Exhibit Index begins
on page 11
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SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
------------------------
FORM 10-K
---------
(Mark One)
x Annual report pursuant to Section 13 or 15(d) of the
--- Securities Exchange Act of 1934 [Fee Required]
for the fiscal year ended December 26, 1993 or
------------------------
Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 [No Fee Required]
for the transition period from ______________ to
_____________.
Commission file number 1-6961
------------
GANNETT CO., INC.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 16-0442930
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer Iden-
incorporation or organization) tification No.)
1100 Wilson Boulevard, Arlington, Virginia 22234
- ------------------------------------------ -------
(Address of principal executive (Zip Code)
offices)
(Registrant's telephone number, including area code) (703) 284-6000
----------------
Securities registered pursuant to
Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, Par Value $1.00 New York Stock Exchange
- ------------------------------- -----------------------
Securities registered pursuant
to Section 12(g) of the Act:
None
- ------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 4, 1994 was in excess of $7,925,792,318.
The number of shares outstanding of the registrant's Common Stock,
Par Value $1.00, as of March 4, 1994 was 147,163,142.
Documents incorporated by reference.
- ------------------------------------
(1) Portions of the registrant's Annual Report to Shareholders
for fiscal year ended December 26, 1993 in Parts I, II and III.
(2) Portions of the registrant's Proxy Statement issued in connection
with its Annual Meeting of Shareholders to be held on May 3, 1994.
CROSS REFERENCE SHEET
---------------------
The information required in Parts I, II and III of the Form 10-K is
incorporated by reference to sections of the Company's 1993 Annual Report
to Shareholders ("Annual Report") and its definitive Proxy Statement
for the Annual Meeting of Shareholders to be held May 3, 1994
("Proxy Statement") as described below:
Part I
- ------
Item 1. Business. Business of the Company (Annual
Report pp. 51-58).
Item 2. Properties. Properties (Annual Report pp. 39,
54, 55, 57, 62 and 63);
Corporate Facilities (Annual
Report p. 57); Gannett Properties
(Annual Report pp. 64-68).
Item 3. Legal Proceedings. Note 9 - Commitments and Contingent
Liabilities - Litigation (Annual
Report p. 46). Regulation
(Annual Report pp. 54-55).
Item 4. Submission of Matters Not Applicable.
to a Vote of Security
Holders.
Part II
- -------
Item 5. Market for Registrant's Market for the Company's
Common Equity and Common Stock (Inside back
Related Stockholder cover); Approximate Number of
Matters. Common Stockholders (Annual Report
p. 1); Common Stock Prices
(Annual Report p. 25);
Dividends (Annual Report p. 33).
Item 6. Selected Financial Eleven-Year Summary and Notes
Data. to Eleven-Year Summary (Annual
Report pp. 48-50).
Item 7. Management's Discussion Management's Discussion and
and Analysis of Analysis of Results of
Financial Condition and Operations and Financial
Results of Operations. Position (Annual Report
pp. 26-33).
Item 8. Financial Statements Consolidated Financial State-
and Supplementary Data. ments and Notes to Consoli-
dated Financial Statements
(Annual Report pp. 34-46).
Effects of inflation and chang-
ing prices (Annual Report p. 33).
Quarterly Statements of Income
(Annual Report pp. 60-61).
Item 9. Changes in and Disagreements None.
with Accountants on Account-
ing and Financial Disclosure.
Part III
- --------
Item 10. Directors and Executive Executive Officers of the
Officers of the Registrant. Company are listed below:
Thomas L. Chapple - General Counsel, Vice President, and Secretary.
Susan Clark-Jackson - President, Gannett West Newspaper Group, and
President and Publisher, Reno (Nev.) Gazette-Journal.
Michael J. Coleman - President, Gannett South Newspaper Group, and
President and Publisher, FLORIDA TODAY at Brevard County.
John J. Curley - Chairman, President, and Chief Executive Officer.
Thomas Curley - President and Publisher, USA TODAY.
Philip R. Currie - Vice President, News, Newspaper Division.
Donald W. Davidson - President, Gannett Outdoor Group.
Gerard R. DeFrancesco - President, Gannett Radio.
Thomas J. Farrell - President, Gannett New Media Group.
Millicent A. Feller - Senior Vice President, Public Affairs
and Government Relations.
Lawrence P. Gasho - Vice President, Financial Analysis.
George R. Gavagan, Vice President, Corporate Accounting Services
Madelyn P. Jennings - Senior Vice President, Personnel.
Douglas H. McCorkindale - Vice Chairman, and Chief Financial
and Administrative Officer.
Larry F. Miller - Senior Vice President, Financial Planning,
and Controller.
Peter S. Prichard - Senior Vice President, News/Chief News
Executive, Gannett, and Editor, USA TODAY.
W. Curtis Riddle - President, Gannett East Newspaper Group, and
President and Publisher, Lansing (Mich.) State Journal.
Carleton F. Rosenburgh - Senior Vice President, Gannett
Newspaper Division.
Gary F. Sherlock - Vice President, Gannett Metro Newspaper
Group, and President and Publisher, Gannett Suburban Newspapers.
Mary P. Stier - President, Gannett Central Newspaper Group, and
President and Publisher, Rockford Register Star
Jimmy L. Thomas - Senior Vice President, Financial Services
and Treasurer.
Ronald Townsend - President, Gannett Television.
Frank J. Vega - President and Chief Executive Officer, Detroit
Newspaper Agency.
Cecil L. Walker - President, Gannett Broadcasting.
Gary L. Watson - President, Gannett Newspaper Division.
Susan V. Watson - Vice President, Investor Relations.
Information concerning the Executive Officers of the Company is
included in the Annual Report on pages 22 through 23.
Information concerning the Board of Directors of the Company is
incorporated by reference to the Company's definitive Proxy
Statement pursuant to General Instruction G(3) to Form 10-K.
Item 11. Executive Compensation. Incorporated by reference to the
Company's definitive Proxy Statement
pursuant to General Instruction G(3)
to Form 10-K.
Item 12. Security Ownership of Certain Incorporated by reference to the
Beneficial Owners and Company's definitive Proxy Statement
Management. pursuant to General Instruction G(3)
to Form 10-K.
Item 13. Certain Relationships and Incorporated by reference to the
Related Transactions. Company's definitive Proxy Statement
pursuant to General Instruction G(3)
to Form 10-K.
Part IV
- -------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
-----------------------------------------------------------------
(a) Financial Statements, Financial Statement Schedules
and Exhibits.
(1) Financial Statements.
The following financial statements of the Company and
the accountants' report thereon are included on pages 34
through 47 of the Company's 1993 Annual Report to
Shareholders and are incorporated herein by reference:
Consolidated Balance Sheets as of December 26, 1993
and December 27, 1992.
Consolidated Statements of Income - Fiscal Years Ended
December 26, 1993, December 27, 1992, and
December 29, 1991.
Consolidated Statements of Cash Flows - Fiscal Years
Ended December 26, 1993, December 27, 1992, and
December 29, 1991.
Consolidated Statements of Changes in Shareholders'
Equity - Fiscal Years Ended December 26, 1993,
December 27, 1992, and December 29, 1991.
Notes to Consolidated Financial Statements.
Report of Independent Accountants.
(2) Financial Statement Schedules.
The following financial statement schedules are
incorporated by reference to "Schedules to Form 10-K
Information - December 26, 1993, December 27, 1992,
and December 29, 1991" appearing on pages 62
through 63 of the Company's 1993 Annual Report
to Shareholders:
Schedule V - Property, Plant and Equipment.
Schedule VI - Accumulated Depreciation and
Amortization of Property, Plant and Equipment.
Schedule VIII - Valuation and Qualifying Accounts.
Schedule X - Supplementary Income Statement
Information.
The Report of Independent Accountants on Financial
Statement Schedules appears on page 8 of this
Annual Report on Form 10-K.
Note: Financial statements of the registrant are omitted
as the registrant is primarily an operating
company and the aggregate of the minority
interest in and the debt of consolidated
subsidiaries is not material in relation to total
consolidated assets. All other schedules are
omitted as the required information is not
applicable or the information is presented
in the consolidated financial statements or
related notes.
(3) Pro Forma Financial Information.
Not Applicable.
(4) Exhibits.
See Exhibit Index for list of exhibits filed with this
Annual Report on Form 10-K. Management contracts and
compensatory plans or arrangements are identified with
asterisks on the Exhibit Index.
(b) Reports on Form 8-K.
None.
UNDERTAKING (included for purposes of incorporation by reference in the
Company's Registration Statements on Form S-8)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
REPORT OF INDEPENDENT ACCOUNTANTS ON
------------------------------------
FINANCIAL STATEMENT SCHEDULES
-----------------------------
To the Board of Directors and Shareholders
of Gannett Co., Inc.
Our audits of the consolidated financial statements referred to in our
report dated January 27, 1994 appearing on page 47 of the 1993 Annual
Report to Shareholders of Gannett Co., Inc. (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedules listed in Item 14(a) of this Form 10-K. In our
opinion, these Financial Statement Schedules present fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
s/ PRICE WATERHOUSE
- ----------------------
PRICE WATERHOUSE
Washington, D.C.
January 27, 1994
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 22, 1994 GANNETT CO., INC.
---------------------
(Registrant)
By s/ Douglas H. McCorkindale
---------------------------------
Douglas H. McCorkindale,
Vice Chairman, and Chief Financial
and Administrative Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
Dated: February 22, 1994 By s/ John J. Curley
---------------------------------
John J. Curley,
Director, and Chairman, President
and Chief Executive Officer
Dated: February 22, 1994 By s/ Douglas H. McCorkindale
---------------------------------
Douglas H. McCorkindale,
Director, and Vice Chairman, and
Chief Financial and
Administrative Officer
Dated: February 22, 1994 By s/ Larry F. Miller
---------------------------------
Larry F. Miller,
Senior Vice President, Financial
Planning and Controller
Dated: February 22, 1994 By s/ Andrew F. Brimmer
---------------------------------
Andrew F. Brimmer, Director
Dated: February 22, 1994 By s/ Meredith A. Brokaw
---------------------------------
Meredith A. Brokaw, Director
Dated: February 22, 1994 By s/ Rosalynn Carter
---------------------------------
Rosalynn Carter, Director
Dated: February 22, 1994 By s/ Peter B. Clark
---------------------------------
Peter B. Clark, Director
Dated: February 22, 1994 By s/ Stuart T. K. Ho
---------------------------------
Stuart T.K. Ho, Director
Dated: February 22, 1994 By s/
---------------------------------
John J. Louis, Jr., Director
Dated: February 22, 1994 By s/ Rollan D. Melton
---------------------------------
Rollan D. Melton, Director
Dated: February 22, 1994 By s/ Thomas A. Reynolds
---------------------------------
Thomas A. Reynolds, Jr., Director
Dated: February 22, 1994 By s/ Carl T. Rowan
---------------------------------
Carl T. Rowan, Director
Dated: February 22, 1994 By s/ Dolores D. Wharton
---------------------------------
Dolores D. Wharton, Director
<TABLE>
EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Exhibit Location
- ------- ------- --------
<S> <C> <C>
3-1 Second Restated Certificate Attached.
of Incorporation of Gannett Co.,
Inc.
Amendment to Restated Attached.
Certificate of Incorporation.
3-2 By-laws of Gannett Co., Inc. Attached.
4-1 $1,000,000,000 Revolving Attached.
Credit Agreement among
Gannett Co., Inc. and the
Banks named in the Agreement.
4-2 $500,000,000 Revolving Attached.
Credit Agreement among
Gannett Co., Inc. and the
Banks named in the Agreement.
4-3 Indenture dated as of March 1, Incorporated by reference to Exhibit 4-2 of
1983 with Citibank, N.A. as Gannett Co., Inc.'s Form 10-K for fiscal
trustee. year ended December 29, 1985.
4-4 First Supplemental Indenture Incorporated by reference to Exhibit 4 of
dated as of November 5, 1986 Gannett Co., Inc.'s Form 8-K dated
among Gannett Co., Inc., November 6, 1986.
Citibank, N.A., Trustee and
Sovran Bank, N.A., Successor
Trustee.
4-5 Rights Plan. Incorporated by reference to Exhibit 1 of
Gannett Co., Inc.'s Form 8-K filed May 23,
1990.
10-1 Employment Agreement dated Incorporated by reference to Gannett Co.,
December 7, 1992 between Inc.'s Form 10-K for fiscal year ended
Gannett Co., Inc. and John J. December 27, 1992.
Curley. (*)
10-2 Employment Agreement dated Incorporated by reference to Gannett Co.,
December 7, 1992 between Inc.'s Form 10-K for fiscal year ended
Gannett Co., Inc. and Douglas H. December 27, 1992.
McCorkindale. (*)
10-3 Gannett Co., Inc. 1978 Executive Incorporated by reference to Exhibit 10-3 of
Long-Term Incentive Plan. (*) Gannett Co., Inc.'s Form 10-K for fiscal year
ended December 28, 1980, SEC file No.
1-6961. Amendment No. 1 incorporated by
reference to Exhibit 20-1 of Gannett Co.,
Inc.'s Form 10-K for fiscal year ended
December 27, 1981, SEC file No. 1-6961.
Amendment No. 2 incorporated by reference
to Exhibit 10-2 of Gannett Co., Inc.'s Form
10-K for the fiscal year ended December 25,
1983. Amendments Nos. 3 and 4
incorporated by reference to Exhibit 4-6 of
Gannett Co., Inc.'s Form S-8 Registration
Statement No. 33-28413 filed May 1, 1989.
Amendments Nos. 5 and 6 incorporated by
reference to Exhibit 10-8 of Gannett Co.,
Inc.'s Form 10-K for the fiscal year ended
December 31, 1989.
10-4 Description of supplemental Attached.
insurance benefits. (*)
10-5 Gannett Co., Inc. Supplemental Incorporated by reference to Exhibit 10-8 of
Retirement Plan, as amended. (*) Gannett Co., Inc's Form 10-K for the fiscal
year ended December 27, 1986 ("1986
Form 10-K")
10-6 Plan for the Deferral of Directors Incorporated by reference to Exhibit 10-9 of
Fees, as amended. (*) the 1986 10-K. 1991 Amendment incorpo-
rated by reference to Exhibit 10-1 to Gannett
Co., Inc.'s Form 10-Q for the quarter ended
September 29, 1991.
10-7 Gannett Co., Inc. Retirement Incorporated by reference to Exhibit 10-10 of
Plan for Directors. (*) the 1986 10-K. 1991 Amendment incorpo-
rated by reference to Exhibit 10-2 to Gannett
Co., Inc.'s Form 10-Q for the quarter ended
September 29, 1991.
10-8 Gannett Co., Inc. 1987 Deferred Attached.
Compensation Plan, as restated.(*)
10-9 Gannett Co., Inc. Transitional Incorporated by reference to Exhibit 10-13 of
Compensation Plan. (*) Gannett Co., Inc.'s Form 10-K for the fiscal
year ended December 30, 1990.
11 Statement re computation of Attached.
earnings per share.
13 Portions of 1993 Annual Report Attached.
to Shareholders incorporated
by reference.
22 Subsidiaries of Gannett Co., Inc. Attached.
24 Consent of Independent Attached.
Accountants.
99 Descriptions of graphics presented in Attached.
the paper copy of Gannett Co., Inc.'s
Annual Report for the fiscal year
ended December 26, 1993.
(*) Asterisks identify management contracts, and compensatory plans or
arrangements.
The Company agrees to furnish to the Commission, upon request, a copy of
each agreement with respect to long-term debt not filed herewith in reliance
upon the exemption from filing applicable to any series of debt which does
not exceed 10% of the total consolidated assets of the Company.
</TABLE>
SECOND RESTATED Exhibit 3-1
CERTIFICATE OF INCORPORATION
OF
GANNETT CO., INC.
(Incorporated February 28, 1972)
The Restated Certificate of Incorporation of Gannett Co., Inc.,
as heretofore amended, is hereby restated and integrated, without further
amendment and without discrepancy between the provisions of the
Certificate of Incorporation as heretofore amended and the provisions of
this restated certificate, pursuant to adoption by the Board of Directors
of the Corporation in accordance with Section 245 of the General
Corporation Law of the State of Delaware, as follows:
FIRST: The name of the Corporation is: GANNETT CO., INC.
SECOND: The registered office of the Corporation in the State
of Delaware is located at Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of the Corporation's
registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is Two Hundred Two
Million (202,000,000) shares of which Two Hundred Million (200,000,000)
shares shall be Common Stock of the par value of One Dollar ($1.00) per
share and Two Million (2,000,000) shares shall be Preferred Stock of the par
value of One Dollar ($1.00) per share. A statement of the designations of
the authorized classes of stock or of any series thereof, and the powers,
preferences and relative, participating, optional or other special rights
and qualifications, limitations or restrictions thereof, or of the authority
by the Board of Directors to fix by resolution or resolutions such
designations and other terms, is as follows:
A. Preferred Stock. The shares of the Preferred Stock
may be issued from time to time in one or more series. The
Board of Directors is hereby vested with authority to fix by
resolution or resolutions the designation of each series of
Preferred Stock and the powers, preferences and relative,
participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including
without limiting the generality of the foregoing, such
provisions as may be desired concerning the dividend rights,
the dividend rate, conversion rate, conversion rights, voting
rights, rights in terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation
preferences and such other subjects or matters as may be fixed
by resolution or resolutions of the Board of Directors under
the General Corporation Law of Delaware; and to fix the number
of shares constituting any such series, and to increase or
decrease the number of shares thereof then outstanding). In
case the number of shares of any such series shall be so
decreased, the shares constituting such decrease shall resume
the status which they had prior to the adoption of the
resolution or resolutions originally fixing the number of
shares of such series.
B. Common Stock. Subject to all of the preferences and
rights of the Preferred Stock or a series thereof that may be
fixed by a resolution or resolutions of the Board of Directors,
(i) dividends may be paid on the Common Stock of the Corporation
as and when declared by the Board of Directors, out of funds of
the Corporation legally available for the payment of such
dividends, and (ii) each share of Common Stock of the
Corporation will be entitled to one vote on all matters on which
such stock is entitled to vote.
FIFTH:
Section 1. Election of Directors. Election of directors
need not be by written ballot unless and to the extent the By-laws of the
Corporation so provide.
Section 2. Number, Election and Terms. Except as
otherwise fixed pursuant to the provisions of Article FOURTH hereof
relating to the rights of the holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation to
elect additional directors under specified circumstances, the number of
the directors of the Corporation shall be fixed from time to time by or
pursuant to the By-laws. The directors, other than those who may be
elected by the holders of any class or series of stock having preference
over the Common Stock as to dividends or upon liquidation, shall be
classified, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible, as shall be
provided in the manner specified in the By-laws, one class to be originally
elected for a term expiring at the annual meeting of stockholders to be
held in 1986, another class to be originally elected for a term expiring at
the annual meeting of stockholders to be held in 1987, and another class to
be originally elected for a term expiring at the annual meeting of
stockholders to be held in 1988, with the members of each class to hold
office until their successors are elected and qualified. At each annual
meeting of the stockholders of the Corporation, the successors of the
class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held
in the third year following the year of their election.
Section 3. Stockholder Nomination of Director Candidates.
Advance notice of stockholder nominations for the election of directors
and of any stockholder proposals to be considered at an annual stockholder
meeting shall be given in the manner provided in the By-laws.
Section 4. Newly Created Directorships and Vacancies.
Except as otherwise fixed pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon
liquidation to elect additional directors under specified circumstances,
newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or other cause shall be filled
by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence shall hold
office for the remainder of the full term of the class of directors in which
the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in
the number of directors constituting the Board of Directors shall shorten
the term of any incumbent director.
Section 5. Removal of Directors. Subject to the rights of
any class or series of stock having a preference over the Common Stock as
to dividends or upon liquidation to elect directors under specified
circumstances, any director may be removed from office, without cause,
only by the affirmative vote of the holders of 80% of the combined voting
power of the then outstanding Voting Stock (as defined in Article EIGHTH),
voting together as a single class.
Section 6. Amendment or Repeal of this Article FIFTH.
Notwithstanding anything contained in this Certificate of Incorporation to
the contrary, the affirmative vote of the holders of at least 80% of the
voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to alter, amend, adopt any provision
inconsistent with or repeal this Article FIFTH.
SIXTH: The Board of Directors shall have power to make, alter,
amend and repeal the By-laws (except so far as the By-laws adopted by the
stockholders shall otherwise provide). Any By-laws made by the directors
under the powers conferred hereby may be altered, amended or repealed by
the directors or by the stockholders. Notwithstanding the foregoing and
anything contained in this Certificate of Incorporation to the contrary,
Sections 2 and 9 of Article I (as amended), Sections 2, 4, 5, 8, and 9 of
Article II (as amended) and Article VI of the By-laws shall not be altered,
amended or repealed and no provision inconsistent therewith shall be
adopted without the affirmative vote of the holders of at least 80% of the
voting power of the then outstanding Voting Stock, voting together as a
single class. Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at
least 80% of the voting power of the outstanding Voting Stock, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal this Article SIXTH.
SEVENTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual
or special meeting of such holders and may not be effected by any consent
in writing by such holders. Except as otherwise required by law and subject
to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
special meetings of stockholders of the Corporation may be called only by
the Chairman of the Board or the Board of Directors. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary,
the affirmative vote of the holders of at least 80% of the voting power of
the outstanding Voting Stock, voting together as a single class, shall be
required to alter, amend, adopt any provision inconsistent with, or repeal
this Article SEVENTH.
EIGHTH:
Section 1. Vote Required for Certain Business
Combinations.
A. Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise
expressly provided in Section 2 of this Article EIGHTH:
(i) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with (a) any
Interested Shareholder (as hereinafter defined) or (b) any other
company (whether or not itself an Interested Shareholder) which
is, or after such merger or consolidation would be, an Affiliate
(as hereinafter defined) of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Shareholder or any
Affiliate of any Interested Shareholder of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market
Value of $25 million or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of transactions)
of any securities of the Corporation or any Subsidiary to any
Interested Shareholder or any Affiliate of any Interested
Shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market
Value of $25 million or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of any Interested Shareholder or any Affiliate of any
Interested Shareholder; or
(v) any reclassification of securities (including
any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the Corporation
with any of its Subsidiaries or any other transaction (whether
or not with or into or otherwise involving any Interested
Shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares
of any class of Equity Security (as hereinafter defined) of the
Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Shareholder or any Affiliate of any
Interested Shareholder;
shall require the affirmative vote of the holders of at least 80% of the
voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (the
"Voting Stock"), voting together as a single class (it being understood that
for the purposes of this Article EIGHTH, each share of the Voting Stock
shall have the number of votes granted to it pursuant to Article FOURTH of
this Certificate of Incorporation). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
B. Definition of "Business Combination". The term
"Business Combination" used in this Article EIGHTH shall mean
any transaction which is referred to in clauses (i) through (v) of
Paragraph A of this Section 1.
Section 2. When Higher Vote Is Not Required. The
provisions of Section 1 of this Article EIGHTH shall not be applicable to any
particular Business Combination, and the Business Combination shall
require only the affirmative vote required by law and any other provision
of this Certificate of Incorporation, if all of the conditions specified in
either of the following paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
B. Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration
other than cash to be received per share by holders of Common
Stock in the Business Combination shall be at least equal to the
higher of the following:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested
Shareholder for any shares of Common Stock acquired by
it (1) within the two-year period immediately prior to the
first public announcement of the terms of the proposed
Business Combination (the "Announcement Date") or (2) in
the transaction in which it became an Interested
Shareholder, whichever is higher; or
(b) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on which
the Interested Shareholder became an Interested
Shareholder (such latter date is referred to in this
Article EIGHTH as the "Determination Date"), whichever is
higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of shares of any other class of
outstanding Voting Stock shall be at least equal to the highest
of the following (it being intended that the requirements of this
paragraph B(ii) shall be required to be met with respect to
every class of outstanding Voting Stock, whether or not the
Interested Shareholder has previously acquired any shares of a
particular class of Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested
Shareholder for any shares of such class of Voting Stock
acquired by it (1) within the two-year period immediately
prior to the Announcement Date or (2) in the transaction
in which it became an Interested Shareholder, whichever is
higher; or
(b) (if applicable) the highest preferential
amount per share to which the holders of shares of such
class of Voting Stock are entitled in the event of any
voluntary or involuntary liquidation or dissolution of the
Corporation; or
(c) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(iii) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Shareholder has previously paid for shares of such class of
Voting Stock. If the Interested Shareholder has paid for shares
of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of
Voting Stock shall be either cash or the form used to acquire
the largest number of shares of the Voting Stock previously
acquired by it. The price determined in accordance with
paragraphs B(i) and B(ii) of this Section 2 shall be subject to
appropriate adjustment in the event of any stock dividend,
stock split, combination of shares or similar event.
(iv) After such Interested Shareholder has become
an Interested Shareholder and prior to the consummation of
such Business Combination: (a) except as approved by a majority
of the Disinterested Directors, there shall have been no
failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the
outstanding stock having preference over the Common Stock as
to dividends or upon liquidation; (b) there shall have been (1) no
reduction in the annual rate of dividends paid on the Common
Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Disinterested Directors, and (2) an increase in such annual rate
of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is
approved by a majority of the Disinterested Directors; and (c)
such Interested Shareholder shall not have become the
beneficial owner of any additional shares of Voting Stock
subsequent to the transaction which results in it becoming an
Interested Shareholder.
(v) After such Interested Shareholder has become
an Interested Shareholder, it shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination
or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to
public stockholders of the Corporation at least 30 days prior
to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions).
