed Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower
or its securities or the Company or its securities for purposes of United States federal and state securities laws, it being understood that certain of such Borrower Materials may be subject to the confidentiality requirements of the definitive
credit documentation; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) BAS, Bank of America, JPMCB, JPMorgan
Securities shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, you shall
be under no obligation to mark any Borrower Materials “PUBLIC.” 
 By executing this Commitment Letter, you agree to reimburse Bank of America,
BAS, JPMCB and JPMorgan Securities from time to time on demand for all reasonable out-of-pocket fees and expenses (including, but not limited to, (a) the reasonable fees, disbursements and other charges, of (i) one counsel to the Lead
Arrangers, the Administrative Agent and the Syndication Agent, unless the interests of the Lead Arrangers, the Administrative Agent and the Syndication Agent are sufficiently divergent, in which case one additional counsel may be appointed for each
such person or group of persons with such sufficiently divergent interests, and (ii) such local or special legal counsel as may be retained by the Administrative Agent in connection with the Senior Credit Facility, (b) due diligence
expenses and (c) all CUSIP fees for registration with the Standard & Poor’s CUSIP Service Bureau) incurred in connection with the Senior Credit Facility, the syndication thereof, the preparation of the definitive documentation
thereof and the other transactions contemplated hereby. 
 You agree to indemnify and hold harmless Bank of America, BAS, JPMCB and JPMorgan Securities and
each of their affiliates and their respective officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party as the same
are incurred for) any and all claims, damages, losses, liabilities and expenses (including, without limitation, the reasonable fees, disbursements and other charges of counsel) that may be incurred by or asserted or awarded against any Indemnified
Party (but excluding a breach of contract action between you and an Indemnified Party brought by you where you are the prevailing party in a final, non-appealable judgment by a competent court), in each case arising out of or in connection with or
by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) any matters contemplated by this Commitment Letter or any related transaction
or (b) the Senior Credit Facility and any other financings or any use made or proposed to be made with the proceeds thereof except to the extent such claim, damage, loss, liability or expense is found in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. In the case of an investigation, litigation or proceeding to which the indemnity in this paragraph applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding is brought by you (other than a breach of contract action where you are the prevailing party in a final, non-appealable judgment by a competent court), your equity
holders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are 

 The McClatchy Company 
 March 9, 2006 
 Page 4 
 consummated. You also agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you or your subsidiaries or affiliates or to your or their respective equity holders or
creditors for any special, indirect, consequential or punitive damages in connection with its activities related to the Senior Credit Facility. It is further agreed that Bank of America and JPMCB shall only have liability to you (as opposed to any
other person), that each of Bank of America and JPMCB shall be liable solely in respect of its own commitment to the Senior Credit Facility on a several, and not joint, basis with any other Lender, and that such liability shall only arise to the
extent damages have been caused by a breach of Bank of America’s or JPMCB’s obligations hereunder to negotiate in good faith definitive documentation for the Senior Credit Facility on the terms set forth herein as determined in a final
non-appealable judgment by a court of competent jurisdiction. Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials
obtained through electronic telecommunications or other information transmission systems, unless such damages are found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence or willful misconduct. 
 Promptly after receipt by an Indemnified Party under this paragraph of notice of its involvement in any action
arising out of this Commitment Letter, if a claim for indemnification in respect thereof is to be made against you under this paragraph, such Indemnified Party shall notify you in writing of such involvement. Failure by such Indemnified Party to so
notify you shall not relieve you from the obligation to indemnify the Indemnified Party in accordance with this paragraph. If any Indemnified Party is entitled to indemnification under this paragraph with respect to any action or proceeding relating
to this Commitment Letter brought by a third party that is also brought against you, you shall be entitled to assume the defense of such action or proceeding with counsel reasonably satisfactory to the Indemnified Party. Upon assumption by you of
the defense of any such action or proceeding, the Indemnified Party shall have the right to participate in such action or proceeding and to retain its own counsel but you shall not be liable for any legal expenses of such other counsel subsequently
incurred by such Indemnified Party in connection with the defense thereof unless (a) you have agreed to pay such fees and expenses, (b) you shall have failed to employ counsel reasonably satisfactory to the Indemnified Party in a timely
manner, or (c) the Indemnified Party shall have been advised by counsel that there are actual or potential conflicting interests between you and the Indemnified Party, including situations in which there are one or more legal defenses available
to the Indemnified Party that are different from or additional to those available to you. You will not, without the Indemnified Party’s written consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate
any claim, action or proceeding in respect of which indemnity may be sought hereunder, whether or not any Indemnified Party is an actual or potential party thereto, unless such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Party from any liabilities arising out of such claim, action or proceeding. 
 This Commitment Letter and the fee letter among
you, Bank of America, BAS, JPMCB and JPMorgan Securities (the “Fee Letter”) and the contents hereof and thereof are confidential and, except for disclosure hereof or thereof on a confidential basis to your accountants,
attorneys and other professional advisors retained by you in connection with the Senior Credit Facility or as otherwise required by law, may not be disclosed in whole or in part to any person or entity without our prior written consent;
provided, however, it is understood and agreed that you may disclose this Commitment Letter (including the Summary of Terms) but not the Fee Letter after your acceptance of this Commitment Letter and the Fee Letter, in filings with the
Securities and Exchange Commission and other applicable regulatory authorities and stock exchanges. Bank of America, BAS, JPMCB and JPMorgan Securities hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56 (signed into law October 26, 2001) (the “Act”), each of them is required to obtain, verify and record information that identifies you, which information includes your name and address and other information that will allow Bank
of America, BAS, JPMCB or JPMorgan Securities as applicable, to identify you in accordance with the Act. 
 You acknowledge that Bank of America, BAS, JPMCB
and JPMorgan Securities or their affiliates may be providing financing or other services to parties whose interests may conflict with yours. Without limiting 

