The New York Times
Company
Notice of 20032004
Annual Meeting and
Proxy Statement
 |
229 West 43rd Street New York, NY 10036 |
tel 212-556-1234 |
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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ý | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 | |
THE NEW YORK TIMES COMPANY | ||||
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The New York Times
Company
Notice of 20032004
Annual Meeting and
Proxy Statement
|
229 West 43rd Street New York, NY 10036 |
tel 212-556-1234 |
229 West 43rd Street
New York, NY 10036
tel 212-556-1234
Invitation to 20032004 Annual Meeting of Stockholders
DATE: Tuesday, April 15, 2003
13, 2004
TIME: 10:00 a.m.
PLACE: New Amsterdam Theatre
214 West 42nd42nd Street, New York, NY 10036
March 4, 20032, 2004
Dear Fellow Stockholder:
Please join me at our Annual Meeting on April 15, 2003,13, 2004, where we will ask you to vote on the election of our Board of Directors, the adoption of a Non-Employee Directors' Stock Incentive Plan and the ratification of the selection of our auditors.
We are pleaseddelighted to announce that all ofadd two exceptional new nominees for election by our directors have agreed to stand for re-election atstockholders this year’s Annual Meeting.
Over the past year, Thomas Middelhoff and Doreen A. Toben. Dr. Middelhoff, who joined our Board of Directorslast September, has a strong background in the international media and management team have enhancedInternet businesses, which will be extraordinarily useful as our Company’s corporate governance practices. In many cases, we simply formalizedCompany pursues its global ambitions via theInternational Herald Tribune and our current procedures in orderdigital enterprises. Ms. Toben, who will be new to comply with new stricter regulations. In other cases, we introduced changes that we believe strengthen our Board. We will implement further changes as new rules are promulgated and, in addition, as we think appropriate.
We hope you will take some time to review our enhanced corporate governance practices. They are summarized on pages 15-16 of the enclosed Proxy Statement. The formal Corporate Governance Principles recently approved by our Board, are included as Appendix I. The new charters of all five ofwill bring additional financial management expertise and discipline to our Board Committees can now be found in the Corporate Governance section of our corporate Web site, http://www.nytco.com/governance. Our Audit Committee’s charter is also attached, as required, to our Proxy Statement as Appendix II. We are proud that with these steps, our Company continues to maintain a leadership role in corporate goverance. deliberations.
In addition to the formal items of business at our Annual Meeting, my colleagues and I will review the major Company developments over the past year and share with you our plans for the future. You will have an opportunity to ask questions and express your views to the senior management of The New York Times Company. Members of the Board of Directors will also be present.
Whether or not you are able to attend the Annual Meeting in person, it is important that your shares be represented. You can vote your shares using the Internet or a toll-free telephone number, or by completing and returning the enclosed proxy card by mail. Instructions on each of these voting methods are outlined in the enclosed Proxy Statement. Please vote as soon as possible.
I hope to see you on April 1513th.
Sincerely yours,
AARTHUR SULZBERGER, JR.rthur Sulzberger, Jr.
Chairman of the Board
|
229 West 43rd Street New York, NY 10036 |
tel 212-556-1234 |
229 West 43rd Street
New York, NY 10036
tel 212-556-1234
Notice of Annual Meeting of Stockholders
To be held April 15, 200313, 2004
To the Holders of Class A Common Stock and Class B
Common Stock of The New York Times Company:
The Annual Meeting of Stockholders of The New York Times Company will be held at 10:00 a.m., local time, on Tuesday, April 15, 2003,13, 2004, at the New Amsterdam Theatre, 214 West 42nd Street, New York, NY 10036, for the following purposes:
1315 members;
28, 2003;26, 2004; and
3.
Holders of the Class A and Class B common stock as of the close of business on February 18, 2003,17, 2004, are entitled to notice of and to attend this meeting as set forth in the Proxy Statement. Class A stockholders are entitled to vote for the election of fourfive of the 1315 directors. Class A and Class B stockholders, voting together as a single class, are entitled to vote on the proposal to adopt the New Plan and the proposal to ratify the selection of Deloitte & Touche LLP as auditors for the 20032004 fiscal year. Class B stockholders are entitled to vote for the election of nineten of the 1315 directors and on all other matters presented to the meeting.
New York, NY
March 4, 20032, 2004
By Order of the Board of Directors
RhondaRHONDA L. BrauerBRAUER
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE BY TELEPHONE, ON THE INTERNET OR BY COMPLETING AND RETURNING THE ENCLOSED PROXY CARD. THIS IS IMPORTANT FOR THE PURPOSE OF ENSURING A QUORUM AT THE MEETING.
TABLE OF CONTENTS
| Page | |||||||
|---|---|---|---|---|---|---|---|
| 1 | ||||||
| 2 | ||||||
Where To Find More Information On The New York Times Company |
| 3 | |||||
| 4 | ||||||
| The 1997 Trust |
| 4 | |||||
| Principal Holders of Common Stock |
| 5 | |||||
| Security Ownership of Management and Directors |
| 8 | |||||
| Section 16(a) Beneficial Ownership Reporting Compliance |
| 9 | |||||
| 10 | ||||||
| Profiles of Nominees for |
| 11 | |||||
| Class A Directors |
| 11 | |||||
| Class B Directors |
| 12 | |||||
| Interest of Directors in Certain Transactions of the Company |
| 15 | |||||
| Board of Directors and Corporate Governance |
| 16 | |||||
| Board Meetings and Attendance |
| 18 | |||||
| 18 | ||||||
| 19 | ||||||
| 20 | ||||||
| Directors' and Officers' Liability Insurance | 20 | ||||||
| Compensation of Executive Officers |
| 21 | |||||
| Compensation Committee Report |
| 24 | |||||
| Audit Committee Report |
| 27 | |||||
Proposal Number 2 — Approval of Stock Incentive Plan for Non-Employee Directors | 28 | ||||||
| Description of Stock Incentive Plan for Non-Employee Directors | 28 | ||||||
| Stock Options | 29 | ||||||
| Restricted Stock | 29 | ||||||
| Federal Income Tax Consequences | 29 | ||||||
| New Plan Benefits | 30 | ||||||
| Recommendation and Vote Required | 30 | ||||||
| Proposal Number 3 — Selection of Auditors |
| 30 | |||||
| Audit and Other Fees |
| 30 | |||||
| Audit Fees |
| 30 | |||||
| Audit-Related Fees |
| 30 | |||||
| Tax Fees |
| 31 | |||||
| All Other Fees |
| 31 | |||||
| Audit |
| 31 | |||||
| Recommendation and Vote Required |
| 31 | |||||
| 31 | ||||||
| Submission of Stockholder Proposals for |
| 31 | |||||
| Certain Matters Relating to Proxy Materials and Annual Reports |
| 31 | |||||
Appendix I.Corporate Governance Principles |
| I-1 | |||||
Appendix II. |
| II-1 | |||||
1
The New York Times Company
Proxy Statement
Annual Meeting of Stockholders to be Held on April 15, 200313, 2004
¨
Election of the Board of Directors; and
¨
26, 2004.
With respect to the two proposals to be voted on at the Annual Meeting:
¨
Class A stockholders may vote for the election of 4five of the 1315 directors. Class B stockholders may vote for the election of 9ten of the 1315 directors.
¨
Class B stockholders are also entitled to vote on all other matters presented to the meeting.
these proposals.
If your stock is held through a broker or bank, you will receive voting instructions from your bank or broker describing how to vote your stock. The availability of telephone or Internet voting will depend upon the bankbank's or broker’sbroker's voting processes.
Whichever method you use, each valid proxy received in time will be voted at the Annual Meeting by the persons named on the proxy card in accordance with your instructions. To ensure that your proxy is voted, it should be received by the close of business on April 14, 2003.12, 2004.
If you submit a proxy card without giving instructions, your shares will be voted as recommended by the Board of Directors.
Mellon Investor Services has been engaged as the independent inspector of election to tabulate stockholder votes at the Annual Meeting.
¨
The Audit Committee of the Board recommends voting:
¨
If a broker, which is the record holder of shares, indicates on a proxy form that it does not have discretionary authority to vote those shares on a Proposal, or if shares are voted in other circumstances in which proxy authority is defective or has been withheld on such Proposal, those non-voted shares will be counted as present for quorum purposes but will have no effect on Proposals 1 and 2, and will have the same effect as a negative vote on Proposal 2 and no effect on Proposal 1.3.
2, 2004.
1
2
We have been advised by our legal counsel that the procedures that have been put in place are consistent with the requirements of applicable state law. Please remember that if your stock is held through a broker or bank, you will receive voting instructions from your bank or broker describing the available processes for voting your stock.
  | Voting in Person at the Annual Meeting
| ||||
| Internet Voting (Available 24 hours a day) | ||||
Go to the Web site address: | http:// | ||||
| http://
| |||||
 | Mark your selections.
| ||||
| Telephone Voting (Available 24 hours a day)
1-800-435-6710. | ||||
 | Proxy Card Voting by Mail
| ||||
2
Documents Filed with the Securities and Exchange Commission (“SEC”("SEC")
¨
The New York Times Company
229 West 43rd Street
New York, NY 10036
Phone: (212) 556-1234
Attention: Corporate Secretary
¨
¨
Additional Information
There are a number of other sources for additional information on The New York Times Company:
¨
|
4IMPORTANT NOTE:
You should rely only on the information contained in this Proxy Statement to vote on the Proposals at the Annual Meeting.We have not authorized anyone to provide you with information that is different from what is contained in this Proxy Statement. This Proxy Statement is dated March 2, 2004. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than such date, and the mailing of this Proxy Statement to stockholders shall not create any implication to the contrary.
3
General Information
Since the purchase ofThe New York Timesnewspaper by Adolph S. Ochs in 1896, control ofThe New York Times and related properties has rested with his family. Family members have taken an active role in the stewardship and management of The New York Times Company. The title of Publisher ofThe New York Times has been held by various family members, from Adolph S. Ochs to the current Publisher, Arthur Sulzberger, Jr., who also serves as the current Chairman of the Board.
In February 1990, on the death of Adolph Ochs’sOchs's daughter, IphigeneOchs Sulzberger (“("Mrs. Sulzberger”Sulzberger"), control passed to her four children through the automatic termination of a trust established by her father. That trust held 83.7 percent83.7% of the Class B stock of the Company, which is not publicly traded and the holders of which have the right to elect approximately 70% of the Board of Directors. Mrs. Sulzberger’sSulzberger's four children are: Marian S. Heiskell, Ruth S. Holmberg, Judith P. Sulzberger and Arthur Ochs Sulzberger (the “grantors”"grantors").
In 1997, the grantors executed an indenture (the “Trust Indenture”"Trust Indenture") creating a trust (the “1997 Trust”"1997 Trust") for the benefit of each of the grantors and his or her family. The grantors transferred to the 1997 Trust all shares of Class B stock previously held by the trust established by Adolph Ochs, together with a number of shares of Class A stock. The 1997 Trust currently holds 738,810 shares of Class B stock and 1,400,000 shares of Class A stock. The trustees of the 1997 Trust areis also the indirect ownersowner of an additional 4,343,4884,300,197 shares of Class A stock. The primary objective of the 1997 Trust is to maintain the editorial independence and the integrity ofThe New York Times and to continue it as an independent newspaper, entirely fearless, free of ulterior influence and unselfishly devoted to the public welfare (“("the primary objective of the 1997 Trust”Trust").
The current trustees of the 1997 Trust are Daniel H. Cohen, Lynn G. Dolnick, Jacqueline H. Dryfoos, Arthur S. Golden, Michael Golden, Eric M. A. Lax, Arthur Sulzberger, Jr., and Cathy J. Sulzberger (the “Trustees”"Trustees").
The 1997 Trust will continue in existence until the expiration of 21 years after the death of the survivor of all descendants of Mrs. Sulzberger living on December 14, 2000. The Trust Indenture is subject to the terms and provisions of a 1986 shareholders agreement (the “Shareholders Agreement”"Shareholders Agreement") among the grantors, their children and the Company, which restricts the transfer of Class B stock by requiring, prior to any sale or transfer, the offering of those shares among the other family stockholders (including the 1997 Trust) and then to the Company at the Class A stock market price then prevailing (or if the Company is the purchaser, at the option of the selling stockholder, in exchange for Class A stock on a share-for-share basis). The Shareholders Agreement provides for the conversion of such shares into Class A stock if the purchase rights are not exercised by the family stockholders (including the 1997 Trust) or the Company and such shares of Class A stock are to be transferred to a person or persons other than family stockholders or the Company. There are certain exceptions for gifts and other transfers within the family of Adolph S. Ochs provided that the recipients become parties to the Shareholders Agreement.
In addition, the Shareholders Agreement provides that if the Company is a party to a merger (other than a merger solely to change the Company’sCompany's jurisdiction of incorporation), consolidation or plan of liquidation in which the Class B stock is exchanged for cash, stock, securities or any other property of the Company or of any other corporation or entity, each signing stockholder will convert his or her shares of Class B stock into Class A stock prior to the effective date of such transaction so that a holder of such shares will receive the same cash, stock or other consideration that a holder of Class A stock would receive in such a transaction. Except for the foregoing, each signing stockholder has agreed not to convert any shares of Class B stock received from a trust created under the will of Adolph S. Ochs into Class A stock. The Shareholders Agreement will terminate upon the expiration of 21 years after the death of the survivor of all descendants of Mrs. Sulzberger living on August 5, 1986.
The Trustees, subject to the limited exceptions described below, are directed to retain the Class B stock held in the 1997 Trust and not to sell, distribute or convert such shares into Class A stock and to vote such Class B stock against any merger, sale of assets or other transaction pursuant to which control ofThe New York Times passes from the Trustees, unless they unanimously determine that the primary objective of the 1997 Trust can be achieved better by the sale, distribution or conversion of such stock or by the implementation of such transaction. If upon such determination any Class B stock is distributed to the beneficiaries of the 1997 Trust, it must be distributed only to descendants of Mrs. Sulzberger, subject to the provisions of the Shareholders Agreement (if it is still in effect). Similarly, any sale by the 1997 Trust of Class B stock upon such determination can be made only in compliance with the Shareholders Agreement.
The Trustees are granted various powers and rights, including among others: (i) to vote all of the shares of Class A and Class B stock held by the 1997 Trust; (ii) to nominate the trustees who also serve on the Company’sCompany's Board of Directors; and (iii) to amend certain provisions of the Trust Indenture, but not the provisions relating to retaining the Class B stock or the manner in which such shares may be distributed, sold or converted. The Trustees act by the affirmative vote of six of the eight Trustees. Generally, a Trustee may be removed by the agreement of six of the remaining seven Trustees. In general, when a vacancy occurs in the position of a trustee who does not serve on the Company’sCompany's Board of Directors, the new trustee shall be elected by the beneficiaries of the 1997 Trust.