Section 3. Certain Definitions. For the purpose of this
Article EIGHTH:
A. A "person" shall mean any individual, firm, company or
other entity.
B. "Interested Shareholder" shall mean any person (other
than the Corporation, any Subsidiary, or the Gannett
Foundation, Inc. ) who or which:
(i) is the beneficial owner, directly or indirectly,
of 10% or more of the voting power of the outstanding Voting
Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10%
or more of the voting power of the then outstanding Voting
Stock; or
(iii) is an assignee of or has otherwise succeeded to
any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question
beneficially owned by an Interested Shareholder, if such
assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting
Stock:
(i) that such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns directly
or indirectly; or
(ii) that such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the rights to vote
pursuant to any agreement, arrangement or understanding; or
(iii) that is beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
D. For the purpose of determining whether a person is an
Interested Shareholder pursuant to paragraph B of this Section
3, the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through
application of paragraph C of this Section 3 but shall not
include any other shares of Voting Stock that may be issuable
pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or
otherwise.
E. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as in effect on March 1, 1985.
F. "Subsidiary" means any corporation of which a majority
of any class of Equity Security is owned, directly or indirectly,
by the Corporation, provided, however, that for the purposes of
the definition of Interested Shareholder set forth in paragraph
B of this Section 3, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of Equity
Security is owned, directly or indirectly, by the Corporation.
G. "Disinterested Director" means any member of the
Board of Directors who is unaffiliated with the Interested
Shareholder and who was a member prior to the time that the
Interested Shareholder became an Interested Shareholder, or
any successor of a Disinterested Director who is unaffiliated
with the Interested Shareholder and is recommended to succeed
a Disinterested Director by a majority of Disinterested
Directors then on the Board of Directors.
H. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange -- Listed Stocks,
or, if such stock is not quoted on the Composite Tape, on the
New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding the
date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then
in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as
determined by the Board of Directors in good faith; and (ii) in
the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by
the Board of Directors in good faith.
I. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than
cash to be received" as used in paragraphs B(i) and (ii) of
Section 2 of this Article EIGHTH shall include the shares of
Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such
shares.
J. "Equity Security" shall have the meaning ascribed to
such term in Section 3(a)(11) of the Securities Exchange Act of
1934, as in effect on March 1, 1985.
Section 4. Powers of the Board of Directors. A majority
of the directors shall have the power and duty to determine for the
purposes of this Article EIGHTH, on the basis of information known to them
after reasonable inquiry, (A) whether a person is an Interested
Shareholder, (B) the number of shares of Voting Stock beneficially owned by
any person, (C) whether a person is an Affiliate or Associate of another, (D)
whether the assets which are the subject of any Business Combination
have, or the consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25 million or more. A
majority of the directors shall have the further power to interpret all of
the terms and provisions of this Article EIGHTH.
Section 5. No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this Article EIGHTH shall be
construed to relieve any Interested Shareholder of any fiduciary
obligation imposed by law.
Section 6. Amendment, Repeal, etc. Notwithstanding any
other provisions of this Certificate of Incorporation or the By-laws (and
notwithstanding the fact that a lesser percentage may be specified by law,
this Certificate of Incorporation or the By-laws) the affirmative vote of
the holders of 80% or more of the voting power of the outstanding Voting
Stock, voting together as a single class, shall be required to amend or
repeal, or adopt any provisions inconsistent with, this Article EIGHTH or
any provision hereof.
NINTH: The Corporation reserves the right at any time and from
time to time to amend, alter or repeal any provision contained in this
Certificate of Incorporation in the manner now or as hereafter prescribed
by law, and all rights, preferences and privileges conferred upon
stockholders, directors and officers by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended are subject to
the right reserved in this Article.
IN WITNESS WHEREOF, the undersigned have signed this
Certificate as of this 30th day of September, 1985.
s/ Douglas H. McCorkindale
--------------------------
Douglas H. McCorkindale
Vice Chairman and Chief
Financial Officer
ATTEST:
s/ Thomas L. Chapple
- --------------------
Thomas L. Chapple
Secretary
Exhibit 3-1 (Cont'd)
CERTIFICATE OF AMENDMENT
OF THE
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
GANNETT CO., INC.
The undersigned, being the Vice Chairman and Chief Financial and
Administrative Officer of Gannett Co., Inc. (the "Corporation"), a
corporation organized and existing under the laws of the State of Delaware,
hereby certifies that an amendment of the Second Restated Certificate of
Incorporation of the Corporation has been duly adopted by the Board of
Directors and the Stockholders of the Corporation, in accordance with
Section 242 of the Delaware General Corporation Law, as follows:
1. Article "FOURTH" is amended to read in its entirety as
follows:
FOURTH: The total number of shares of all classes
of stock which the Corporation shall have authority to
issue is Four Hundred Two Million (402,000,000) shares of
which Four Hundred Million (400,000,000) shares shall be
Common Stock of the par value of One Dollar ($1.00) per
share and Two Million (2,000,000) shares shall be
Preferred Stock of the par value of One Dollar ($1.00) per
share. A statement of the designations of the authorized
classes of stock or of any series thereof, and the
powers, preferences and relative, participating, optional
or other special rights and qualifications, limitations or
restrictions thereof, or of the authority of the Board of
Directors to fix by resolution or resolutions such
designations and other terms, is as follows:
A. Preferred Stock. The shares of Preferred
Stock may be issued from time to time in one or more
series. The Board of Directors is hereby vested with
authority to fix by resolution or resolutions the
designation of each series of Preferred Stock and the
powers, preferences and relative, participating, optional
or other special rights and qualifications, limitations
or restrictions thereof, including without limiting
the generality of the foregoing, such provisions
as may be desired concerning the dividend rights,
the dividend rate, conversion rate, conversion rights,
voting rights, rights in terms of redemption
(including sinking fund provisions), the redemption
price or prices, and the liquidation preferences
and such other subjects or matters as may be
fixed by resolution or resolutions of the Board of
Directors under the General Corporation Law of Delaware;
and to fix the number of shares constituting any such
series, and to increase or decrease the number of shares
of any such series (but not below the number of shares
thereof then outstanding). In case the number of shares
of any such series shall be so decreased, the shares
constituting such decrease shall resume the status which
they had prior to the adoption of the resolution or
resolutions originally fixing the number of shares of such
series.
B. Common Stock. Subject to all of the
preferences and rights of the Preferred Stock or a series
thereof that may be fixed by a resolution or resolutions
of the Board of Directors, (i) dividends may be paid on the
Common Stock of the Corporation as and when declared by
the Board of Directors, out of funds of the Corporation
legally available for the payment of such dividends, and
(ii) each share of Common Stock of the Corporation will be
entitled to one vote on all matters on which such stock is
entitled to vote.
2. Old Article "NINTH" shall be renumbered Article "TENTH"
and the new Article "NINTH" shall read in its entirety as follows:
NINTH: A director of the Corporation shall not be
personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from
which the director derived an improper personal benefit.
IN WITNESS WHEREOF, the undersigned has subscribed this
Certificate by order of the Board of Directors of the Corporation and
hereby affirms under penalties of perjury that the facts stated herein are
true this 7th day of May, 1987.
s/ Douglas H. McCorkindale
Douglas H. McCorkindale
Vice Chairman and Chief
Financial and Administrative
Officer
ATTEST:
s/ Thomas L. Chapple
Thomas L. Chapple
Secretary
Exhibit 3-2
BY-LAWS
OF
GANNETT CO., INC.
ARTICLE I.
Meetings of Stockholders
Section 1. Annual Meetings: The annual meeting of the
stockholders for the election of directors and for the
transaction of such other business as may come before the meeting
shall be held on such date and at such hour as shall each year be
fixed by the Board of Directors.
Section 2. Special Meetings: Except as otherwise required
by law and subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation, special meetings of the
stockholders may be called only by the Chairman of the Board or
by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors.
Section 3. Place of Meeting: Meetings of stockholders of
the Corporation shall be held at such place, either within or
without the State of Delaware, as shall be fixed by the Board of
Directors in the case of meetings called by the Board, or by the
Chairman of the Board in the case of meetings called by the
Chairman, and specified in the notice of said meeting.
Section 4. Notice of Meetings: Except as otherwise
permitted or provided by law or these By-laws, written notice of
each meeting of the stockholders shall be given to each
stockholder of record entitled to vote at such meeting, whether
annual or special, not less than ten (10) nor more than sixty
(60) days before the day on which the meeting is to be held. A
written waiver of notice of any meeting of stockholders, signed
by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice.
Notice of any adjourned meeting of stockholders shall not be
required to be given, except where expressly required by law.
Section 5. Organization: At each meeting of the
stockholders, the Chairman of the Board, or in his absence, the
Vice Chairman, or in the absence of both officers, an officer
selected by the Chairman of the Board, or if the Chairman of the
Board has made no selection, an officer selected by the Board,
shall act as chairman of the meeting and the Secretary or, in his
absence, an Assistant Secretary, if one be appointed, shall act
as secretary of the meeting. In case at any meeting none of the
officers who have been designated to act as chairman or secretary
of the meeting, respectively, shall be present, a chairman or
secretary of the meeting, as the case may be, shall be chosen by
the vote of a majority in interest of the stockholders of the
Corporation present in person or by proxy and entitled to vote at
such meeting.
Section 6. Quorum: At each meeting of the stockholders,
except where otherwise provided by law, the holders of a majority
of the issued and outstanding shares of each class of stock of
the Corporation entitled to vote at such meeting shall constitute
a quorum for the transaction of business and a majority in amount
of such quorum shall decide any questions that may come before
the meeting. In the absence of a quorum, a majority in interest
of the stockholders of the Corporation present in person or by
proxy and entitled to vote, or, if no stockholder entitled to
vote is present, any officer entitled to preside at, or act as
secretary of, such meeting, shall have the power to adjourn the
meeting from time to time until stockholders holding the
requisite amount of stock shall be present or represented. At
any such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted
at the meeting as originally called.
Section 7. Voting.
(a) At each meeting of stockholders every
stockholder of record of the Corporation entitled to
vote at such meeting shall be entitled to one vote for
each share of stock of the Corporation registered in
his name on the books of the Corporation on the record
date for such meeting. Each stockholder entitled to
vote at a meeting of stockholders or to express consent
or dissent to corporate action in writing without a
meeting may authorize another person or persons to act
for him by proxy. Such proxy shall be appointed by an
instrument in writing, subscribed by such stockholder
or by his attorney thereunto authorized and delivered
to the secretary of the meeting, or shall otherwise be
executed and transmitted as may be permissible under
applicable law; provided, however, that no proxy shall
be voted on after three years from its date unless said
proxy provides for a longer period. At all meetings of
the stockholders, all matters (except where other
provision is made by statute, by the Certificate of
Incorporation or by these By-laws) shall be decided by
the vote of a majority of the stock present in person
or by proxy and entitled to vote at the meeting. At
each meeting of stockholders for the election of
Directors, the voting for Directors need not be by
ballot unless the chairman of the meeting or the
holders, present in person or by proxy, of a majority
of the stock of the Corporation entitled to vote at
such meeting shall so determine.
(b) The date and time of the opening and the
closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be announced
at the meeting. No ballot, proxies or votes, nor any
revocations thereof or changes thereto, shall be
accepted by the inspectors after the closing of the
polls unless a proper court upon application by a
stockholder shall determine otherwise.
(c) The Corporation shall, in advance of any
meeting of stockholders, appoint one or more inspectors
to act at the meeting and make a written report
thereof. The Corporation may designate one or more
persons as alternate inspectors to replace any
inspector who fails to act. If no inspector or
alternate is able to act at a meeting of stockholders,
the person presiding at the meeting shall appoint one
or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of his or
her duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict
impartiality and according to the best of his or her
ability.
(d) The inspectors shall (i) ascertain the number
of shares outstanding and the voting power of each,
(ii) determine the shares represented at a meeting and
the validity of proxies and ballots, (iii) count all
votes and ballots, (iv) determine and retain for a
reasonable period a record of the disposition of any
challenges made to any determination by the inspectors,
(v) certify their determination of the number of shares
represented at the meeting and their count of all votes
and ballots, and (vi) perform such other duties as may
be required by law or designated by the Secretary of
the Corporation. In performing their duties, the
inspectors of election shall follow applicable law and
the instructions of the Secretary.
Section 8. List of Stockholders: It shall be the duty of
the Secretary or other officer of the Corporation who shall have
charge of its stock ledger, either directly or through another
officer of the Corporation designated by him or through a
transfer agent or transfer clerk appointed by the Board of
Directors, to prepare and make, at least ten (10) days before
every meeting of the stockholders, a complete list of the
stockholders entitled to vote thereat, arranged in alphabetical
order and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours,
for said ten (10) days, either at a place within the city where
the meeting is to be held, which place shall be specified in the
notice of meeting, or, if not so specified, at the place where
said meeting is to be held. The list shall be produced and kept
at the time and place of said meeting during the whole time
thereof and subject to the inspection of any stockholder who
shall be present thereat. The original or duplicate stock ledger
shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, such list or the books of
the Corporation, or to vote in person or by proxy at such
meeting.
Section 9. Stockholder Action: Any action required or
permitted to be taken by the stockholders of the Corporation must
be effected at a duly called annual or special meeting of such
holders and may not be effected by any consent in writing by such
holders.
ARTICLE II.
Board of Directors
Section 1. General Power: The property, business and
affairs of the Corporation shall be managed by or under the
direction of the Board of Directors.
Section 2. Number and Terms: Except as otherwise fixed
pursuant to the provisions of Article FOURTH of the Certificate
of Incorporation relating to the rights of the holders of any
class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, the number of the
directors of the Corporation shall be fixed from time to time by
majority vote of the entire Board of Directors. The directors,
other than those who may be elected by the holders of any class
or series of stock having preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect
to the time for which they severally hold office, into three
classes, as nearly equal in number as possible, as determined by
the Board of Directors, one class to be originally elected for a
term expiring at the annual meeting of stockholders to be held in
1986, another class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 1987, and
another class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1988, with the
members of each class to hold office until their successors are
elected and qualified. At each annual meeting of the
stockholders of the Corporation, the successors of the class of
directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their
election.
Section 3. Qualifications of Directors: No one shall be
eligible to serve as a member of the Board of Directors after the
first annual meeting of shareholders following his or her
seventieth birthday, or, in the case of anyone who has at any
time served as an executive of this Corporation, after the first
annual meeting of shareholders following his or her sixty-fifth
birthday or the date on which he or she retires under the
Corporation's retirement plan, whichever occurs first. Every
person who is elected a director of this Corporation at the 1989
annual meeting of shareholders of this Corporation or thereafter
shall at the time of his or her election to the Board, and at all
times during his or her tenure as a director, own, directly or
beneficially (beneficial ownership to be determined in accordance
with the Securities Exchange Act of 1934), at least one thousand
shares of the common stock of this Corporation.
Section 4. Nominations: Subject to the rights of any class
or series of stock having a preference over the Common Stock as
to dividends or upon liquidation to elect directors under
specified circumstances, nominations for the election of
directors may be made by the Board of Directors or a committee
appointed by the Board of Directors or by any stockholder
entitled to vote in the election of directors generally.
However, any stockholder entitled to vote in the election of
directors generally may nominate one or more persons for election
as director at a meeting only if written notice of such
stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by United States mail,
postage prepaid, to the Secretary of the Corporation not later
than (i) with respect to an election to be held at an annual
meeting of stockholders, 90 days in advance of such meeting, and
(ii) with respect to an election to be held at a special meeting
of stockholders for the election of directors, the close of
business on the tenth day following the date on which notice of
such meeting is first given to stockholders. Each such notice
shall set forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings
between stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d)
such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (e) the consent
of each nominee to serve as a director of the Corporation if so
elected. The chairman of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the
foregoing procedure.
Section 5. Notice of Stockholder Business: At an annual
meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting.
To be properly brought before an annual meeting, business must be
(a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors,
(b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly
brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a stockholder's
notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 90
days prior to the meeting. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (b) the name and address, as they appear on
the Corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the Corporation
which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business.
Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 5. The
chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the
provisions of this Section 5 and if he should so determine, he
shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
Section 6. Election: At each annual meeting of
stockholders, Directors shall, except as otherwise required or
provided by law or by the Certificate of Incorporation, be
elected by a plurality of the votes cast at such meeting by the
holders of stock entitled to vote in the election. Each Director
shall hold office until his successor shall be elected and
qualified, or until his death, or until he shall resign or shall
have been removed in the manner hereinafter provided, or until he
shall cease to qualify.
Section 7. Resignation: Any Director of the Corporation
may resign at any time by giving written notice to the
Corporation. The resignation of any Director shall take effect
at the time specified therein, and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 8. Removal of Directors: Any Director may be
removed from office, with cause, by the affirmative vote of the
holders of record of a majority of the combined voting power of
the outstanding shares of Stock entitled to vote generally in the
election of directors, voting together as a single class and
without cause, only by the affirmative vote of the holders of 80%
of the combined voting power of the then outstanding shares of
stock entitled to vote generally in the election of directors,
voting together as a single class.
Section 9. Newly Created Directorships and Vacancies:
Except as otherwise fixed pursuant to the provisions of Article
FOURTH of the Certificate of Incorporation relating to the rights
of the holders of any class or series of stock having preference
over the Common Stock as to dividends or upon liquidation to
elect additional directors under specified circumstances, newly
created directorships resulting from any increase in the number
of directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other cause shall be filled by the affirmative vote of a majority
of the remaining directors then in office, even though less than
a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the
new directorship was created or the vacancy occurred and until
such director's successor shall have been elected and qualified.
No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Section 10. First Meeting: After each annual election of
Directors and on the same day, the Board of Directors may meet
for the purpose of organization, the election of officers and the
transaction of other business at the place where regular meetings
of the Board of Directors are held. Notice of such meeting need
not be given. Such meeting may be held at any other time or
place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors or in a
consent and waiver of notice thereof signed by all the Directors.
Section 11. Regular Meetings: Regular meetings of the
Board of Directors shall be held at such places and at such times
as may from time to time be fixed by the Board. Notice of
regular meetings need not be given.
Section 12. Special Meetings: Special meetings of the
Board of Directors shall be held at any time upon the call of the
Chairman of the Board or any two of the Directors. Notice of
each such meeting shall be mailed to each Director, addressed to
him at his residence or usual place of business, at least three
days before the day on which the meeting is to be held, or shall
be sent to him by telegraph, cable or wireless so addressed or
shall be delivered personally or by telephone at least 24 hours
before the time the meeting is to be held. Each notice shall
state the time and place of the meeting but need not state the
purposes thereof, except as otherwise herein expressly provided.
Notice of any meeting of the Board of Directors need not,
however, be given to any Director, if waived by him in writing or
by telegraph, cable, wireless or other form of recorded
communication or if he shall be present at such meeting; and any
meeting of the Board shall be a legal meeting without any notice
thereof having been given if all of the Directors of the
Corporation then in office shall be present thereat.
Members of the Board of Directors, or any committee
designated by such Board, may participate in a meeting of such
Board or committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 13. Quorum and Manner of Acting: Except as
otherwise provided by statute or by these By-laws, a majority of
the authorized number of Directors shall be required to
constitute a quorum for the transaction of business at any
meeting, and the affirmative vote of a majority of the Directors
present at the meeting shall be necessary for the adoption of any
resolution or the taking of any other action. In the absence of
a quorum, the Director or Directors present may adjourn any
meeting from time to time until a quorum be had. Notice of any
adjourned meeting need not be given.
Section 14. Written Consent: Any action required or
permitted to be taken at any meeting of the Board of Directors
may be taken without a meeting if all members of the Board
consent thereto in writing and such writing or writings are filed
with the minutes of proceedings of the Board.
Section 15. Compensation: The Board of Directors shall
have the authority to fix the compensation of Directors for
services in any capacity and to provide that the Corporation
shall reimburse each Director for any expenses paid to him on
account of his attendance at any regular or special meeting of
the Board. Nothing herein contained shall be construed so as to
preclude any Director from serving the Corporation in any other
capacity, or from serving any of its stockholders, subsidiaries
or affiliated corporations in any capacity and receiving proper
compensation therefor.
Section 16. Executive and Other Committees: The Board of
Directors may in its discretion by resolution passed by a
majority of the whole Board designate an Executive Committee and
one or more other committees, each consisting of one or more of
the Directors of the Corporation, and each of which, to the
extent provided in the resolution and the laws of the State of
Delaware, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may
require it; provided, however, that no such committee shall have
power or authority as to the following matters:
(1) The amendment of the Certificate of Incorporation of
the Corporation (except as provided under applicable
Delaware law).
(2) The adoption of an agreement of merger or
consolidation.
(3) Recommending to the stockholders the sale, lease or
exchange of all or substantially all of the
Corporation's property and assets.
(4) Recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution.
(5) The amendment of the By-laws of the Corporation.
Unless a greater proportion is required by the resolution
designating a committee of the Board of Directors, a majority of
the entire authorized number of members of such committee shall
constitute a quorum for the transaction of business, and the act
of a majority of the members voting on any item of business, if a
quorum votes, shall be the act of such committee. Any action
required, or permitted to be taken at any meeting of a committee
of the Board of Directors, may be taken without a meeting if all
members of such committee consent thereto in writing and the
writing or writings are filed with the minutes of proceedings of
such committee.
Section 17. Indemnification.
(a) Each person (including, here and hereinafter,
the heirs, executors, administrators, or estate of such
person) (1) who is or was a Director or officer of the
Corporation, (2) who is or was an agent or employee of
the Corporation other than an officer and as to whom
the Corporation has agreed to grant such indemnity, or
(3) who is or was serving at the request of the
Corporation as its representative in the position of a
director or officer of another corporation, partner-
ship, joint venture, trust or other enterprise, shall
be indemnified by the Corporation as of right to the
full extent permitted or authorized by the General
Corporation Law of the State of Delaware as the same
exists or may hereafter be amended against any fine,
liability, cost or expense asserted against him or
incurred by him in his capacity as such director,
officer, agent, employee, or representative, or arising
out of his status as such director, officer, agent,
employee, or representative. The Corporation may
maintain insurance, at its expense, to protect itself
and any such person against any such fine, liability,
cost or expense, whether or not the Corporation would
have the power to indemnify him against such liability
under the General Corporation Law of the State of
Delaware.
(b) The right to indemnification conferred in
this Section shall be a contract right and shall
include the right to be paid by the Corporation the
expenses incurred in connection with any matter covered
by paragraph (a) of this Section 17 in advance of its
final disposition (hereinafter an "advance payment of
expenses"). If the Delaware General Corporation Law
requires, however, an advance payment of expenses
incurred by an indemnitee in his or her capacity as a
director or officer shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of
such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial
decision that such indemnitee is not entitled to be
indemnified for such expenses. Such expenses incurred
by other employees, agents, or representatives, or by
directors or officers who become the subject of a
lawsuit by reason of actions other than in their
capacity as a director or officer, may be so paid upon
such terms and conditions as the Board of Directors
deems appropriate.
(c) If a request for indemnification is not paid
in full within sixty days, or if a request for advance
payment of expenses is not paid in full within twenty
days, after receipt by the Corporation of the written
request, the indemnitee may at any time thereafter,
prior to such payment, bring suit against the
Corporation to recover the unpaid amount of the claim.
If successful in whole or in part in such suit, the
indemnitee shall be entitled also to recover from the
Corporation the expenses reasonably incurred in
prosecuting the claim. Neither the failure of the
Board of Directors, legal counsel, or the stockholders
of the Corporation to make a determination that the
indemnitee is entitled to indemnification, nor a
determination by any of them that the indemnitee is not
entitled to indemnification, for whatever reason, shall
create a presumption in such a suit that the indemnitee
has not met the applicable standard of conduct, nor
shall it be a defense to such suit. In any such suit
the burden of establishing that the indemnitee is not
entitled to indemnification or an advance payment of
expenses shall be on the Corporation.
(d) The rights to indemnification and advance
payment of expenses hereunder shall be in addition to
any other right which any director, officer, employee,
agent, or representative may have under any statute,
provision of the Certificate of Incorporation, By-law,
agreement, vote of stockholders or directors, or
otherwise.
ARTICLE III.
Officers
Section 1. Officers Enumerated: The Board of Directors, as
soon as may be practicable after the annual election of
Directors, shall elect a Chairman of the Board, a President and
Chief Executive Officer, a Vice Chairman, one or more Vice
Presidents (one or more of whom may be designated Executive Vice
President or Senior Vice President), a Secretary, a Treasurer,
and a Controller and from time to time may elect or appoint such
other officers as it may determine. Any two or more offices may
be held by the same person.
Section 2. Term of Office: Each officer shall hold office
for the term for which he is elected or appointed and until his
successor has been elected or appointed and qualified or until
his death or until he shall resign or until he shall have been
removed in the manner hereinafter provided.
Section 3. Powers and Duties: The officers of the
Corporation shall each have such powers and authority and perform
such duties in the management of the property and affairs of the
Corporation as from time to time may be prescribed by the Board
of Directors and, to the extent not so prescribed, they shall
each have such powers and authority and perform such duties in
the management of the property and affairs of the Corporation,
subject to the control of the Board, as generally pertain to
their respective offices.
Without limitation of the foregoing:
(a) Chairman of the Board: The Chairman of the Board shall
preside at all meetings of the Board and of the
Executive Committee of the Board and at all meetings of
stockholders. He shall be a director of the
Corporation. He shall be an ex officio member of all
committees of the Board, except the Executive
Compensation and the Audit Committees.
(b) President and Chief Executive Officer: The President
shall be the chief executive officer of the Corporation
and shall be a director of the Corporation.