 The McClatchy Company 
 March 9, 2006 
 Page 5 
 any of the
other confidentiality obligations hereunder, each of Bank of America, BAS, JPMCB and JPMorgan Securities agrees that it will not furnish the Information (as defined below) to any of their other customers. Each of Bank of America, BAS, JPMCB and
JPMorgan Securities agrees to use the Information solely in connection with the extensions of its commitment under, and its syndication of, the Senior Credit Facility. Each of Bank of America, BAS, JMPCB and JPMorgan Securities further agrees to
maintain the confidentiality of all Information with the same degree of care as it reasonably would be expected to exercise with respect to its own confidential information, except that Information may be disclosed by any such party (a) to its
affiliates and to its affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (provided each such person to whom such disclosure is made is informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory agency having authority over such person, (c) to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any prospective Lender that has agreed to keep the Information confidential and to use the Information only for the purpose of evaluating its participation in the Senior Credit Facility, (e) in connection with
any action or proceeding relating to this Commitment Letter, the Fee Letter or the Senior Credit Facility or the enforcement of rights hereunder or thereunder, (f) with the prior written consent of the Borrower or (g) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this paragraph or (y) becomes available to such person on a nonconfidential basis from a source other than the Borrower. The Borrower further agrees that
pursuant to clause (f) of the preceding sentence Bank of America, BAS, JPMCB and JPMorgan Securities may use any public information in marketing materials, press releases or other transactional announcements or updates provided to investor or
trade publications, provided that the content and final form of any such intended use are furnished to the Borrower reasonably in advance of the date of proposed use and such content and final form are acceptable to the Borrower. For purposes of
this paragraph “Information” means all information received in connection with this Commitment Letter or the Senior Credit Facility relating to the Borrower or its business, other than any such information that is available on a
non-confidential basis prior to such receipt. Bank of America, BAS, JPMCB and JPMorgan Securities further advise you that they will not make available to you confidential information that they have obtained or may obtain from any other customer. The
confidentiality provisions set forth in this paragraph shall terminate on the earlier of (i) December 31, 2007, (ii) the date of execution of definitive documentation for the Senior Credit Facility or (iii) termination of the planned
Acquisition. 
 In connection with all aspects of each transaction contemplated by this letter, you acknowledge and agree that: (i) the Senior Credit
Facility and any related arranging or other services described in this letter is an arm’s-length commercial transaction between you and your affiliates, on the one hand, and Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead
Arranger, on the other hand, and you are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this letter; (ii) in connection with the process leading to the
Senior Credit Facility, Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead Arranger, each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for you or any of your affiliates,
stockholders, creditors or employees or any other party; (iii) neither Bank of America, BAS, JPMCB nor JPMorgan Securities nor any other Lead Arranger has assumed or will assume by virtue of this Commitment Letter, the Summary of Terms or the
Fee Letter, an advisory, agency or fiduciary responsibility in your or your affiliates’ favor with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether Bank of America, BAS, JPMCB or
JPMorgan Securities or any other Lead Arranger has advised or is currently advising you or your affiliates on other matters) and neither Bank of America, BAS, JPMCB nor JPMorgan Securities nor any other Lead Arranger has any obligation to you or
your affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth in this letter; (iv) Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead Arranger, and their respective
affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and your affiliates and Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead Arranger have no obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and (v) Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead 