Upon the termination of the 1997 Trust at the end of the stated term thereof, the shares of Class A and Class B stock held by such trust will be distributed to the descendants of Mrs. Sulzberger then living.
4
5
The following table sets forth the only persons who, to the knowledge of management, owned beneficially on February 18, 2003,17, 2004, more than 5% of the outstanding shares of either Class A or Class B stock:
|
| Shares (%) |
| ||||||||
Name and Address |
| Class A |
| Class B |
| ||||||
1997 Trust1,2 |
| 6,482,298 |
| (4.3 | %) |
| 738,810 |
| (87.6 | %) |
|
Daniel H. Cohen1,2,3 |
| 6,556,393 |
| (4.3 | %) |
| 740,430 |
| (87.7 | %) |
|
Lynn G. Dolnick1,2,4 |
| 6,526,366 |
| (4.3 | %) |
| 739,928 |
| (87.7 | %) |
|
Jacqueline H. Dryfoos1,2,5 |
| 6,968,906 |
| (4.6 | %) |
| 739,410 |
| (87.6 | %) |
|
Arthur S. Golden1,2,6 |
| 6,587,200 |
| (4.4 | %) |
| 739,928 |
| (87.7 | %) |
|
Michael Golden1,2,7 |
| 6,810,985 |
| (4.5 | %) |
| 739,930 |
| (87.7 | %) |
|
Eric M. A. Lax1,2,8 |
| 6,527,528 |
| (4.3 | %) |
| 738,810 |
| (87.6 | %) |
|
Arthur Sulzberger, Jr.1,2,9 |
| 7,096,095 |
| (4.7 | %) |
| 739,770 |
| (87.7 | %) |
|
Cathy J. Sulzberger1,2,10 |
| 6,575,628 |
| (4.3 | %) |
| 739,770 |
| (87.7 | %) |
|
Prudential Financial, Inc.11 |
| 8,331,822 |
| (5.5 | %) |
| 0 |
|
|
|
|
Shares (%) Name and Address Class A Class B 1997 Trust1,2
229 West 43rd Street
New York, NY 10036 6,439,007 (4.3 %) 738,810 (87.9 %)
Daniel H. Cohen1,2,3
229 West 43rd Street
New York, NY 10036
6,820,837
(4.5
%)
740,430
(88.1
%)
Lynn G. Dolnick1,2,4
229 West 43rd Street
New York, NY 10036
6,802,306
(4.5
%)
739,928
(88.1
%)
Jacqueline H. Dryfoos1,2,5
229 West 43rd Street
New York, NY 10036
7,248,562
(4.8
%)
739,410
(88.0
%)
Arthur S. Golden1,2,6
229 West 43rd Street
New York, NY 10036
6,855,624
(4.6
%)
739,928
(88.1
%)
Michael Golden1,2,7
229 West 43rd Street
New York, NY 10036
7,168,391
(4.8
%)
739,930
(88.1
%)
Eric M. A. Lax1,2,8
229 West 43rd Street
New York, NY 10036
6,482,217
(4.3
%)
738,810
(87.9
%)
Arthur Sulzberger, Jr.1,2,9
229 West 43rd Street
New York, NY 10036
7,546,950
(5.0
%)
739,770
(88.0
%)
Cathy J. Sulzberger1,2,10
229 West 43rd Street
New York, NY 10036
6,860,775
(4.6
%)
739,770
(88.0
%)
Private Capital Management11
8889 Pelican Bay Blvd.
Naples, FL 34108
10,291,823
(6.9
%)
0
T. Rowe Price Associates, Inc.11
100 E. Pratt Street
Baltimore, MD 21202
7,481,986
(5.0
%)
0
W.P. Stewart & Co., Ltd.11
Trinity Hall
43 Cedar Avenue
Hamilton HM 12 Bermuda
7,495,430
(5.0
%)
0
(Footnotes continue on following page)
5
(Footnotes continued from preceding page)
(Footnotes continue on following page)
6
(Footnotes continued from preceding page)
all shares of Class B stock of which that person is deemed the beneficial owner. Thus all shares of Class B stock held by the 1997 Trust and by the Trustees have been included in the calculation of the total amount of Class A stock owned by each such person as well as in the calculation of the total amount of Class B stock owned by each such person. As a result of this presentation, there are substantial duplications in the number of shares and percentages shown in the table.
ownership in all shares held by the trusts described in (c) and (d) above. The holdings of Class A stock reported for Mr. Cohen exclude 11,000 shares of Class A stock held by a trust of which his wife is a co-trustee, the beneficiaries of which are Mr. Cohen and his children.
Directors' Plan.
6
reported for Mr. Sulzberger, Jr. include (a) 20,80121,312 shares of Class A stock and 960 shares of Class B stock held solely and 7,0668,046 shares of Class A stock held jointly with his wife, (b) 19,690319,215 shares of Class A stock beneficially owned by a limited liability company of which Mr. Sulzberger, Jr. and his siblings, including Ms. Sulzberger and Mr. Lax's wife, are members, (c) 43,130 shares of Class A stock held by trusts of which Mr. Sulzberger, Jr. is a co-trustee, which were created by certain of Mr. Sulzberger, Jr.’s cousin's cousins for the benefit of the latter’slatter and/or their children and of which Mr. Sulzberger, Jr. disclaims beneficial ownership, (c) 485,280(d) 635,280 shares which could be acquired within 60 days upon the exercise of options granted under the NYT Stock Plan (of which 60,140 have been transferred to a family limited partnership) and (d)(e) 80,000 restricted shares of Class A stock granted under the NYT Stock Plan. The holdings of Class A stock reported for Mr. Sulzberger, Jr. exclude 22,79023,770 shares of Class A stock held by trusts of which Mr. Sulzberger, Jr.’s's wife is a co-trustee and the beneficiaries of which are their children.
38,80338,333 shares of Class A stock and 960 shares of Class B stock held solely, (b) 4,000319,215 shares of Class A stock beneficially owned by a limited liability company of which Ms. Sulzberger and her siblings, including Mr. Sulzberger, Jr. and Mr. Lax's wife, are members, (c) 8,000 shares of Class A stock which could be acquired within 60 days upon the exercise of options granted under the Directors’Directors' Plan and (c)(d) 23,156 shares of Class A stock held by a trust created by Ms. Sulzberger’sSulzberger's cousin, Ms. Dryfoos, for the benefit of her children of which Ms. Sulzberger is the sole trustee, 7,7718,836 shares of Class A stock held by a trust created by Ms. Sulzberger’sSulzberger's son of which Ms. Sulzberger is a co-trustee, 18,41020,918 shares of Class A stock held in trusts or accounts under uniform gifts to minors acts for the benefit of Ms. Sulzberger’sSulzberger's children of which Ms. Sulzberger is the sole trustee/custodian, and 2301,860 shares of Class A stock held in a trust for the benefit of Ms. Sulzberger’sSulzberger's nephew of which Ms. Sulzberger is the sole trustee and 490 shares of Class A stock held in a trust for the benefit of Ms. Sulzberger's niece of which Ms. Sulzberger is the sole trustee. Ms. Sulzberger disclaims beneficial ownership of all shares of Class A stock held by such trusts and accounts. The holdings of Class A stock reported for Ms. Sulzberger exclude 1,736 shares of Class A stock held by her husband and 1,040 shares of Class A stock held by her adult daughter.
husband.its filingfilings with the SEC pursuant to Section 13(g) of the Securities Exchange Act of 1934, as amended, by Prudential Financial, Inc. (“Prudential Financial”), as of December 31, 2002, Prudential Financial may be deemed to have2003, Private Capital Management ("PCM") beneficially owned 8,331,82210,291,823 shares of Class A stock, T. Rowe Price Associates, Inc. ("T. Rowe Price") beneficially owned 7,481,986 shares of Class A stock, and W. P. Stewart & Co., Ltd. ("W.P. Stewart") beneficially owned 7,495,430 shares of Class A stock. According to the filing 19,700 of suchby PCM, PCM's CEO, Bruce S. Sherman, and President, Gregg J. Powers, exercise shared dispositive and shared voting power with respect to shares were held by PCM's clients and managed by PCM, but Messrs. Sherman and Powers disclaim beneficial ownership for the benefitshares held by PCM's clients and disclaim the existence of the general account of its subsidiary, Prudential Insurance Company of America, and the remaining 8,312,122 shares were held for Prudential Financial’s own benefit or for the benefit of its clients by its separate accounts, externally managed accounts, registered investment companies, subsidiaries and/or other affiliates, including Prudential Financial’s subsidiary, Jennison Associates LLC (“Jennison”).a group. According to the separatefilings by T. Rowe Price and W.P. Stewart, each holder has sole voting power and sole dispositive power over its reported shares, but each holds such shares for clients, none of whom has a 5% or more interest. W.P. Stewart's filing made by Jennison,states that it does not have an economic interest in its role as an investment adviser of various managed portfolios, as of December 31, 2002, Jennison may be deemed to have been the beneficial owner of 8,174,875 of these shares of Class A stock. Eachreported shares. T. Rowe Price's filing states that it disclaims beneficial ownership of its reported shares. Each of the three filings also states that, to the best of the holder's knowledge, the shares were acquired in the ordinary course of such holder's business and were not withacquired for the purpose orof and do not have the effect of changing or influencing the control of the Company.
7
The following table shows the beneficial ownership, reported to the Company as of February 18, 2003,17, 2004, of Class A and Class B stock, including shares as to which a right to acquire ownership exists (by the exercise of stock options or the conversion of Class B stock into Class A stock) within the meaning of Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended, of each director, each nominee for election as director, the chief executive officer and the four other most highly compensated executive officers of the Company during 20022003 and all directors, nominees, and executive officers of the Company, as a group. A portion of the shares reported below are held by the 1997 Trust, whose Trustees share voting and, in some cases, investment power with respect thereto. See “The"The 1997 Trust”Trust". The table also shows the amount of Class A stock units credited to the account of non-employee directors in lieu of cash retainers and meeting fees under the Company's Non-Employee Directors Deferral Plan. Distribution in cash is made subsequent to retirement.
|
| Shares (%) | Class A Stock | Percent of Outstanding Class A Stock | Class A Stock Units | Class B Stock | Percent of Outstanding Class B Stock | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
| Class A | Class B | ||||||||||||||||||
John F. Akers1 |
| 34,878 |
|
|
| 0 |
|
|
| 30,203 | 0 | 0 | |||||||||
Brenda C. Barnes1 |
| 25,450 |
|
|
| 0 |
|
|
| 30,950 | 0 | 0 | |||||||||
Raul E. Cesan1 |
| 41,000 |
|
|
| 0 |
|
|
| 45,000 | 5,023 | 0 | |||||||||
Jacqueline H. Dryfoos2, 3 |
| 6,968,906 |
| (4.6 | %) | 739,410 |
| (87.6 | %) | ||||||||||||
Leonard P. Forman4 |
| 125,224 |
|
|
| 0 |
|
|
| ||||||||||||
Michael Golden2, 3 |
| 6,810,985 |
| (4.5 | %) | 739,930 |
| (87.7 | %) | ||||||||||||
| Jacqueline H. Dryfoos2,3 Director | 7,248,562 | (4.8 | %) | 0 | 739,410 | (88.0 | %) | ||||||||||||||
| Leonard P. Forman4,5 Senior Vice President and Chief Financial Officer | 200,750 | 0 | 0 | ||||||||||||||||||
| Michael Golden2,3 Vice Chairman, Senior Vice President, Publisher of theInternational Herald Tribuneand Director | 7,168,391 | (4.8 | %) | 0 | 739,930 | (88.1 | %) | ||||||||||||||
William E. Kennard1 |
| 5,200 |
|
|
| 0 |
|
|
| 9,200 | 2,854 | 0 | |||||||||
Russell T. Lewis4 |
| 415,760 |
|
|
| 0 |
|
|
| ||||||||||||
| Russell T. Lewis4,5 President, Chief Executive Officer and Director | 561,736 | 0 | 0 | ||||||||||||||||||
David E. Liddle1 |
| 14,600 |
|
|
| 0 |
|
|
| 18,600 | 0 | 0 | |||||||||
Ellen R. Marram1 |
| 24,000 |
|
|
| 0 |
|
|
| 28,000 | 5,827 | 0 | |||||||||
Janet L. Robinson4 |
| 311,182 |
|
|
| 0 |
|
|
| ||||||||||||
| Thomas Middelhoff Director | 0 | 0 | 0 | ||||||||||||||||||
| Janet L. Robinson4,5 Senior Vice President, Newspaper Operations, and President and General Manager ofThe New York Times | 409,664 | 0 | 0 | ||||||||||||||||||
Henry B. Schacht1 |
| 26,000 |
|
|
| 0 |
|
|
| 30,000 | 0 | 0 | |||||||||
Donald M. Stewart1 |
| 25,259 |
|
|
| 0 |
|
|
| 29,259 | 0 | 0 | |||||||||
Arthur Sulzberger, Jr.2, 3 |
| 7,096,095 |
| (4.7 | %) | 739,770 |
| (87.7 | %) | ||||||||||||
| Arthur Sulzberger, Jr.2,3 Chairman of the Board, Publisher ofThe New York Timesand Director | 7,546,950 | (5.0 | %) | 0 | 739,770 | (88.0 | %) | ||||||||||||||
(Table continues and footnotes appear on following page)
8
| Cathy J. Sulzberger2,3 Director | 6,860,775 | (4.6 | %) | 0 | 739,770 | (88.0 | %) | ||||
Doreen A. Toben Nominee for Director | 0 | 0 | 0 | ||||||||
All Directors, Nominees and Executive Officers2 (26 individuals) | 11,520,347 | (7.5 | %) | 13,704 | 742,450 | (88.4 | %) |
Cathy J. Sulzberger2,3 |
| 6,575,628 |
| (4.3 | %) | 739,770 |
| (87.7 | %) |
All Directors and Executive Officers2 |
| 9,727,162 |
| (6.4 | %) | 742,450 |
| (88.0 | %) |
Note: Each individual Director, Nominee and Executive Officer has beneficial ownership of less than 1%, other than in those instances noted.
The Company’sCompany's directors and executive officers and the beneficial holders of more than 10% of the Class A stock are required to file reports with the SEC of changes in their ownership of Company stock. Based on its review of such reports, the Company believes that all such filing requirements were met during 2002.2003, except for the following inadvertently late filings by directors: Jacqueline H. Dryfoos, two late reports relating to transactions by a trust owning shares of Class A stock and of which Ms. Dryfoos is a trustee and as to which Ms. Dryfoos disclaims beneficial ownership, and John F. Akers, one late report relating to option transfers to his children.
9
ThirteenFifteen Directors will be elected to the Board of The New York Times Company at the 20032004 Annual Meeting. Nominees proposed for election as directors are listed below. Directors will hold office until the next Annual Meeting and until their successors are elected and qualified. Each of the nominees is now a member of the Board of Directors and was elected at the 20022003 Annual Meeting for which proxies were solicited.solicited, except for Thomas Middelhoff, who was elected by the board on September 18, 2003, and Doreen A. Toben.