(c) Vice Chairman: The Vice Chairman shall be the chief
financial and administrative officer of the Corporation
and shall be a director of the Corporation. In the
event of the death, resignation, removal, disability or
absence of the Chairman or the President, he shall
possess the powers and perform the duties of such
officer.
(d) Vice Presidents: The Board of Directors shall
determine the powers and duties of the respective Vice
Presidents and may, in its discretion, fix such order
of seniority among the respective Vice Presidents as it
may deem advisable.
(e) Secretary: The Secretary shall issue notices of all
meetings of the stockholders and Directors where
notices of such meetings are required by law or these
By-laws and shall keep the minutes of such meetings.
He shall sign such instruments and attest such
documents as require his signature of attestation and
affix the corporate seal thereto where appropriate.
(f) Treasurer: The Treasurer shall have custody of all
funds and securities of the Corporation and shall sign
all instruments and documents as require his signature.
He shall perform all acts incident to the position of
Treasurer, subject to the control of the Board of
Directors.
(g) Controller: The Controller shall be in charge of the
accounts of the Corporation and he shall have such
powers and perform such duties as may be assigned to
him by the Board of Directors.
(h) General Counsel: The General Counsel shall have
general control of all matters of legal import
concerning the Corporation.
Section 4. Temporary Absence: In case of the temporary
absence or disability of any officer of the Corporation, except
as otherwise provided in these By-laws, the Chairman of the
Board, the President, the Vice Chairman, any Vice President, the
Secretary or the Treasurer may perform any of the duties of any
such other officer as the Board of Directors or Executive
Committee may prescribe.
Section 5. Resignations: Any officer may resign at any
time by giving written notice of his resignation to the
Corporation. Any such resignation shall take effect at the time
specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 6. Removal: Any officer may be removed, either
with or without cause, at any time by action of the Board of
Directors.
Section 7. Vacancies: A vacancy in any office because of
death, resignation, removal or any other cause may be filled by
the Board of Directors.
Section 8. Compensation: The salaries of the officers
shall be fixed from time to time by the Board of Directors.
Nothing contained herein shall preclude any officer from serving
the Corporation in any other capacity, including that of
director, or from serving any of its stockholders, subsidiaries
or affiliated corporations in any capacity and receiving a proper
compensation therefor.
Section 9. Contracts, Checks, etc.: All contracts and
agreements authorized by the Board of Directors, and all checks,
drafts, bills of exchange or other orders for the payment of
money, notes or other evidences of indebtedness, issued in the
name of the Corporation, shall be signed by such person or
persons and in such manner as may from time to time be designated
by the Board of Directors, which designation may be general or
confined to specific instances.
Section 10. Proxies in Respect of Securities of Other
Corporations: Unless otherwise provided by resolution adopted by
the Board of Directors, the Chairman of the Board, the President
and Chief Executive Officer, the Vice Chairman, a Vice President,
or the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, or any one of them, may exercise or appoint
an attorney or attorneys, or an agent or agents, to exercise in
the name and on behalf of the Corporation the powers and rights
which the Corporation may have as the holder of stock or other
securities in any other corporation to vote or to consent in
respect of such stock or other securities; and the Chairman of
the Board, the President and Chief Executive Officer, the Vice
Chairman, a Vice President, or the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer may instruct
the person or persons so appointed as to the manner of exercising
such powers and rights and the Chairman of the Board, the
President and Chief Executive Officer, the Vice Chairman, a Vice
President, or the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer may execute or cause to be
executed in the name and on behalf of the Corporation and under
its corporate seal, or otherwise, all such ballots, consents,
proxies, powers of attorney or other written instruments as they
or either of them may deem necessary in order that the
Corporation may exercise such powers and rights. Any stock or
other securities in any other corporation which may from time to
time be owned by or stand in the name of the Corporation may,
without further action, be endorsed for sale or transfer or sold
or transferred by the Chairman of the Board, the President and
Chief Executive Officer, the Vice Chairman, or a Vice President,
or the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Corporation or any proxy appointed in
writing by any of them.
ARTICLE IV.
Shares and Their Transfer
Section 1. Certificates of Stock: Every stockholder shall
be entitled to have a certificate certifying the number of shares
of stock of the Corporation owned by him signed by, or in the
name of, the Corporation by the Chairman of the Board, or the
President and Chief Executive Officer, the Vice Chairman, or a
Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation. Any
of or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such
officer, transfer agent or registrar.
Section 2. Transfers: Certificates shall be registered for
transfer on the stock books of the Corporation in person or by
attorney, but, except as hereinafter provided in the case of
loss, destruction or mutilation of certificates, no transfer of
stock shall be entered until the previous certificate, if any,
given for the same shall have been surrendered and canceled.
Section 3. Lost, Destroyed or Mutilated Certificates: The
Corporation may issue a new certificate of stock of the same
tenor and same number of shares in place of a certificate
theretofore issued by it which is alleged to have been lost,
stolen or destroyed; provided, however, the Board of Directors or
the Executive Committee or the Secretary of the Corporation may
require the owner of the lost, stolen or destroyed certificate,
or his legal representative, to give the Corporation a bond of
indemnity, in form and with one or more sureties satisfactory to
the Board or the Executive Committee, sufficient to indemnify it
against any claim that may be made against the Corporation on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 4. Record Date: The Board of Directors may fix a
record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the
board of directors, and which shall not be more than sixty (60)
nor less than ten (10) days before the date of such meeting, nor
more than sixty (60) days prior to any other action, as a record
date for the determination of the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to exercise
any rights with respect to any change, conversion or exchange of
stock or for the purpose of any other lawful action. If no
record date is fixed, (a) the record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the
day upon which the meeting is held, and (b) the date for
determining stockholders for any other purpose shall be at the
close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
Section 5. Books and Records: The books and records of the
Corporation may be kept at such places within or without the
State of Delaware as the Board of Directors may from time to time
determine.
ARTICLE V.
Seal
The Board of Directors shall provide a corporate seal, which
shall be in the form of a circle and shall bear the name of the
Corporation, the year in which the Corporation was incorporated
(1971) and the words "Corporate Seal - Delaware" and such other
words or figures as the Board of Directors may approve and adopt.
ARTICLE VI.
Amendments
Except as otherwise provided by these By-laws, the
Certificate of Incorporation, or by operation of law, the By-laws
of the Corporation may be made, altered or repealed by vote of
the stockholders at any annual or special meeting of stockholders
called for that purpose or by the affirmative vote of a majority
of the directors then in office given at any regular or special
meeting of the Board of Directors.
Exhibit 4-1
$1,000,000,000
REVOLVING CREDIT AGREEMENT
dated as of December 1, 1993
Between
GANNETT CO., INC.
and
CHEMICAL BANK, FIRST INTERSTATE BANK OF CALIFORNIA,
MARINE MIDLAND BANK, MORGAN GUARANTY TRUST COMPANY,
J.P. MORGAN DELAWARE, NATIONSBANK OF NORTH CAROLINA, N.A.,
TORONTO DOMINION (TEXAS), INC.,
THE FIRST NATIONAL BANK OF CHICAGO, BANK OF AMERICA, N.T. & S.A.,
BANK OF HAWAII, THE BANK OF NOVA SCOTIA, CRESTAR BANK,
NBD BANK, N.A., ROYAL BANK OF CANADA, SOCIETE GENERALE,
CITIBANK, N.A., CREDIT LYONNAIS CAYMAN ISLAND BRANCH, THE SANWA BANK,
LIMITED, WACHOVIA BANK OF GEORGIA, N.A.,
CHASE MANHATTAN BANK, N.A., THE FIRST NATIONAL BANK OF MARYLAND,
THE FUJI BANK, LIMITED and THE NORTHERN TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1:Definitions 1
SECTION 2:Facility Fee; Termination of Commitments 7
SECTION 3:Revolving Credit - Domestic Borrowings
and Eurodollar Borrowings 8
SECTION 4:Change in Circumstances 14
SECTION 5:Representations and Warranties of
Gannett 17
SECTION 6:Representations, Warranties and Covenants of
the Banks 19
SECTION 7:Conditions of Lending 20
SECTION 8:Affirmative Covenants 20
SECTION 9:Negative Covenants 22
SECTION 10:Events of Default 24
SECTION 11:Amendments 26
SECTION 12:Servicing Bank 26
SECTION 13:Miscellaneous 27
<PAGE>
GANNETT CO., INC.
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is made as of December 1, 1993
between Gannett Co., Inc., a Delaware corporation ("Gannett"), and each of the
banks that is or may become a party to this Agreement from time to time
(each called a "Bank" and collectively called the "Banks").
The parties agree as follows:
SECTION 1. Definitions. The following words and terms shall have the
following meanings in this Agreement:
"Advance" shall mean a Money Market Advance, a Competitive Bid
Rate Advance, an Alternate Rate Advance or a Eurodollar Advance, as the
case may be.
"Agreement" shall mean this Revolving Credit Agreement, as
amended from time to time.
"Applicable Margin" for an Advance shall be the appropriate rate
per annum set forth below opposite the interest rate applicable to such
Advance:
Prior to After Credit After Credit
Interest Rate Credit Adjustment Adjustment A Adjustment B
------------- ----------------- ------------------ -----------------
Alternate Rate 0% 0% 0%
Eurodollar Rate 16.5 Basis Points 26.25 Basis Points 40 Basis Points
Money Market Rate 29 Basis Points 38.75 Basis Points 52.5 Basis Points
Competitive Bid Rate 0% 0% 0%
"Alternate Rate" means, with respect to an Alternate Rate
Advance an interest rate equal to the Prime Rate.
"Alternate Rate Advance" shall mean any Revolving Credit Loan
with respect to which interest is computed at the Alternate Rate.
"Basis Point" means 1/100th of one percent.
"Board" means the Board of Governors of the Federal Reserve
System, or any successor thereto.
"Borrowing" shall mean the outstanding principal amount of any
Revolving Credit Loans made to Gannett by any Bank or Banks in response to
each borrowing notice delivered by Gannett pursuant to this Agreement. A
Borrowing is referred to as a "Domestic Borrowing" if it is comprised of
Revolving Credit Loans made pursuant to Section 3(b) or accepted by Gannett
pursuant to Section 3(d) or a "Eurodollar Borrowing" if it is comprised of
Revolving Credit Loans made pursuant to Section 3(c). A Competitive Bid
Rate Borrowing may be either a Eurodollar Borrowing or a Domestic Borrowing
depending on the type of interest rate at which such Competitive Bid Rate
Borrowing is made.
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a legal holiday for banks in the State of
New York.
"Commitment" shall mean, with respect to each Bank, the amount
set forth opposite such Bank's name on Schedule 1 hereto or in such lesser
amount as shall be established from time to time pursuant to Sections 2(b) or
3(d) hereof, and subject to any adjustments resulting from Sections 3(f) or
13(i) hereof.
"Competitive Bid Rate" means the rate of interest offered by a
Bank in response to a Request for Offer and accepted by Gannett pursuant
to Section 3(d).
"Competitive Bid Rate Advance" shall mean any Revolving Credit
Loan with respect to which interest is computed at the Competitive Bid Rate.
"Credit Rating Adjustment A" shall occur if Standard & Poor's
Corporation adjusts Gannett's credit rating on long-term debt below A or
Moody's Investors Service, Inc. adjusts Gannett's credit rating on long-term
debt below A2.
"Credit Rating Adjustment B" shall occur if Standard & Poor's
Corporation adjusts Gannett's credit rating on long-term debt below BBB,
Moody's Investors Service, Inc. adjusts Gannett's credit rating on long-term
debt below Baa2 or Moody's Investor Service and Standard and Poor's
Corporation or any similar rating agency ceases to provide a credit rating
for Gannett.
"Designated Banks" shall mean Morgan Guaranty Trust Company of
New York, The Toronto Dominion Bank and First Interstate Bank of California.
"Effective Date" shall mean the date of this Agreement.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"Eurodollar Advance" shall mean any Revolving Credit Loan with
respect to which interest is computed at the Eurodollar Rate.
"Eurodollar Business Day" means any day on which commercial
banks are open for domestic and international business (including dealings in
dollar deposits) in London and New York City.
"Eurodollar Interest Period" means, with respect to any
Eurodollar Borrowing:
(i) initially, the period commencing on the date of such
Eurodollar Borrowing and ending one month, two months, three
months or six months thereafter, as Gannett may elect; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Eurodollar Interest Period for such
Loans and ending one month, two months, three months or six
months thereafter, as Gannett may elect;
provided that:
(A) any Eurodollar Interest Period which would
otherwise end on a day which is not a Eurodollar
Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar
month in which case such Eurodollar Interest
Period shall end on the immediately preceding
Eurodollar Business Day;
(B) any Eurodollar Interest Period which begins on a
day for which there is no numerically
corresponding day in the calendar month during
which such Eurodollar Interest Period is to end
shall, subject to clause (A) above, end on the last
Eurodollar Business Day of such calendar month;
(C) if any Eurodollar Interest Period determined as
set forth above would otherwise end after the
Maturity Date of such Eurodollar Borrowing such
Eurodollar Interest Period shall end on such
Maturity Date.
"Eurodollar Rate" means, with respect to Eurodollar Borrowings,
the rate of interest in effect from time to time with respect to such
Eurodollar Borrowings, as determined pursuant to Section 3(c)(iii).
"Eurodollar Lending Office" means, as to each Bank, its office or
branch located at its address set forth in Schedule 1 hereof or such other
branch (or affiliate) of such Bank as it may hereafter designate as its
Eurodollar Lending Office by notice to Gannett and the Servicing Bank.
"Event of Default" shall mean any of the Events of Default
specified in Section 10(a) of this Agreement.
"Expiration Date" shall mean December 1, 1998.
"Facility Fee" shall have the meaning assigned to such term in
Section 2(a).
"LIBOR Reserve Adjustment" means an adjustment to the London
Interbank Offered Rate determined by dividing the London Interbank Offered
Rate determined by the Reference Bank by a percentage equal to 100% minus
the applicable Statutory Rate then in effect, determined by the Reference
Bank.
"London Interbank Offered Rate or LIBOR" shall mean the average
of the rates per annum at which deposits in dollars are offered in
immediately available funds to the Designated Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Eurodollar Business Days
prior to the first day of the Eurodollar Interest Period to which such rate
applies on amounts of $5,000,000 or more for a period of time comparable to
such Eurodollar Interest Period and adjusted for by the LIBOR Reserve
Adjustment applicable to the Reference Bank.
"Material" or "Materially" when used to describe an adverse
effect of an event on Gannett or its subsidiaries shall mean a condition,
event or act which with the giving of notice or the lapse of time or both, will
constitute an Event of Default.
"Maturity Date" means, with respect to the loans comprising any
Borrowing, the maturity date of such Borrowing specified by Gannett
pursuant to Sections 3(b)(i), 3(c)(i) or 3(d) but in no event a date extending
beyond the Expiration Date.
"Money Market Rate" means, with respect to Money Market
Advances, the interest rate for a specified N.Y. Interest Period determined
to be the sum of the Applicable Margin plus the rate of interest determined
by the Reference Bank to be the average of prevailing secondary market
morning bid rates in the U.S. at 9:00 A.M. (New York, New York time) (or as soon
thereafter as practicable) on the first day of the N.Y. Interest Period of
three New York certificate of deposit dealers of recognized standing for the
purchase at face value from each Designated Bank of its certificates of
deposit in an amount comparable to the unpaid principal amount of the Money
Market Advances from such Designated Bank to which such N.Y. Interest
Period applies and having a maturity comparable to such N.Y. Interest Period,
adjusted to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1% and further adjusted for by the Reserve
and Assessment Adjustment applicable to the Reference Bank.
"Money Market Advance" shall mean any Revolving Credit Loan with
respect to which interest is computed at the Money Market Rate.
"Net Property, Plant and Equipment" shall mean the amount under
that heading on the consolidated balance sheet of Gannett and its
Subsidiaries prepared in accordance with generally accepted accounting
principles.
"N.Y. Interest Period" means one or more successive periods,
commencing the date of a Money Market Advance or Alternate Rate Advance
and continuing until such Money Market Advance or Alternate Rate Advance is
repaid or is converted to an Alternate Rate Advance, Money Market Advance,
or Eurodollar Advance, with each successive period beginning the day after
the last day of the immediately preceding period. The duration of each N.Y.
Interest Period with respect to each Money Market Advance shall be 30, 60,
90 or 180 days, as Gannett shall, by notice delivered to the Servicing Bank
no later than 10:00 A.M. (New York time) one Business Day prior to the first
day of such N.Y. Interest Period, select, provided that (i) if Gannett fails to
select the duration of any N.Y. Interest Period, the duration shall be 30
days, and (ii) whenever the last day of any N.Y. Interest Period falls on a
date which is not a Business Day then the last day of such N.Y. Interest
Period shall be extended automatically to the next succeeding Business Day.
The N.Y. Interest Period with respect to each Alternate Rate Advance shall
be the period specified by Gannett in the borrowing notice relating to such
Alternate Rate Advance.
"Prime Rate" means the fluctuating rate of interest as announced
publicly in New York City from time to time by the Reference Bank as its
prime rate.
"Reference Bank" shall mean Morgan Guaranty Trust Company of
New York.
"Request for Offer" shall have the meaning assigned to that term
in Section 3(d).
"Required Banks" shall mean the Banks which are the holders of at
least 51% of the Commitments and, if there are any Borrowings then
outstanding, the holders of 51% of the unpaid principal amount of the
Borrowings then outstanding.
"Reserve and Assessment Adjustment" means an adjustment to the
certificate of deposit rate component of the Money Market Rate determined
by (i) dividing the certificate of deposit rate determined by the Reference
Bank (excluding the Applicable Margin) by a percentage equal to 100% minus
the Statutory Rate then in effect, as determined by the Reference Bank, (ii)
adding to the result determined pursuant to clause (i) the Assessment Rate
for such Bank then in effect and adjusting the result to the nearest 1/100 of
1% or, if there is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%.
For purposes of this definition, the "Statutory Rate" of the
Reference Bank at any time is the percentage then specified by the Board
for determining the reserve requirements for such Bank for domestic non-
personal time deposits of $100,000 or more having a maturity equal to the
maturity of the applicable N.Y. Interest Period or for determining the
Eurodollar reserve requirements for such Bank in amounts of $5,000,000 or
more for the Eurodollar Interest Period selected by Gannett. It shall be
assumed that the Statutory Rate in each case on the Effective Date is 0%.
The Statutory Rate shall be adjusted automatically on and as of the
effective date for any change in such rate specified by the Board. The
"Assessment Rate" for the Reference Bank is the net annual assessment rate
(rounded upward to the nearest 1/100 of 1%) actually paid by the Reference
Bank to the Federal Deposit Insurance Corporation (or its successor) for
insurance by such corporation (or such successor) of certificates of
deposit made in dollars at the Reference Bank's domestic offices during the
immediately preceding calendar year. The Assessment Rate for the period
from the Effective Date through January 31, 1994 shall be 22.77 Basis Points.
The Assessment Rate for any subsequent year shall be that rate in effect on
February 1st of such year and shall remain in effect through January 31st of
the immediately following year or such other period as may be publicly
announced by the Federal Deposit Insurance Corporation (or any successor).
"Revolving Credit Loan" shall have the meaning assigned to such
term in Section 3(a).
"Servicing Bank" shall mean Chase Manhattan Bank, N.A. (Rochester
Division), so long as it shall act as Servicing Bank as provided in this
Agreement, and thereafter any successor appointed as Servicing Bank as
provided in Section 12 hereof.
"Subsidiary" shall mean any corporation the majority of the
shares of voting stock of which at any time outstanding is owned directly or
indirectly by Gannett or by one or more of its other subsidiaries or by
Gannett in conjunction with one or more of its other subsidiaries.
"Total Shareholders' Equity" shall mean the amount appearing
under that heading on the consolidated balance sheet of Gannett and its
Subsidiaries, prepared in accordance with generally accepted accounting
principles.
SECTION 2. Facility Fee; Termination of Commitments.
2(a). Facility Fee. Gannett will pay to each Bank pro rata, as
consideration for the Bank's Commitment hereunder, a facility fee (the
"Facility Fee") consisting of:
(i) a fee calculated at the rate of 12.5 Basis Points per
annum or after Credit Rating Adjustment A, a fee calculated at
the rate of 18.75 Basis Points per annum or after Credit Rating
Adjustment B, a fee calculated at the rate of 25 Basis Points per
annum, computed pursuant to Section 3(g) from (and including) the
Effective Date on the Bank's Commitment hereunder, payable
quarterly on each June 1, September 1, December 1 and March 1,
after the date hereof, commencing with the first payment due on
March 1, 1994, and on (but excluding for purposes of calculating
the Facility Fee) the Expiration Date, for the preceding period
for which such Facility Fee has not been paid.
2(b). Termination of Commitments. Gannett may from time to time
terminate in whole or in part the unborrowed Commitments of the Banks
hereunder by giving not less than two Business Days prior notice to such
effect to the Servicing Bank. Any partial termination shall be in the
aggregate amount of $100,000 or a multiple thereof. After each termination,
the facility fee shall be calculated based upon the Commitment of the Banks
as so reduced.
SECTION 3. Revolving Credit - Domestic Borrowings
and Eurodollar Borrowings.
3(a). Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank severally
agrees to make one or more loans (each a "Revolving Credit Loan" and,
collectively, the "Revolving Credit Loans") to Gannett, at any time and from
time to time on or after the Effective Date to and excluding the Expiration
Date, in an aggregate principal amount not exceeding at any one time
outstanding the amounts set forth opposite each Bank's name on Schedule 1
hereto under the heading "Commitment Amount."
Within such limits, Gannett may borrow, prepay under Section 3(e),
and reborrow on and after the Effective Date to and excluding the Expiration
Date. The first Borrowing hereunder shall not be less than $50,000,000 and
each Borrowing thereafter shall be at least $1,000,000 or a multiple
thereof. Such Borrowings may be used for any of Gannett's or its
Subsidiaries' general corporate purposes, including but not limited to,
general operating expenses, repurchases of securities, dividends, costs of
construction, acquisitions, and refunding or purchase of its commercial
paper issued or any other of Gannett's or its Subsidiaries' obligations or
securities.
Except as provided in Section 3(d) hereof, each Borrowing shall be
made ratably from the Banks in accordance with their respective
Commitments; provided, however, that the failure of any Bank to make its
Advance shall not relieve any other Bank of its obligations to lend.
3(b).Money Market and Alternate Rate Advances
(i) For each Money Market Advance and Alternate Rate
Advance, Gannett shall deliver to the Servicing Bank notice at
least one Business Day before such proposed Borrowing
specifying the total amount of such Borrowing, whether it is to
be comprised of Money Market Advances or Alternate Rate
Advances, the applicable N.Y. Interest Period, the amount
thereof which is to be loaned by each Bank, the date of such
proposed Borrowing and the Maturity Date, which shall not be
later than the Expiration Date. Upon its receipt of Gannett's
notice, the Servicing Bank shall promptly notify each Bank by
telecopy of the date of the proposed borrowing, the amount to
be loaned by such Bank, whether it is to be a Money Market
Advance or an Alternate Rate Advance, the N.Y. Interest Period
and the Maturity Date, which shall be the last day of the N.Y.
Interest Period. Thereafter, the Servicing Bank shall forward a
xerographic copy of Gannett's notice to each other Bank. On the
date specified in such notice and prior to 11:00 A.M. (New York,
New York time), each Bank shall make its share of the Borrowing
available in immediately available funds to Gannett at the
principal office of the Servicing Bank.
(ii) Gannett will pay to each Bank on or, as set forth in
Section 3(e), before the Maturity Date the principal amount of
each Money Market or Alternate Rate Advance from such Bank
incurred pursuant to this Agreement, and accrued and unpaid
interest on the unpaid principal amount thereof from time to
time outstanding payable on the last day of the N.Y. Interest
Period at the Money Market Rate for Money Market Advances, and
payable on the last day of the N.Y. Interest Period at the
Alternate Rate for Alternate Rate Advances. Accrued and
unpaid interest on a Money Market Advance for a N.Y. Interest
Period of 180 days shall be due and payable on the 90th day
succeeding such Domestic Borrowing and on the last day of the
N.Y. Interest Period. Gannett shall have the right, at its sole
option, provided that the conditions specified in Section 7(a)
are satisfied as of that date, to extend the Maturity Date of
such Borrowings by giving notice to the Servicing Bank one
Business Day before such Maturity Date, specifying another
Maturity Date, not later than the Expiration Date, whether the
Borrowing is to be a Money Market Advance or an Alternate Rate
Advance and the N.Y. Interest Period.
(iii) Gannett may at its option, subject to compliance with
Section 3(e)(i), convert Alternate Rate Advances to Money Market
Advances or, subject to compliance with Section 3(e)(ii), convert
Money Market Advances to Alternate Rate Advances, by giving
the Servicing Bank at least two Business Days prior notice
meeting the requirements of Section 3(b)(i) hereof, and, in
addition, specifying in such notice that, instead of a new
borrowing, Gannett will convert an existing Alternate Rate
Advance to a Money Market Advance or an existing Money Market
Advance to an Alternate Rate Advance, as the case may be.
(iv) If on or before the date on which a Money Market Rate
is to be determined hereunder, a Money Market Rate cannot be
determined, the Servicing Bank shall forthwith give notice to
Gannett and, unless Gannett and the Banks agree to alternative
action, the Money Market Advance shall become an Alternate
Rate Advance on the first day of the N.Y. Interest Period
specified in Gannett's notice.
3(c). Eurodollar Borrowings.