 The McClatchy Company 
 March 9, 2006 
 Page 6 
 Arranger
have not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate.
You hereby waive and release, to the fullest extent permitted by law, any claims that you may have against Bank of America, BAS, JPMCB and JPMorgan Securities and any other Lead Arranger with respect to any breach or alleged breach of agency or
fiduciary duty. 
 Except as provided in the last sentence of the second preceding paragraph, the provisions of the immediately preceding five paragraphs
shall remain in full force and effect regardless of whether any definitive documentation for the Senior Credit Facility shall be executed and delivered, and notwithstanding the termination of this letter or any commitment or undertaking hereunder.

 This Commitment Letter and the Fee Letter may be executed in counterparts which, taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by telecopier or facsimile shall be effective as delivery of a manually executed counterpart thereof. 
 This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each of you, Bank of America, BAS, JPMCB and JPMorgan Securities hereby irrevocably waives any and all
right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter (including, without limitation, the Summary of Terms), the Fee Letter, the
transactions contemplated hereby and thereby or the actions of Bank of America and BAS in the negotiation, performance or enforcement hereof. The commitments and undertakings of Bank of America, BAS, JPMCB and JPMorgan Securities may be terminated
by us, if you fail to perform your obligations under this Commitment Letter or the Fee Letter on a timely basis. 
 This Commitment Letter, together with the
Summary of Terms and the Fee Letter, embodies the entire agreement and understanding among Bank of America, BAS, JPMCB and JPMorgan Securities, you and your affiliates with respect to the Senior Credit Facility and supercedes all prior agreements
and understandings relating to the specific matters hereof. However, please note that the terms and conditions of the commitment of Bank of America and JPMCB and the undertaking of BAS and JPMorgan Securities hereunder are not limited to those set
forth herein or in the Summary of Terms. Those matters that are not covered or made clear herein or in the Summary of Terms or the Fee Letter are subject to mutual agreement of the parties. No party has been authorized by Bank of America, BAS, JPMCB
or JPMorgan Securities to make any oral or written statements that are inconsistent with this Commitment Letter. This Commitment Letter is not assignable by the Borrower without our prior written consent and is intended to be solely for the benefit
of the parties hereto and the Indemnified Parties. 
 This offer will expire at 5:00 p.m. Pacific Time on March 20, 2006 unless you execute this letter
and the Fee Letter and return them to us prior to that time (which may be by facsimile transmission), whereupon this letter and the Fee Letter (each of which may be signed in one or more counterparts) shall become binding agreements. Thereafter,
this undertaking and commitment will expire on the End Date (as defined in the Acquisition Agreement) as it may be extended pursuant to the provisions of Section 7.1(b) of the Acquisition Agreement (but in no event later than December 31,
2006), unless definitive documentation for the Senior Credit Facility is executed and delivered prior to such date. 

 The McClatchy Company 
 March 9, 2006 
 Page 7 
 We are pleased to have the opportunity to work with you in connection with this important financing. 
 Very truly yours, 
  

									
	BANK OF AMERICA, N.A.	 		 	JPMORGAN CHASE BANK, N.A.
					
	By:	 	 /s/ Robert Munn Jr.
	 		 	By:	 	 /s/ Peter Thauer

	Name:	 	Robert Munn Jr.	 		 	Name:	 	Peter Thauer
	Title:	 	Senior Vice President	 		 	Title:	 	Vice President
			
	BANC OF AMERICA SECURITIES LLC	 		 	J.P. MORGAN SECURITIES INC.
					
	By:	 	 /s/ William Bowen Jr.
	 		 	By:	 	 /s/ Richard Gabriel

	Name:	 	William Bowen Jr.	 		 	Name:	 	Richard Gabriel
	Title:	 	Managing Director	 		 	Title:	 	Vice President

 Accepted and agreed to 
 as of the date first above written: 
 THE MCCLATCHY COMPANY 
  

			
	By:	 	 /s/ Patrick J. Talamantes

	Name:	 	Patrick J. Talamantes
	Title:	 	Chief Financial Officer

 SUMMARY OF TERMS AND CONDITIONS 
 THE MCCLATCHY COMPANY 
 $3,750,000,000 SENIOR CREDIT FACILITY 

 

			
	BORROWER:	  	The McClatchy Company (the “Borrower”).
		