The Certificate of Incorporation of the Company provides that Class A stockholders have the right to elect 30% of the Board of Directors (or the nearest larger whole number). Accordingly, Class A stockholders will elect fourfive of the 1315 directors; Class B stockholders will elect nine.ten. Directors are elected by a plurality of the votes cast.
| Class A Nominees | Class B Nominees | ||||
|---|---|---|---|---|---|
Raul E. Cesan William E. Kennard Thomas Middelhoff Henry B. Schacht Donald M. Stewart | John F. Akers | ||||
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Doreen A. Toben | |||||
If any of the nominees become unavailable for election, all uninstructed proxies will be voted for such other person or persons designated by the Board. The Board has no reason to anticipate that this will occur.
Notes on Nominees:
¨
¨
10
The following information was provided by the nominees:
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Director Since: |
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| Principal Occupation: Experience: Other Directorships: Committee Memberships: |
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| President and Chief Operating Officer of | |||
| First Health Group Corp. | |||
and Flamel Technologies | Audit and Finance |
10
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| WILLIAM E. KENNARD Age: | Director Since: Experience: Other Directorships: Committee Memberships: |
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(from 2001) | Chairman of the Federal Communications | |||||||
| Nextel Communications, Inc. | |||||||
| Nominating & Governance (Chair), and Finance | |||||||
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| THOMAS MIDDELHOFF Age: | Director Since: Recent Business Experience: Committee Memberships: |
50 2003 Managing Director, Investcorp Ltd. (from 2002) Chairman and Chief Executive Officer (from 1997 to 2002), Head of Corporate Development and Coordinator of Multimedia Business (from 1994 to 1998), and Member of The Board Industry Division (from 1990 to 1994), Bertelsmann AG; Managing Director (from 1989 to 1990), Mohndruck, Calandar Publishing Company Compensation | |||||
11
 | HENRY B. SCHACHT Age: | Director Since: Experience: Other Directorships: Committee Memberships: |
| |||||
| Inc; Managing Director | |||||||
| Alcoa Inc. (Aluminum Company of America), | |||||||
| Audit, Finance and Compensation | |||||||
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| DONALD M. STEWART Age: | Director Since: |
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| Principal Occupation: Experience: Other Directorships: Committee Memberships: |
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| Senior Program Officer and Special Advisor to the | |||||||
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and Sotheby's Holdings, | Compensation, Foundation, and Nominating & | |||||||
11
| Class B Directors | ||||||
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| JOHN F. AKERS Age: |
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Director Since: |
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| Principal Occupation: Experience: Other Directorships: Committee Memberships: |
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| Chairman (from 1986 to 1993), Director (from 1983 | |||||
| PepsiCo, Inc., Lehman Brothers Holdings Inc., | |||||
| Finance (Chair), Compensation, and Nominating & | |||||
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12
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| BRENDA C. BARNES Age: | Director Since: |
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| Principal Occupation: Experience: Other Directorships: Committee Memberships: |
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and consultant | Interim President and Chief Operating Officer, | |||||||
| Sears, Roebuck and Co., Avon Products, Inc., | |||||||
| Compensation (Chair) and Finance | |||||||
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| JACQUELINE H. DRYFOOS Age: | Director Since: |
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| Principal Occupation: |
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| Recent Business Committee Memberships: |
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| Foundation (Chair) and Finance | |||||||
12
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 | MICHAEL GOLDEN Age: Director Since: Principal Occupation: Recent Business Experience: Committee Memberships: |
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November | Vice President, Operations Development, of the Foundation | ||||||
13
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 |
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RUSSELL T. LEWIS |
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Principal Occupation: Experience: |
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| Chief Operating Officer of the Company (from 1996 | |||||||
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 | DAVID E. LIDDLE Age: Director Since: |
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Principal Occupation: Experience: Committee Memberships: |
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| Chairman (1999), President (from 1992 to 1999) and | |||||||
| Audit and Compensation | |||||||
13
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 | ELLEN R. MARRAM Age: Director Since: Principal Occupation: Recent Business Experience: Other Directorships: Committee Memberships: |
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| President and Chief Executive Officer of efdex, Inc. | ||||||
| Eli Lilly and Company and Ford Motor Company | ||||||
| Audit (Chair), Foundation, and Nominating & | ||||||
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14
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 | ARTHUR SULZBERGER, JR. Age: Director Since: Principal Occupation: Recent Business Experience: Committee Memberships: |
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| Deputy Publisher (from 1988 to 1992) and Assistant Foundation | ||||||
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 |
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CATHY J. SULZBERGER |
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Principal Occupation: Experience: Committee Memberships: |
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| Director, The Chattanooga Times (from 1996 to Finance | ||||||
 | DOREEN A. TOBEN Age: Principal Occupation: Recent Business Experience: |
| 54 Executive Vice President and Chief Financial Officer, Verizon Communications, Inc. (from 2002) Senior Vice President and Chief Financial Officer, Telecom Group, Verizon Communications, Inc. (from 2000 to 2002), Vice President and Controller (from 1999 to 2000) and Vice President and Chief Financial Officer, Telecom/Network, Bell Atlantic Inc. (from 1997 to 1999) | ||||
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14
1. In the ordinary course of business, the Company and its subsidiaries from time to time engage in transactions with other corporations or financial institutions whose officers or directors are also directors of the Company. Such transactions are conducted on an arm’s-lengtharm's-length basis.
2. During 2002,2003, Arthur Sulzberger, Jr. was employed as Chairman of the Company and Publisher ofThe New York Times, and Michael Golden was employed as Vice Chairman and Senior Vice President of the Company.Company and Publisher of theInternational Herald Tribune. See “Compensation"Compensation of Executive Officers”Officers" for a description of Mr. Sulzberger, Jr.’s's and Mr. Michael Golden’sGolden's compensation. Michael Greenspon Jacqueline Dryfoos’s son, joined the Company on July 15, 2002, as Account Executive, Advertising Sales,is Director, Youth Readership, ofThe Boston Globe, and was paid a total of $31,073$95,285 in 2002. Daniel Cohen, formerly Senior Vice President, Advertising, in the Advertising Department of The New York Times, was retained as a television programming consultant to the Company, and was paid a total of $83,335 (and reimbursed related expenses). Stephen Golden, Michael Golden’s brother, formerly Vice President, Forest Products, Health, Safety and Environmental Affairs, was on a leave of absence and retired on April 1, 2002.2003. Mr. Stephen Golden was paid a total of $1,947,624 in 2002, of which $1,829,983 was income recognized in connection with the exercise of stock options granted to him during his employment. Susan W. Dryfoos,Greenspon is Ms. Jacqueline Dryfoos’s sister, formerly Director, Times History Productions, retired on November 30, 2001, and was paid a total of $32,548 in 2002, of which $29,859 was a payment of amounts earned during her employment and previously deferred.Dryfoos's son. Mr. Sulzberger, Jr., Mr. Michael Golden, Mr. Cohen, Mr. Stephen Golden, Ms. Jacqueline Dryfoos, and Ms. Susan Dryfoos are all either siblings or cousins and Mr. Greenspon is Ms. Jacqueline Dryfoos’s son.cousins.
The Board of Directors is responsible for overseeing the direction, affairs and management of the Company. The Board recognizes its fiduciary duty to both Class A and Class B stockholders.
The Company is in the process of implementinghas implemented various changes to its corporate governance practices in response to the Sarbanes-Oxley Act of 2002 and the proposed changes to the corporate governance listing standards of the New York Stock Exchange (“NYSE”("NYSE"). In many instances, the Company already had in place procedures that comply with the new stricter requirements. In other cases, changes are necessary. Many of the changes required by the Sarbanes-Oxley Act are being phased in over time and the proposed NYSE rules are not yet effective. As a result, the Company’s response to these changes will be an on-going process.
The following highlights some of the corporate governance initiatives taken by the Board, both in response to the Sarbanes-Oxley Act and the proposed NYSE rules and otherwise:
Corporate Governance Principles. The proposed NYSE rules will require listed companies to adopt corporate governance principles. The current version of the Company’sCompany's corporate governance principles, reflecting the following and other provisions, is included in this Proxy Statement as Appendix I. It can also be found on the Corporate Governance section of our Web site,http://www.nytco.com/governance.
Director Election. All directors stand for election annually. Voting is not cumulative.
Director Attendance at Annual Meetings. All directors are expected to attend the Company's annual meeting of stockholders. All 13 directors attended the Company's 2003 annual meeting of stockholders.
Director Retirement Age.None of our directors will stand for re-election after his or her 70th birthday, unless the Board determines otherwise.
Directors as Stockholders. All directors are expected to own stock in the Company. Ownership of $100,000 in Company stock is considered an appropriate amount for each director to accumulate over a reasonable period of time.
Director Orientation. The Company has a comprehensive orientation program for all new non-management directors. It includes one-on-one meetings with senior management and topNew York Times editors, a plant visit and extensive written materials on each of the Company’sCompany's different business units. The senior management meetings will cover a corporate overview, the Company’sCompany's strategic plans, its significant financial, accounting and risk management issues, its compliance programs, and its business conduct policies. All other directors will also be invited to attend each orientation program.
“"Controlled Company”Company" Exception to NYSE Rules. The Company’sCompany's Board of Directors has determined not to take advantage of an available exception tofrom certain of the proposed NYSE rules. A company of which more than 50% of the voting power is held by a single entity, a “controlled company”"controlled company", need not comply with the requirements for a majority of independent directors or for independent compensation and nominating/corporate governance committees discussed below. As a result of the 1997 Trust’sTrust's holdings of Class B stock, the Company would qualify as a controlled company and could elect not to comply with these independence requirements. However, the Company’sCompany's Board of Directors has determined to comply in all respects with the NYSE rules.
Independent Directors. The proposed NYSE rules will require listed companies to have a board of directors with at least a majority of independent directors. The Company has now, and has had for many years, a majority of independent directors.
Under the proposed NYSE rules, a director qualifies as “independent”"independent" upon the Board affirmatively determining that he or she has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The proposed NYSE rules will permit the adoption of, and the Board of the Company has already adopted, categorical standards to assist it in making determinations of independence. Under these standards, the Board has determined that no director will be considered not independent solely as a result of either of the following relationships:
¨
¨
Consistent with the proposed NYSE rules, the Board has determined that each of Mr. Akers, Ms. Barnes, Messrs. Cesan and Kennard, andDr. Liddle, Ms. Marram, Dr. Middelhoff, Mr. Schacht, and Dr. Stewart are independent. Of the remaining directors, Messrs. Sulzberger, Jr., Lewis and Golden are executive officers of the Company, Ms. Dryfoos is a cousin of Messrs. Sulzberger, Jr. and
16
Golden, and Ms. Sulzberger is the sister of Mr. Sulzberger, Jr. and a cousin of Mr. Golden.
16
Board Committees. Both the Sarbanes-Oxley Act and the proposed NYSE rules will require the Company to have an audit committee comprised solely of independent directors, and the proposed NYSE rules will also require the Company to have independent compensation and nominating/corporate governance committees. The Company has long had Audit, Compensation and Nominating & Governance Committees comprised of independent directors,is in compliance with the exception that Mr. Sulzberger, Jr. and Ms. Sulzberger previously served on the Nominating & Governance Committee. In order to comply with the proposed NYSE rules, Mr. Sulzberger, Jr. and Ms. Sulzberger recently stepped down from that Committee.these requirements.
Under the Sarbanes-Oxley Act, members of an audit committee must have no affiliation with the issuer, other than the Board seat, and receive no compensation in a capacity other than as a director/committee member. Each member of our Audit Committee meets this independence standard.
The current charters of all five of the Company’sCompany's Board Committees can be found on the Corporate Governance section of our Web site,http://www.nytco.com/governance. In addition, the Audit Committee charter is attached to this Proxy Statement as Appendix II.
Audit Committee Financial Experts. Rules promulgated by the SEC under the Sarbanes-Oxley Act will require the Company to disclose annually beginning in its 2004 proxy statement, whether our Audit Committee has one or more “audit"audit committee financial experts,”" as defined by the SEC. The Board has determined that currently each of Ms. Marram, and Messrs.Mr. Cesan, Dr. Liddle and Mr. Schacht qualifies as such an expert.
Code of Ethics. The Board has adopted a code of ethics that applies not only to the Company’sCompany's CEO and senior financial officers, as required by the SEC, but also to its Chairman and Vice Chairman. The current version of such code of ethics can be found on the Corporate Governance section of our Web site,http://www.nytco.com/governance.
Non-Management Directors Meeting.Directors. The proposed NYSE rules will require that the non-management directors of a listed company meet periodically in executive sessions. While this has occurred informally at the Company from time to time in the past, the procedure has now been formalized with the intention that theThe Company's non-management directors will meet separately at the end of each regular meeting of the Board. Additionally, at least once a year the non-management directors will meet in executive session without Ms. Sulzberger or Ms. Dryfoos. Mr. Akers has been appointed as Presiding Director by the non-management directors to preside at these sessions. Stockholders wishing
Interested parties may express their concerns to communicate with Mr. Akers in this capacity may do so c/othe Company's non-management directors by contacting the Presiding Director, care of the Corporate Secretary, of The New York Times Company, 229 West 43rd Street, New York, NY 10036. The Corporate Secretary will relay all such correspondence to the Presiding Director.
Communications with the Board. Stockholders may communicate with the Board of Directors care of the Corporate Secretary, The New York Times Company, 229 West 43rd Street, New York, NY 10036. The Corporate Secretary will relay all such correspondence to the entire Board of Directors.
Board and Committee Evaluations.Our Board has initiated a Board and Committee evaluation process to faciliate an examinationexamine and discussion ofdiscuss how our Board and Committees function as groups and with senior management of our Company. We believe that our stockholders’stockholders' interests can be best protected by acknowledging the separate responsibilities of management and our Board and its Committees and by ensuring an open environment for Board and management discussions and actions.
No Interlocking Directorships. The Chairman of the Board, as Publisher ofThe New York Times newspaper, does not sit on any other company board. Although other members of senior management without editorial responsibilities are not so precluded, none sit on the boards of directors of any company at which one of our directors is the chief executive officer or chief operating officer.
Succession Planning. Recognizing the critical importance of executive leadership to the success of the Company, the Board works with senior management to ensure that effective plans are in place for both short-term and long-term executive succession at The New York Times Company. In February 2004, the Company announced that Janet L. Robinson would succeed Russell T. Lewis as President and Chief Executive Officer upon Mr. Lewis's retirement by the end of 2004. At the time of this announcement, Ms. Robinson was named Executive Vice President and Chief Operating Officer.