(i) For each Eurodollar Borrowing Gannett shall deliver
to the Servicing Bank at least three Eurodollar Business Days
prior notice specifying (A) the total amount of such Borrowing;
(B) the amount thereof which is to be loaned by each Bank; (C) the
date of such proposed Borrowing which shall be a Eurodollar
Business Day; (D) the Maturity Date of the Borrowing, which shall
be the last Eurodollar Business Day of the Eurodollar Interest
Period, and no later than the Expiration Date; and (E) the
duration of the first Eurodollar Interest Period, which shall be
either one month, two months, three months or six months. Upon
receipt of such notice, the Servicing Bank shall promptly notify
each Bank by telecopy of the contents thereof and of such
Bank's ratable share of such Borrowing. Thereafter, the
Servicing Bank shall forward a xerographic copy of Gannett's
notice to each other Bank. Not later than 11:00 A.M. (New York,
New York time) on the date so specified, each Bank shall make
available its ratable share of such Borrowing, in immediately
available funds to Gannett at the principal office of the
Servicing Bank.
(ii) Gannett will pay to each Bank each Eurodollar
Advance made by it on the date specified as its Maturity Date in
the notice given by Gannett pursuant to Section 3(c)(i) with
respect to such Borrowing. Gannett shall have the right, at its
sole option, provided that the conditions specified in Section
7(a) are satisfied as of that date, to extend the Maturity Date
of such Borrowings by giving notice to the Servicing Bank at
least three Eurodollar Business Days before such Maturity
Date, specifying another date ending one month, two months,
three months or six months thereafter, but not later than the
Expiration Date as the Maturity Date for such Borrowings.
(iii) Each Eurodollar Advance shall bear interest on the
unpaid principal amount thereof from time to time outstanding
and Gannett will pay accrued and unpaid interest for each
applicable Eurodollar Interest Period on the last day of such
Eurodollar Interest Period, at an interest rate equal to the
sum of the Applicable Margin plus the applicable London
Interbank Offered Rate; provided, however, that accrued and
unpaid interest for a six-month Eurodollar Interest Period will
be paid on the first three-month anniversary of that Eurodollar
Borrowing and on the last day of such Eurodollar Interest
Period.
(iv) Any overdue principal of the Eurodollar Borrowings
shall bear interest payable on demand, for each day from the
date payment thereof was due to the date of actual payment, at
the "Eurodollar Overdue Interest Rate" determined as set forth
below. The Eurodollar Overdue Interest Rate shall be calculated
by the Servicing Bank, whose determination shall be conclusive
absent manifest error, on a daily basis, and shall be a rate per
annum equal to the sum of the Applicable Margin plus the
interest rate per annum at which one day deposits in an amount
equal to the aggregate sum of such overdue payments due the
Banks are offered to the Reference Bank in the London interbank
market for the applicable period determined as provided above.
(v) Subject to the provisions of the definition of
Eurodollar Interest Period, Gannett shall have the option to
elect a length of one month, two months, three months or six
months for each Eurodollar Interest Period. Such option shall
be exercised as provided in Section 3(c)(i) with respect to the
first Eurodollar Interest Period applicable to the loans
comprising each Eurodollar Borrowing and may be exercised as to
each subsequent Eurodollar Interest Period applicable to such
loans by giving notice to the Servicing Bank three Eurodollar
Business Days prior to the first day of the relevant Eurodollar
Interest Period. If no such notice is received by the Servicing
Bank within the prescribed time, Gannett shall be deemed to have
elected a Eurodollar Interest Period of three months.
3(d). Competitive Bid Rate Borrowings. At any time and from
time to time Gannett may request that some or all of the Banks submit in
writing to Gannett an offer to make a Revolving Credit Loan in the amount
and for the duration specified in Gannett's request for offer ("Request for
Offer"), at an interest rate not otherwise available under the terms of this
Agreement to be specified by such Bank. Each Bank shall, on the Business Day
following the date of receipt of such Request for Offer deliver a written
offer to Gannett specifying an interest rate on the terms otherwise set
forth in the Request for Offer. Any Bank that does not deliver an offer on
the next Business Day shall be deemed to have declined to make an offer. To
accept any such offer, Gannett shall send notice to such Bank and the
Servicing Bank within three Business Days after the date on which all such
Requests for Offer shall have been delivered by Gannett, specifying its
acceptance of such offer, reconfirming the terms thereof, specifying the
date such Borrowing is to be made and the Maturity Date. Each Revolving
Credit Loan, together with all other Revolving Credit Loans made pursuant
to any individual Request for Offer made by Gannett under this Section 3(d),
shall be referred to as a "Competitive Bid Rate Borrowing". Except as
specifically set forth in the Request for Offer relating thereto or
otherwise agreed to by Gannett and the Bank or Banks making Advances
comprising any such Competitive Bid Rate Borrowing, each Competitive Bid
Rate Borrowing shall be subject to this Agreement. Notwithstanding any
Request for Offer by Gannett, no Bank may make a Competitive Bid Rate
Advance in excess of the then unused amount of its Commitment. For so long
as any such Competitive Bid Rate Advance shall remain outstanding, each
Bank's Commitment shall be deemed automatically reduced by the aggregate
amount of any such Competitive Bid Rate Advance made by it for all purposes
under this Agreement including, but not limited to, the obligation of such
Bank to make additional Revolving Credit Loans and the right of such Bank to
receive its pro rata portion of the Facility Fee.
3(e). Prepayment or Conversion. Gannett may prepay or convert
Borrowings pursuant to this Section 3 as follows:
(i) Alternate Rate Advances may, upon one Business Day
prior notice to the Servicing Bank, be prepaid or, upon two
Business Days prior notice to the Servicing Bank, be converted
to another type of Advance without premium or penalty in whole
at any time or in part from time to time by paying or converting
a principal amount of not less than $10,000,000 or a multiple
thereof, and paying accrued interest thereon to the date of
prepayment or conversion and each such prepayment or
conversion shall be applied to prepay or convert the Alternate
Rate Advances of the several Banks in proportion to their
respective Advances; and
(ii) Money Market Advances and Eurodollar Advances may,
upon two Business Days prior notice to the Servicing Bank, be
prepaid or converted to another type of Borrowing in a principal
amount of not less than $10,000,000 or a multiple thereof with
accrued interest thereon to the date of prepayment or
conversion, provided that in the event of any prepayment or
conversion of Money Market Advances or Eurodollar Advances
other than on the last day of a N.Y. Interest Period or
Eurodollar Interest Period, Gannett shall reimburse each Bank
on demand for the loss, if any, incurred by such Bank as a result
of the timing of such prepayment or conversion by paying such
Bank a premium (if there is an excess as determined herein) on
the principal sum prepaid to such Bank, or converted, computed
from the date of the prepayment or conversion to the last day
of the N.Y. Interest Period or Eurodollar Interest Period at a
rate per annum equal to the excess, if any, of (A) the applicable
Eurodollar Rate or Money Market Rate over (B) the interest rate
which such Bank is able to obtain for an Advance of the same
type made on the day of such prepayment or conversion and
maturing on the last day of the N.Y. Interest Period or
Eurodollar Interest Period. A certificate as to the amount of
such premium submitted to Gannett and the Servicing Bank by
such Bank shall be conclusive and binding on Gannett in the
absence of manifest error.
3(f). Replacement of Commitments. If any Bank shall fail to make
an Advance in accordance with its obligations hereunder, Gannett shall have
the right to arrange that the Commitment of such Bank be taken over by any
one or more of the Banks or another bank or banks; provided that each such
bank shall sign and deliver an agreement, in suitable form, by which it will
become a party hereto. Such action by Gannett shall not constitute a waiver
or release of any right that it may have against the Bank that has failed to
extend credit hereunder.
3(g). Computation of Fees and Interest. Interest on Alternate
Rate Advances, Competitive Bid Rate Advances and the Facility Fee shall be
computed on the basis of a year of 365 (or 366) days, including any time
extended by reason of Saturdays, Sundays and holidays, and paid for the
actual number of days for which due, including the date of the Advance or
Commitment as the case may be, and excluding the date of repayment of
principal. Interest on Money Market Advances and Eurodollar Advances shall
be computed on the basis of a year of 360 days and paid for the actual
number of days for which due, including the first day of each N.Y. Interest
Period or Eurodollar Interest Period to but excluding the last day thereof.
3(h). Payments. All payments of principal or interest on the
Borrowings and the Facility Fee shall be made by Gannett when due in
immediately available funds at the principal office of the Servicing Bank in
lawful money of the United States of America.
3(i). Gannett's Borrowing Notices. Each notice given by Gannett
pursuant to Section 3 hereof concerning a Borrowing (including acceptance
by Gannett of any offer by a Bank made pursuant to Section 3(d) hereof, but
not including a Request for Offer), selection of an interest period or an
extension of a Maturity Date, shall be executed by any two of the Chairman,
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Controller, the Assistant Controller or the Vice President/Treasury
Services of Gannett. The giving of each such notice by Gannett shall be
deemed to be a representation and warranty by Gannett that the conditions
specified in Section 7(a) are satisfied on and as of the date of such notice.
Any notice of a proposed Borrowing may be withdrawn at any time prior to the
date of Borrowing specified in such notice, provided that if a notice
concerning a Borrowing at the Money Market Rate is withdrawn on the date of
the proposed Borrowing or, in the case of a Eurodollar Borrowing, two
Eurodollar Business Days or less prior to the date of the proposed
Borrowing, Gannett will indemnify each Bank against any loss or expense
incurred by such Bank in anticipation of the Borrowing, including, without
limitation, any loss (excluding loss of anticipated profits) or expense
incurred in the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Bank's share of the anticipated Borrowing.
A certificate as to the amount of such loss or expense submitted to Gannett
and the Servicing Bank by such Bank shall be conclusive and binding on
Gannett in the absence of manifest error.
3(k). Rate Quotations. The Reference Bank agrees to use its
best efforts to furnish quotations of rates applicable to this Agreement to
the Servicing Bank promptly upon request from time to time by the Servicing
Bank, and the Servicing Bank shall give notice of such rates by 12:00 Noon
(New York, New York time) to Gannett and the Banks.
3(l). Notice. Any notice under this Section 3 after 12:00 noon
on a particular Business Day or Eurodollar Business Day constitutes notice
on the morning of the next Business Day or Eurodollar Business Day, as the
case may be.
SECTION 4. Change in Circumstances.
4(a). Reduction in Rate of Return. If after the date hereof, any
Bank shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's
capital as a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Servicing Bank), Gannett shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction. Gannett shall not
be liable in respect of any increased cost to, or reduced amount of any sum
received or receivable by, any Bank pursuant to this Section 4(a) with
respect to any interest or fees accrued by such Bank more than 15 days
prior to the date of the notice required by the first sentence of Section
4(c), regardless of when such interest or fees are payable.
4(b). Increased Cost. If after the date hereof, the adoption of
any applicable law, rule or regulation or any change therein or change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank (or its Eurodollar Lending
office) with any request or directive of any such authority, central bank or
comparable agency (whether or not having the force of law):
(i) shall subject any Bank (or its Eurodollar Lending
Office) to any tax, duty or other charge with respect to a Money
Market Advance or a Eurodollar Advance or its obligation to
make Money Market Advances or Eurodollar Advances available,
or shall change the basis of taxation of payments to any Bank
(or its Eurodollar Lending office) of the principal of or interest
on its Money Market Advances or Eurodollar Advances or any
other amounts due under this Agreement in respect of its Money
Market Advances or Eurodollar Advances or its obligation to
make Money Market Advances or Eurodollar Advances (except for
changes in the rate of tax on the overall net income of a Bank or
its Eurodollar Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Eurodollar
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board, but
excluding (A) with respect to any Money Market Advance any such
requirement included in an applicable domestic reserve
percentage and (B) with respect to any Eurodollar Advance, any
such requirement included in an applicable Eurodollar reserve
percentage) against assets of, deposits with or for the account
of, or credit extended by, any Bank (or its Eurodollar Lending
Office) or shall impose on any Bank (or its Eurodollar Lending
Office) or on the United States market for certificates of
deposit or the London Interbank market any other condition
affecting its Money Market Advances, its Eurodollar Advances or
its obligation to make Money Market Advances or Eurodollar
Advances available;
and the result of any of the foregoing is to increase the cost to the Bank
(or its Eurodollar Lending Office) of making or maintaining its Money Market
Advances or its Eurodollar Advances, or its obligation to make Money Market
Advances or Eurodollar Advances, or to reduce the amount of any sum
received or receivable by any Bank (or its Eurodollar Lending Office) under
this Agreement, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Servicing Bank),
Gannett agrees to pay for the account of such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or
reduction. Gannett shall not be liable in respect of any such increased
costs to, or reduced amount of any sum received or receivable by, any Bank
pursuant to this Section 4(b) with respect to any interest or fees accrued
by such Bank more than 15 days prior to the date of the notice required by
the first sentence of Section 4(c) regardless of when such interest or fees
are payable.
4(c). Notice. Each Bank will promptly notify Gannett and the
Servicing Bank of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to
Section 4(a) or 4(b) and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank or in the reasonable judgment of
Gannett be disadvantageous to Gannett. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
4(d). Basis for Determining Interest Rate Inadequate or Unfair.
If before the beginning of any Eurodollar Interest Period:
(i) The Servicing Bank is advised by the Reference Bank
that, by reason of circumstances affecting the London Interbank
market generally, deposits in dollars (in the applicable amounts)
are not being offered to the Reference Bank in the London
interbank market for such Eurodollar Interest Period, or
(ii) Banks that have made Revolving Credit Loans
representing at least 51% in the aggregate of the unpaid
principal amount of all Eurodollar Borrowings then outstanding
(or the Commitments, if no Eurodollar Borrowings are then
outstanding) advise the Servicing Bank that the London
Interbank Offered Rate as determined by the Servicing Bank will
not adequately and fairly reflect the cost to such Banks of
maintaining or funding, for such Eurodollar Interest Period,
their Eurodollar Advances to which such Eurodollar Interest
Period applies;
The Servicing Bank shall forthwith give notice thereof to Gannett and the
Banks, whereupon until the Servicing Bank notifies Gannett that the
circumstances giving rise to such suspension no longer exist (A) the
obligations of the Banks to make Eurodollar Advances shall be suspended and
(B) Gannett shall prepay in full, without premium or penalty, the then
outstanding principal and interest of each Eurodollar Advance. Gannett
shall concurrently with prepaying each Eurodollar Advance pursuant to this
Section 4(d), draw a Domestic Borrowing in equal principal amount from such
Bank, and such Bank shall make such Domestic Borrowing notwithstanding any
provision herein to the contrary.
4(e). Illegality. If, after the date of this Agreement, the
introduction of or any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency, charged with the interpretation or
administration thereof or compliance by any Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for any Bank (or
its Eurodollar Lending Office) to make, maintain or fund its Eurodollar
Advances and such Bank shall so notify the Servicing Bank, the Servicing
Bank shall forthwith give notice thereof to the other Banks and Gannett.
Before giving any such notice to the Servicing Bank pursuant to this
Section, such Bank shall designate a different Eurodollar Lending office if
such designation will avoid the need for giving such notice and will not be
otherwise disadvantageous to such Bank. Upon receipt of such notice
Gannett shall prepay in full, without premium or penalty, the then
outstanding principal amount of each Eurodollar Borrowing of such Bank,
together with accrued interest thereon, on either (A) the last day of the
then current Eurodollar Interest Period applicable to such Eurodollar
Advance if such Bank may lawfully continue to maintain and fund such
Eurodollar Advance to such day or (B) immediately if such Bank may not
lawfully continue to fund and maintain such Eurodollar Advance to such day.
SECTION 5. Representations and Warranties of Gannett.
Gannett represents and warrants that:
5(a). Gannett and each of its Subsidiaries are corporations
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and each is duly qualified to do
business as a foreign corporation and is in good standing in all states in
which it owns substantial properties or in which it conducts a substantial
business and its activities make such qualifications necessary in order that
the business activities or financial conditions of Gannett and its
Subsidiaries, taken as a whole, are not Materially adversely affected.
5(b). Gannett has furnished to each of the Banks copies of its
Annual Report for 1992, containing copies of its consolidated balance sheet
as of December 27, 1992 and the related statements of consolidated income
and changes in shareholders' equity and cash flows for 1992, all reported on
by Price Waterhouse, independent public accountants and copies of its
Quarterly Report on Form 10-Q for the period ending September 26, 1993. The
financial statements contained in such Annual and Quarterly Reports
(including the related notes) fairly present Gannett's consolidated financial
condition as of their respective dates and the consolidated results of the
operations of Gannett and its Subsidiaries for the periods then ended, and
have been prepared in accordance with generally accepted accounting
principles. Gannett and its Subsidiaries have no Material liabilities as of
September 26, 1993 not reflected in the consolidated balance sheet as of
September 26, 1993 or the related notes as of said date, and from that date
to the Effective Date there has been no Material change in the business or
financial condition of Gannett and its Subsidiaries taken as a whole.
5(c). As of the Effective Date, Gannett and its Subsidiaries
owned absolutely, free and clear of all liens or encumbrances, all of the real
or personal property reflected in the consolidated balance sheet dated as
of September 26, 1993 referred to in Section 5(b) and all other property
acquired by them, respectively after September 26, 1993 except such
property as has been disposed of in the ordinary course of business, and
except for (i) easements, restrictions, exceptions, reservations or defects
which, in the aggregate, do not materially interfere with the continued use
of such property or materially affect the value thereof to Gannett or its
Subsidiaries, (ii) liens, if any, for current taxes not delinquent, and (iii)
mortgages, pledges, encumbrances, liens or charges reflected on such
consolidated balance sheet or not otherwise prohibited by Section 9(a). As
of the Effective Date Gannett and its Subsidiaries enjoy peaceful and
undisturbed possession of their properties which are held under lease and
all such leases are in good standing and valid and binding obligations of the
lessors in full force and effect, except for exceptions, reservations or
defects which in the aggregate do not materially interfere with the
continued use of such property or materially affect the value thereof to
Gannett or its Subsidiaries.
5(d). Except as indicated in the opinion of counsel delivered
pursuant to Section 7(b) (as supplemented from time to time by the reports
required pursuant to Section 8(e) hereof) there are no actions, suits, or
proceedings pending or, to Gannett's knowledge, threatened against or
affecting it or any Subsidiary in or before any court or foreign or domestic
governmental instrumentality, and neither Gannett nor any Subsidiary is in
default in respect of any order of any such court or instrumentality which,
in Gannett's opinion, are Material.
5(e). Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with
the terms and provisions hereof will conflict with or result in a breach of
any of the provisions of Gannett's restated certificate of incorporation, as
amended, or by-laws, as amended, or any law or regulation, or any order of
any court or governmental instrumentality, or any agreement or instrument
by which Gannett is bound, or constitute a default thereunder, or result in
the imposition of any lien not permitted under this Agreement upon any of
Gannett's property.
5(f). To the best of Gannett's knowledge, Gannett and its
Subsidiaries have filed all tax returns which are required to be filed by any
jurisdiction, and have paid all taxes which have become due pursuant to said
returns or pursuant to any assessments against it or its Subsidiaries
except to the extent only that such taxes are not material or are being
contested in good faith by appropriate proceedings.
5(g). The execution and delivery of this Agreement and the
making of all Borrowings permitted by the provisions hereof have been duly
authorized by all necessary corporate action on the part of Gannett; this
Agreement has been duly and validly executed and delivered by Gannett and
constitutes Gannett's valid and legally binding agreement enforceable in
accordance with its terms; and the Borrowings when made, will constitute
valid and binding obligations of Gannett enforceable in accordance with the
terms of this Agreement except as limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws, judicial decisions or
principles of equity relating to or affecting the enforcement of creditors
rights or contractual obligations generally.
5(h). Environmental Matters. In the ordinary course of its
business, Gannett becomes aware from time to time of the effect of
Environmental Laws on its business, operations and properties and the
business, operations and properties of its Subsidiaries, and it identifies
and evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties then owned or operated by Gannett or its Subsidiaries, any
capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted at such properties, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On
the basis of these evaluations, Gannett has reasonably concluded that
Environmental Laws are unlikely to have a Material adverse effect on the
business, financial condition, results of operations or prospects of Gannett
and its Subsidiaries, considered as a whole.
SECTION 6. Representations, Warranties and Covenants of the Banks.
Each Bank severally represents and warrants that: (i) the
execution and delivery of this Agreement and the extending of all Borrowings
permitted by the provisions hereof have been duly authorized by all
corporate action on its part and will not conflict with or result in a breach
of any provision of its certificate of incorporation or by-laws, or of any
law or any regulation or order of any governmental instrumentality or of
any material agreement or instrument by which it is bound or constitute a
default thereunder, and (ii) this Agreement has been duly and validly
executed and delivered by such Bank and constitutes the valid and legally
binding agreement of such Bank enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws, judicial decisions or principles of equity
relating to or affecting the enforcement of creditors' rights or contractual
obligations generally.
SECTION 7. Conditions of Lending. The obligation of each Bank to
make loans hereunder is subject to the accuracy, as of the date hereof, of
the representations and warranties herein contained; and to the
satisfaction of the following further conditions:
7(a). On the date of each Borrowing (i) no Event of Default and no
noncompliance with any covenant contained in Section 9 hereof or Section
8(a) shall have occurred and be continuing and (ii) the representations and
warranties contained in Sections 5(a), 5(e), 5(g) and 5(h) shall be true and
correct in all Material respects on and as of such date;
7(b). On or prior to the date of the first Borrowing hereunder,
there shall have been delivered to each Bank an opinion from Nixon,
Hargrave, Devans and Doyle, counsel to Gannett, in substantially the form of
Exhibit A hereto. In rendering the foregoing opinion, such counsel may rely
upon certificates of officers of Gannett and its Subsidiaries as to (i) the
nature and location of the property of Gannett and of its Subsidiaries, (ii)
agreements and instruments to which Gannett and/or its Subsidiaries are a
party, and (iii) the conduct of the business of Gannett and its Subsidiaries.
7(c). On or prior to the date of the first Borrowing hereunder,
there shall have been delivered to each Bank a certificate of the Secretary
or an Assistant Secretary of Gannett certifying, as of the date of the
Agreement, to resolutions duly adopted by the Board of Directors of Gannett
or a duly authorized committee thereof authorizing Gannett's execution and
delivery of this Agreement and the making of the Borrowings.
SECTION 8. Affirmative Covenants.
Gannett covenants that, so long as it may borrow hereunder and
until payment in full of all Borrowings, it will:
8(a). Punctually pay or cause to be paid the principal and
interest due in respect of the Borrowings according to the terms hereof and
the Facility Fee provided in Section 2(a) hereof.
8(b). Furnish to the Banks:
(i) within 60 days after the end of each of the first
three quarterly periods in each fiscal year, its consolidated
statements of income for such quarterly period and for the
period from the beginning of the fiscal year to the end of such
quarterly period and its consolidated balance sheet at the end
of that period, all in reasonable detail, subject, however, to
year-end audit adjustments, together with a certificate of
compliance and no default in substantially the form of Exhibit B
hereto certified by an appropriate financial officer of Gannett;
(ii) within 120 days after and as of the close of each
fiscal year, Gannett's Annual Report to shareholders for such
fiscal year, containing copies of its consolidated income
statement, consolidated balance sheet and changes in
shareholders' equity and cash flows for such fiscal year
accompanied by a report by Price Waterhouse or some other
accounting firm of national reputation selected by Gannett,
based on their examination of such financial statements, which
examination shall have been conducted in accordance with
generally accepted auditing standards and which report shall
indicate that the financial statements have been prepared in
accordance with generally accepted accounting principles,
together with a certificate of compliance and no default in
substantially the form of Exhibit B hereto, certified by an
appropriate financial officer of Gannett.
(iii) promptly upon their becoming available, copies of all
regular and periodic financial reports, if any, which Gannett or
any of its Subsidiaries shall file with the Securities and
Exchange Commission or with any securities exchange.
(iv) promptly upon their becoming available, copies of all
prospectuses of Gannett and all reports, proxy statements and
financial statements mailed by Gannett to its shareholders
generally; and
(v) such other information respecting the financial
condition and affairs of Gannett and its subsidiaries as any of
the Banks may from time to time reasonably request.
The financial statements of Gannett and its Subsidiaries
hereafter delivered to the Banks pursuant to this Section 8(b) will fairly
set forth the financial condition of Gannett and its Subsidiaries as of the
dates thereof, and the results of Gannett's and its Subsidiaries' operations
for the respective periods stated therein, all in accordance with generally
accepted accounting principles.
8(c). Duly pay and discharge all (i) material obligations when due
and (ii) taxes, assessments and governmental charges of which Gannett has
knowledge assessed against it or against its properties prior to the date on
which penalties are attached thereto, unless and only to the extent that
such obligations, taxes, assessments or charters are not material or shall
be contested in good faith by appropriate proceedings initiated by Gannett.
8(d). Permit and cause its Subsidiaries to permit any Bank, upon
reasonable request, to inspect at all reasonable times its and its
Subsidiaries, properties, operations and books of account.
8(e). Notify the Servicing Bank promptly in writing in the event
that any proceeding is instituted or threatened against it or any Subsidiary
of which Gannett has knowledge and which in its opinion is Material.
SECTION 9. Negative Covenants.