	GUARANTORS:	  	If the ratings on the Senior Credit Facility are lower than BBB- and Baa3, then the obligations of the Borrower under the Senior Credit Facility will be guaranteed by each existing and future
direct and indirect material domestic and, to the extent no adverse tax consequences would result, foreign subsidiary of the Borrower (collectively, the “Guarantors”). All guarantees will be guarantees of payment and not of
collection.
		
	ADMINISTRATIVE AGENT:	  	Bank of America, N.A. (the “Administrative Agent” or “Bank of America”) will act as sole and exclusive administrative agent.
		
	SYNDICATION AGENT:	  	JPMorgan Chase Bank, N.A. (the “Syndication Agent” or “JPMCB”) will act as sole and exclusive syndication agent.
		
	JOINT LEAD ARRANGERS AND	  	
	JOINT BOOK RUNNERS:	  	Banc of America Securities LLC (“BAS”) and J. P. Morgan Securities Inc. (“JPMorgan Securities”).
		
	LENDERS:	  	A syndicate of financial institutions (including Bank of America and JPMCB) arranged by BAS and JPMorgan Securities, which institutions shall be acceptable to the Borrower, the Administrative
Agent and the Syndication Agent (collectively, the “Lenders”).
		
	SENIOR CREDIT FACILITY:	  	An aggregate principal amount of up to $3.75 billion will be available through the following facilities:
		
		  	Term A Facility: a $2.2 billion term A loan facility (the “Term A Facility”), all of which will be drawn on the Closing Date.
		
		  	Bridge Facility: a $550 million bridge facility (the “Bridge Facility”), all of which will be drawn on the Closing Date.
		
		  	Revolving Credit Facility: a $1.0 billion Revolving Credit Facility (the “Revolving Credit Facility”) which will include a to-be-determined sublimit
for the issuance of standby letters of credit (each a “Letter of Credit”) and a $60 million sublimit for swingline loans (each a “Swingline Loan”). Letters of Credit will be issued by Bank of
America (in such capacity, the “Fronting Bank”) and Swingline Loans will be made available by Bank of America, and each Lender will purchase an irrevocable and unconditional participation in each Letter of Credit and
Swingline Loan.
		
	SWINGLINE OPTION:	  	Swingline Loans will be made available on a same day basis in an aggregate amount not exceeding $60 million and in minimum amounts of $500,000. The Borrower must repay each Swingline Loan in
full no later than 7 days after such loan is made.

			
	INCREASE OPTION:	  	Provided there is no Event of Default then existing and continuing and within four years of Closing, the Borrower may, without the consent of the Lenders, increase the size of the Revolving
Credit Facility by $500 million. No Lender is in any manner obligated to participate in such increase by increasing its own commitment amount. Lenders of the additional amount(s) will be afforded the same rights and protections that are
provided to the Lenders of the original Revolving Credit Facility. Additional Lenders shall be subject to the same criteria as assignees of Lenders.
		
	PURPOSE:	  	The Senior Credit Facility shall be used: (i) to finance in part the acquisition (the “Acquisition”) of Knight-Ridder, Inc. (the “Company”),
(ii) to refinance outstanding amounts under the Borrower’s and the Company’s existing credit agreements, (iii) for working capital, (iv) to support the Borrower’s commercial paper program, and (v) for other lawful
corporate purposes.
		
	MATURITY:	  	The Term A Facility shall be due and payable in full 5 years after the Closing Date with no required amortization prior to that date.
		
		  	The Bridge Facility shall be due and payable in full 24 months after the Closing Date.
		
		  	The Revolving Credit Facility shall terminate and all amounts outstanding thereunder shall be due and payable in full 5 years from the Closing Date.
		
	CLOSING DATE:	  	The execution of definitive loan documentation is currently expected to occur on or before September 30, 2006; however, this date will be extended if the End Date (as defined in the
Acquisition Agreement) is extended pursuant to the provisions of Section 7.1(b) of the Acquisition Agreement (but in no event to a date later than December 31, 2006) (the “Closing Date”).
		
	INTEREST RATES:	  	As set forth in Addendum I.
		