Senior Management Evaluation.In consultation with all non-management directors, the Compensation Committee annually evaluates the performance of our Chairman, CEO and Vice Chairman.
Corporate Financial Ethics Hotline.
The Company has established a corporate financial ethics hotline to allow an employee to lodge a complaint, confidentially and anonymously, about any accounting, internal control or auditing matter that is of concern.
Board Meetings in 2002:2003: Six Seven
Board Committees: Five Standing Committees: Audit, Compensation, Finance, Foundation, and Nominating & Governance. See “Board Committees”"Board Committees" for Committee descriptions and membership.
Total Committee Meetings in 2002: 2003:22 21
20022003 Attendance: All directors attended 75% or more of the total Board and Committee meetings.
Nominating & Governance Committee
Our Nominating & Governance Committee is comprised of four non-employee, independent directors, William E. Kennard, Chair, John F. Akers, Ellen R. Marram and Donald M. Stewart.
The Committee operates under a written charter adopted by the Board of Directors, which can be found in the Corporate Governance section of our corporate Web site,http://www.nytco.com/governance. The chart set forth in "Board Committees" describes the principal functions of the Committee under its charter.
The Committee will consider director candidates recommended by stockholders. Stockholders wishing to recommend director candidates for consideration by the Nominating & Governance Committee may do so by writing to the Corporate Secretary, giving the recommended nominee’snominee's name, biographical data and qualifications, accompanied by the written consent of the recommended nominee.
Consistent with the Company's Corporate Governance Principles, the Committee considers various criteria in Board candidates, including, among others, independence, diversity, character, judgment and business experience, as well as their appreciation of the Company's core purpose, core values and journalistic mission, and whether they have time available to devote to Board activities. The Committee also considers whether a potential nominee would satisfy:
Whenever a vacancy exists on the Board due to expansion of the Board's size or the resignation or retirement of an existing director, the Committee begins its process of identifying and evaluating potential director nominees. The Committee considers recommendations of management, stockholders and others. The Committee has sole authority to retain and terminate any search firm to be used to identify director candidates, including approving its fees and other retention terms. In this regard, from time to time the Committee has retained a global executive recruiting firm, whose function is to bring specific director candidates to the attention of the Committee. As discussed above, the 1997 Trust, as holder of a majority of our Class B stock, has the right to elect 70% of our Board. The Committee considers, among other potential nominees, recommendations of the trustees of the 1997 Trust for nominees to be elected by the holders of the Class B stock.
Director candidates are evaluated using the criteria described above and in light of the then-existing composition of the Board, including its overall size, structure, backgrounds and areas of expertise of existing directors and the relative mix of independent and management directors. The Committee also considers the specific needs of the various Board committees. The Committee recommends potential director nominees to the full Board, and final approval of a candidate is determined by the full Board. This evaluation process is the same for director nominees who are recommended by our stockholders.
At the 2004 Annual Meeting, Thomas Middelhoff and Doreen A. Toben are the director nominees who were not previously elected by our stockholders. In the case of Dr. Middelhoff, members of the Company's senior management team, including the Chairman of the Board, became acquainted with him through prior business dealings. In the case of Ms. Toben, a global executive recruiting firm brought her to the attention of senior management and the Nominating & Governance Committee. After meeting with each of them, the Committee Chair then recommended that the Committee recommend to the full Board the election of Dr. Middelhoff and Ms. Toben as Company directors. Dr. Middelhoff's election occurred in September 2003. The Board has proposed that Ms. Toben be elected to the Board at the 2004 Annual Meeting.
The Committee did not receive any recommendations from stockholders proposing candidate(s) for election at the 2004 Annual Meeting.
18
| Name of Committee and Members | Principal Functions of the Committee | Meetings in | ||||||
|---|---|---|---|---|---|---|---|---|
Audit |
| • | Engages the
| 7 | ||||
• | Reviews with management and the independent auditors the
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• | Meets at each meeting with the
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• | Reviews and approves the scope of the audit at the outset and reviews the performance of the independent auditors and any audit problems or difficulties encountered.
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• | Reviews the
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• | Reviews the organization, resources and competence of the |
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• | Prepares the report to stockholders included in the annual Proxy Statement. | |||||||
| Compensation Brenda C. Barnes, Chair John F. Akers David E. Liddle Thomas Middelhoff Henry B. Schacht Donald M. Stewart |
| • | Approves remuneration arrangements for
| 3 | ||||
• | In consultation with all non-employee Directors, annually evaluates the performance of the Chairman, the CEO and the Vice Chairman and, together with the other independent directors, approves their remuneration arrangements. | |||||||
• | Adopts and oversees the administration of incentive compensation and executive stock plans and determines awards granted to executive officers and senior management under such plans.
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• | Advises the Board on the reasonableness and appropriateness of executive compensation plans and levels, generally, including whether these effectively serve the interests of the Company and its stockholders by creating appropriate incentives for high levels of individual and Company performance.
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• | Appoints the ERISA Management Committee, which oversees administration of the
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• | Has sole authority to engage an executive compensation consultant. |
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• | Prepares the report to stockholders included in the annual Proxy Statement. | |||||||
| Nominating & Governance William E. Kennard, Chair John F. Akers Ellen R. Marram Donald M. Stewart |
| • | Makes recommendations to the Board regarding the composition of the Board and its Committees, including size and qualifications for membership.
| 3 | ||||
• | Recommends candidates to the Board for election to the Board at the Annual Meeting.
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• | Advises the Board on appropriate compensation for outside directors.
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• | Advises the Board on corporate governance matters.
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• | Oversees periodic evaluation of the Board. | |||||||
• | Has sole authority to engage a search firm to identify director candidates. |
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| Finance John F. Akers, Chair Brenda C. Barnes Raul E. Cesan Jacqueline H. Dryfoos William E. Kennard Henry B. Schacht Cathy J. Sulzberger |
| • | Reviews the
| 5 | ||||
• | Establishes (and adjusts from time to time) investment policies for the
| |||||||
• | Appoints the Pension Investment Committee, which appoints and reviews the performance of the trustees and investment managers for the |
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| Foundation Jacqueline H. Dryfoos, Chair Michael Golden Ellen R. Marram Donald M. Stewart Arthur Sulzberger, Jr. |
| • | Advises the Board on the policies and direction of The New York Times Company Foundation.
| 3 | ||||
• | Reviews and makes recommendations to the Board with respect to the |
| ||||||
19
Directors’Directors' compensation is paid only to non-employee Directors.
Annual Retainer:$30,000 $30,000 (paid quarterly)
Meeting FeesFees:: $1,000 $2,000 per Board or Committee meeting attendedattended; and $1,500 per informal Committee information session, designated as such by the Committee Chair. Audit Committee members also receive $1,500 for participating in quarterly pre-earnings release telephone calls.
Expenses:Reasonable expenses are reimbursed for attendance at Board and Committee meetings.
Aggregate Directors Compensation: For 2002,2003, the Company paid an aggregate of approximately $618,024$709,246 in the form of retainers, meeting fees and expenses of attendance (including amounts deferred at the Directors’Directors' request).
Stock Options:Options on 4,000 shares of our Class A stock are granted annually at market value. Options vest on the date of the next succeeding Annual Meeting and have a term of 10 years from date of grant.
Non-Employee Directors Deferral Plan: The Company's Non-Employee Directors Deferral Plan allows each non-employee director to elect to defer the receipt of a portion of his or her cash compensation. Deferred amounts are credited quarterly to an account in the form of Class A stock units at the then current market price. Subsequent to retirement, the non-employee director will receive cash payments of amounts accumulated in his or her account.
Matching Gifts Program: The Company matches 150% of charitable contributions made by Directors to colleges, schools, cultural, journalism or environmental organizations, up to a maximum Company contribution of $4,500 per person per year. The Company also matches charitable contributions of retired Directors. A Director is considered “retired”"retired" if such director has served at least five years on the Board and is at least age 60 at the time he or she leaves the Company’sCompany's Board.
Life Insurance: The Company maintains insurance of $100,000 on the life of each non-employee Director. The income required by the Internal Revenue Service to be imputed in 20022003 to non-employee Directors relative to this insurance was $2,915$2,802 in aggregate. Life insurance of $25,000 is maintained on the life of each retired non-employee Director.
Directors' and Officers' Liability Insurance
CombinedThe Company maintains directors' and officers' liability insurance. Currently, this is part of our combined insurance, including directors’ and officers’ liability,which was purchased effective December 21, 2002, for2003, with an expiration date of January 1, 2005, at a periodcost of one year.$7,233,209. The aggregate limit for the combined insurance for D&O claims is $125$100 million with the Company responsible for 20% of any claim. The total cost to the Company is $7,823,000. If the $125$100 million combined limit is exhausted, in covering claims not involving directors’ and officers’ liability, there is a separate $50 million side limit available for directorsdirectors' and officersofficers' liability. The insurance carriers are CNA, U.S. Specialty InsuranceContinental Casualty Company, AceHouston Casualty, ACE USA, Gulf, Hartford, Liberty Insurance Underwriters, Munich American, Starr Excess International, Allied World Assurance Co. Ltd. and Allied World.Great Lakes Reinsurance.
20
The following tables and discussion summarize the compensation for the fiscal year ended December 29, 2002,28, 2003, of our chief executive officer and each of our four other most highly compensated executive officers.
Summary Compensation Table
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|
|
|
| |||||
|
| Annual Compensation |
|
| Awards |
| Payouts |
|
|
|
| |||||||||
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
|
| (f) |
| (g) |
|
| (h) |
|
| (i) |
|
|
|
|
| Salary |
| Bonus |
| Other |
|
| Restricted |
| Stock |
|
| LTIP |
|
| All Other |
|
Name and Principal Position |
| Year |
| ($)1 |
| ($) |
| ($)2 |
|
| ($)3 |
| (#) |
|
| ($)4 |
|
| ($)5 |
|
Arthur Sulzberger, Jr. |
| 2002 |
| 956,800 |
| 1,532,794 |
| 4,593 |
|
| 3,593,600 |
| 150,000 |
|
| 200,000 |
|
| 5,100 |
|
Russell T. Lewis |
| 2002 |
| 956,800 |
| 1,532,794 |
| 89,782 |
|
| 898,400 |
| 150,000 |
|
| 200,000 |
|
| 5,100 |
|
Michael Golden |
| 2002 |
| 552,000 |
| 638,664 |
| 4,890 |
|
| 0 |
| 80,000 |
|
| 100,000 |
|
| 5,100 |
|
Janet L. Robinson |
| 2002 |
| 625,000 |
| 743,438 |
| 5,186 |
|
| 1,796,800 |
| 80,000 |
|
| 100,000 |
|
| 5,100 |
|
Leonard P. Forman6 |
| 2002 |
| 535,000 |
| 635,662 |
| 5,308 |
|
| 0 |
| 80,000 |
|
| 50,000 |
|
| 5,100 |
|
| Long-Term Compensation | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annual Compensation | Awards | Payouts | ||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||
Name and Principal Position | Year | Salary ($)1 | Bonus ($) | Other Annual Compensation ($)2 | Restricted Stock Awards ($)3 | Stock Options (#) | LTIP Payouts ($)4 | All Other Compensation ($)5 | ||||||||
| Arthur Sulzberger, Jr. Chairman of the Board and Publisher ofThe New York Times | 2003 2002 2001 | 995,000 956,800 920,000 | 743,265 1,532,794 0 | 10,216 4,593 4,920 | 0 3,593,600 0 | 90,000 150,000 150,000 | 0 200,000 500,000 | 6,000 5,100 5,100 | ||||||||
Russell T. Lewis6 President and Chief Executive Officer | 2003 2002 2001 | 995,000 956,800 920,000 | 743,265 1,532,794 0 | 31,478 89,782 16,011 | 0 898,400 2,152,750 | 90,000 150,000 150,000 | 0 200,000 500,000 | 6,000 5,100 5,100 | ||||||||
Janet L. Robinson6 Senior Vice President, Newspaper Operations; and President & General Manager,The New York Times | 2003 2002 2001 | 650,000 625,000 595,000 | 340,113 743,438 83,333 | 4,753 5,186 6,076 | 926,800 1,796,800 0 | 48,000 80,000 80,000 | 0 100,000 125,000 | 6,000 5,100 5,100 | ||||||||
Michael Golden Vice Chairman and Senior Vice President; and Publisher of theInternational Herald Tribune | 2003 2002 2001 | 574,000 552,000 530,000 | 309,673 638,664 0 | 6,902 4,890 4,920 | 0 0 0 | 48,000 80,000 80,000 | 0 100,000 250,000 | 6,000 5,100 5,100 | ||||||||
Leonard P. Forman6,7 Senior Vice President and Chief Financial Officer | 2003 2002 | 556,000 535,000 | 299,962 635,662 | 12,148 5,308 | 695,100 0 | 48,000 80,000 | 0 50,000 | 6,000 5,100 | ||||||||
$3,002,880 and Mr. Forman held 15,000 shares with an aggregate market value of $703,800.
21
Option Grants In Last Fiscal Year
|
| Individual Grants1 |
|
| Grant Date |
| ||||||||||||||
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
|
| (f) |
| ||||||||
Name |
| Options |
| % of Total |
| Exercise or |
| Expiration |
|
| Grant Date |
| ||||||||
Arthur Sulzberger, Jr. |
|
| 150,000 |
|
|
| 2.78 |
|
|
| 46.015 |
|
| 12/12/2012 |
|
|
| 1,908,000 |
|
|
Russell T. Lewis |
|
| 150,000 |
|
|
| 2.78 |
|
|
| 46.015 |
|
| 12/12/2012 |
|
|
| 1,908,000 |
|
|
Michael Golden |
|
| 80,000 |
|
|
| 1.49 |
|
|
| 46.015 |
|
| 12/12/2012 |
|
|
| 1,017,600 |
|
|
Janet L. Robinson |
|
| 80,000 |
|
|
| 1.49 |
|
|
| 46.015 |
|
| 12/12/2012 |
|
|
| 1,017,600 |
|
|
Leonard P. Forman |
|
| 80,000 |
|
|
| 1.49 |
|
|
| 46.015 |
|
| 12/12/2012 |
|
|
| 1,017,600 |
|
|
Individual Grants1 Grant Date
Value2 (a) (b) (c) (d) (e) (f)
Name
Options
Granted (#) % of Total
Options
Granted to
Employees in
Fiscal Year
Exercise or
Base Price
($/SH)
Expiration
Date
Grant Date
Present Value ($)Arthur Sulzberger, Jr. 90,000 2.69 46.34 12/18/2013 1,014,300 Russell T. Lewis 90,000 2.69 46.34 12/18/2013 1,014,300 Janet L. Robinson 48,000 1.43 46.34 12/18/2013 540,960 Michael Golden 48,000 1.43 46.34 12/18/2013 540,960 Leonard P. Forman 48,000 1.43 46.34 12/18/2013 540,960 The options granted to the named individuals in 2002 become exercisable in installments of 25% of the original grant on each of the first through fourth anniversaries of the grant date.