Gannett covenants that, so long as it may borrow hereunder and
until payment in full of all Borrowings, it will not, without prior written
consent of the Required Banks:
9(a). Allow any lien to exist on any of its or its Subsidiaries'
assets, without making provision satisfactory to the Banks whereby the
Banks obtain an equal and ratable or prior lien as security for the payment
of the Borrowings; or transfer any of its assets for the purpose of
subjecting them to the payment of obligations prior in payment to any of its
general creditors; or allow any liability of, or claims, or demands against it,
or any of its Subsidiaries, to exist for more than 30 days if the liability,
claim or demand might by law be given any priority over those of its general
creditors; provided, however, that none of the above shall prohibit Gannett
or any Subsidiary from creating or allowing any of the following to exist:
(i) liens of any type other than those described in
Section 9(a)(v), incurred after the date hereof covering any of
Gannett's or its Subsidiaries' properties provided that the
total principal amount of indebtedness of Gannett and its
Subsidiaries (on a consolidated basis) secured by all such liens
permitted under this Section 9(a)(i) at any time outstanding
shall not exceed 50% of Net Property, Plant and Equipment;
(ii) leases of all types, whether or not such leases
constitute leasebacks of property sold or transferred by
Gannett or any Subsidiary;
(iii) pledges and deposits securing the payment of
workmen's compensation or insurance premiums, good-faith
deposits in connection with tenders, contracts (other than
contracts for the payment of borrowed money) or leases,
deposits to secure surety or appeal bonds, liens, pledges or
deposits in connection with contracts made with or at the
request of the United States Government or any agency thereof,
or pledges or deposits for similar purposes made in the ordinary
course of business;
(iv) liens securing taxes, assessments or governmental
or other charges or claims for labor, materials or supplies
which are not delinquent or which are being contested in good
faith by appropriate proceedings and liens, restrictions,
easements, licenses on the use of property or minor
irregularities in the title thereof, which do not, in Gannett's
opinion, in the aggregate materially impair their use in
Gannett's and its Subsidiaries' business; and
(v) liens on the assets of any corporation which becomes
a Subsidiary of Gannett after the date of this Agreement to the
extent that such liens existed prior to the date of acquisition
of such corporation by Gannett.
9(b). Merge, consolidate, sell, lease, transfer or otherwise
dispose of all or substantially all of its assets or permit any of its
Subsidiaries to merge, consolidate, sell, lease, transfer or otherwise
dispose of all or substantially all of its assets, unless immediately after
giving effect to such transaction, Gannett shall be the survivor corporation
and shall be in compliance with Sections 9(a), 9(c) and 9(d) hereof.
9(c). Permit Gannett's Total Shareholders' Equity at any time to
be less than $1,200,000,000.
9(d). Permit Gannett's "consolidated net earnings available for
interest charges," aggregated for the four fiscal quarters immediately
preceding the date of determination, at any time to be less than 200% of the
"adjusted consolidated total interest expense." "Consolidated net earnings
available for interest charges" shall mean Gannett's consolidated net income
for the four fiscal quarters, excluding extraordinary income or loss, plus
the sum of all Federal and state income taxes, and total interest charges,
including amortization of debt discount or premium and interest charges
attributable to capitalized leases, but only to the extent that such charges
exceed $10,000,000 for the four-quarter period. "Adjusted consolidated
total interest expense" shall mean Gannett's total interest expense plus
amortization of debt discount for the four fiscal quarters, plus interest
charges in excess of $10,000,000 attributable to capitalized leases for the
four-quarter period. For purposes of this Section 9(d), Gannett's
consolidated financial statements shall not include any Subsidiary which has
defaulted in the payment of principal or interest on $50,000,000 or more of
the Subsidiary's obligations for borrowed money if such default has resulted
in acceleration of the obligation.
SECTION 10. Events of Default.
10(a).The following are Events of Default:
(i) Gannett shall default in the payment of principal of
or interest on any Borrowings when due and such default shall
have continued for a period of 15 Business Days;
(ii) Gannett shall (A) default in any payment of principal
or of interest on any other obligation for borrowed money in
excess of $25,000,000 beyond any grace period provided with
respect thereto, or (B) default in the performance of any other
agreement, term or condition contained in any agreement under
which any such obligation is created, if the effect of such
default is to cause such obligation to be accelerated or become
due prior to its stated maturity;
(iii) Any representation or warranty herein made by
Gannett, or any certificate or financial statement furnished by
Gannett pursuant to the provisions hereof, shall prove to have
been false or misleading in any material respect as of the time
made or furnished and Gannett shall fail to take corrective
measures satisfactory to the Required Banks within 30 days
after notice thereof to Gannett from any Bank.
(iv) Gannett shall default in the performance of any
other covenant, condition or provision hereof and such default
shall not be remedied to the satisfaction of the Required Banks
within a period of 30 days after notice thereof to Gannett from
any Bank or by Gannett to the Servicing Bank. Gannett shall
promptly notify the Servicing Bank upon discovery of the
existence of a default in the performance of a covenant,
condition or provision referred to in this Section 10(a)(iv) and
Section 10(a)(iii).
(v) Gannett or any Subsidiary with more than
$100,000,000 in revenue in the preceding fiscal year (other than
Gannett Satellite Information Network, Inc.) shall (A) apply for
or consent to the appointment of a receiver, trustee, or
liquidator of Gannett, (B) make a general assignment for the
benefit of creditors, or (C) file a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or
an arrangement with creditors or take advantage of any
insolvency law or an answer admitting the material allegations
of a petition filed against Gannett in any bankruptcy,
reorganization or insolvency proceeding, or corporate action
shall be taken by Gannett for the purpose of affecting any of
the foregoing; or
(vi) An order, judgment or decree shall be entered,
without the application, approval or consent of Gannett, by any
court of competent jurisdiction, approving a petition seeking
reorganization of Gannett or appointing a receiver, trustee or
liquidator of Gannett or of all or a substantial part of the
assets of Gannett, and such order, judgment or decree shall
continue unstayed and in effect for any period of ninety (90)
consecutive days.
10(b).If an Event of Default shall occur and be continuing:
(i) Under Sections 10(a)(i) and 10(a)(ii), any Bank shall be
entitled by notice to Gannett to elect to be relieved of its
obligation to make further loans hereunder, and the holders of
not less than 66-2/3% of the unpaid principal amount of
Borrowings then outstanding hereunder shall be entitled by
notice to Gannett to declare all Advances then outstanding
hereunder and interest accrued thereon and all liabilities of
Gannett hereunder to be forthwith due and payable;
(ii) Under Sections 10(a)(iii) and 10(a)(iv): (A) the holders
of not less than 66-2/3% of the unpaid principal amount of the
Borrowings then outstanding hereunder shall be entitled by
notice to Gannett to declare all Borrowings then outstanding
hereunder and interest accrued thereon and all liabilities of
Gannett hereunder to be forthwith due and payable, and (B) the
holders of not less than 66-2/3% of the Commitments and, if
there are any Borrowings then outstanding, the holders of 66-
2/3% of the unpaid principal amount of the Borrowings shall be
entitled by notice to Gannett to relieve the Banks of their
obligations to make further Revolving Credit Loans hereunder;
or
(iii) Under Sections 10(a)(v) and 10(a)(vi), no Bank shall be
under further obligation to make Revolving Credit Loans and all
Borrowings then outstanding hereunder and interest accrued
thereon and all liabilities of Gannett hereunder to each Bank
shall become forthwith due and payable without presentment,
demand, protest or notice of any kind, all which are hereby
expressly waived.
Any Bank giving any notice to Gannett under this Section 10
shall simultaneously give like notice to all of the other Banks and to the
Servicing Bank.
SECTION 11. Amendments.
Any provision of this Agreement may from time to time be
modified, waived or amended with the written consent of Gannett and the
Banks which are holders of 66-2/3% of the Commitments and, if there are any
Borrowings then outstanding, the holders of 66-2/3% of the unpaid principal
amount of the Borrowings; provided, that no such modification, waiver, or
amendment may be made which will (i) reduce or increase the amount or alter
the term of the Commitment of, or the Facility Fee payable to, any Bank
hereunder other than as permitted by Sections 2(b), 3(d) and Section 4
hereof, without the written consent of Gannett and of all the Banks, (ii)
extend the time for payment of principal of any Borrowing or change the rate
of interest on any Borrowing, or otherwise affect the terms of payment of
such principal or interest, without the prior written consent of Gannett and
the makers of all Advances comprising such Borrowings, (iii) modify, waive or
amend any provision of this Section 11 or Section 7, without the written
consent of Gannett and the Banks which are holders of 100% of the
Commitments and, if there are any Borrowings then outstanding , the holders
of 100% of the unpaid principal amount of all Advances or (iv) change the
percentage specified in the definition of Required Banks, the definition of
Applicable Margin or other percentages specified hereunder as to consents,
votes or waivers by the Banks without the prior written consent of Gannett
and all of the Banks.
SECTION 12. Servicing Bank.
12(a).By signing this Agreement the Servicing Bank as a Bank
agrees to perform as provided in this Section 12. The Servicing Bank agrees
to accept for transmission and shall promptly transmit to all of the Banks
any notice, statement, report or communication received from any Bank with
the request to forward the same to Gannett. Likewise, the Servicing Bank
agrees to accept for transmission and shall transmit promptly to the Banks
any funding notice or other notice or information received from Gannett with
a request to forward same to the Banks. The Servicing Bank shall have no
liability or responsibility for, nor shall it be deemed to make any
representation with respect to, the completeness, accuracy or contents of
any notice, statement, report or communication transmitted pursuant to this
Section 12(a).
12(b).The Servicing Bank agrees to act for and on behalf of the
Banks in receiving funds from each Bank for disbursement to Gannett and in
receiving payments from Gannett for transmission to the Banks; provided,
however, that in so acting the Servicing Bank shall not be authorized, nor
shall it be deemed, either to waive or compromise the rights of any Bank
under this Agreement or to accept or approve, on behalf of any Bank, any act
by Gannett as performance under this Agreement. Any such payment of
principal of or interest on the Borrowings, or of the Facility Fee, or any
other payment received from Gannett shall be transmitted forthwith upon
collection by the Servicing Bank to the Banks in immediately available funds,
in accordance with Gannett's written instructions. The Servicing Bank shall
not be liable or accountable to any Bank for delays or failures in
transmission of payments, instruments, notices or other communications
received by it for transmission to any party, except for delays or failures
caused by the Servicing Bank's bad faith, willful misconduct or gross
negligence.
12(c).The Servicing Bank shall be protected in acting upon any
document believed by it to be genuine and to have been signed or sent by a
proper person or persons. Any communication from the Servicing Bank to
Gannett or any Bank may be sent or given as provided in Section 13(e) hereof.
12(d).The Servicing Bank may resign at anytime by giving 30 days
prior notice to the Banks and Gannett. The Servicing Bank shall resign upon
30 days prior written demand for its resignation delivered by Gannett to the
Servicing Bank and the Banks. Such resignation shall take effect at the end
of the 30 day period or earlier if Gannett appoints a successor with the
approval of the Required Banks, which approval shall not be unreasonably
withheld, conditioned or delayed.
12(e).The Servicing Bank shall maintain a register (the
"Register") on which it will record the Commitments from time to time of each
of the Banks, the Advances made by each of the Banks and each repayment in
respect of the principal amount of the Advances of each Bank. Any such
recordation shall be conclusive, absent manifest error.
12(f).Each Bank will record on its internal records the amount
of each Advance made by it and each payment in respect thereof. Failure to
make any such recordation, or any error in such recordation, shall not
affect Gannett's obligations in respect of such Borrowing. Any such
recordation shall be conclusive, absent manifest error.
SECTION 13. Miscellaneous.
13(a).No delay or failure of Gannett, any Bank, or the holder of
any Borrowing in exercising any right, power or privilege hereunder shall
affect such right, power or privilege, nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce
such right, power or privilege preclude any further exercise thereof or of
any other right, power or privilege. The rights and remedies of Gannett and
the Banks hereunder are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Bank of any breach or
default under this Agreement must be specifically set forth in writing.
13(b).Nothing in this Agreement shall be deemed a waiver or
prohibition of any Bank's right of banker's lien or set-off against Gannett
or of Gannett's right of set-off or counterclaim against any Bank, and no
set-off by Gannett against any Bank shall be deemed to be a prepayment of
any Advances made by that Bank for the purposes of Section 4 hereof.
13(c).Any Bank that shall make recovery against Gannett
through the exercise of any banker's lien, right of counterclaim or set-off
of the amount of any Borrowing or obligation of Gannett, shall apply such
recovery solely to the repayment of Advances made under this Agreement,
and shall purchase a ratable proportion of the Advances held by other Banks
so that all such recoveries shall be shared pro rata on the basis of each
Bank's ownership interest in the outstanding Borrowings.
13(d).All representations, warranties, covenants and
agreements of Gannett and the Banks contained herein or made in writing in
connection herewith, shall survive the execution and delivery of this
Agreement, and the making of Revolving Credit Loans hereunder.
13(e).Unless otherwise specified herein all notices, requests,
demands or other communications to or from the parties hereto shall be
deemed to have been duly given and made either by letter or telecopy. In the
case of a letter, such notice shall be deemed to have been duly given upon
delivery or three days after deposit in the mail if sent by registered first
class mail, postage prepaid and, in the case of a telecopy, such notice shall
be deemed to have been duly given when a telecopy is sent. Any such notice,
request, demand or communication shall be delivered addressed as follows:
(i) if to the Servicing Bank, at its address or telecopy
number set forth on Schedule 1 hereof;
(ii) if to another Bank, at its address or telecopy number
set forth on Schedule 1 hereof;
(iii) if to Gannett at its principal office, 1100 Wilson
Blvd., Arlington, VA 22234 (or telecopy number (703) 558-4638)
(Attention: Senior Vice President, Financial Services and
Treasurer, and Vice President/Treasury Services).
13(f).Gannett will pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Agreement or
any amendment, consent or waiver requested by Gannett (including the
reasonable fees and out-of-pocket expenses of special counsel to the
Banks). In addition, Gannett will pay reasonable costs and expenses
(including attorneys' fees), if any, in connection with the enforcement or
collection of this Agreement and the Borrowings and arising after the
occurrence of any event which with notice or lapse of time would constitute
an Event of Default, unless such occurrence is cured by Gannett within any
applicable grace period or such reimbursement is not required by the terms
of any waiver granted by the Banks in respect of such occurrence; provided,
however, that (i) Gannett shall have no such obligation for costs and
expenses if Gannett prevails or successfully defeats any enforcement or
collection proceedings; and (ii) if, by final adjudication in any proceeding not
involving Gannett's bankruptcy, reorganization or insolvency, the Banks
receive less relief than claimed, Gannett's obligation for costs and
expenses shall be limited proportionate to the relief granted to the Banks.
If Gannett is required to commence proceedings against any Bank to enforce
its Commitment, the Bank will pay Gannett's reasonable costs and expenses
(including attorneys' fees) if Gannett succeeds, or a share of such
reasonable costs and expenses proportionate to Gannett's recovery if
Gannett is only partially successful. In addition, Gannett will pay any and
all stamp and other taxes (excluding income taxes now applicable or which may
be levied in lieu of stamp or other taxes), and to save each holder of each
Advance harmless from any and all liabilities with respect to or resulting
from any delay or omission on the part of Gannett to pay such taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of this Agreement or the making of any of the
Borrowings. The obligations of Gannett under this Section 13(f) shall
survive the payment of the Borrowings.
13(g).THIS AGREEMENT AND THE BORROWINGS SHALL BE DEEMED TO BE
CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.
13(h).This Agreement may be executed in as many counterparts
as may be deemed necessary and convenient, and by the different parties
hereto on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and
the same instrument.
13(i).This Agreement may not be assigned by Gannett without the
consent of the Banks which are the holders of 100% of the Commitments and, if
there are any Borrowings then outstanding, the holders of 100% of the unpaid
principal amount of the Borrowings. This Agreement may not be assigned by
any Bank, except in whole or part to any other Bank party hereto or with the
prior written consent of Gannett in its sole discretion. In the event that
any Bank shall so assign all or part of its Commitment to another Bank,
and/or any Advances made by it hereunder (which individual Advances may
only be assigned in full), the assignor Bank and the assignee Bank shall, on
or before the next Business Day after such assignment shall become
effective, deliver a notice to Gannett signed by each of such Banks
specifying the relevant details of such assignment and, if appropriate,
requesting that the Commitments of the respective Banks be automatically
adjusted to reflect such assignment. Notwithstanding the foregoing, no Bank
shall be permitted to grant participations in all or any portion of its
Commitment or any Advances made by it.
13(j).This Agreement shall be binding upon and inure to the
benefit of the Banks and their respective successors and assigns, and
Gannett and its successors and assigns.
13(k).No provision of this Agreement is intended to or should be
construed as preventing Gannett from entering into loan agreements of any
kind or nature with any or all of the Banks or any other financial institution
as Gannett may select, the terms and conditions of which shall be wholly
separate and apart from the terms of this Agreement.
13(l).This Agreement, together with the $500,000,000 Revolving
Credit Agreement of even date herewith between Gannett and each of the
banks parties thereto, replaces in its entirety the Loan Agreement made as
of December 1, 1990 between Gannett and certain banks, as amended, which
Agreement and the commitments thereunder shall be deemed terminated by the
Banks parties thereto and Gannett without further notice upon the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GANNETT CO., INC.
By s/ Gracia C. Martore
Name: Gracia C. Martore
Title: Vice President/Treasury Services
CHEMICAL BANK
By s/ Laura S. Tingley
Name: Laura S. Tingley
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA
By s/ Clark Wilcox
Name: Clark Wilcox
Title: Vice President
MARINE MIDLAND BANK
By s/ Paul E. Willsey
Name: Paul E. Willsey
Title: Administrative Vice President
MORGAN GUARANTY TRUST COMPANY
By s/ Michael Y. Leder
Name: Michael Y. Leder
Title: Vice President
J.P. MORGAN DELAWARE
By s/ David J. Morris
Name: David J. Morris
Title: Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
By s/ Lawrence Saunders
Name: Lawrence Saunders
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By s/ Lisa Allison
Name: Lisa Allison
Title: Manager/Credit Administration
THE FIRST NATIONAL BANK OF CHICAGO
By s/ Ted Wozniak
Name: Ted Wozniak
Title: Vice President
BANK OF AMERICA, N.T. & S.A.
By s/ Nancy L. Sun
Name: Nancy L. Sun
Title: Vice President
BANK OF HAWAII
By s/ Curtis W. Chinn
Name: Curtis W. Chinn
Title: Vice President
THE BANK OF NOVA SCOTIA
By s/ James N. Tryforos
Name: James N. Tryforos
Title: Authorized Signatory
CRESTAR BANK
By s/ Michael A. Hart
Name: Michael A. Hart
Title: Senior Vice President
NBD BANK, N.A.
By s/ L. E. Schuster
Name: L. E. Schuster
Title: Vice President
ROYAL BANK OF CANADA
By s/ Peter D. Steffen
Name: Peter D. Steffen
Title: Senior Manager
SOCIETE GENERALE
By s/ Pascale Hainline
Name: Pascale Hainline
Title: Vice President
CITIBANK, N.A.
By s/ Thomas D. Stott
Name: Thomas D. Stott
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By s/ Silvana Burdick
Name: Silvana Burdick
Title: Authorized Signature
THE SANWA BANK, LIMITED
By s/ Peter J. Pawlak
Name: Peter J. Pawlak
Title: Vice President and Senior Manager
WACHOVIA BANK OF GEORGIA, N.A.
By s/ Tina P. Hayes
Name: Tina P. Hayes
Title: Assistant Vice President
CHASE MANHATTAN BANK, N.A.
By s/ Diana Lauria
Name: Diana Lauria
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By s/ Susan E. Pritchett
Name: Susan E. Pritchett
Title: Vice President
THE FUJI BANK, LIMITED
By s/ Takashi Nagao
Name: Takashi Nagao
Title: Vice President and Manager
THE NORTHERN TRUST COMPANY
By s/ David L. Love
Name: David L. Love
Title: Commercial Banking Officer
<PAGE>
SCHEDULE 1
COMMITMENTS OF THE BANKS
NAME, ADDRESS AND TELEPHONE COMMITMENT AMOUNT
NUMBER OF BANK
Chemical Bank $66,666,667
270 Park Avenue
New York, NY 10017
Telecopy: 212-270-2112
First Interstate Bank of California $66,666,667
885 Third Avenue
New York, NY 10022-4802
Telecopy: 212-593-5238
Marine Midland Bank $66,666,667
One Marine Midland Plaza
Rochester, New York 14639
Telecopy: 716-238-7140
Morgan Guaranty Trust Company $33,333,334
60 Wall Street, 22nd Floor
New York, NY 10260
Telecopy: 212-648-5018
J.P. Morgan Delaware $33,333,333
902 North Market Street
Wilmington, DE 19801
Telecopy: 302-654-5336
NationsBank of North Carolina, N.A. $66,666,667
6610 Rockledge Drive, 1st Floor
Bethesda, MD 20817-1876
Telecopy: 301-571-0719
Toronto Dominion (Texas), Inc. $66,666,667
909 Fannin, Suite 1700
Houston, TX 77010
Telecopy: 713-951-9921
With a copy to:
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
Telecopy: 212-262-1926
The First National Bank $56,666,667
of Chicago
One First National Plaza
Mail Suite 0374
Chicago, IL 60670-0083
Telecopy: 312-732-3885
Bank of America, N.T. & S. A. $43,333,333
Attn: Nina Lemmer
1850 Gateway Blvd.
Concord, CA 94520
Telecopy: 510-675-7531 or 7532
With a copy to:
Bank of America, N.T. & S.A.
335 Madison Avenue
New York, NY 10017
Telecopy: 212-503-7173
Bank of Hawaii $43,333,333
130 Merchant Street, 20th Floor
Honolulu, HI 96813
Telecopy: 808-537-8301
The Bank of Nova Scotia $43,333,333
New York Agency
1 Liberty Plaza, 26th Floor
New York, NY 10006
Telecopy: 212-225-5090 or 5091
Crestar Bank $43,333,333
1445 New York Avenue, N.W.
Washington, DC 20005
Telecopy: 202-879-6137
NBD Bank, N.A. $43,333,333
611 Woodward
Detroit, MI 48226
Telecopy: 313-225-2649
Royal Bank of Canada $43,333,333
c/o Grand Cayman (North America #1)
New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, NY 11201-2701
Telecopy: 718-522-6292
Societe Generale $43,333,333
50 Rockefeller Plaza
New York, NY 10020
Telecopy: 212-581-8752
Citibank, N.A. $33,333,333
399 Park Avenue
New York, NY 10043
Telecopy: 212-793-6873
Credit Lyonnais $33,333,333
Cayman Island Branch
1301 Avenue of the Americas
New York, NY 10019
Telecopy: 212-459-3179
The Sanwa Bank, Limited $33,333,333
Atlanta Agency
Georgia-Pacific Center
Suite 4750
133 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-589-1629
Wachovia Bank of Georgia, N.A. $33,333,333
191 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-332-6898
Chase Manhattan Bank, N.A. $26,666,667
One Chase Square
Corp. Industries Dept.
Tower 9
Rochester, NY 14643
Telecopy: 716-258-4258
The First National Bank of Maryland $26,666,667
1800 K Street, N.W., Suite 1010
Washington, DC 20006
Telecopy: 202-775-4838
The Fuji Bank, Limited $26,666,667
2 World Trade Center, 79th Floor
New York, NY 10048
Telecopy: 212-912-0516
The Northern Trust Company $26,666,667
50 South LaSalle Street - B11
Chicago, IL 60675
Telecopy: 312-444-3508
TOTAL $1,000,000,000
<PAGE>
EXHIBIT A
[Letterhead of Nixon, Hargrave, Devans & Doyle]
December 1, 1993
To the Banks parties to the
Revolving Credit Agreement
dated as of December 1, 1993
between Gannett and the Banks
Ladies and Gentlemen:
We are counsel to Gannett Co., Inc. ("Gannett"), and as such we are
familiar with the Revolving Credit Agreement of even date herewith between
each of you and Gannett (the "Credit Agreement") relating to Gannett's
borrowing of up to $1,000,000,000. We are also familiar with Gannett's
Restated Certificate of Incorporation, as amended, By-Laws, as amended,
agreements and other documents and matters of law as we consider
necessary for purposes of this opinion. Capitalized terms defined in the
Credit Agreement are used herein with the respective meanings assigned to
such terms in the Credit Agreement. Based upon the foregoing, we are of the
opinion that:
1. Gannett is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly qualified to do
business as a foreign corporation, and Gannett is in good standing in all
states in which it owns substantial properties or in which it conducts
substantial business or in which qualification is necessary in order that
the business or financial condition of Gannett and its Subsidiaries, taken as
a whole, be not Materially adversely affected.
2. There are no actions, suits or proceedings pending or, to our
knowledge, threatened against or affecting Gannett or any of its
Subsidiaries in or before any court or foreign or domestic government
instrumentality, and neither Gannett nor any of its Subsidiaries are in
default in respect of any order of any such court or governmental
instrumentality which, in the opinion of Gannett, are Material.
3. Neither the execution and delivery of the Agreement, the
consummation of the transactions therein contemplated nor compliance with
the terms and provisions thereof will conflict with or result in breach of
any of the provisions of the Restated Certificate of Incorporation, as
amended, or the By-Laws, as amended, of Gannett or, to our knowledge and
based on reasonable inquiries made of corporate officers of any law or of
any regulation or order of any court or governmental instrumentality or any
material agreement or instrument by which Gannett is bound or constitute a
default thereunder or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever not permitted under
Section 9(a) of the Agreement upon any of the property of Gannett.
4. The execution and delivery of the Agreement and the making of all
Borrowings contemplated or permitted by the provisions thereof have been
duly authorized by all necessary corporate action on the part of Gannett;
and the Agreement has been duly and validly executed and delivered by
Gannett. The Agreement constitutes a valid and legally binding agreement
enforceable in accordance with its terms and the Borrowings when duly made,
will constitute valid and legally binding obligations of Gannett enforceable
in accordance with the terms thereof and of the Agreement, except as limited
by applicable bankruptcy, insolvency, moratorium, reorganization or other
laws, judicial decisions or principles of equity relating to or affecting the
enforcement of creditors' rights or contractual obligations generally.