	MANDATORY	  	
	PREPAYMENTS:	  	100% of all net cash proceeds from sales of property and assets of the Borrower and its subsidiaries (excluding sales of inventory in the ordinary course and other exceptions to be agreed in
the loan documentation) shall be applied to the repayment of the Bridge Facility.
		
	OPTIONAL PREPAYMENTS AND COMMITMENT	  	
	REDUCTIONS:	  	Prior to the Closing Date, any voluntary reduction of the commitments shall be applied to first reduce the Bridge Facility, and once the Bridge Facility has been reduced to zero thereafter to
either the Term A Facility or the Revolving Credit Facility, as the Borrower may elect. After the Closing Date, the Borrower may prepay any portion of the Senior Credit Facility in whole or in part at any time without penalty, subject to
reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The unutilized portion of any commitment under the Revolving Credit Facility and Swing Line Loans may be irrevocably canceled by
Borrower in whole or in part.

  

 2 

					
	 CONDITIONS PRECEDENT
	  		  	
	TO CLOSING:	  	The Closing of the Senior Credit Facility will be subject to satisfaction of the conditions precedent customary for a credit facility of this type, including, but not limited to, the
following:
			
		  	(i)	  	The negotiation, execution and delivery of definitive documentation (including, without limitation, satisfactory legal opinions and other customary closing documents) for the Senior Credit
Facility satisfactory to BAS, the Administrative Agent, the Syndication Agent and the Lenders.
			
		  	(ii)	  	There shall not have occurred a Company Material Adverse Effect (as defined in the Acquisition Agreement).
			
		  	(iii)	  	The simultaneous termination of the existing Credit Agreement dated May 10, 2004 as among the Borrower, various financial institutions and Bank of America, N.A., as agent, upon repayment
(or refinancing under the Senior Credit Facility) of all outstanding loans, fees and other amounts accrued or owing thereunder, concurrently with, or prior to, the initial borrowing under the Senior Credit Facility on the Closing
Date.
			
		  	(iv)	  	Receipt of pro forma corporate ratings for the Borrower and ratings on the Senior Credit Facility from each of Moody’s Investor Service Inc. and Standard & Poors Ratings
Group.
			
		  	(v)	  	Receipt of confirmation that all continuing public indebtedness of the Company and its subsidiaries will, after giving effect to the Acquisition, be an obligation of the
Borrower.
			
		  	(vi)	  	Receipt of confirmation that the Acquisition will be consummated as contemplated in the Commitment Letter and in accordance with the Acquisition Agreement without any amendment or modification
of any material provision of the Acquisition Agreement (except with the consent of the Lead Arrangers and except with respect to any amendment or modification that does not materially and adversely affect the interests of the Lead Arrangers, the
Agents or the Lenders).
			
		  	(vii)	  	Receipt of confirmations that all conditions precedent to the consummation of the Acquisition have been satisfied or if waived, such waivers do not materially and adversely affect the interests
of the Lead Arrangers, the Agents or the Lenders or the Lead Arrangers shall have consented to such waivers.
			
	 CONDITIONS PRECEDENT
	  		  	
	TO ALL LOANS:	  	Usual and customary for transactions of this type, to include without limitation: (i) all representations and warranties are true and correct in all material respects as of the date
of each loan, and (ii) no event of default under the Senior Credit Facility or incipient default has occurred and is continuing, or would result from such loan.
		
	REPRESENTATIONS	  	
	AND WARRANTIES:	  	Usual and customary for transactions of this type subject to appropriate standards of materiality, to include without limitation: (i) corporate

  

 3 

					
		 	existence and status; (ii) corporate power and authority, enforceability; (iii) no violation of law, contracts or organizational documents; (iv) no material
litigation; (v) accuracy and completeness of specified financial statements and no material adverse change; (vi) no absence of required governmental or third party approvals or consents; (vii) use of proceeds and not engaging in
business of purchasing/carrying margin stock; (viii) status under Investment Company Act; (ix) ERISA matters; (x) environmental matters; (xi) tax matters; (xii) accuracy of disclosure; (xiii) compliance with laws;
(xiv) subsidiaries; (xv) ownership of property and insurance matters, and (xvi) no default.
		