The options granted to the named individuals in 2003 become exercisable in installments of 25% of the original grant on each of the first through fourth anniversaries of the grant date.
Aggregated Option Exercises in Last Fiscal Year and FY-EndYear-End Option Values1
(a) |
| (b) |
| (c-1) |
| (c-2) |
| (d) |
| (e) |
| ||
Name |
|
|
| Shares |
| Aggregate |
| Annualized |
| Number of |
| Value of |
|
Arthur Sulzberger, Jr. |
| 40,058 |
| 1,326,136 |
| 240,936 |
| 495,280/375,000 |
| 3,043,066/153,514 |
| ||
Russell T. Lewis |
| 171,848 |
| 2,684,959 |
| 708,433 |
| 321,846/375,000 |
| 1,161,836/153,514 |
| ||
Michael Golden |
| 64,534 |
| 2,530,652 |
| 343,280 |
| 291,124/200,000 |
| 2,240,856/81,874 |
| ||
Janet L. Robinson |
| 10,000 |
| 306,813 |
| 52,184 |
| 259,028/200,000 |
| 1,580,357/81,874 |
| ||
Leonard P. Forman |
| 14,000 |
| 237,013 |
| 48,876 |
| 124,575/170,000 |
| 614,222/24,837 |
| ||
| (d) | (e) | |||
|---|---|---|---|---|
| Number of Unexercised Options at Fiscal Year-End (#) Exercisable/Unexercisable2 | Value of Unexercised In-the-Money Options at Fiscal Year-End ($) Exercisable/Unexercisable3 | |||
| (a) | ||||
| Name | ||||
| Arthur Sulzberger, Jr. | 645,280/315,000 | 4,652,142/694,013 | ||
| Russell T. Lewis | 471,846/315,000 | 2,352,936/694,013 | ||
| Janet L. Robinson | 339,028/168,000 | 2,426,189/370,140 | ||
| Michael Golden | 371,124/168,000 | 3,164,039/370,140 | ||
| Leonard P. Forman | 184,575/158,000 | 1,072,935/303,440 | ||
3. Aggregate Value Realized upon exercise (column c-1) divided by the number of years executive held applicable option before exercise (column c-2).
4.
5.
22
Long-Term Incentive Plan Awards in Last Fiscal Year
In 1998,Under the Company began aCompany's long-term performance award program for senior executives. Aexecutives, a grant is made each year in December for thea three-year cycle commencing in the following January. The table below shows the grants made on December 18, 2003, for the 2004-2006 performance cycle. The actual amount paid at the end of each of the cycles to the executive officers named below will range from the threshold to the maximum amount, or be $0, depending on the total return to holders of Class A stock relative to the total return to holders of stock in the companies that make up the “peer group”"peer group" described under “Performance Presentation”"Performance Presentation" during such three-year periods. Amounts paid for completed cycles are set forth in column (h) of the Summary Compensation Table.
|
|
|
|
|
| Price-Based Plans |
| | | Estimated Future Payouts Under Non-Stock Price-Based Plan | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (b) | (c) | (d) | (e) | (f) | |||||
Name |
| Number of |
| Performance or Other |
| Threshold ($) |
| Target ($) |
| Maximum ($) |
| Number of Shares, Units or Other Rights (#) | Performance or Other Period Until Maturation or Payout | Threshold ($) | Target ($) | Maximum ($) | |||||
Arthur Sulzberger, Jr. |
| 1 |
| 3 years (2003-2005) |
| 100,000 |
| 400,000 |
| 700,000 |
| 1 | 3 years (2004-2006) | 100,000 | 400,000 | 700,000 | |||||
Russell T. Lewis |
| 1 |
| 3 years (2003-2005) |
| 100,000 |
| 400,000 |
| 700,000 |
| 1 | 3 years (2004-2006) | 100,000 | 400,000 | 700,000 | |||||
| Janet L. Robinson | 1 | 3 years (2004-2006) | 75,000 | 300,000 | 525,000 | ||||||||||||||||
Michael Golden |
| 1 |
| 3 years (2003-2005) |
| 50,000 |
| 200,000 |
| 350,000 |
| 1 | 3 years (2004-2006) | 50,000 | 200,000 | 350,000 | |||||
Janet L. Robinson |
| 1 |
| 3 years (2003-2005) |
| 75,000 |
| 300,000 |
| 525,000 |
| ||||||||||
Leonard P. Forman |
| 1 |
| 3 years (2003-2005) |
| 50,000 |
| 200,000 |
| 350,000 |
| 1 | 3 years (2004-2006) | 50,000 | 200,000 | 350,000 | |||||
Pension Plan Table
The following table shows the annual estimated benefits payable under our defined benefit retirement plans upon retirement to employees in specified covered compensation and years of credited service classifications. The maximum annual benefit payable under the plans which cover the executive officers is 50% of average annual covered compensation for the five highest-paid consecutive years out of the most recent 10 years. The maximum annual benefit is payable with 20 years of credited service and is prorated for less than 20 years. The amount of estimated annual benefit is based upon the assumption that the nonqualified supplemental executive retirement plan will continue in force in its present form.
| | Estimated Annual Pension For Representative Years of Credited Service | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Highest Five-Year Average |
| Estimated Annual Pension For |
| ||||||||||
| 10 |
| 15 |
| 20 |
| 10 | 15 | 20 | ||||
$500,000 |
| $125,000 |
| $187,500 |
| $250,000 |
| $125,000 | $187,500 | $250,000 | |||
750,000 |
| 187,500 |
| 281,250 |
| 375,000 |
| 187,500 | 281,250 | 375,000 | |||
1,000,000 |
| 250,000 |
| 375,000 |
| 500,000 |
| 250,000 | 375,000 | 500,000 | |||
1,250,000 |
| 312,500 |
| 468,750 |
| 625,000 |
| 312,500 | 468,750 | 625,000 | |||
1,500,000 |
| 375,000 |
| 562,500 |
| 750,000 |
| 375,000 | 562,500 | 750,000 | |||
1,750,000 |
| 437,500 |
| 656,250 |
| 875,000 |
| 437,500 | 656,250 | 875,000 | |||
The benefits described in the table above are calculated on a straight-life annuity basis and are not subject to any reduction for Social Security or other offset amounts.
For named executive officers, annual covered compensation for 20022003 is the sum of (i) the amount shown for 20022003 in column (c) of the Summary Compensation Table and (ii) the annual bonus earned for 2001.2002. Annual covered compensation for 20022003 was $956,800$2,527,794 for Mr. Sulzberger, Jr., $956,800$2,527,794 for Mr. Lewis, $552,000$1,393,438 for Ms. Robinson, $1,212,664 for Mr. Golden, $708,333 for Ms. Robinson and $535,000$1,191,662 for Mr. Forman.
The named executive officers had the following full years of credited service as of December 29, 2002:28, 2003: Mr. Sulzberger, Jr.: 24;25; Mr. Lewis: 31;32; Ms. Robinson: 20; Mr. Golden: 18; Ms. Robinson: 19; and Mr. Forman: 18.19.
23
Performance Presentation
The following graph shows the annual cumulative total stockholder return for the five years ending December 31, 2002,2003, on an assumed investment of $100 on December 31, 1997,1998, in the Company, the Standard & Poor’sPoor's S&P 500 Stock Index and an index of peer group communications companies. The peer group returns are weighted by market capitalization at the beginning of each year. The peer group is comprised of the common stocks of the Company and the following other communications companies: Dow Jones & Company, Inc., Gannett Co., Inc., Knight Ridder, Inc., Media General, Inc., The McClatchy Company, Tribune Company and The Washington Post Company. Stockholder return is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period, assuming monthly reinvestment of dividends and (ii) the difference between the issuer’sissuer's share price at the end and the beginning of the measurement period by (b) the share price at the beginning of the measurement period. As a result, stockholder return includes both dividends and stock appreciation.
Stock Performance Comparison Between S&P 500, The New York TimesCompany’sCompany's Class A Common Stock and Peer Group Common Stock
To the Stockholders of The New York Times Company:
Compensation Policies and Purposes
In order to effectively serve the interests of the Company and its stockholders, compensation for the Company’sCompany's executive officers, including the Chairman and the Chief Executive Officer, is designed to create incentives for high levels of individual and Company performance and to reward such performance. “At risk”"At risk" compensation focuses on the Company’sCompany's financial targets, its performance relative to peer companies and the performance of its Class A stock; it is designed to align the interests of executives with those of stockholders. Annual bonuses are paid only if financial targets are achieved. Long-term bonuses are paid only if performance targets relative to certain peer companies are met. Both sets of targets are set by the Committee in advance and in conjunction with its review of the Company’sCompany's strategic and operating plans. The Committee grants stock options as part of executive compensation because it views stock options as a means of motivating superior performance and directly linking the interests of executives with those of stockholders. Stock options produce value for executives only if the Company’sCompany's stock price increases over the option price, which is set at the market price on the date of grant.
Compensation Structure
In 2001,2002, the Committee structured 20022003 compensation for executive officers to consist of salary, an annual bonus potential, stock options and restricted stock. It also set potential long-term performance awards for the three-year period 2002-20042003-2005 for most executive officers, including Arthur Sulzberger, Jr. and Russell T. Lewis. A substantial portion of total potential cash compensation for executive officers depended on annual bonus potentials and thus was tied to Company performance. The more responsible the executive officer’sofficer's position, the greater the portion of this “at risk”"at risk" compensation.
24
Committee Procedures
The Committee consists solely of non-employee directors of the Company. The Board of Directors has determined that each Committee member is “independent”"independent" under the proposed corporate governance listing standards of the New York Stock Exchange. Dr. Thomas Middelhoff joined the Committee upon his election to the Board in September 2003.
Prior to the Committee’sCommittee's determination of 20022003 salaries and annual bonus potentials for the Company’sCompany's executive officers, management reported to the Committee on its review of survey data assembled and analyzed by outside compensation consultants. The consultantsManagement analyzed total actual annual cash compensation and long-term awards for comparable executive positions at United States companies with revenues comparable to the Company as well as similar data from media companies, including those companies in the peer group described under “Performance Presentation”"Performance Presentation" in this Proxy Statement. Approximately 10040 companies were included in the survey, with annual revenues ranging from approximately $1.1$1.0 billion to $18.3$9.9 billion, with an average of $6.9$4.4 billion and a median of $5.5$3.9 billion. The consultants’ analysesanalysis took into account the effect of revenue size on the compensation practices of individual companies. The data was used to set target annual cash compensation for executive officers slightly above the mid-range of companies surveyed and to allocate a significant portion of such compensation to performance-based annual bonus potentials.
Salaries
Salaries for executive officers are generally reviewed annually and were set for 20022003 in late 2001.2002. Salary increases, including increases for the named executive officers, were based on a review of the competitive data described above. The 20022003 salaries for the Company’sCompany's executive officers were generally within the mid-range of practices for companies surveyed, taking into account the Company’sCompany's revenue size. In setting compensation for individual executive officers, the Committee considered individual performance and responsibilities, the performance of the executive’sexecutive's operating unit, where applicable, and the performance of the Company as a whole. The Committee believes these salaries are appropriate in light of salaries paid for comparable positions at other companies and the individual performance and responsibilities of the executives.
Prior to setting salaries for Mr. Sulzberger, Jr. and Mr. Lewis, the Committee reviewed data assembled by outside compensation consultants concerning the compensation for similar positions at other companies of comparable size. Their base salaries were set at $956,800,$995,000, an amount which is slightly above the median for base salaries for their comparable positions at other companies.
Annual Bonuses
Annual bonus potentials for 20022003 were set for executive officers in late 2001February 2003 as percentages of salaries. The more responsible the executive officer’sofficer's position, the higher the percentage. The amounts actually paid depended principally on the level of achievement of performance against financial targets which were also set by the Committee at the same time in 2001February 2003 and, to a lesser extent, on an individual’sindividual's performance and contribution to other operating unit and corporate goals. These targets were based on earnings per share of the Company and on operating earnings of the Company or of the person’sperson's operating unit.
The 20022003 earnings per share targets, which were used to determine annual bonuses for Mr. Sulzberger, Jr. and Mr. Lewis, were substantially exceeded.met at the 83% target. As a result, annual bonus payouts were made to these executives at the 178%83% payout level as permitted under the plan. In 2001,2002, the earnings per share target was not metsubstantially exceeded and no annual bonus payout was made.payouts were made at the 178% level. In 2000,2001, the earnings per share targets set for their annual bonuses were substantially exceeded,not met, resulting in no bonus payouts at the maximum amounts permitted under the plan for that year.
Long-Term Compensation
The number of stock options granted to each executive officer in 20022003 depended on the degree of responsibility of the executive officer’sofficer's position. The number was based on a review of survey data supplied by outside compensation consultants of stock option grants and other long-term compensation paid to executives at comparable salary and responsibility levels at other companies surveyed to analyze salary and annual bonus compensation. In granting options, the Company’sCompany's goals are to attract, retain and motivate the highest caliber of executives by offering a competitive combination of annual and long-term compensation and to link a significant portion of executives’executives' total compensation to the interests of stockholders. To implement these goals, the Company’s grants were generally made slightly above the mid-range for option grants made by media companies in the survey. All stock options have an exercise price equal to the average of the highest and lowest market price of the Class A stock on the date of grant. In order to assure the retention of high-level executives and to tie the compensation of those executives to the creation of long-term value for stockholders, the Committee provided that these stock options become exercisable in equal portions over a four-year period. In making option grants in 2002,2003, the Committee did not considerconsidered the number of options previously granted that remain outstanding.outstanding and the anticipated changes in the accounting rules relating to the treatment of employee stock options. As a result of these factors, the number of options granted to each executive officer was reduced by 40% from the 2002 grant amount.
25
The Committee has made grants of restricted stock to certain executive officers from time to time, including in 2002,2003, to recognize superior contribution and/or to
25
encourage retention. The amounts of these grants were set based on a review of survey data provided by the consultants. A restricted stock award is a grant of Class A stock conditioned upon continued employment throughout a specified period.
Long-term performance award potentials for the three-year period 2003-20052004-2006 were set in late 2002.2003. Amounts actually paid will generally depend on the total return over a three-year period to Class A stockholders relative to the total return to stockholders of the companies that make up the “peer group”"peer group" described under “Performance Presentation”."Performance Presentation." The amount of the potential award depended on the scope of the executive’sexecutive's responsibility. These amounts were set based on a review of the survey data described above. The amounts of the potential awards were designed to set total long-term compensation slightly above the mid-range of total long-term compensation in the survey. Long-term performance awardsNo payment was made for the three-year cycle ended December 2002,2003, the potentials for which were set in 1999, were paid in February 2003.2000.