In rendering the foregoing opinion we have relied upon the
certificates of officers of Gannett as to (i) the nature and location of the
property of Gannett, (ii) agreements and instruments to which Gannett and/or
its Subsidiaries is a party, and (iii) the existence of Material pending or
threatened actions, suits or proceedings or orders of any court or
governmental instrumentality.
Very truly yours,
<PAGE>
EXHIBIT B
CERTIFICATE AS TO COMPLIANCE
PURSUANT TO SECTION 8 (b) OF
$1,000,000,000 REVOLVING CREDIT AGREEMENT
[Use for Quarterly report] The undersigned, an officer of Gannett Co.,
Inc. ("Gannett"), has executed this
Certificate pursuant to Section 8(b)(i) of
the Revolving Credit Agreement dated as of
December 1, 1993 between Gannett and the
Banks parties thereto. The undersigned
has reviewed Gannett's activities during
the preceding fiscal quarter, which has
consisted solely of a review of the
unaudited consolidated financial
statements of Gannett for said fiscal
quarter.
[Use for annual report] The undersigned, an officer of Gannett Co.,
Inc. ("Gannett") has executed this
Certificate pursuant to Section 8(b)(ii) of
the Revolving Credit Agreement dated as of
December 1, 1993 between Gannett and the
Banks parties thereto. The undersigned
has reviewed the activities of Gannett and
its Subsidiaries during the preceding
fiscal year, which has consisted solely of
a review of the audited consolidated
financial statements of Gannett for said
fiscal year.
The undersigned hereby CERTIFIES THAT, based upon the review described
above and a review of the Revolving Credit Agreement, nothing came to his
attention which caused him to believe that (i) Gannett has not fulfilled all of
its obligations under the Revolving Credit Agreement or (ii) there has
occurred an Event of Default as defined in said Agreement, or any condition,
event or act, which with notice or lapse of time or both, would constitute an
Event of Default, which has not been cured pursuant to the provisions of
said Agreement.
GANNETT CO., INC.
By ______________________________
Name:
Title:
Exhibit 4-2
$500,000,000
REVOLVING CREDIT AGREEMENT
dated as of December 1, 1993
Between
GANNETT CO., INC.
and
CHEMICAL BANK, FIRST INTERSTATE BANK OF CALIFORNIA,
MARINE MIDLAND BANK, MORGAN GUARANTY TRUST COMPANY,
J.P. MORGAN DELAWARE, NATIONSBANK OF NORTH CAROLINA, N.A.,
TORONTO DOMINION (TEXAS), INC.,
THE FIRST NATIONAL BANK OF CHICAGO, BANK OF AMERICA, N.T. & S.A.,
BANK OF HAWAII, THE BANK OF NOVA SCOTIA, CRESTAR BANK,
NBD BANK, N.A., ROYAL BANK OF CANADA, SOCIETE GENERALE,
CITIBANK, N.A., CREDIT LYONNAIS CAYMAN ISLAND BRANCH, THE SANWA BANK,
LIMITED, WACHOVIA BANK OF GEORGIA, N.A.,
CHASE MANHATTAN BANK, N.A., THE FIRST NATIONAL BANK OF MARYLAND,
THE FUJI BANK, LIMITED and THE NORTHERN TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1:Definitions 1
SECTION 2:Facility Fee; Commitments 6
SECTION 3:Revolving Credit - Domestic Borrowings
and Eurodollar Borrowings 8
SECTION 4:Change in Circumstances 14
SECTION 5:Representations and Warranties of
Gannett 17
SECTION 6:Representations, Warranties and Covenants of
the Banks 19
SECTION 7:Conditions of Lending 20
SECTION 8:Affirmative Covenants 20
SECTION 9:Negative Covenants 22
SECTION 10:Events of Default 24
SECTION 11:Amendments 26
SECTION 12:Servicing Bank 26
SECTION 13:Miscellaneous 27
<PAGE>
GANNETT CO., INC.
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is made as of December 1, 1993
between Gannett Co., Inc., a Delaware corporation ("Gannett"), and each of the
banks that is or may become a party to this Agreement from time to time
(each called a "Bank" and collectively called the "Banks").
The parties agree as follows:
SECTION 1. Definitions. The following words and terms shall have the
following meanings in this Agreement:
"Advance" shall mean a Money Market Advance, a Competitive Bid
Rate Advance, an Alternate Rate Advance or a Eurodollar Advance, as the
case may be.
"Agreement" shall mean this Revolving Credit Agreement, as
amended from time to time.
"Applicable Margin" shall mean, (i) with respect to Alternate Rate
Advances and Competitive Bid Rate Advances, 0%, (ii) with respect to
Eurodollar Advances, 16.5 Basis Points and (iii) with respect to Money Market
Advances, 29 Basis Points.
"Alternate Rate" means, with respect to an Alternate Rate
Advance an interest rate equal to the Prime Rate.
"Alternate Rate Advance" shall mean any Revolving Credit Loan
with respect to which interest is computed at the Alternate Rate.
"Basis Point" means 1/100th of one percent.
"Board" means the Board of Governors of the Federal Reserve
System, or any successor thereto.
"Borrowing" shall mean the outstanding principal amount of any
Revolving Credit Loans made to Gannett by any Bank or Banks in response to
each borrowing notice delivered by Gannett pursuant to this Agreement. A
Borrowing is referred to as a "Domestic Borrowing" if it is comprised of
Revolving Credit Loans made pursuant to Section 3(b) or accepted by Gannett
pursuant to Section 3(d) or a "Eurodollar Borrowing" if it is comprised of
Revolving Credit Loans made pursuant to Section 3(c). A Competitive Bid
Rate Borrowing may be either a Eurodollar Borrowing or a Domestic Borrowing
depending on the type of interest rate at which such Competitive Bid Rate
Borrowing is made.
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a legal holiday for banks in the State of
New York.
"Commitment" shall mean, with respect to each Bank, the amount
set forth opposite such Bank's name on Schedule 1 hereto or in such lesser
amount as shall be established from time to time pursuant to Sections 2(b) or
3(d) hereof, and subject to any adjustments resulting from Sections 3(f) or
13(i) hereof.
"Competitive Bid Rate" means the rate of interest offered by a
Bank in response to a Request for Offer and accepted by Gannett pursuant
to Section 3(d).
"Competitive Bid Rate Advance" shall mean any Revolving Credit
Loan with respect to which interest is computed at the Competitive Bid Rate.
"Designated Banks" shall mean Morgan Guaranty Trust Company of
New York, The Toronto Dominion Bank and First Interstate Bank of California.
"Effective Date" shall mean the date of this Agreement.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"Eurodollar Advance" shall mean any Revolving Credit Loan with
respect to which interest is computed at the Eurodollar Rate.
"Eurodollar Business Day" means any day on which commercial
banks are open for domestic and international business (including dealings in
dollar deposits) in London and New York City.
"Eurodollar Interest Period" means, with respect to any
Eurodollar Borrowing:
(i) initially, the period commencing on the date of such
Eurodollar Borrowing and ending one month, two months, three
months or six months thereafter, as Gannett may elect; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Eurodollar Interest Period for such
Loans and ending one month, two months, three months or six
months thereafter, as Gannett may elect;
provided that:
(A) any Eurodollar Interest Period which would
otherwise end on a day which is not a Eurodollar
Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar
month in which case such Eurodollar Interest
Period shall end on the immediately preceding
Eurodollar Business Day;
(B) any Eurodollar Interest Period which begins on a
day for which there is no numerically
corresponding day in the calendar month during
which such Eurodollar Interest Period is to end
shall, subject to clause (A) above, end on the last
Eurodollar Business Day of such calendar month;
(C) if any Eurodollar Interest Period determined as
set forth above would otherwise end after the
Maturity Date of such Eurodollar Borrowing such
Eurodollar Interest Period shall end on such
Maturity Date.
"Eurodollar Rate" means, with respect to Eurodollar Borrowings,
the rate of interest in effect from time to time with respect to such
Eurodollar Borrowings, as determined pursuant to Section 3(c)(iii).
"Eurodollar Lending Office" means, as to each Bank, its office or
branch located at its address set forth in Schedule 1 hereof or such other
branch (or affiliate) of such Bank as it may hereafter designate as its
Eurodollar Lending Office by notice to Gannett and the Servicing Bank.
"Event of Default" shall mean any of the Events of Default
specified in Section 10(a) of this Agreement.
"Expiration Date" shall mean November 30, 1994, or such earlier
date as shall be specified in the request delivered by Gannett pursuant to
Section 2(c).
"Facility Fee" shall have the meaning assigned to such term in
Section 2(a).
"LIBOR Reserve Adjustment" means an adjustment to the London
Interbank Offered Rate determined by dividing the London Interbank Offered
Rate determined by the Reference Bank by a percentage equal to 100% minus
the applicable Statutory Rate then in effect, determined by the Reference
Bank.
"London Interbank Offered Rate or LIBOR" shall mean the average
of the rates per annum at which deposits in dollars are offered in
immediately available funds to the Designated Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Eurodollar Business Days
prior to the first day of the Eurodollar Interest Period to which such rate
applies on amounts of $5,000,000 or more for a period of time comparable to
such Eurodollar Interest Period and adjusted for by the LIBOR Reserve
Adjustment applicable to the Reference Bank.
"Material" or "Materially" when used to describe an adverse
effect of an event on Gannett or its subsidiaries shall mean a condition,
event or act which with the giving of notice or the lapse of time or both, will
constitute an Event of Default.
"Maturity Date" means, with respect to the loans comprising any
Borrowing, the maturity date of such Borrowing specified by Gannett
pursuant to Sections 3(b)(i), 3(c)(i) or 3(d) but in no event a date extending
beyond the Expiration Date.
"Money Market Rate" means, with respect to Money Market
Advances, the interest rate for a specified N.Y. Interest Period determined
to be the sum of the Applicable Margin plus the rate of interest determined
by the Reference Bank to be the average of prevailing secondary market
morning bid rates in the U.S. at 9:00 A.M. (New York, New York time) (or as soon
thereafter as practicable) on the first day of the N.Y. Interest Period of
three New York certificate of deposit dealers of recognized standing for the
purchase at face value from each Designated Bank of its certificates of
deposit in an amount comparable to the unpaid principal amount of the Money
Market Advances from such Designated Bank to which such N.Y. Interest
Period applies and having a maturity comparable to such N.Y. Interest Period,
adjusted to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1% and further adjusted for by the Reserve
and Assessment Adjustment applicable to the Reference Bank.
"Money Market Advance" shall mean any Revolving Credit Loan with
respect to which interest is computed at the Money Market Rate.
"Net Property, Plant and Equipment" shall mean the amount under
that heading on the consolidated balance sheet of Gannett and its
Subsidiaries prepared in accordance with generally accepted accounting
principles.
"N.Y. Interest Period" means one or more successive periods,
commencing the date of a Money Market Advance or Alternate Rate Advance
and continuing until such Money Market Advance or Alternate Rate Advance is
repaid or is converted to an Alternate Rate Advance, Money Market Advance,
or Eurodollar Advance, with each successive period beginning the day after
the last day of the immediately preceding period. The duration of each N.Y.
Interest Period with respect to each Money Market Advance shall be 30, 60,
90 or 180 days, as Gannett shall, by notice delivered to the Servicing Bank
no later than 10:00 A.M. (New York time) one Business Day prior to the first
day of such N.Y. Interest Period, select, provided that (i) if Gannett fails to
select the duration of any N.Y. Interest Period, the duration shall be 30
days, and (ii) whenever the last day of any N.Y. Interest Period falls on a
date which is not a Business Day then the last day of such N.Y. Interest
Period shall be extended automatically to the next succeeding Business Day.
The N.Y. Interest Period with respect to each Alternate Rate Advance shall
be the period specified by Gannett in the borrowing notice relating to such
Alternate Rate Advance.
"Prime Rate" means the fluctuating rate of interest as announced
publicly in New York City from time to time by the Reference Bank as its
prime rate.
"Reference Bank" shall mean Morgan Guaranty Trust Company of
New York.
"Request for Offer" shall have the meaning assigned to that term
in Section 3(d).
"Required Banks" shall mean the Banks which are the holders of at
least 51% of the Commitments and, if there are any Borrowings then
outstanding, the holders of 51% of the unpaid principal amount of the
Borrowings then outstanding.
"Reserve and Assessment Adjustment" means an adjustment to the
certificate of deposit rate component of the Money Market Rate determined
by (i) dividing the certificate of deposit rate determined by the Reference
Bank (excluding the Applicable Margin) by a percentage equal to 100% minus
the Statutory Rate then in effect, as determined by the Reference Bank, (ii)
adding to the result determined pursuant to clause (i) the Assessment Rate
for such Bank then in effect and adjusting the result to the nearest 1/100 of
1% or, if there is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%.
For purposes of this definition, the "Statutory Rate" of the
Reference Bank at any time is the percentage then specified by the Board
for determining the reserve requirements for such Bank for domestic non-
personal time deposits of $100,000 or more having a maturity equal to the
maturity of the applicable N.Y. Interest Period or for determining the
Eurodollar reserve requirements for such Bank in amounts of $5,000,000 or
more for the Eurodollar Interest Period selected by Gannett. It shall be
assumed that the Statutory Rate in each case on the Effective Date is 0%.
The Statutory Rate shall be adjusted automatically on and as of the
effective date for any change in such rate specified by the Board. The
"Assessment Rate" for the Reference Bank is the net annual assessment rate
(rounded upward to the nearest 1/100 of 1%) actually paid by the Reference
Bank to the Federal Deposit Insurance Corporation (or its successor) for
insurance by such corporation (or such successor) of certificates of
deposit made in dollars at the Reference Bank's domestic offices during the
immediately preceding calendar year. The Assessment Rate for the period
from the Effective Date through January 31, 1994 shall be 22.77 Basis Points.
The Assessment Rate for any subsequent year shall be that rate in effect on
February 1st of such year and shall remain in effect through January 31st of
the immediately following year or such other period as may be publicly
announced by the Federal Deposit Insurance Corporation (or any successor).
"Revolving Credit Loan" shall have the meaning assigned to such
term in Section 3(a).
"Servicing Bank" shall mean Chase Manhattan Bank, N.A. (Rochester
Division), so long as it shall act as Servicing Bank as provided in this
Agreement, and thereafter any successor appointed as Servicing Bank as
provided in Section 12 hereof.
"Subsidiary" shall mean any corporation the majority of the
shares of voting stock of which at any time outstanding is owned directly or
indirectly by Gannett or by one or more of its other subsidiaries or by
Gannett in conjunction with one or more of its other subsidiaries.
"Total Shareholders' Equity" shall mean the amount appearing
under that heading on the consolidated balance sheet of Gannett and its
Subsidiaries, prepared in accordance with generally accepted accounting
principles.
SECTION 2. Facility Fee; Commitment.
2(a). Facility Fee. Gannett will pay to each Bank pro rata, as
consideration for the Bank's Commitment hereunder, a facility fee (the
"Facility Fee") consisting of:
(i) a fee calculated at the rate of 9 Basis Points per
annum, computed pursuant to Section 3(g) from (and including) the
Effective Date on the Bank's Commitment hereunder, payable
quarterly on each June 1, September 1, December 1 and March 1,
after the date hereof, commencing with the first payment due on
March 1, 1994, and on (but excluding for purposes of calculating
the Facility Fee) the Expiration Date, for the preceding period
for which such Facility Fee has not been paid.
2(b). Termination of Commitments. Gannett may from time to time
terminate in whole or in part the unborrowed Commitments of the Banks
hereunder by giving not less than two Business Days prior notice to such
effect to the Servicing Bank. Any partial termination shall be in the
aggregate amount of $100,000 or a multiple thereof. After each termination,
the facility fee shall be calculated based upon the Commitment of the Banks
as so reduced.
2(c). Extension of Commitments. Gannett may, by written request
to each of the Banks not less than 45 days prior to the Expiration Date,
request that the term of this Agreement be extended for 364 days following
the Expiration Date specified in such written request (the first day of such
364 day period being referred to herein as the "Renewal Date"). Each Bank
shall advise Gannett by notice not later than 30 days after receipt of such
notice from Gannett whether it agrees to such extension. If any Bank shall
fail to so advise Gannett it shall be deemed to have declined such request,
and Gannett shall be free to agree with any of the other Banks or any other
institution in the business of providing financing to assume in whole or in
part such Bank's obligations hereunder. Any extension hereunder shall
become effective as of the Renewal Date with respect to each Bank that
shall have agreed to such extension, provided that on or prior to the
Renewal Date: (i) Gannett shall have delivered to each such Bank a
certificate certifying that as of the date five days prior to the Renewal
Date: (A) no Event of Default shall have occurred and be continuing and (B)
the representations and warranties made by Gannett in Section 5 hereof are
true, correct and complete and have the same force and effect as if made on
and as of the Renewal Date; and (ii) Gannett and each of the Banks agreeing
to such extension shall have signed an extension agreement in the form of
Exhibit A hereto, and the financing institutions, if any, to be made parties
to this Agreement as of the Renewal Date shall have executed an agreement
with Gannett to such effect in form and substance satisfactory to Gannett
and such financing institution. On and after the Renewal Date, and upon the
effectiveness of any such agreement between Gannett and such financing
institution, such financing institution shall be deemed a Bank for all
purposes under this Agreement.
SECTION 3. Revolving Credit - Domestic Borrowings
and Eurodollar Borrowings.
3(a). Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank severally
agrees to make one or more loans (each a "Revolving Credit Loan" and,
collectively, the "Revolving Credit Loans") to Gannett, at any time and from
time to time on or after the Effective Date to and excluding the Expiration
Date, in an aggregate principal amount not exceeding at any one time
outstanding the amounts set forth opposite each Bank's name on Schedule 1
hereto under the heading "Commitment Amount."
Within such limits, Gannett may borrow, prepay under Section 3(e),
and reborrow on and after the Effective Date to and excluding the Expiration
Date. The first Borrowing hereunder shall not be less than $50,000,000 and
each Borrowing thereafter shall be at least $1,000,000 or a multiple
thereof. Such Borrowings may be used for any of Gannett's or its
Subsidiaries' general corporate purposes, including but not limited to,
general operating expenses, repurchases of securities, dividends, costs of
construction, acquisitions, and refunding or purchase of its commercial
paper issued or any other of Gannett's or its Subsidiaries' obligations or
securities.
Except as provided in Section 3(d) hereof, each Borrowing shall be
made ratably from the Banks in accordance with their respective
Commitments; provided, however, that the failure of any Bank to make its
Advance shall not relieve any other Bank of its obligations to lend.
3(b). Money Market and Alternate Rate Advances
(i) For each Money Market Advance and Alternate Rate
Advance, Gannett shall deliver to the Servicing Bank notice at
least one Business Day before such proposed Borrowing
specifying the total amount of such Borrowing, whether it is to
be comprised of Money Market Advances or Alternate Rate
Advances, the applicable N.Y. Interest Period, the amount
thereof which is to be loaned by each Bank, the date of such
proposed Borrowing and the Maturity Date, which shall not be
later than the Expiration Date. Upon its receipt of Gannett's
notice, the Servicing Bank shall promptly notify each Bank by
telecopy of the date of the proposed borrowing, the amount to
be loaned by such Bank, whether it is to be a Money Market
Advance or an Alternate Rate Advance, the N.Y. Interest Period
and the Maturity Date, which shall be the last day of the N.Y.
Interest Period. Thereafter, the Servicing Bank shall forward a
xerographic copy of Gannett's notice to each other Bank. On the
date specified in such notice and prior to 11:00 A.M. (New York,
New York time), each Bank shall make its share of the Borrowing
available in immediately available funds to Gannett at the
principal office of the Servicing Bank.
(ii) Gannett will pay to each Bank on or, as set forth in
Section 3(e), before the Maturity Date the principal amount of
each Money Market or Alternate Rate Advance from such Bank
incurred pursuant to this Agreement, and accrued and unpaid
interest on the unpaid principal amount thereof from time to
time outstanding payable on the last day of the N.Y. Interest
Period at the Money Market Rate for Money Market Advances, and
payable on the last day of the N.Y. Interest Period at the
Alternate Rate for Alternate Rate Advances. Accrued and
unpaid interest on a Money Market Advance for a N.Y. Interest
Period of 180 days shall be due and payable on the 90th day
succeeding such Domestic Borrowing and on the last day of the
N.Y. Interest Period. Gannett shall have the right, at its sole
option, provided that the conditions specified in Section 7(a)
are satisfied as of that date, to extend the Maturity Date of
such Borrowings by giving notice to the Servicing Bank one
Business Day before such Maturity Date, specifying another
Maturity Date, not later than the Expiration Date, whether the
Borrowing is to be a Money Market Advance or an Alternate Rate
Advance and the N.Y. Interest Period.
(iii) Gannett may at its option, subject to compliance with
Section 3(e)(i), convert Alternate Rate Advances to Money Market
Advances or, subject to compliance with Section 3(e)(ii), convert
Money Market Advances to Alternate Rate Advances, by giving
the Servicing Bank at least two Business Days prior notice
meeting the requirements of Section 3(b)(i) hereof, and, in
addition, specifying in such notice that, instead of a new
borrowing, Gannett will convert an existing Alternate Rate
Advance to a Money Market Advance or an existing Money Market
Advance to an Alternate Rate Advance, as the case may be.
(iv)If on or before the date on which a Money Market Rate
is to be determined hereunder, a Money Market Rate cannot be
determined, the Servicing Bank shall forthwith give notice to
Gannett and, unless Gannett and the Banks agree to alternative
action, the Money Market Advance shall become an Alternate
Rate Advance on the first day of the N.Y. Interest Period
specified in Gannett's notice.
3(c). Eurodollar Borrowings.
(i) For each Eurodollar Borrowing Gannett shall deliver
to the Servicing Bank at least three Eurodollar Business Days
prior notice specifying (A) the total amount of such Borrowing;
(B) the amount thereof which is to be loaned by each Bank; (C)the
date of such proposed Borrowing which shall be a Eurodollar
Business Day; (D) the Maturity Date of the Borrowing, which shall
be the last Eurodollar Business Day of the Eurodollar Interest
Period, and no later than the Expiration Date; and (E) the
duration of the first Eurodollar Interest Period, which shall be
either one month, two months, three months or six months. Upon
receipt of such notice, the Servicing Bank shall promptly notify
each Bank by telecopy of the contents thereof and of such
Bank's ratable share of such Borrowing. Thereafter, the
Servicing Bank shall forward a xerographic copy of Gannett's
notice to each other Bank. Not later than 11:00 A.M. (New York,
New York time) on the date so specified, each Bank shall make
available its ratable share of such Borrowing, in immediately
available funds to Gannett at the principal office of the
Servicing Bank.
(ii) Gannett will pay to each Bank each Eurodollar
Advance made by it on the date specified as its Maturity Date in
the notice given by Gannett pursuant to Section 3(c)(i) with
respect to such Borrowing. Gannett shall have the right, at its
sole option, provided that the conditions specified in Section
7(a) are satisfied as of that date, to extend the Maturity Date
of such Borrowings by giving notice to the Servicing Bank at
least three Eurodollar Business Days before such Maturity
Date, specifying another date ending one month, two months,
three months or six months thereafter, but not later than the
Expiration Date as the Maturity Date for such Borrowings.
(iii) Each Eurodollar Advance shall bear interest on the
unpaid principal amount thereof from time to time outstanding
and Gannett will pay accrued and unpaid interest for each
applicable Eurodollar Interest Period on the last day of such
Eurodollar Interest Period, at an interest rate equal to the
sum of the Applicable Margin plus the applicable London
Interbank Offered Rate; provided, however, that accrued and
unpaid interest for a six-month Eurodollar Interest Period will
be paid on the first three-month anniversary of that Eurodollar
Borrowing and on the last day of such Eurodollar Interest
Period.
(iv) Any overdue principal of the Eurodollar Borrowings
shall bear interest payable on demand, for each day from the
date payment thereof was due to the date of actual payment, at
the "Eurodollar Overdue Interest Rate" determined as set forth
below. The Eurodollar Overdue Interest Rate shall be calculated
by the Servicing Bank, whose determination shall be conclusive
absent manifest error, on a daily basis, and shall be a rate per
annum equal to the sum of the Applicable Margin plus the
interest rate per annum at which one day deposits in an amount
equal to the aggregate sum of such overdue payments due the
Banks are offered to the Reference Bank in the London interbank
market for the applicable period determined as provided above.
(v) Subject to the provisions of the definition of
Eurodollar Interest Period, Gannett shall have the option to
elect a length of one month, two months, three months or six
months for each Eurodollar Interest Period. Such option shall
be exercised as provided in Section 3(c)(i) with respect to the
first Eurodollar Interest Period applicable to the loans
comprising each Eurodollar Borrowing and may be exercised as to
each subsequent Eurodollar Interest Period applicable to such
loans by giving notice to the Servicing Bank three Eurodollar
Business Days prior to the first day of the relevant Eurodollar
Interest Period. If no such notice is received by the Servicing
Bank within the prescribed time, Gannett shall be deemed to have
elected a Eurodollar Interest Period of three months.