	COVENANTS:	 	Usual and customary for transactions of this type subject to mutually agreeable standards of materiality and customary exceptions, where applicable, to include without limitation:
(i) delivery of financial statements, SEC filings, compliance certificates and notices of default, material litigation, material governmental, ERISA and environmental proceedings and material changes in accounting or financial reporting
practices; (ii) compliance with laws (including environmental laws and ERISA matters) and material contractual obligations; (iii) payment of obligations; (iv) preservation of existence; (v) maintenance of books and records, and
inspection rights; (vi) use of proceeds; (vii) maintenance of properties and insurance; (viii) limitation on liens and sales of all or substantially all of the assets of the Borrower; (ix) limitation on subsidiary indebtedness;
(x) limitation on transactions with affiliates; and (xi) limitation on restrictive agreements that could adversely affect the Lenders.
		
		 	Financial covenants to include (but not be limited to):
			
		 	•	 	Maintenance on a rolling four quarter basis of a Maximum Total Leverage Ratio (total debt/EBITDA) of equal to or less than 5.50 to 1.00 as of the Closing Date, with step downs to 4.75 to
1.00 as of December 31, 2006, to 4.25 to 1.00 as of December 31, 2007 and a further step down to 4.00 to 1.00 as of December 31, 2008; and
			
		 	•	 	Maintenance on a rolling four quarter basis of an Interest Coverage Ratio (EBITDA/interest expense) of at least 3.00 to 1.00; provided, that if the ratings on the Senior Credit
Facility shall at any time be A- and A3 or better, this covenant shall cease to be operative.
		
	EVENTS OF DEFAULT:	 	Usual and customary in transactions of this type subject to appropriate grace periods, to include without limitation: (i) nonpayment of principal, interest, fees or other
amounts; (ii) any representation or warranty proving to have been materially incorrect when made or confirmed; (iii) failure to perform or observe covenants set forth in the loan documentation within a specified period of time, where
customary and appropriate, after such failure; (iv) cross-default to other indebtedness in an amount to be agreed; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) monetary judgment defaults
in an amount to be agreed; (vii) actual or asserted invalidity of any loan documentation; (viii) change of control (defined as a change in ownership of 51% or more of the voting stock of the Borrower); and (ix) customary ERISA
defaults.

  

 4 

			
	 ASSIGNMENTS AND
	  	
	PARTICIPATIONS:	  	Each Lender will be permitted to make assignments in a minimum amount of $5 million to other financial institutions approved by the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower, which approval shall not be unreasonably withheld or delayed; provided, however, that neither the approval of the Borrower nor the Administrative Agent shall be required in connection with assignments
to other Lenders, to any affiliate or a Lender, or to any Approved Fund (as such term shall be defined in the definitive loan documentation), but the parties to such an assignment shall use reasonable efforts to provide the Borrower and
Administrative Agent with five business days prior notice thereof. An assignment fee of $3,500 may be charged with respect to each assignment (other than assignments to affiliates). Each Lender will also have the right, without consent of the
Borrower or the Administrative Agent, to assign as security all or part of its rights under the loan documentation to any Federal Reserve Bank. Lenders will be permitted to sell participations with voting rights limited to significant matters such
as changes in amount, rate and maturity date.
		
	WAIVERS AND	  	
	AMENDMENTS:	  	Amendments and waivers of the provisions of the loan agreement and other definitive credit documentation will require the approval of Lenders holding loans and commitments representing more than
51% of the aggregate amount of loans and commitments under the Senior Credit Facility, except that the consent of all the Lenders affected thereby shall be required with respect to (i) increases in the commitment of such Lenders, (ii) reductions of
principal, interest or fees and (iii) extensions of scheduled maturities or times for payment.
		
	INDEMNIFICATION:	  	The Borrower will indemnify and hold harmless the Administrative Agent, BAS, the Syndication Agent, JPMCB and each Lender and their respective affiliates and their officers, directors,
employees, agents and advisors from and against all losses, liabilities, claims, damages or expenses arising out of or relating to the Senior Credit Facility, the Borrower’s use of loan proceeds or the commitments, including, but not limited
to, reasonable attorneys’ fees (including the allocated cost of internal counsel) and settlement costs. This indemnification shall survive and continue for the benefit of all such persons or entities, notwithstanding any failure of the Senior
Credit Facility to close.
		
	GOVERNING LAW:	  	State of New York
		
	PRICING / FEES EXPENSES:	  	As set forth in Addendum I.
		
	OTHER:	  	Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction. The loan documentation will contain customary increased cost, withholding tax, capital
adequacy and yield protection provisions as covered in Addendum I.