Tax
The Internal Revenue Code has set certain limitations on the deductibility of compensation paid to a public company’scompany's five most highly compensated executive officers. In 2000, stockholders of the Company approved amendmentsCertain compensation, including performance-based compensation meeting specified requirements, is exempt from this deduction limit. The Committee has structured, and intends to the Company’s 1991 Executive Cash Bonus Plancontinue to structure, performance-based compensation, including stock option grants and 1991 Executive Stock Incentive Plan (the “NYT Plans”) to allow compensation paid by the Companybonuses, to executive officers pursuantwho may be subject to these planslimitations in a manner that satisfies those requirements. However, the Committee reserves the authority to continue to be deductible by the Company for federal income tax purposes. Allaward non-deductible compensation paid to the Company’s executive officers in 2002 was deductible by the Company in accordance with such provisions of the Internal Revenue Code other than an amount of approximately $100,000.circumstances as it deems appropriate. The Company maywill not be entitled to a tax deduction upon the vesting ofwith respect to restricted stock grantedthat vested in 2002.2003. In addition, a portion of the other compensation received by certain executive officers of the Company for 2003 was not deductible.
Compensation of the Chairman and Compensation
of the President and Chief Executive Officer
The Committee based 20022003 compensation for Mr. Sulzberger, Jr. and Mr. Lewis on several different
factors and criteria.criteria, including the review of an outside executive compensation consultant retained by the Committee. The Committee believes that it structured Mr. Sulzberger, Jr.’s's and Mr. Lewis’s 2002Lewis's 2003 compensation package to include a significant amount of “at risk”"at risk" compensation that provides incentives tying the amount of their compensation to the Company’sCompany's performance. Stock options produce value in direct proportion to the value realized by all stockholders from price appreciation; annual bonuses are based on the achievement of specified financial performance targets; restricted stock rewards performance and retains executive talent; and long-term bonuses are based upon the relative performance of the Company’sCompany's stock and the stock of the companies described under “Performance Presentation”."Performance Presentation." Thus, 20022003 compensation was based to a large degree on threefour types of performance measures, which taken together, closely link Company performance and Messrs.Mr. Sulzberger, Jr.’s's and Lewis’sMr. Lewis's compensation. Other important factors the Committee considered in the determination of compensation for Mr. Sulzberger, Jr. and Mr. Lewis include their roles in creatingthe design and then implementing the Company’s long-termestablishment of a strategy includingand business plan for the successful completionintegration of investments intheInternational Herald Tribune into the Discovery Civilization Channel (to be renamed Discovery Times Channel in the first quarter of 2003) and New England Sports Ventures, as well as the acquisitionoperations of the International Herald Tribune.Company. In addition, the Committee considered their roles in instituting and maintaining strong management succession and development programs, including in connection with Mr. Lewis's planned retirement by the end of 2004 and in managing the Company’s affairs during the country’s current economic downturn.Board's designation of Janet Robinson to become President and Chief Executive Officer.
Brenda C. Barnes,ChairChair
John F. Akers
David E. Liddle
Thomas Middelhoff
Henry B. Schacht
Donald M. Stewart
To the Stockholders of The New York Times Company:
OurThe Audit Committee is comprised of four non-employee directors, Ellen R. Marram, Chair, Raul E. Cesan, David E. Liddle and Henry B. Schacht. The Committee operates under a written charter adopted by the Board of Directors, (see Appendix II)which can be found in the Corporate Governance section of the Company's corporate Web site,http://www.nytco.com/governance. The Board of Directors has determined that:
¨
¨
¨
The Sarbanes-Oxley Act of 2002 andUnder the NYSE’s proposed corporate governance listing standards have expanded the responsibilities of the Audit Committee. Some of the changes have become effective and others will become effective at later dates. Members of the Committee continue to work closely with management to implement all changes and procedures required by the legislation and the amended listing standards.
Under our Audit Committee’sCommittee's charter, management has the primary responsibility for the financial statements and the financial reporting process, including the system of internal controls.control over financial reporting. The Company’sCompany's independent auditors, Deloitte & Touche LLP (“Deloitte”("Deloitte"), are responsible for performing an independent audit of the Company’sCompany's consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and for issuing a report thereon. Our AuditThe Committee is responsible for assisting ourthe Board in monitoring:
¨
¨
¨
¨
In this context, during 20022003 the Committee met seven times and held separate discussions with management, the Company’sCompany's internal auditors and Deloitte. The Committee’sCommittee's Chair, as representative of the Committee, discussed the Company’sCompany's interim financial information contained in each quarterly earnings announcement, with the Company’sCompany's Chief Financial Officer and/or Controller and Deloitte prior to public release. In the third quarterEach other member of 2002, the Committee began reviewingalso generally participated in this discussion. The full Committee reviews the Company’sCompany's quarterly financial statements with management and Deloitte.
Management has represented to the Committee that the Company’sCompany's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Committee reviewed and discussed with management and Deloitte the Company’s 2002Company's 2003 annual consolidated financial statements. The Committee has also discussed the following with Deloitte Deloitte:
In addition, the Committee has discussed with Deloitte that firm’s independence from the Company and management. The Committee has obtainedreceived and reviewed the written disclosures and the letter from Deloitte required by the Independence Standards Board Standard No. 1 and provided to the Committee by Deloitte (Independence Discussions with Audit Committees)., and has discussed with Deloitte that firm's independence from the Company and management, including all relationships between the firm and the Company. In addition, the Committee has discussed with Deloitte:obtained and reviewed a report by Deloitte describing:
¨
¨ and
¨ all relationships between the firm and the Company.
The Committee has also considered whether the provision of non-audit services by Deloitte in 20022003 is compatible with maintaining the auditors’auditors' independence.
The Committee discussed with the Company’sCompany's internal auditors, Deloitte and management the overall scope and plans for their respective audits. The Committee met with the internal auditors and Deloitte, with and without management present, to discuss the results of their respective audits, the evaluations of the Company’sCompany's internal controls,control over financial reporting, and the overall quality of the Company’sCompany's financial reporting. The Committee also discussed with Deloitte whether there were any audit problems or difficulties.difficulties, and management's response.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of
27
Directors, and the Board has approved, that the audited consolidated financial statements be included in the Company’sCompany's Annual Report on Form 10-K for the year ended December 29, 2002,28, 2003, for filing with the SEC.
27
The Committee also has recommended, subject to stockholder approval, the selection of Deloitte as the Company’sCompany's independent auditors for the fiscal year ending December 28, 2003.26, 2004.
Ellen R. Marram,ChairChair
Raul E. Cesan
David E. Liddle
Henry B. Schacht
Proposal Number 2 –
Approval of Stock Incentive Plan for Non-Employee Directors
In February 2004, the Board of Directors adopted the 2004 Non-Employee Directors' Stock Incentive Plan (the "New Plan"), subject to stockholder approval. If the stockholders approve the New Plan at the Annual Meeting, the New Plan will become effective as of the date of the Annual Meeting.
The New Plan is intended to replace the Company's existing Non-Employee Directors' Stock Option Plan (the "Existing Plan"), which will terminate upon approval of the New Plan. The purpose of the New Plan is to secure for the Company and its stockholders the benefits of the incentive inherent in increased common stock ownership by those members of the Board of Directors who are not employees of the Company or any of its subsidiaries by providing for shares to be issued to such non-employee directors in the form of stock options, restricted stock or some combination thereof.
The following summary of the New Plan is qualified in its entirety by reference to the full text of the New Plan, a copy of which is attached to this Proxy Statement as Appendix II.
Description of Stock Incentive Plan for Non-Employee Directors
Shares Reserved for Issuance Under the New Plan. The Company has reserved a total of 500,000 shares of Class A stock for issuance under the New Plan. The number and kind of shares available for grants under the New Plan will be adjusted appropriately by the Board of Directors if the outstanding Class A stock is hereafter changed by reason of dividends (other than cash dividends), recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like.
Types of Awards. The New Plan authorizes the Board of Directors to grant stock options and award restricted stock.
Eligibility. Grants and awards under the New Plan may be made to non-employee directors. For purposes of the New Plan, a non-employee director is a director of the Company who is not an employee of the Company or any subsidiary of the Company. The Company currently has eleven non-employee directors.
Administration. The Board of Directors interprets and administers the New Plan. Any decision of the Board of Directors in the administration of the New Plan is final and conclusive.
Amendment and Termination of the New Directors' Plan. The Board of Directors may amend the New Plan at any time; provided, however, that except for any adjustments authorized by the New Plan, the Board of Directors may not, without further approval by a majority of the votes cast by holders of shares of Class A stock and Class B stock in attendance, in person or by proxy, at a duly called meeting of stockholders entitled to vote thereon, voting together as one class:
Generally, no amendment of the New Plan may materially and adversely affect any right of any non-employee director with respect to any option or restricted stock already granted without such director's written consent. The New Plan will terminate on the earlier of the following to occur:
Transferability. A non-employee director's rights and interests under the New Plan may not be assigned or transferred either directly or by operation of law or otherwise (except in the event of a non-employee director's death, by will or the laws of descent and distribution). The Board may determine that options granted under the New Plan may be transferred by a non-employee director to members of his or her immediate family (or certain affiliated entities).
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Stock Options
Option Terms. Each year, as of the date of the Annual Meeting of Stockholders of the Company, each non-employee director who is continuing as a member of the Board as of the adjournment of such Annual Meeting will receive options for 4,000 shares of Class A stock, or such other amount as may be determined by the Board of Directors from time to time by resolution. The option exercise will be the average of the highest and lowest market price of a share of Class A stock on the date the option is granted.
Holding Period of Options. Options vest on the date of the next succeeding Annual Meeting of Stockholders and have a term of ten years from the date of grant.
Exercise of Options. Vested stock options may be exercised from time to time over the term of the option.
Termination of Service. If an optionee ceases to be a member of the Board of Directors for reasons other than retirement or death while holding an option then exercisable that has not expired, such optionee may exercise such option at any time within one year after the date he or she ceases to be a director (but not beyond the expiration date of the option). If an optionee ceases to be a director by reason of retirement or death while holding an option (whether or not then exercisable) that has not expired, such optionee, or in the case of death, his or her executors, administrators, heirs, legatees or distributees, as the case may be, may exercise such option at any time until the expiration of such option. If any optionee who has ceased to be a director for reasons other than death or retirement dies holding an option, his or her executors, administrators, heirs, legatees or distributees, as the case may be, may exercise such option at any time within one year after the date of death (but not beyond the expiration date of the option).
Restricted Stock
Restricted Stock Terms. Each year, as of the date of the Annual Meeting of Stockholders of the Company, each non-employee director who is continuing as a member of the Board as of the adjournment of such Annual Meeting will receive a grant of such number of shares of restricted stock, if any, as may be determined by the Board from time to time by resolution. If any grants are made, each such grant of restricted stock shall be in the same amount, and on the same terms, for each non-employee director. The Board has determined that no restricted stock will be awarded under the New Plan in 2004.
Shares of restricted stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered by a non-employee director during the restricted period except as provided for in the New Plan. The restricted period begins on the date of the award and continues for a period of time as specified by the Board of Directors in the award. The restricted period for restricted stock shall be at least one year in the case of restricted stock having restrictions based on performance-based criteria and at least three years in the case of restricted stock having restrictions based solely on the passage of time. Upon the lapse of a restricted period with respect to any shares of restricted stock, such shares shall no longer be subject to the restrictions imposed in the award.
Termination of Service. If a non-employee director ceases to be a member of the Board of Directors by reason of death or retirement, the restricted period covering all shares of restricted stock transferred or issued to such non-employee director shall immediately lapse. If a non-employee director ceases to be a member of the Board of Directors other than due to death or retirement, all shares of restricted stock owned by such non-employee director for which the restricted period has not lapsed shall revert back to the Company.
Federal Income Tax Consequences
The following is a brief description of the federal income tax consequences generally arising with respect to awards that may be granted under the New Plan. This discussion is intended for the information of stockholders considering how to vote at the Annual Meeting and not as tax guidance to individuals who participate in the New Plan.
Stock Options. The options under the New Plan are nonstatutory options not intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code. The grant of options will not result in taxable income to the non-employee director or a tax deduction to the Company. The exercise of an option by a non-employee director will result in taxable ordinary income to the non-employee director and a corresponding deduction for the Company, in each case equal to the difference between the fair market value on the date the option was exercised and the fair market value on the date the option was granted (the option price).
Restricted Stock. The grant of restricted stock under the New Plan will generally not result in taxable income to the non-employee director until the lapse of the restricted period. At that time, the non-employee director will recognize ordinary income equal to the fair market value of the shares at the time of the lapse of the restrictions. A non-employee director may elect to recognize income at the time of receipt of the shares of restricted stock equal to the fair market value of the shares at such time, but if the non-employee director subsequently forfeits the shares, the non-employee director would not be entitled to any tax deduction, including a capital loss, for the value of the shares on which the tax was previously paid. Such election must be made and filed with the Internal Revenue Service
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within 30 days of receipt of the shares of restricted stock. The Company will generally be entitled to a deduction that corresponds to the amount and time of the non-employee director's recognition of income.
New Plan Benefits
No benefits or amounts will be received by or allocated to any current executive officer or any employee (including any current officer who is not an executive officer) under the New Plan because no such person is eligible to participate in the New Plan. The benefits or amounts that will be received by, or allocated to, all current directors who are not executive officers (the "Non-Executive Director Group") under the New Plan are not determinable because such benefits or amounts, if any, will be awarded in the future at the discretion of the Board of Directors. If the New Plan had been in effect, the benefits or amounts which would have been received by, or allocated to, the Non-Executive Director Group for the fiscal year ended December 28, 2003 would have been as follows:
| Name and Position | Dollar Value ($) | Number of Stock Options | Number of Shares of Restricted Stock | |||
|---|---|---|---|---|---|---|
| Non-Executive Director Group | 1 | 4,000 | 1 | 2 | ||
Recommendation and Vote Required
The non-employee directors of the Company, who will receive grants and/or awards under the New Plan, have an interest in the adoption of the New Plan. The Board of Directors believes the adoption of the New Plan is in the best interests of the Company and its stockholders and recommends a voteFOR the following resolution which will be presented at the Annual Meeting:
RESOLVED, that the 2004 Non-Employee Directors' Stock Incentive Plan described in Proposal 2 in The New York Times Company's 2004 Proxy Statement, be, and the same hereby is, ratified, confirmed and approved.
An affirmative vote of a majority of the votes cast by holders of shares of Class A and Class B stock in attendance, in person or by proxy, at the 2004 Annual Meeting of Stockholders, voting together as a single class, is required for approval of this resolution. As a result, abstentions and broker non-votes will have no effect on the proposal.
Proposal Number 3 –
Selection of Auditors
The Audit Committee has selected the firm of Deloitte & Touche LLP, independent auditors, as our auditors for the fiscal year ending December 28, 2003,26, 2004, subject to ratification of such selection by our Class A and Class B stockholders voting together as one class. Deloitte & Touche LLP has audited our financial statements for many years.