3(d). Competitive Bid Rate Borrowings. At any time and from
time to time Gannett may request that some or all of the Banks submit in
writing to Gannett an offer to make a Revolving Credit Loan in the amount
and for the duration specified in Gannett's request for offer ("Request for
Offer"), at an interest rate not otherwise available under the terms of this
Agreement to be specified by such Bank. Each Bank shall, on the Business Day
following the date of receipt of such Request for Offer deliver a written
offer to Gannett specifying an interest rate on the terms otherwise set
forth in the Request for Offer. Any Bank that does not deliver an offer on
the next Business Day shall be deemed to have declined to make an offer. To
accept any such offer, Gannett shall send notice to such Bank and the
Servicing Bank within three Business Days after the date on which all such
Requests for Offer shall have been delivered by Gannett, specifying its
acceptance of such offer, reconfirming the terms thereof, specifying the
date such Borrowing is to be made and the Maturity Date. Each Revolving
Credit Loan, together with all other Revolving Credit Loans made pursuant
to any individual Request for Offer made by Gannett under this Section 3(d),
shall be referred to as a "Competitive Bid Rate Borrowing". Except as
specifically set forth in the Request for Offer relating thereto or
otherwise agreed to by Gannett and the Bank or Banks making Advances
comprising any such Competitive Bid Rate Borrowing, each Competitive Bid
Rate Borrowing shall be subject to this Agreement. Notwithstanding any
Request for Offer by Gannett, no Bank may make a Competitive Bid Rate
Advance in excess of the then unused amount of its Commitment. For so long
as any such Competitive Bid Rate Advance shall remain outstanding, each
Bank's Commitment shall be deemed automatically reduced by the aggregate
amount of any such Competitive Bid Rate Advance made by it for all purposes
under this Agreement including, but not limited to, the obligation of such
Bank to make additional Revolving Credit Loans and the right of such Bank to
receive its pro rata portion of the Facility Fee.
3(e). Prepayment or Conversion. Gannett may prepay or convert
Borrowings pursuant to this Section 3 as follows:
(i) Alternate Rate Advances may, upon one Business Day
prior notice to the Servicing Bank, be prepaid or, upon two
Business Days prior notice to the Servicing Bank, be converted
to another type of Advance without premium or penalty in whole
at any time or in part from time to time by paying or converting
a principal amount of not less than $10,000,000 or a multiple
thereof, and paying accrued interest thereon to the date of
prepayment or conversion and each such prepayment or
conversion shall be applied to prepay or convert the Alternate
Rate Advances of the several Banks in proportion to their
respective Advances; and
(ii) Money Market Advances and Eurodollar Advances may,
upon two Business Days prior notice to the Servicing Bank, be
prepaid or converted to another type of Borrowing in a principal
amount of not less than $10,000,000 or a multiple thereof with
accrued interest thereon to the date of prepayment or
conversion, provided that in the event of any prepayment or
conversion of Money Market Advances or Eurodollar Advances
other than on the last day of a N.Y. Interest Period or
Eurodollar Interest Period, Gannett shall reimburse each Bank
on demand for the loss, if any, incurred by such Bank as a result
of the timing of such prepayment or conversion by paying such
Bank a premium (if there is an excess as determined herein) on
the principal sum prepaid to such Bank, or converted, computed
from the date of the prepayment or conversion to the last day
of the N.Y. Interest Period or Eurodollar Interest Period at a
rate per annum equal to the excess, if any, of (A) the applicable
Eurodollar Rate or Money Market Rate over (B) the interest rate
which such Bank is able to obtain for an Advance of the same
type made on the day of such prepayment or conversion and
maturing on the last day of the N.Y. Interest Period or
Eurodollar Interest Period. A certificate as to the amount of
such premium submitted to Gannett and the Servicing Bank by
such Bank shall be conclusive and binding on Gannett in the
absence of manifest error.
3(f). Replacement of Commitments. If any Bank shall fail to make
an Advance in accordance with its obligations hereunder, Gannett shall have
the right to arrange that the Commitment of such Bank be taken over by any
one or more of the Banks or another bank or banks; provided that each such
bank shall sign and deliver an agreement, in suitable form, by which it will
become a party hereto. Such action by Gannett shall not constitute a waiver
or release of any right that it may have against the Bank that has failed to
extend credit hereunder.
3(g). Computation of Fees and Interest. Interest on Alternate
Rate Advances, Competitive Bid Rate Advances and the Facility Fee shall be
computed on the basis of a year of 365 (or 366) days, including any time
extended by reason of Saturdays, Sundays and holidays, and paid for the
actual number of days for which due, including the date of the Advance or
Commitment as the case may be, and excluding the date of repayment of
principal. Interest on Money Market Advances and Eurodollar Advances shall
be computed on the basis of a year of 360 days and paid for the actual
number of days for which due, including the first day of each N.Y. Interest
Period or Eurodollar Interest Period to but excluding the last day thereof.
3(h). Payments. All payments of principal or interest on the
Borrowings and the Facility Fee shall be made by Gannett when due in
immediately available funds at the principal office of the Servicing Bank in
lawful money of the United States of America.
3(i). Gannett's Borrowing Notices. Each notice given by Gannett
pursuant to Section 3 hereof concerning a Borrowing (including acceptance
by Gannett of any offer by a Bank made pursuant to Section 3(d) hereof, but
not including a Request for Offer), selection of an interest period or an
extension of a Maturity Date, shall be executed by any two of the Chairman,
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Controller, the Assistant Controller or the Vice President/Treasury
Services of Gannett. The giving of each such notice by Gannett shall be
deemed to be a representation and warranty by Gannett that the conditions
specified in Section 7(a) are satisfied on and as of the date of such notice.
Any notice of a proposed Borrowing may be withdrawn at any time prior to the
date of Borrowing specified in such notice, provided that if a notice
concerning a Borrowing at the Money Market Rate is withdrawn on the date of
the proposed Borrowing or, in the case of a Eurodollar Borrowing, two
Eurodollar Business Days or less prior to the date of the proposed
Borrowing, Gannett will indemnify each Bank against any loss or expense
incurred by such Bank in anticipation of the Borrowing, including, without
limitation, any loss (excluding loss of anticipated profits) or expense
incurred in the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Bank's share of the anticipated Borrowing.
A certificate as to the amount of such loss or expense submitted to Gannett
and the Servicing Bank by such Bank shall be conclusive and binding on
Gannett in the absence of manifest error.
3(k). Rate Quotations. The Reference Bank agrees to use its
best efforts to furnish quotations of rates applicable to this Agreement to
the Servicing Bank promptly upon request from time to time by the Servicing
Bank, and the Servicing Bank shall give notice of such rates by 12:00 Noon
(New York, New York time) to Gannett and the Banks.
3(l). Notice. Any notice under this Section 3 after 12:00 noon
on a particular Business Day or Eurodollar Business Day constitutes notice
on the morning of the next Business Day or Eurodollar Business Day, as the
case may be.
SECTION 4. Change in Circumstances.
4(a). Reduction in Rate of Return. If after the date hereof, any
Bank shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's
capital as a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Servicing Bank), Gannett shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction. Gannett shall not
be liable in respect of any increased cost to, or reduced amount of any sum
received or receivable by, any Bank pursuant to this Section 4(a) with
respect to any interest or fees accrued by such Bank more than 15 days
prior to the date of the notice required by the first sentence of Section
4(c), regardless of when such interest or fees are payable.
4(b). Increased Cost. If after the date hereof, the adoption of
any applicable law, rule or regulation or any change therein or change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank (or its Eurodollar Lending
office) with any request or directive of any such authority, central bank or
comparable agency (whether or not having the force of law):
(i) shall subject any Bank (or its Eurodollar Lending
Office) to any tax, duty or other charge with respect to a Money
Market Advance or a Eurodollar Advance or its obligation to
make Money Market Advances or Eurodollar Advances available,
or shall change the basis of taxation of payments to any Bank
(or its Eurodollar Lending office) of the principal of or interest
on its Money Market Advances or Eurodollar Advances or any
other amounts due under this Agreement in respect of its Money
Market Advances or Eurodollar Advances or its obligation to
make Money Market Advances or Eurodollar Advances (except for
changes in the rate of tax on the overall net income of a Bank or
its Eurodollar Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Eurodollar
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board, but
excluding (A) with respect to any Money Market Advance any such
requirement included in an applicable domestic reserve
percentage and (B) with respect to any Eurodollar Advance, any
such requirement included in an applicable Eurodollar reserve
percentage) against assets of, deposits with or for the account
of, or credit extended by, any Bank (or its Eurodollar Lending
Office) or shall impose on any Bank (or its Eurodollar Lending
Office) or on the United States market for certificates of
deposit or the London Interbank market any other condition
affecting its Money Market Advances, its Eurodollar Advances or
its obligation to make Money Market Advances or Eurodollar
Advances available;
and the result of any of the foregoing is to increase the cost to the Bank
(or its Eurodollar Lending Office) of making or maintaining its Money Market
Advances or its Eurodollar Advances, or its obligation to make Money Market
Advances or Eurodollar Advances, or to reduce the amount of any sum
received or receivable by any Bank (or its Eurodollar Lending Office) under
this Agreement, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Servicing Bank),
Gannett agrees to pay for the account of such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or
reduction. Gannett shall not be liable in respect of any such increased
costs to, or reduced amount of any sum received or receivable by, any Bank
pursuant to this Section 4(b) with respect to any interest or fees accrued
by such Bank more than 15 days prior to the date of the notice required by
the first sentence of Section 4(c) regardless of when such interest or fees
are payable.
4(c). Notice. Each Bank will promptly notify Gannett and the
Servicing Bank of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to
Section 4(a) or 4(b) and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank or in the reasonable judgment of
Gannett be disadvantageous to Gannett. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
4(d). Basis for Determining Interest Rate Inadequate or Unfair.
If before the beginning of any Eurodollar Interest Period:
(i) The Servicing Bank is advised by the Reference Bank
that, by reason of circumstances affecting the London Interbank
market generally, deposits in dollars (in the applicable amounts)
are not being offered to the Reference Bank in the London
interbank market for such Eurodollar Interest Period, or
(ii) Banks that have made Revolving Credit Loans
representing at least 51% in the aggregate of the unpaid
principal amount of all Eurodollar Borrowings then outstanding
(or the Commitments, if no Eurodollar Borrowings are then
outstanding) advise the Servicing Bank that the London
Interbank Offered Rate as determined by the Servicing Bank will
not adequately and fairly reflect the cost to such Banks of
maintaining or funding, for such Eurodollar Interest Period,
their Eurodollar Advances to which such Eurodollar Interest
Period applies;
The Servicing Bank shall forthwith give notice thereof to Gannett and the
Banks, whereupon until the Servicing Bank notifies Gannett that the
circumstances giving rise to such suspension no longer exist (A) the
obligations of the Banks to make Eurodollar Advances shall be suspended and
(B) Gannett shall prepay in full, without premium or penalty, the then
outstanding principal and interest of each Eurodollar Advance. Gannett
shall concurrently with prepaying each Eurodollar Advance pursuant to this
Section 4(d), draw a Domestic Borrowing in equal principal amount from such
Bank, and such Bank shall make such Domestic Borrowing notwithstanding any
provision herein to the contrary.
4(e). Illegality. If, after the date of this Agreement, the
introduction of or any change in any applicable law, rule or regulation or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency, charged with the interpretation or
administration thereof or compliance by any Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority shall make it unlawful or impossible for any Bank (or
its Eurodollar Lending Office) to make, maintain or fund its Eurodollar
Advances and such Bank shall so notify the Servicing Bank, the Servicing
Bank shall forthwith give notice thereof to the other Banks and Gannett.
Before giving any such notice to the Servicing Bank pursuant to this
Section, such Bank shall designate a different Eurodollar Lending office if
such designation will avoid the need for giving such notice and will not be
otherwise disadvantageous to such Bank. Upon receipt of such notice
Gannett shall prepay in full, without premium or penalty, the then
outstanding principal amount of each Eurodollar Borrowing of such Bank,
together with accrued interest thereon, on either (A) the last day of the
then current Eurodollar Interest Period applicable to such Eurodollar
Advance if such Bank may lawfully continue to maintain and fund such
Eurodollar Advance to such day or (B) immediately if such Bank may not
lawfully continue to fund and maintain such Eurodollar Advance to such day.
SECTION 5. Representations and Warranties of Gannett.
Gannett represents and warrants that:
5(a). Gannett and each of its Subsidiaries are corporations
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and each is duly qualified to do
business as a foreign corporation and is in good standing in all states in
which it owns substantial properties or in which it conducts a substantial
business and its activities make such qualifications necessary in order that
the business activities or financial conditions of Gannett and its
Subsidiaries, taken as a whole, are not Materially adversely affected.
5(b). Gannett has furnished to each of the Banks copies of its
Annual Report for 1992, containing copies of its consolidated balance sheet
as of December 27, 1992 and the related statements of consolidated income
and changes in shareholders' equity and cash flows for 1992, all reported on
by Price Waterhouse, independent public accountants and copies of its
Quarterly Report on Form 10-Q for the period ending September 26, 1993. The
financial statements contained in such Annual and Quarterly Reports
(including the related notes) fairly present Gannett's consolidated financial
condition as of their respective dates and the consolidated results of the
operations of Gannett and its Subsidiaries for the periods then ended, and
have been prepared in accordance with generally accepted accounting
principles. Gannett and its Subsidiaries have no Material liabilities as of
September 26, 1993 not reflected in the consolidated balance sheet as of
September 26, 1993 or the related notes as of said date, and from that date
to the Effective Date there has been no Material change in the business or
financial condition of Gannett and its Subsidiaries taken as a whole.
5(c). As of the Effective Date, Gannett and its Subsidiaries
owned absolutely, free and clear of all liens or encumbrances, all of the real
or personal property reflected in the consolidated balance sheet dated as
of September 26, 1993 referred to in Section 5(b) and all other property
acquired by them, respectively after September 26, 1993 except such
property as has been disposed of in the ordinary course of business, and
except for (i) easements, restrictions, exceptions, reservations or defects
which, in the aggregate, do not materially interfere with the continued use
of such property or materially affect the value thereof to Gannett or its
Subsidiaries, (ii) liens, if any, for current taxes not delinquent, and (iii)
mortgages, pledges, encumbrances, liens or charges reflected on such
consolidated balance sheet or not otherwise prohibited by Section 9(a). As
of the Effective Date Gannett and its Subsidiaries enjoy peaceful and
undisturbed possession of their properties which are held under lease and
all such leases are in good standing and valid and binding obligations of the
lessors in full force and effect, except for exceptions, reservations or
defects which in the aggregate do not materially interfere with the
continued use of such property or materially affect the value thereof to
Gannett or its Subsidiaries.
5(d). Except as indicated in the opinion of counsel delivered
pursuant to Section 7(b) (as supplemented from time to time by the reports
required pursuant to Section 8(e) hereof) there are no actions, suits, or
proceedings pending or, to Gannett's knowledge, threatened against or
affecting it or any Subsidiary in or before any court or foreign or domestic
governmental instrumentality, and neither Gannett nor any Subsidiary is in
default in respect of any order of any such court or instrumentality which,
in Gannett's opinion, are Material.
5(e). Neither the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, nor compliance with
the terms and provisions hereof will conflict with or result in a breach of
any of the provisions of Gannett's restated certificate of incorporation, as
amended, or by-laws, as amended, or any law or regulation, or any order of
any court or governmental instrumentality, or any agreement or instrument
by which Gannett is bound, or constitute a default thereunder, or result in
the imposition of any lien not permitted under this Agreement upon any of
Gannett's property.
5(f). To the best of Gannett's knowledge, Gannett and its
Subsidiaries have filed all tax returns which are required to be filed by any
jurisdiction, and have paid all taxes which have become due pursuant to said
returns or pursuant to any assessments against it or its Subsidiaries
except to the extent only that such taxes are not material or are being
contested in good faith by appropriate proceedings.
5(g). The execution and delivery of this Agreement and the
making of all Borrowings permitted by the provisions hereof have been duly
authorized by all necessary corporate action on the part of Gannett; this
Agreement has been duly and validly executed and delivered by Gannett and
constitutes Gannett's valid and legally binding agreement enforceable in
accordance with its terms; and the Borrowings when made, will constitute
valid and binding obligations of Gannett enforceable in accordance with the
terms of this Agreement except as limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other laws, judicial decisions or
principles of equity relating to or affecting the enforcement of creditors
rights or contractual obligations generally.
5(h). Environmental Matters. In the ordinary course of its
business, Gannett becomes aware from time to time of the effect of
Environmental Laws on its business, operations and properties and the
business, operations and properties of its Subsidiaries, and it identifies
and evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties then owned or operated by Gannett or its Subsidiaries, any
capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted at such properties, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On
the basis of these evaluations, Gannett has reasonably concluded that
Environmental Laws are unlikely to have a Material adverse effect on the
business, financial condition, results of operations or prospects of Gannett
and its Subsidiaries, considered as a whole.
SECTION 6. Representations, Warranties and Covenants of the Banks.
Each Bank severally represents and warrants that: (i) the
execution and delivery of this Agreement and the extending of all Borrowings
permitted by the provisions hereof have been duly authorized by all
corporate action on its part and will not conflict with or result in a breach
of any provision of its certificate of incorporation or by-laws, or of any
law or any regulation or order of any governmental instrumentality or of
any material agreement or instrument by which it is bound or constitute a
default thereunder, and (ii) this Agreement has been duly and validly
executed and delivered by such Bank and constitutes the valid and legally
binding agreement of such Bank enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws, judicial decisions or principles of equity
relating to or affecting the enforcement of creditors' rights or contractual
obligations generally.
SECTION 7. Conditions of Lending. The obligation of each Bank to
make loans hereunder is subject to the accuracy, as of the date hereof, of
the representations and warranties herein contained; and to the
satisfaction of the following further conditions:
7(a). On the date of each Borrowing (i) no Event of Default and no
noncompliance with any covenant contained in Section 9 hereof or Section
8(a) shall have occurred and be continuing and (ii) the representations and
warranties contained in Sections 5(a), 5(e), 5(g) and 5(h) shall be true and
correct in all Material respects on and as of such date;
7(b). On or prior to the date of the first Borrowing hereunder,
there shall have been delivered to each Bank an opinion from Nixon,
Hargrave, Devans and Doyle, counsel to Gannett, in substantially the form of
Exhibit B hereto. In rendering the foregoing opinion, such counsel may rely
upon certificates of officers of Gannett and its Subsidiaries as to (i) the
nature and location of the property of Gannett and of its Subsidiaries, (ii)
agreements and instruments to which Gannett and/or its Subsidiaries are a
party, and (iii) the conduct of the business of Gannett and its Subsidiaries.
7(c). On or prior to the date of the first Borrowing hereunder,
there shall have been delivered to each Bank a certificate of the Secretary
or an Assistant Secretary of Gannett certifying, as of the date of the
Agreement, to resolutions duly adopted by the Board of Directors of Gannett
or a duly authorized committee thereof authorizing Gannett's execution and
delivery of this Agreement and the making of the Borrowings.
SECTION 8. Affirmative Covenants.
Gannett covenants that, so long as it may borrow hereunder and
until payment in full of all Borrowings, it will:
8(a). Punctually pay or cause to be paid the principal and
interest due in respect of the Borrowings according to the terms hereof and
the Facility Fee provided in Section 2(a) hereof.
8(b). Furnish to the Banks:
(i) within 60 days after the end of each of the first
three quarterly periods in each fiscal year, its consolidated
statements of income for such quarterly period and for the
period from the beginning of the fiscal year to the end of such
quarterly period and its consolidated balance sheet at the end
of that period, all in reasonable detail, subject, however, to
year-end audit adjustments, together with a certificate of
compliance and no default in substantially the form of Exhibit C
hereto certified by an appropriate financial officer of Gannett;
(ii) within 120 days after and as of the close of each
fiscal year, Gannett's Annual Report to shareholders for such
fiscal year, containing copies of its consolidated income
statement, consolidated balance sheet and changes in
shareholders' equity and cash flows for such fiscal year
accompanied by a report by Price Waterhouse or some other
accounting firm of national reputation selected by Gannett,
based on their examination of such financial statements, which
examination shall have been conducted in accordance with
generally accepted auditing standards and which report shall
indicate that the financial statements have been prepared in
accordance with generally accepted accounting principles,
together with a certificate of compliance and no default in
substantially the form of Exhibit C, hereto certified by an
appropriate financial officer of Gannett.
(iii) promptly upon their becoming available, copies of all
regular and periodic financial reports, if any, which Gannett or
any of its Subsidiaries shall file with the Securities and
Exchange Commission or with any securities exchange.
(iv)promptly upon their becoming available, copies of all
prospectuses of Gannett and all reports, proxy statements and
financial statements mailed by Gannett to its shareholders
generally; and
(v) such other information respecting the financial
condition and affairs of Gannett and its subsidiaries as any of
the Banks may from time to time reasonably request.
The financial statements of Gannett and its Subsidiaries
hereafter delivered to the Banks pursuant to this Section 8(b) will fairly
set forth the financial condition of Gannett and its Subsidiaries as of the
dates thereof, and the results of Gannett's and its Subsidiaries' operations
for the respective periods stated therein, all in accordance with generally
accepted accounting principles.
8(c).Duly pay and discharge all (i) material obligations when due
and (ii) taxes, assessments and governmental charges of which Gannett has
knowledge assessed against it or against its properties prior to the date on
which penalties are attached thereto, unless and only to the extent that
such obligations, taxes, assessments or charters are not material or shall
be contested in good faith by appropriate proceedings initiated by Gannett.
8(d). Permit and cause its Subsidiaries to permit any Bank, upon
reasonable request, to inspect at all reasonable times its and its
Subsidiaries, properties, operations and books of account.
8(e). Notify the Servicing Bank promptly in writing in the event
that any proceeding is instituted or threatened against it or any Subsidiary
of which Gannett has knowledge and which in its opinion is Material.
SECTION 9. Negative Covenants.
Gannett covenants that, so long as it may borrow hereunder and
until payment in full of all Borrowings, it will not, without prior written
consent of the Required Banks:
9(a). Allow any lien to exist on any of its or its Subsidiaries'
assets, without making provision satisfactory to the Banks whereby the
Banks obtain an equal and ratable or prior lien as security for the payment
of the Borrowings; or transfer any of its assets for the purpose of
subjecting them to the payment of obligations prior in payment to any of its
general creditors; or allow any liability of, or claims, or demands against it,
or any of its Subsidiaries, to exist for more than 30 days if the liability,
claim or demand might by law be given any priority over those of its general
creditors; provided, however, that none of the above shall prohibit Gannett
or any Subsidiary from creating or allowing any of the following to exist:
(i) liens of any type other than those described in
Section 9(a)(v), incurred after the date hereof covering any of
Gannett's or its Subsidiaries' properties provided that the
total principal amount of indebtedness of Gannett and its
Subsidiaries (on a consolidated basis) secured by all such liens
permitted under this Section 9(a)(i) at any time outstanding
shall not exceed 50% of Net Property, Plant and Equipment;
(ii) leases of all types, whether or not such leases
constitute leasebacks of property sold or transferred by
Gannett or any Subsidiary;
(iii) pledges and deposits securing the payment of
workmen's compensation or insurance premiums, good-faith
deposits in connection with tenders, contracts (other than
contracts for the payment of borrowed money) or leases,
deposits to secure surety or appeal bonds, liens, pledges or
deposits in connection with contracts made with or at the
request of the United States Government or any agency thereof,
or pledges or deposits for similar purposes made in the ordinary
course of business;
(iv) liens securing taxes, assessments or governmental
or other charges or claims for labor, materials or supplies
which are not delinquent or which are being contested in good
faith by appropriate proceedings and liens, restrictions,
easements, licenses on the use of property or minor
irregularities in the title thereof, which do not, in Gannett's
opinion, in the aggregate materially impair their use in
Gannett's and its Subsidiaries' business; and
(v) liens on the assets of any corporation which becomes
a Subsidiary of Gannett after the date of this Agreement to the
extent that such liens existed prior to the date of acquisition
of such corporation by Gannett.
9(b). Merge, consolidate, sell, lease, transfer or otherwise
dispose of all or substantially all of its assets or permit any of its
Subsidiaries to merge, consolidate, sell, lease, transfer or otherwise
dispose of all or substantially all of its assets, unless immediately after
giving effect to such transaction, Gannett shall be the survivor corporation
and shall be in compliance with Sections 9(a), 9(c) and 9(d) hereof.
9(c). Permit Gannett's Total Shareholders' Equity at any time to
be less than $1,200,000,000.
9(d). Permit Gannett's "consolidated net earnings available for
interest charges," aggregated for the four fiscal quarters immediately
preceding the date of determination, at any time to be less than 200% of the
"adjusted consolidated total interest expense." "Consolidated net earnings
available for interest charges" shall mean Gannett's consolidated net income
for the four fiscal quarters, excluding extraordinary income or loss, plus
the sum of all Federal and state income taxes, and total interest charges,
including amortization of debt discount or premium and interest charges
attributable to capitalized leases, but only to the extent that such charges
exceed $10,000,000 for the four-quarter period. "Adjusted consolidated
total interest expense" shall mean Gannett's total interest expense plus
amortization of debt discount for the four fiscal quarters, plus interest
charges in excess of $10,000,000 attributable to capitalized leases for the
four-quarter period. For purposes of this Section 9(d), Gannett's
consolidated financial statements shall not include any Subsidiary which has
defaulted in the payment of principal or interest on $50,000,000 or more of
the Subsidiary's obligations for borrowed money if such default has resulted
in acceleration of the obligation.
SECTION 10. Events of Default.