  

 5 

					
	 Confidential
	 		 	The McClatchy Company

 ADDENDUM I 
 PRICING, FEES AND EXPENSES 
  

			
	COMMITMENT FEE:	  	The Borrower will pay a fee (the “Commitment Fee”), determined in accordance with the Performance Pricing grid set forth below, on the unused portion of each
Lender’s commitments under the Senior Credit Facility. The Commitment Fee is payable quarterly in arrears commencing upon the Closing Date. Swing Line Loans will not be deemed to be utilization for purposes of calculating the Commitment
Fee.
		
	LETTER OF	  	
	CREDIT FEES:	  	The Borrower will pay a fee (the “Letter of Credit Fee”), determined in accordance with the Performance Pricing grid set forth below, in an amount equal to the
Applicable Margin on the aggregate maximum stated amount for each Letter of Credit that is issued and outstanding. The Letter of Credit Fee is payable quarterly in arrears, commencing on the Closing Date, and will be shared proportionately by the
Lenders.
		
	INTEREST RATES:	  	At the Borrower’s option, any loan under the Senior Credit Facility that is made to it will bear interest at a rate equal to (i) LIBOR plus the Applicable Margin, as determined in
accordance with the Performance Pricing grid set forth below, and (ii) the Alternate Base Rate (to be defined as the higher of (a) the Bank of America prime rate and (b) the Federal Funds rate plus .50%); provided, in each case that if during the
180 day period following the Closing Date, any breakage costs, charges or fees are incurred on account of the syndication of the Senior Credit Facility, the Borrower shall immediately reimburse the Administrative Agent for any such costs, charges or
fees; provided that the Administrative Agent and the Borrower shall use reasonable efforts to coordinate the syndication with the ends of interest periods. Such right of reimbursement shall be in addition to and not in limitation of customary
cost and yield protections. The Borrower may select interest periods of 1, 2, 3 or 6 months for LIBOR loans, subject to availability. Interest shall be payable at the end of the selected interest period, but no less frequently than quarterly. A
default rate shall apply on all obligations in the event of default under the Senior Credit Facility at a rate per annum of 2% above the applicable interest rate.
		
	 PERFORMANCE
	  	
	PRICING:	  	The Commitment Fee and Applicable Margin for LIBOR Loans shall be, at any time, the rate per annum set forth in the table below opposite the rating of the Senior Credit Facility by Standard
& Poor’s Ratings Group and Moody’s Investors Service Inc. (In the case of a split rating when the ratings are at least BBB- and Baa3, the higher rating will apply; in the case of any other split rating, the lower rating will apply; and
in the case of any multiple split rating, the rating that is one level higher than the lower rating will apply).

  

					
	 Confidential
	 		 	The McClatchy Company

  

							
	 Level
	 	 Rating
	  	Applicable Margin for
LIBOR Loans	  	Commitment Fee
	 I
	 	A- / A3 or better	  	37.5	  	10.0
	 II
	 	BBB+ / Baa1	  	50.0	  	10.0
	 III
	 	BBB / Baa2	  	62.5	  	12.5
	 IV
	 	BBB- / Baa3	  	75.0	  	15.0
	 V
	 	BBB- or better and Ba1; or BB+ and Baa3 or better	  	100.0	  	17.5
	 VI
	 	BB+ / Ba1 or below	  	125.0	  	20.0

  

			
	 CALCULATION OF
 INTEREST
AND
	  	
	FEES:	  	Other than calculations in respect of interest at the Bank of America prime rate (which shall be made on the basis of actual number of days elapsed in a 365/366 day year), all calculations of
interest and fees shall be made on the basis of actual number of days elapsed in a 360-day year.
		
	 COST AND YIELD
	  	
	PROTECTION:	  	Customary for transactions and facilities of this type, including, without limitation, in respect of breakage or redeployment costs incurred in connection with prepayments, changes in capital
adequacy and capital requirements or their interpretation, illegality, unavailability, reserves and payments free and clear of withholding or other taxes.
		
	EXPENSES:	  	The Borrower will pay all reasonable costs and expenses associated with the preparation, due diligence, administration, syndication and closing of all loan documentation, including, without
limitation, the reasonable legal fees of counsel to the Administrative Agent and BAS, regardless of whether or not the Senior Credit Facility is closed. The Borrower will also pay the expenses of the Administrative Agent, the Syndication Agent and
each Lender in connection with the enforcement of any loan documentation.

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