We have been informed by Deloitte & Touche LLP that their firm has no direct financial interest nor any material indirect financial interest in us or any of our affiliated companies. Deloitte & Touche LLP has not had any connection during the past fivethree years with us or any of our affiliated companies in the capacity of promoter, underwriter, voting trustee, director, officer or employee.
A representative of Deloitte & Touche LLP will be present at the Annual Meeting and will be afforded the opportunity to make a statement if he or she decides to do so. The representative will also be available to respond to appropriate questions from stockholders at the Annual Meeting.
We have elected to disclose fees billed to us by Deloitte & Touche LLP in accordance with the newly-adopted SEC rules amending the requirements for disclosure of audit and audit-related fees.
Audit FeesFees.. The aggregate fees billed by Deloitte & Touche LLP for professional services rendered for the audit of the Company’sCompany's annual financial statements, the reviews of the financial statements included in the Company’sCompany's quarterly reports on Form 10-Q, comfort letters to underwriters and services normally provided by the independent auditor in connection with statutory and regulatory filings were $1,731,000$1,929,000 for the fiscal year ended December 28, 2003, and $1,725,000 for the fiscal year ended December 29, 2002, and $1,270,000 for the fiscal year ended December 30, 2001.2002.
Audit-Related FeeFees.s.The aggregate fees billed by Deloitte & Touche LLP for assurance and related services related to the performance or review of the Company’sCompany's financial statements and not described above under “Audit Fees”"Audit Fees" were $400,000$509,000 for the 20022003 fiscal year and $182,000$479,000 for the 20012002 fiscal year. In both years, the audit-related services included audits of the Company’sCompany's benefit plans and not-for-profit foundationsentities and in 2002, audit-related services also included agreed-upon procedures related to contract compliance reviews of certain of its third-party print sites. In 2003, audit-related services also included advice with respect to the requirements of the Sarbanes-Oxley Act of 2002 relating to internal controls.
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Tax FeesFees.. The aggregate fees billed by Deloitte & Touche LLP for professional services rendered for tax compliance were $115,000 in the 2003 fiscal year and $93,000 in the 2002 fiscal year, and for tax advice and tax planning were $604,000 for$101,000 in the 2003 fiscal year and $876,000 in the 2002 fiscal year and $2,216,000 for the 2001 fiscal year.
All Other Fees. The aggregate fees billed by Deloitte & Touche LLP for products and services other than those described above were none$37,000 for the 2003 fiscal year and $35,000 for the 2002 fiscal year and $14,000 for the 2001 fiscal year. In 2001, the otherOther fees consisted primarily of a systems documentation project.software licensing fees.
Audit Committee’sCommittee's Pre-Approval Policies and Procedures
Effective February 20, 2003, our Board of Directors adopted a new Audit Committee Charter which, among other things, requires the Audit Committee to pre-approve the rendering by our independent auditor of audit or permitted non-audit services. The Chair of the Audit Committee may pre-approve the rendering of services on behalf of the Committee, provided the matter is then presented to the full Committee at the next scheduled meeting.
Recommendation and Vote Required
The Audit Committee of the Board of Directors recommends a voteFORFOR the following resolution which will be presented to the meeting:
RESOLVEDRESOLVED, that the selection, by the Audit Committee of the Board of Directors, of Deloitte & Touche LLP, independent auditors, as auditors of The New York Times Company for the fiscal year ending December 28, 2003,26, 2004, is hereby ratified, confirmed and approved.
The affirmative vote of the holders of a majority of the shares of Class A and Class B stock represented at the Annual Meeting, in person or by proxy, voting together as one class, is required for approval of this resolution. As a result, abstentions and broker non-votes will have the same effect as a vote against the proposal.
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Submission of Stockholder Proposals for 20042005
Stockholders who intend to present proposals at the 20042005 Annual Meeting under SEC Rule 14a-8 must insure that such proposals are received by the Secretary of the Company not later than November 5, 2003.2, 2004. Such proposals must meet the requirements of the SEC to be eligible for inclusion in the Company’s 2003Company's 2004 proxy materials. In order for a proposal submitted outside of Rule 14a-8 to be considered “timely”"timely" within the meaning of SEC Rule 14a-4(c), such proposal must be received prior to January 20, 2004.16, 2005.
Certain Matters Relating to Proxy Materials and Annual Reports
The Company may now satisfy SEC rules regarding delivery of proxy statements and annual reports by delivering a single proxy statement and annual report to an address shared by two or more Company stockholders. This delivery method is referred to as “householding”"householding" and can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company has delivered only one proxy statement and annual report to multiple stockholders who share an address, unless contrary instructions were received from impacted stockholders prior to the mailing date. We undertake to deliver promptly upon written or oral request a separate copy of the proxy statement and/or annual report, as requested, to a stockholder at a shared address to which a single copy of these documents was delivered. If you hold stock as a registered stockholder and prefer to receive separate copies of a proxy statement or annual report either now or in the future, please contact EquiServe Trust Company, N.A.,Mellon Investor Services, P.O. Box 43069, Providence, RI 02940-3069,3315, South Hackensack, NJ 07606-1915, telephone 1-800-317-4445.1-800-851-9677. If your stock is held through a broker or bank and you prefer to receive separate copies of a proxy statement or annual report either now or in the future, please contact such broker or bank.
By order of the Board of Directors
Rhonda l. BrauerRHONDA L. BRAUER
SecretarySecretary
New York, NY
March 4, 20032, 2004
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Appendix I
CORPORATE GOVERNANCE PRINCIPLES
In February 2003, The New York Times Company’sCompany's Board of Directors, acting on the recommendation of the Nominating & Governance Committee, adopted the following Corporate Governance Principles:
1. The Core Purpose and Core Values of the Company
The Company’sCompany's core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.
The core values that enable the Company to achieve its core purpose are:
In support of the Company’sCompany's core purpose and core values, the Board is committed to the editorial independence at all Company properties.
2. Director Responsibilities
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3. Director Qualifications
4. Director Access to Officers and Employees
5. Director Compensation, Independence and Stock Ownership
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will consider that Directors’Directors' independence may be jeopardized if Director compensation (both direct and indirect) and perquisites exceed customary levels.
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6. Director Orientation
7. Chairman, CEO and Vice Chairman Evaluation and Management Succession
8. Annual Performance Evaluation
9. Board Committees
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10. Periodic Review
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Appendix II
THE NEW YORK TIMES COMPANY
2004 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
AUDIT COMMITTEE CHARTER1.
Purpose of the Committee
The Board of Directorspurpose of The New York Times Company 2004 Non-Employee Directors' Stock Incentive Plan (the “Company”"Plan") has establishedis to secure for The New York Times Company (the "Company") and its stockholders the Audit Committee (the “Committee”) to assist the Board in monitoring (1) the integritybenefits of the Company’s financial statements, (2)incentive inherent in increased common stock ownership by the Company’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of the Company’s internal audit function and independent auditor. The Committee is also responsible for producing an annual report on its activities for inclusion in the Company’s proxy statement.
The business of the Company is managed under the directionmembers of the Board of Directors and the various committees thereof, including the Committee. The basic responsibility of the Committee is to exercise its business judgment in carrying out the responsibilities described in this Charter in a manner the Committee members reasonably believe to be in the best interest(the "Board") of the Company who are not employees of the Company or any of its subsidiaries.
2. Administration
The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of any agreement embodying awards of stock options or restricted stock made under the Plan ("Options" and its stockholders."Restricted Stock," respectively). The Committee is not expectedBoard shall, subject to assume an active rolethe provisions of the Plan, grant Options and Restricted Stock under the Plan and shall have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Board in the day to day operation or managementadministration of the Company.
WhilePlan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the Audit Committee hasmembers thereof may authorize any one or more of their number or the responsibilities and powers set forth in this Charter, it is not the dutySecretary or any other officer of the Audit CommitteeCompany to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by such member or by any other member of the Board in connection with the Plan, except in circumstances involving actual bad faith.
3. Amount of Stock
The stock which may be issued under the Plan will be the Class A Common Stock of the Company ("Common Stock"), of a total number not exceeding 500,000 shares, subject to adjustment as provided in Section 7 below. The stock to be issued pursuant to Options may be either authorized and unissued shares, treasury shares, issued shares acquired by the Company or its subsidiaries or any combination thereof. Unless the Board otherwise determines, Restricted Stock awards shall be made from treasury shares. In the event that (i) to planOptions granted under the Plan shall terminate or conduct auditsexpire without being exercised in whole or in part or (ii) Restricted Stock granted under the Plan shall be forfeited pursuant to determine thatSection 6, new Options may be granted and/or new awards of Restricted Stock may be made hereunder covering the Company’s financial statements are complete and accurate and are in accordance with accounting principles generally accepted in the United States of America. This is the responsibility of management and the independent auditor.shares not purchased or forfeited.
Committee Membership4. Eligibility
The Committee shall consist of no fewer than three members. Each member of the Committee shall meet the independence and experience requirementsBoard who is not an employee of the New YorkCompany or any of its subsidiaries (a "Non-Employee Director") shall be eligible to receive an Option or Restricted Stock Exchange (the “NYSE”).
In consultationin accordance with the Nominating & Governance Committee,specific provisions of Sections 5 and 6 below. The adoption of this Plan shall not be deemed to give any director any right to be granted an Option to purchase Common Stock or Restricted Stock except to the extent and upon such terms and conditions consistent with the Plan as may be determined by the Board.
5. Terms and Conditions of Options
Each Option granted under the Plan shall comply with the following terms and conditions and with any other terms and conditions not inconsistent with the Plan as shall be prescribed by the Board in its sole discretion and which may be contained in the agreement, if any, referred to in Section 2 above (or in any amendment thereto):
Organization
laws of descent and distribution and (ii) as provided in the next sentence. The CommitteeBoard may determine that Options granted to a Non-Employee
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Director or a specified group of Non-Employee Directors may be transferred by the Non-Employee Director to one or more members of the Non-Employee Director's immediate family, to a partnership or limited liability company whose only partners or members are members of the Non-Employee Director's immediate family, or to a trust established by the Non-Employee Director for the benefit of one or more members of the Non-Employee Director's immediate family. For this purpose, "immediate family" means the Non-Employee Director's spouse, parents, children (including adopted and step-children), grandchildren and the spouses of such parents, children (including adopted and step-children) and grandchildren. A transferee described in this subsection may not further transfer an Option. An Option transferred pursuant to this subsection shall meet regularly atremain subject to the provisions of the Plan and shall be subject to such time and placeother rules as the CommitteeBoard shall determine. Representatives
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unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased Non-Employee Director's estate or the proper legatees or distributees thereof or the duly appointed guardian or legal representative of the disabled Non-Employee Director.
6. Terms and Conditions of Restricted Stock
Each year, as of the date of the Annual Meeting of Stockholders of the Company, each Non-Employee Director who has been elected or re-elected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive a grant of such number of shares of Restricted Stock, as may be determined by the Board from time to time by resolution (which shall be the same number, and on the same terms, for all Non-Employee Directors). Each such award of Restricted Stock shall be subject to the following terms and conditions and to any other terms and conditions not inconsistent with the Plan as shall be prescribed by the Board in its sole discretion and which may be contained in the agreement, if any, referred to in Section 2 above (or in any amendment thereto):
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW YORK TIMES COMPANY 2004 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN (THE "PLAN") APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED STOCK AGREEMENT DATED (THE "AGREEMENT"), AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY MANNER DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
7. Adjustment in the Event of two Committee members.Change in Stock
The Chair shall,In the event of changes in consultation with other Committee members, set the agenda for, and preside at, meetingsoutstanding Common Stock of the Committee.Company by reason of dividends (other than cash dividends), recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and class of shares available under the Plan, the number, class and the price of shares of Common Stock subject to outstanding Options and the number of shares constituting an Option grant under Section 5(b) hereof, shall be appropriately adjusted by the Board, whose determination shall be conclusive.
8. Miscellaneous Provisions
Committee Responsibility and Authority
The responsibility and authority of the Committee include the following:
Engagement of Auditor; Company Relationship with Auditor
1. The Committeefollowing terms shall have the sole authoritymeanings specified below:
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2. The Committee
3. The Committee shall reviewtransactions involving options under the Plan comply in all respects with the independent auditor the items as to which the independent auditor is required to report to the Committee pursuant to Section 10A(k) ofRule 16b-3 and/or Rule 16b-6 or any successor rules under the Securities Exchange Act of 1934, as amended, andthat any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention. The Board may adopt rules and regulations promulgated thereunder, asunder, and amend, the Plan in effectfurtherance of the intent of the foregoing.
9. Amendment or Discontinuance
The Plan may be amended at any time and from time to time. These include (a) all critical accounting policies and practices to be used; (b) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferredtime by the independent auditor; and (c) other material written communications between the independent auditor and management.
4. The Committee shall review with the independent auditor (a) any management letter provided by the independent auditor and management’s response to that letter and (b) a summary of the major audit reports issued by the internal audit department and management’s response thereto.
5. The Committee shall review with the independent auditor audit problems or difficulties encountered by the independent auditor in the course of its annual audit work, and management’s response.
6. As required by the NYSE, the Committee shall, at least annually, obtain and review a report by the independent auditor describing: (a) the firm’s internal quality-control procedures; (b) any material issues raised by (i) the most recent internal quality-control review (or peer review) of the firm, or (ii) any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (c) all relationships between the independent auditor and the Company.
The Committee shall evaluate the qualifications, performance and independence of the independent auditor (in light of applicable legal or stock exchange independence standards then in effect), including considering whether the independent auditor’s quality controls are adequate and whether the provision of permitted non-audit services is compatible with maintaining the independent auditor’s independence, and taking into account the opinions of management and the internal auditors.
7. The Committee shall set clear Company policies for hiring employees or former employees of the independent auditor.
Financial Disclosure of the Company
8. The Committee shall meet with the independent auditor and the Company’s internal auditors, prior to the commencement of the annual audit, to review the planning and scope of the audit.
9. The Committee shall generally discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies. It is not expected that the Committee will pre-approve each such release or guidance. The Committee Chair (or another Committee member acting as Chair), as representative of the Committee, shall discuss the Company’s quarterly earnings press releases with management and the independent auditor prior to public release.
10. The Committee shall discuss with management and the independent auditor the annual audited financial statements and quarterly financial statements including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Committee shall also review with management, on a quarterly basis, the Company’s disclosure controls and procedures. The Committee shall recommend to the Board whether the audited financial statements should be included in the Company’s Annual Report on Form 10-K.
11. The Committee shall discuss with management, internal auditors and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including (i) any significant change in the Company’s selection or application of accounting principles, (ii) any major issues relating to the adequacy of the Company’s internal controls, (iii) any steps
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adopted in light of material control deficiencies, and (iv) any fraud, material or otherwise, that involved management or other employees who have a significant role in the Company’s internal controls and that had come to the attention of management or to the independent auditor.
Communication with Management and Employees
12. The Committee shall review with the Company’s General Counsel legal matters that may have a material impact on the financial statements, the Company’s compliance policies and any material reports or inquiries received from regulators or governmental agencies.
13. The Committee shall meet separately, periodically, with the Company’s Chief Financial Officer, its General Counsel, and its Director of Internal Audit, and with representatives of the independent auditor.
14. As required by the NYSE, the Committee shall maintain procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by Company employees of concerns regarding accounting or auditing matters.
Other Responsibilities
15. The Committee shall review the Company’s policies with respect to risk assessment and risk management.
16. The Committee shall review the organization of the internal audit department, the adequacy of its resources, the competence of its staff and whether it has the independence necessary to work in compliance with recognized standards of internal auditing.
17. The Committee shall, as appropriate, obtain advice and assistance from outside legal, accounting or other advisors.
18. The Committee may delegate authority to individual Committee members or such subcommittees as the Committee deems appropriate and shall review the actions of all such individuals or subcommittees as appropriate. In this regard, the Chair is delegated the authority to (a) pre-approve any engagement for audit services or permitted non-audit services, provided the Chair shall present any decisions made under the auspices of this authority to the full Committee at the next scheduled meeting, and (b) discuss with the independent auditor the matters required to be discussed by SAS 100.
19. The Committee shall report to the Board regularly on its actions and deliberations.
20. The Committee shall exercise such other powers and authority as the Board shall from timedeem advisable, including, but not limited to, time, conferamendments necessary to qualify for any exemption or to comply with applicable law or regulations;provided,however, that except as provided in Section 7 above, the Board may not, without further approval by a majority of the votes cast by holders of shares of Class A and Class B Common Stock of the Company, in person or by proxy, at a duly called meeting of stockholders and entitled to vote thereon, voting together as one class:
Subject to the provision of Section 8(i) hereof relating to Rule 16b-3 and Rule 16b-6, no amendment of the Plan shall materially and adversely effect any right of any Non-Employee Director with respect to any Option or Restricted Stock theretofore granted without such Non-Employee Director's written consent.
10. Termination
This Plan shall terminate upon it.
In carrying out its responsibilities, the Committee’s practices and policies should remain flexible,earlier of the following dates or events to occur:
Committee Self-Assessment11. Effective Date of Plan
The Committee shall conduct an annual evaluationPlan became effective as of its performance and shall reportApril 13, 2004 upon the results of such review to the Board. In connection with the annual review, the Committee shall also recommend to the Board any modifications to this Charter that the Committee deems necessary or appropriate. The formatapproval of the self-assessment shall be determinedadoption of the Plan by a majority of the Committee.votes cast by holders of shares of Class A and Class B Common Stock of the Company, in person or by proxy, at the 2004 Annual Meeting of Stockholders, voting together as a single class.
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229 West 43rd Street New York, NY 10036 | |
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Please return this card only if you plan to attend.
The New York Times Company
Annual Meeting of Stockholders
10:00 A.M., Tuesday, April 13, 2004
New Amsterdam Theatre
214 West 42nd Street
New York, New York 10036
o I plan to attend the Meeting.*
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| Proxy Solicited on Behalf of the Board of Directors of | |||||||
| The undersigned hereby constitutes and appoints Arthur Sulzberger, Jr., Solomon B. Watson IV, and | |||||||||
| Rhonda L. Brauer, and each of them, as proxies with full power of substitution in each, to represent | |||||||||
| the undersigned at the Annual Meeting of Stockholders of THE NEW YORK TIMES COMPANY | |||||||||
| to be held at 10:00 A.M., local time, at the New Amsterdam Theatre, 214 West 42nd Street, New | |||||||||
| York, New York 10036, on Tuesday, April 15, 2003, or at any adjournments thereof, and to vote on | |||||||||
| all matters coming before said meeting including the proposals indicated on the reverse side hereof. | |||||||||
| Election of Class A Directors. Nominees: |
| Change of Address | |||||||
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You are encouraged to specify your choices by marking the appropriate boxes-SEE REVERSE SIDE-but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. Your shares cannot be voted unless you sign and return this card. | ||||||||||
SEE REVERSE SIDE | ||||||||||
*To facilitate counting, please vote your proxy even if you are planning
to attend. You can always revoke it at the meeting if you wish.
| PROXY | Class A | |||
| [LOGO] | THE NEW YORK TIMES COMPANY Proxy Solicited on Behalf of the Board of Directors of the Company for Annual Meeting on April 13, 2004 |
The undersigned hereby constitutes and appoints Arthur Sulzberger, Jr., Solomon B. Watson IV and Rhonda L. Brauer, and each of them, as proxies with full power of substitution in each, to represent the undersigned at the Annual Meeting of Stockholders of THE NEW YORK TIMES COMPANY to be held at 10:00 A.M., local time, at the New Amsterdam Theatre, 214 West 42nd Street, New York, New York 10036, on Tuesday, April 13, 2004, or at any adjournments thereof, and to vote on all matters coming before said meeting including the proposals indicated on the reverse side hereof.
You are encouraged to specify your choices by marking the appropriate boxes—SEE REVERSE SIDE—but you need not mark any boxes if you wish to vote in accordance with the Board of Directors' recommendations. Your shares cannot be voted unless you sign and return this card.
(Continued and to be marked, dated and signed, on the other side)
Address Change/Comments (Mark the corresponding box on the reverse side)
^FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL^
The New York Times Company
Annual Meeting of Stockholders
April 15, 2003
13, 2004
10:00 A.M.
New Amsterdam Theatre
214 West 42nd Street
New York, New York 10036
x Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed herein. If no direction is given, this proxy will be voted FOR the election of Class A directors and FOR proposal 2.
This proxy when properly executed will be voted in the manner directed herein. If no direction is given, this proxy will be voted FOR the election of Class A directors, FOR proposal 2 and FOR proposal 3. | Please Mark Here for Address Change or Comments | o | ||||||||||||||||||||||||
| SEE REVERSE SIDE | ||||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the election of Class A directors and FOR proposals | ||||||||||||||||||||||||||
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FOR | WITHHELD FOR ALL | FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||||||||
| 1. | Election of Class A Directors | o | o |
| o | o | o | ITEM 3— RATIFICATION OF DELOITTE & | o | o | o | |||||||||||||||
| Nominees: | |||||||||||||||||||||||||
| 01. | Raul E. Cesan | Consenting to receive all future annual meeting materials and shareholder | ||||||||||||||||||||||||
| 02. | William E. Kennard | communications electronically is simple and fast! Enroll today at | ||||||||||||||||||||||||
| 03. | Thomas Middelhoff | www.melloninvestor.com/ISD for secure online access to your proxy materials, statements, | ||||||||||||||||||||||||
| 04. | Henry B. Schacht | tax documents and other important shareholder correspondence. | ||||||||||||||||||||||||
| 05. | Donald M. Stewart | |||||||||||||||||||||||||
| Withheld for the nominees you list below: (Write that nominee's name in the space provided below.) ________________________________________________ | ||||||||||||||||||||||||||
| This proxy is solicited on behalf of the Board of Directors for the Annual Meeting on April | ||||||||||||||||||||||||||
| Your signature on the proxy is your acknowledgment of receipt of the Notice of Meeting and Proxy Statement, both dated March | ||||||||||||||||||||||||||
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SIGNATURE(S) DATE
| Date ________________ | |||||||||||||||||||||||||
| NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as | ||||||||||||||||||||||||||
attorney, executor, administrator, trustee or guardian, please give full title as such. | ||||||||||||||||||||||||||
^FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL^
The New York Times Company
Dear Stockholder:
The New York Times Company encourages you to take advantage of new and convenient waysVote by which you can vote your shares. You can vote your shares electronically through the Internet or by telephone. This eliminates the need to return your proxy card.Telephone or Mail
24 Hours a Day, 7 Days a Week
To vote your shares electronically, you must use the control number printed in the box above, just below the perforation. The series of numbers that appear in the box above must be used to access the system.
1. To vote over the Internet:
· Log on to the Internet and gotelephone voting are available through 11:59 p.m. Eastern Standard Time
the day prior to the web site http://www.eproxyvote.com/nytannual meeting day.
2. To vote by telephone:
· On a touch-tone
Your Internet or telephone call 1-877-PRX-VOTE (1-877-779-8683) 24 hours a day, 7 days a week.
Your electronic vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed dated and returned theyour proxy card.
| Internet http://www.eproxy.com/nyt | Telephone 1-800-435-6710 | |||||||
| Use the Internet to vote your proxy. Have your proxy card in hand when you access the Web site. | OR | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you choose to vote your shares electronically, there is noproxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
YourYou can view the Annual Report and Proxy Statement
on the Internet at www.nytco.com
| PROXY | Class B | |||
| [LOGO] | THE NEW YORK TIMES COMPANY Proxy Solicited on Behalf of the Board of Directors of the Company for Annual Meeting on April 13, 2004 |
The undersigned hereby constitutes and appoints Arthur Sulzberger, Jr., Solomon B. Watson IV and Rhonda L. Brauer, and each of them, as proxies with full power of substitution in each, to represent the undersigned at the Annual Meeting of Stockholders of THE NEW YORK TIMES COMPANY to be held at 10:00 A.M., local time, at the New Amsterdam Theatre, 214 West 42nd Street, New York, New York 10036, on Tuesday, April 13, 2004, or at any adjournments thereof, and to vote is important. Thank you for voting.on all matters coming before said meeting including the proposals indicated on the reverse side hereof.
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| The New York Times Company CLASS B | ||||||||||||
P |
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| Proxy Solicited on Behalf of the Board of Directors of | |||||||||||
| The undersigned hereby constitutes and appoints Arthur Sulzberger, Jr., Solomon B. Watson IV, and | |||||||||||||
| Rhonda L. Brauer, and each of them, as proxies with full power of substitution in each, to represent | |||||||||||||
| the undersigned at the Annual Meeting of Stockholders of THE NEW YORK TIMES COMPANY | |||||||||||||
| to be held at 10:00 A.M., local time, at the New Amsterdam Theatre, 214 West 42nd Street, New | |||||||||||||
| York, New York 10036, on Tuesday, April 15, 2003, or at any adjournments thereof, and to vote on | |||||||||||||
| all matters coming before said meeting including the proposals indicated on the reverse side hereof. | |||||||||||||
| Election of Class B Directors. Nominees: |
| Change of Address | |||||||||||
| 01. |
| John F. Akers |
| 02. |
| Brenda C. Barnes |
| 03. |
| Jacqueline H. Dryfoos |
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| Michael Golden |
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| Russell T. Lewis |
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| David E. Liddle |
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| Arthur Sulzberger, Jr. |
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| Cathy J. Sulzberger |
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You are encouraged to specify your choices by marking the appropriate boxes-SEEboxes—SEE REVERSE SIDE-butSIDE—but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’Directors' recommendations. Your shares cannot be voted unless you sign and return this card.
(Continued and to be marked, dated and signed, on the other side)
SEE REVERSE SIDE
Address Change/Comments (Mark the corresponding box on the reverse side)
^FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL^
The New York Times Company
Annual Meeting of Stockholders
April 15, 200313, 2004
10:00 A.M.
New Amsterdam Theatre
214 West 42nd Street
New York, New York 10036
x Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed herein. If no direction is given, this proxy will be voted FOR the election of Class B directors and FOR proposal 2.
This proxy when properly executed will be voted in the manner directed herein. If no direction is given, this proxy will be voted FOR the election of Class B directors, FOR proposal 2 and FOR proposal 3. | Please Mark Here for Address Change or Comments SEE REVERSE SIDE | o | ||||||||||||||||||||||||
| The Board of Directors recommends a vote FOR the election of Class B directors and FOR proposals | ||||||||||||||||||||||||||
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FOR | WITHHELD FOR ALL | FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||||||||
| 1. | Election of Class B Directors | o | o |
| o | o | o | ITEM 3— RATIFICATION OF DELOITTE & | o | o | o | |||||||||||||||
| Nominees: | |||||||||||||||||||||||||
| 01. | John F. Akers | Consenting to receive all future annual meeting materials and shareholder | ||||||||||||||||||||||||
| 02. | Brenda C. Barnes | communications electronically is simple and fast! Enroll today at | ||||||||||||||||||||||||
| 03. | Jacqueline H. Dryfoos | www.melloninvestor.com/ISD for secure online access to your proxy materials, statements, | ||||||||||||||||||||||||
| 04. | Michael Golden | tax documents and other important shareholder correspondence. | ||||||||||||||||||||||||
| 05. | Russell T. Lewis | |||||||||||||||||||||||||
| 06. | David E. Liddle | |||||||||||||||||||||||||
| 07. | Ellen R. Marram | |||||||||||||||||||||||||
| 08. | Arthur Sulzberger, Jr. | |||||||||||||||||||||||||
| 09. | Cathy J. Sulzberger | |||||||||||||||||||||||||
| 10. | Doreen A. Toben | |||||||||||||||||||||||||
| Withheld for the nominees you list below: (Write that nominee's name in the space provided below.) ________________________________________________ | ||||||||||||||||||||||||||
| This proxy is solicited on behalf of the Board of Directors for the Annual Meeting on April | ||||||||||||||||||||||||||
| Your signature on the proxy is your | ||||||||||||||||||||||||||
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Signature(s) Date
| Date ________________ | |||||||||||||||||||||||||
| NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as | ||||||||||||||||||||||||||
attorney, executor, administrator, trustee or guardian, please give full title as such. | ||||||||||||||||||||||||||
^FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL^
The New York Times Company
Dear Stockholder:
The New York Times Company encourages you to take advantage of new and convenient waysVote by which you can vote your shares. You can vote your shares electronically through the Internet or by telephone. This eliminates the need to return your proxy card.Telephone or Mail
24 Hours a Day, 7 Days a Week
To vote your shares electronically, you must use the control number printed in the box above, just below the perforation. The series of numbers that appear in the box above must be used to access the system.
1. To vote over the Internet:
· Log on to the Internet and gotelephone voting are available through 11:59 p.m. Eastern Standard Time
the day prior to the web site http://www.eproxyvote.com/nyt1annual meeting day.
2. To vote by telephone:
· On a touch-tone
Your Internet or telephone call 1-877-PRX-VOTE (1-877-779-8683) 24 hours a day, 7 days a week.
Your electronic vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed dated and returned theyour proxy card.
| Internet http:\\www.eproxy.com/nyt1 | Telephone 1-800-435-6710 | |||||||
| Use the Internet to vote your proxy. Have your proxy card in hand when you access the Web site. | OR | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you choose to vote your shares electronically, there is noproxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
Your vote is important. Thank you for voting.You can view the Annual Report and Proxy Statement
on the Internet at www.nytco.com
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