10(a). The following are Events of Default:
(i) Gannett shall default in the payment of principal of
or interest on any Borrowings when due and such default shall
have continued for a period of 15 Business Days;
(ii) Gannett shall (A) default in any payment of principal
or of interest on any other obligation for borrowed money in
excess of $25,000,000 beyond any grace period provided with
respect thereto, or (B) default in the performance of any other
agreement, term or condition contained in any agreement under
which any such obligation is created, if the effect of such
default is to cause such obligation to be accelerated or become
due prior to its stated maturity;
(iii) Any representation or warranty herein made by
Gannett, or any certificate or financial statement furnished by
Gannett pursuant to the provisions hereof, shall prove to have
been false or misleading in any material respect as of the time
made or furnished and Gannett shall fail to take corrective
measures satisfactory to the Required Banks within 30 days
after notice thereof to Gannett from any Bank.
(iv) Gannett shall default in the performance of any
other covenant, condition or provision hereof and such default
shall not be remedied to the satisfaction of the Required Banks
within a period of 30 days after notice thereof to Gannett from
any Bank or by Gannett to the Servicing Bank. Gannett shall
promptly notify the Servicing Bank upon discovery of the
existence of a default in the performance of a covenant,
condition or provision referred to in this Section 10(a)(iv) and
Section 10(a)(iii).
(v) Gannett or any Subsidiary with more than
$100,000,000 in revenue in the preceding fiscal year (other than
Gannett Satellite Information Network, Inc.) shall (A) apply for
or consent to the appointment of a receiver, trustee, or
liquidator of Gannett, (B) make a general assignment for the
benefit of creditors, or (C) file a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or
an arrangement with creditors or take advantage of any
insolvency law or an answer admitting the material allegations
of a petition filed against Gannett in any bankruptcy,
reorganization or insolvency proceeding, or corporate action
shall be taken by Gannett for the purpose of affecting any of
the foregoing; or
(vi) An order, judgment or decree shall be entered,
without the application, approval or consent of Gannett, by any
court of competent jurisdiction, approving a petition seeking
reorganization of Gannett or appointing a receiver, trustee or
liquidator of Gannett or of all or a substantial part of the
assets of Gannett, and such order, judgment or decree shall
continue unstayed and in effect for any period of ninety (90)
consecutive days.
10(b). If an Event of Default shall occur and be continuing:
(i) Under Sections 10(a)(i) and 10(a)(ii), any Bank shall be
entitled by notice to Gannett to elect to be relieved of its
obligation to make further loans hereunder, and the holders of
not less than 66-2/3% of the unpaid principal amount of
Borrowings then outstanding hereunder shall be entitled by
notice to Gannett to declare all Advances then outstanding
hereunder and interest accrued thereon and all liabilities of
Gannett hereunder to be forthwith due and payable;
(ii) Under Sections 10(a)(iii) and 10(a)(iv):(A) the holders
of not less than 66-2/3% of the unpaid principal amount of the
Borrowings then outstanding hereunder shall be entitled by
notice to Gannett to declare all Borrowings then outstanding
hereunder and interest accrued thereon and all liabilities of
Gannett hereunder to be forthwith due and payable, and (B) the
holders of not less than 66-2/3% of the Commitments and, if
there are any Borrowings then outstanding, the holders of 66-
2/3% of the unpaid principal amount of the Borrowings shall be
entitled by notice to Gannett to relieve the Banks of their
obligations to make further Revolving Credit Loans hereunder;
or
(iii) Under Sections 10(a)(v) and 10(a)(vi), no Bank shall be
under further obligation to make Revolving Credit Loans and all
Borrowings then outstanding hereunder and interest accrued
thereon and all liabilities of Gannett hereunder to each Bank
shall become forthwith due and payable without presentment,
demand, protest or notice of any kind, all which are hereby
expressly waived.
Any Bank giving any notice to Gannett under this Section 10
shall simultaneously give like notice to all of the other Banks and to the
Servicing Bank.
SECTION 11. Amendments.
Any provision of this Agreement may from time to time be
modified, waived or amended with the written consent of Gannett and the
Banks which are holders of 66-2/3% of the Commitments and, if there are any
Borrowings then outstanding, the holders of 66-2/3% of the unpaid principal
amount of the Borrowings; provided, that no such modification, waiver, or
amendment may be made which will (i) reduce or increase the amount or alter
the term of the Commitment of, or the Facility Fee payable to, any Bank
hereunder other than as permitted by Sections 2(b), 2(c), 3(d) and Section 4
hereof, without the written consent of Gannett and of all the Banks, (ii)
extend the time for payment of principal of any Borrowing or change the rate
of interest on any Borrowing, or otherwise affect the terms of payment of
such principal or interest, without the prior written consent of Gannett and
the makers of all Advances comprising such Borrowings, (iii) modify, waive or
amend any provision of this Section 11 or Section 7, without the written
consent of Gannett and the Banks which are holders of 100% of the
Commitments and, if there are any Borrowings then outstanding, the holders
of 100% of the unpaid principal amount of the Advances or (iv) change the
percentage specified in the definition of Required Banks, the definition of
Applicable Margin or other percentages specified hereunder as to consents,
votes or waivers by the Banks without the prior written consent of Gannett
and all of the Banks.
SECTION 12. Servicing Bank.
12(a). By signing this Agreement the Servicing Bank as a Bank
agrees to perform as provided in this Section 12. The Servicing Bank agrees
to accept for transmission and shall promptly transmit to all of the Banks
any notice, statement, report or communication received from any Bank with
the request to forward the same to Gannett. Likewise, the Servicing Bank
agrees to accept for transmission and shall transmit promptly to the Banks
any funding notice or other notice or information received from Gannett with
a request to forward same to the Banks. The Servicing Bank shall have no
liability or responsibility for, nor shall it be deemed to make any
representation with respect to, the completeness, accuracy or contents of
any notice, statement, report or communication transmitted pursuant to this
Section 12(a).
12(b). The Servicing Bank agrees to act for and on behalf of the
Banks in receiving funds from each Bank for disbursement to Gannett and in
receiving payments from Gannett for transmission to the Banks; provided,
however, that in so acting the Servicing Bank shall not be authorized, nor
shall it be deemed, either to waive or compromise the rights of any Bank
under this Agreement or to accept or approve, on behalf of any Bank, any act
by Gannett as performance under this Agreement. Any such payment of
principal of or interest on the Borrowings, or of the Facility Fee, or any
other payment received from Gannett shall be transmitted forthwith upon
collection by the Servicing Bank to the Banks in immediately available funds,
in accordance with Gannett's written instructions. The Servicing Bank shall
not be liable or accountable to any Bank for delays or failures in
transmission of payments, instruments, notices or other communications
received by it for transmission to any party, except for delays or failures
caused by the Servicing Bank's bad faith, willful misconduct or gross
negligence.
12(c). The Servicing Bank shall be protected in acting upon any
document believed by it to be genuine and to have been signed or sent by a
proper person or persons. Any communication from the Servicing Bank to
Gannett or any Bank may be sent or given as provided in Section 13(e) hereof.
12(d). The Servicing Bank may resign at anytime by giving 30 days
prior notice to the Banks and Gannett. The Servicing Bank shall resign upon
30 days prior written demand for its resignation delivered by Gannett to the
Servicing Bank and the Banks. Such resignation shall take effect at the end
of the 30 day period or earlier if Gannett appoints a successor with the
approval of the Required Banks, which approval shall not be unreasonably
withheld, conditioned or delayed.
12(e). The Servicing Bank shall maintain a register (the
"Register") on which it will record the Commitments from time to time of each
of the Banks, the Advances made by each of the Banks and each repayment in
respect of the principal amount of the Advances of each Bank. Any such
recordation shall be conclusive, absent manifest error.
12(f). Each Bank will record on its internal records the amount
of each Advance made by it and each payment in respect thereof. Failure to
make any such recordation, or any error in such recordation, shall not
affect Gannett's obligations in respect of such Borrowing. Any such
recordation shall be conclusive, absent manifest error.
SECTION 13. Miscellaneous.
13(a). No delay or failure of Gannett, any Bank, or the holder of
any Borrowing in exercising any right, power or privilege hereunder shall
affect such right, power or privilege, nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce
such right, power or privilege preclude any further exercise thereof or of
any other right, power or privilege. The rights and remedies of Gannett and
the Banks hereunder are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Bank of any breach or
default under this Agreement must be specifically set forth in writing.
13(b). Nothing in this Agreement shall be deemed a waiver or
prohibition of any Bank's right of banker's lien or set-off against Gannett
or of Gannett's right of set-off or counterclaim against any Bank, and no
set-off by Gannett against any Bank shall be deemed to be a prepayment of
any Advances made by that Bank for the purposes of Section 4 hereof.
13(c). Any Bank that shall make recovery against Gannett
through the exercise of any banker's lien, right of counterclaim or set-off
of the amount of any Borrowing or obligation of Gannett, shall apply such
recovery solely to the repayment of Advances made under this Agreement,
and shall purchase a ratable proportion of the Advances held by other Banks
so that all such recoveries shall be shared pro rata on the basis of each
Bank's ownership interest in the outstanding Borrowings.
13(d). All representations, warranties, covenants and
agreements of Gannett and the Banks contained herein or made in writing in
connection herewith, shall survive the execution and delivery of this
Agreement, and the making of Revolving Credit Loans hereunder.
13(e). Unless otherwise specified herein all notices, requests,
demands or other communications to or from the parties hereto shall be
deemed to have been duly given and made either by letter or telecopy. In the
case of a letter, such notice shall be deemed to have been duly given upon
delivery or three days after deposit in the mail if sent by registered first
class mail, postage prepaid and, in the case of a telecopy, such notice shall
be deemed to have been duly given when a telecopy is sent. Any such notice,
request, demand or communication shall be delivered addressed as follows:
(i) if to the Servicing Bank, at its address or telecopy
number set forth on Schedule 1 hereof;
(ii) if to another Bank, at its address or telecopy number
set forth on Schedule 1 hereof;
(iii) if to Gannett at its principal office, 1100 Wilson
Blvd., Arlington, VA 22234 (or telecopy number (703) 558-4638)
(Attention: Senior Vice President, Financial Services and
Treasurer, and Vice President/Treasury Services).
13(f). Gannett will pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Agreement or
any amendment, consent or waiver requested by Gannett (including the
reasonable fees and out-of-pocket expenses of special counsel to the
Banks). In addition, Gannett will pay reasonable costs and expenses
(including attorneys' fees), if any, in connection with the enforcement or
collection of this Agreement and the Borrowings and arising after the
occurrence of any event which with notice or lapse of time would constitute
an Event of Default, unless such occurrence is cured by Gannett within any
applicable grace period or such reimbursement is not required by the terms
of any waiver granted by the Banks in respect of such occurrence; provided,
however, that (i) Gannett shall have no such obligation for costs and
expenses if Gannett prevails or successfully defeats any enforcement or
collection proceedings; and (ii) if, by final adjudication in any proceeding not
involving Gannett's bankruptcy, reorganization or insolvency, the Banks
receive less relief than claimed, Gannett's obligation for costs and
expenses shall be limited proportionate to the relief granted to the Banks.
If Gannett is required to commence proceedings against any Bank to enforce
its Commitment, the Bank will pay Gannett's reasonable costs and expenses
(including attorneys' fees) if Gannett succeeds, or a share of such
reasonable costs and expenses proportionate to Gannett's recovery if
Gannett is only partially successful. In addition, Gannett will pay any and
all stamp and other taxes (excluding income taxes now applicable or which may
be levied in lieu of stamp or other taxes), and to save each holder of each
Advance harmless from any and all liabilities with respect to or resulting
from any delay or omission on the part of Gannett to pay such taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of this Agreement or the making of any of the
Borrowings. The obligations of Gannett under this Section 13(f) shall
survive the payment of the Borrowings.
13(g). THIS AGREEMENT AND THE BORROWINGS SHALL BE DEEMED TO BE
CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.
13(h). This Agreement may be executed in as many counterparts
as may be deemed necessary and convenient, and by the different parties
hereto on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and
the same instrument.
13(i). This Agreement may not be assigned by Gannett without the
consent of the Banks which are the holders of 100% of the Commitments and, if
there are any Borrowings then outstanding, the holders of 100% of the unpaid
principal amount of the Borrowings. This Agreement may not be assigned by
any Bank, except in whole or part to any other Bank party hereto or with the
prior written consent of Gannett in its sole discretion. In the event that
any Bank shall so assign all or part of its Commitment to another Bank,
and/or any Advances made by it hereunder (which individual Advances may
only be assigned in full), the assignor Bank and the assignee Bank shall, on
or before the next Business Day after such assignment shall become
effective, deliver a notice to Gannett signed by each of such Banks
specifying the relevant details of such assignment and, if appropriate,
requesting that the Commitments of the respective Banks be automatically
adjusted to reflect such assignment. Notwithstanding the foregoing, no Bank
shall be permitted to grant participations in all or any portion of its
Commitment or any Advances made by it.
13(j). This Agreement shall be binding upon and inure to the
benefit of the Banks and their respective successors and assigns, and
Gannett and its successors and assigns.
13(k). No provision of this Agreement is intended to or should be
construed as preventing Gannett from entering into loan agreements of any
kind or nature with any or all of the Banks or any other financial institution
as Gannett may select, the terms and conditions of which shall be wholly
separate and apart from the terms of this Agreement.
13(l). This Agreement, together with the $1,000,000,000
Revolving Credit Agreement of even date herewith between Gannett and each
of the banks parties thereto, replaces in its entirety the Loan Agreement
made as of December 1, 1990 between Gannett and certain banks, as amended,
which Agreement and the commitments thereunder shall be deemed terminated
by the Banks parties thereto and Gannett without further notice upon the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GANNETT CO., INC.
By s/ Gracia C. Martore
Name: Gracia C. Martore
Title: Vice President/
Treasury Services
CHEMICAL BANK
By s/ Laura S. Tingley
Name: Laura S. Tingley
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA
By s/ Clark Wilson
Name: Clark Wilson
Title: Vice President
MARINE MIDLAND BANK
By s/ Paul Willsey
Name: Paul Willsey
Title: Administrative Vice
President
MORGAN GUARANTY TRUST COMPANY
By s/ Michael Y. Leder
Name: Michael Y. Leder
Title: Vice President
J.P. MORGAN DELAWARE
By s/ David J. Morris
Name: David J. Morris
Title: Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
By s/ Lawrence Saunders
Name: Lawrence Saunders
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By s/ Lisa Allison
Name: Lisa Allison
Title: Manager/Credit
Administration
THE FIRST NATIONAL BANK OF CHICAGO
By s/ Ted Wozniak
Name: Ted Wozniak
Title: Vice President
BANK OF AMERICA, N.T. & S.A.
By s/ Nancy L. Sun
Name: Nancy L. Sun
Title: Vice President
BANK OF HAWAII
By s/ Curtis W. Chinn
Name: Curtis W. Chinn
Title: Vice President
THE BANK OF NOVA SCOTIA
By s/ James N. Tryforos
Name: James N. Tryforos
Title: Authorized Signatory
CRESTAR BANK
By s/ Michael A. Hart
Name: Michael A. Hart
Title: Senior Vice President
NBD BANK, N.A.
By s/ L. E. Schuster
Name: L. E. Schuster
Title: Vice President
ROYAL BANK OF CANADA
By s/ Peter D. Steffen
Name: Peter D. Steffen
Title: Senior Manager
SOCIETE GENERALE
By s/ Pascale Hainline
Name: Pascale Hainline
Title: Vice President
CITIBANK, N.A.
By s/ Thomas D. Stott
Name: Thomas D. Stott
Title: Vice President
CREDIT LYONNAIS
By s/ Silvana Burdick
Name: Silvana Burdick
Title: Authorized Signatory
THE SANWA BANK, LIMITED
By s/ Peter J. Pawlak
Name: Peter J. Pawlak
Title: Vice President and
Senior Manager
THE WACHOVIA BANK OF GEORGIA, N.A.
By s/ Tina P. Hayes
Name: Tina P. Hayes
Title: Assistant Vice President
CHASE MANHATTAN BANK, N.A.
By s/ Diana Lauria
Name: Diana Lauria
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By s/ Susan E. Pritchett
Name: Susan E. Pritchett
Title: Vice President
THE FUJI BANK, LIMITED
By s/ Takashi Nagao
Name: Takashi Nagao
Title: Vice President and
Manager
THE NORTHERN TRUST COMPANY
By s/ David L. Love
Name: David L. Love
Title: Commercial Banking Officer
<PAGE>
SCHEDULE 1
COMMITMENTS OF THE BANKS
NAME, ADDRESS AND TELEPHONE COMMITMENT AMOUNT
NUMBER OF BANK
Chemical Bank $33,333,333
270 Park Avenue
New York, NY 10017
Telecopy: 212-270-2112
First Interstate Bank of California $33,333,333
885 Third Avenue
New York, NY 10022-4802
Telecopy: 212-593-5238
Marine Midland Bank $33,333,333
One Marine Midland Plaza
Rochester, New York 14639
Telecopy: 716-238-7140
Morgan Guaranty Trust Company $16,666,666
60 Wall Street, 22nd Floor
New York, NY 10260
Telecopy: 212-648-5018
J.P. Morgan Delaware $16,666,667
902 North Market Street
Wilmington, DE 19801
Telecopy: 302-654-5336
NationsBank of North Carolina, N.A. $33,333,333
6610 Rockledge Drive, 1st Floor
Bethesda, MD 20817-1876
Telecopy: 301-571-0719
Toronto Dominion (Texas), Inc. $33,333,333
909 Fannin, Suite 1700
Houston, TX 77010
Telecopy: 713-951-9921
With a copy to:
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
Telecopy: 212-262-1926
The First National Bank $28,333,333
of Chicago
One First National Plaza
Mail Suite 0374
Chicago, IL 60670-0083
Telecopy: 312-732-3885
Bank of America, N.T. & S. A. $21,666,667
Attn: Nina Lemmer
1850 Gateway Blvd.
Concord, CA 94520
Telecopy: 510-675-7531 or 7532
With a copy to:
Bank of America, N.T. & S.A.
335 Madison Avenue
New York, NY 10017
Telecopy: 212-503-7173
Bank of Hawaii $21,666,667
130 Merchant Street, 20th Floor
Honolulu, HI 96813
Telecopy: 808-537-8301
The Bank of Nova Scotia $21,666,667
New York Agency
1 Liberty Plaza, 26th Floor
New York, NY 10006
Telecopy: 212-225-5090 or 5091
Crestar Bank $21,666,667
1445 New York Avenue, N.W.
Washington, DC 20005
Telecopy: 202-879-6137
NBD Bank, N.A. $21,666,667
611 Woodward
Detroit, MI 48226
Telecopy: 313-225-2649
Royal Bank of Canada $21,666,667
c/o New York Branch
New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, NY 11201-2701
Telecopy: 718-522-6292
Societe Generale $21,666,667
50 Rockefeller Plaza
New York, NY 10020
Telecopy: 212-581-8752
Citibank, N.A. $16,666,667
399 Park Avenue
New York, NY 10043
Telecopy: 212-793-6873
Credit Lyonnais $16,666,667
Cayman Island Branch
1301 Avenue of the Americas
New York, NY 10019
Telecopy: 212-459-3179
The Sanwa Bank, Limited $16,666,667
Atlanta Agency
Georgia-Pacific Center
Suite 4750
133 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-589-1629
Wachovia Bank of Georgia, N.A. $16,666,667
191 Peachtree Street, N.E.
Atlanta, GA 30303
Telecopy: 404-332-6898
Chase Manhattan Bank, N.A. $13,333,333
One Chase Square
Corp. Industries Dept.
Tower 9
Rochester, NY 14643
Telecopy: 716-258-4258
The First National Bank of Maryland $13,333,333
1800 K Street, N.W., Suite 1010
Washington, DC 20006
Telecopy: 202-775-4838
The Fuji Bank, Limited $13,333,333
2 World Trade Center, 79th Floor
New York, NY 10048
Telecopy: 212-912-0516
The Northern Trust Company $13,333,333
50 South LaSalle Street - B11
Chicago, IL 60675
Telecopy: 312-444-3508
TOTAL $500,000,000
<PAGE>
EXHIBIT A
[FORM OF EXTENSION AGREEMENT]
EXTENSION NUMBER ____ OF CREDIT AGREEMENT
Dated as of: ________________ __, 199_
Reference is made to the Revolving Credit Agreement (as amended,
modified, supplemented or extended from time to time, the "Credit Agreement")
dated as of December 1, 1993 between GANNETT CO., INC. ("Gannett") and each
of the banks parties thereto (each a "Bank" and collectively the "Banks"). All
capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Credit Agreement.
Gannett and each of the Banks parties hereto hereby agree that as of
the date hereof (such date to be the Renewal Date): (i) the Expiration Date
shall be extended from ______________ __, 199_ to _________ __, 199_; (ii)
the date set forth in the definition of "Expiration Date" shall be changed
from _________ __, 199_ to _________ __, 199_ ; and (iii) as extended hereby,
the Credit Agreement remains in full force and effect in accordance with its
terms with respect to all of the parties to this Extension Agreement.
This Agreement may be executed in as many counterparts as may be
deemed necessary and convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall together constitute but one and
the same original.
GANNETT CO., INC.
By ___________________________
Name:
Title:
CHEMICAL BANK
By ________________________
Name:
Title:
FIRST INTERSTATE BANK OF CALIFORNIA
By ________________________
Name:
Title:
MARINE MIDLAND BANK
By ________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
By ________________________
Name:
Title:
J.P. MORGAN DELAWARE
By ________________________
Name:
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.
By ________________________
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By ________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By ________________________
Name:
Title:
BANK OF AMERICA, N.T. & S.A.
By ________________________
Name:
Title:
BANK OF HAWAII
By ________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By ________________________
Name:
Title:
CRESTAR BANK
By ________________________
Name:
Title:
NBD BANK, N.A.
By ________________________
Name:
Title:
ROYAL BANK OF CANADA
By ________________________
Name:
Title:
SOCIETE GENERALE
By ________________________
Name:
Title:
CITIBANK, N.A.
By ________________________
Name:
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By ________________________
Name:
Title:
THE SANWA BANK, LIMITED
By ________________________
Name:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By ________________________
Name:
Title:
CHASE MANHATTAN BANK, N.A.
By ________________________
Name:
Title:
THE FIRST NATIONAL BANK OF MARYLAND
By ________________________
Name:
Title:
THE FUJI BANK, LIMITED
By ________________________
Name:
Title:
THE NORTHERN TRUST COMPANY
By ________________________
Name:
Title:
<PAGE>
EXHIBIT B
[Letterhead of Nixon, Hargrave, Devans & Doyle]
December 1, 1993
To the Banks parties to the
Revolving Credit Agreement
dated as of December 1, 1993
between Gannett and the Banks
Ladies and Gentlemen:
We are counsel to Gannett Co., Inc. ("Gannett"), and as such we are
familiar with the Revolving Credit Agreement of even date herewith between
each of you and Gannett (the "Credit Agreement") relating to Gannett's
borrowing of up to $500,000,000. We are also familiar with Gannett's
Restated Certificate of Incorporation, as amended, By-Laws, as amended,
agreements and other documents and matters of law as we consider
necessary for purposes of this opinion. Capitalized terms defined in the
Credit Agreement are used herein with the respective meanings assigned to
such terms in the Credit Agreement. Based upon the foregoing, we are of the
opinion that:
1. Gannett is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly qualified to do
business as a foreign corporation, and Gannett is in good standing in all
states in which it owns substantial properties or in which it conducts
substantial business or in which qualification is necessary in order that
the business or financial condition of Gannett and its Subsidiaries, taken as
a whole, be not Materially adversely affected.
2. There are no actions, suits or proceedings pending or, to our
knowledge, threatened against or affecting Gannett or any of its
Subsidiaries in or before any court or foreign or domestic government
instrumentality, and neither Gannett nor any of its Subsidiaries are in
default in respect of any order of any such court or governmental
instrumentality which, in the opinion of Gannett, are Material.
3. Neither the execution and delivery of the Agreement, the
consummation of the transactions therein contemplated nor compliance with
the terms and provisions thereof will conflict with or result in breach of
any of the provisions of the Restated Certificate of Incorporation, as
amended, or the By-Laws, as amended, of Gannett or, to our knowledge and
based on reasonable inquiries made of corporate officers of any law or of
any regulation or order of any court or governmental instrumentality or any
material agreement or instrument by which Gannett is bound or constitute a
default thereunder or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever not permitted under
Section 9(a) of the Agreement upon any of the property of Gannett.
4. The execution and delivery of the Agreement and the making of all
Borrowings contemplated or permitted by the provisions thereof have been
duly authorized by all necessary corporate action on the part of Gannett;
and the Agreement has been duly and validly executed and delivered by
Gannett. The Agreement constitutes a valid and legally binding agreement
enforceable in accordance with its terms and the Borrowings when duly made,
will constitute valid and legally binding obligations of Gannett enforceable
in accordance with the terms thereof and of the Agreement, except as limited
by applicable bankruptcy, insolvency, moratorium, reorganization or other
laws, judicial decisions or principles of equity relating to or affecting the
enforcement of creditors' rights or contractual obligations generally.
In rendering the foregoing opinion we have relied upon the
certificates of officers of Gannett as to (i) the nature and location of the
property of Gannett, (ii) agreements and instruments to which Gannett and/or
its Subsidiaries is a party, and (iii) the existence of Material pending or
threatened actions, suits or proceedings or orders of any court or
governmental instrumentality.
Very truly yours,
<PAGE>
EXHIBIT C
CERTIFICATE AS TO COMPLIANCE
PURSUANT TO SECTION 8 (b) OF
$500,000,000 REVOLVING CREDIT AGREEMENT
[Use for Quarterly report] The undersigned, an officer of Gannett Co.,
Inc. ("Gannett"), has executed this
Certificate pursuant to Section 8(b)(i) of
the Revolving Credit Agreement dated as of
December 1, 1993 between Gannett and the
Banks parties thereto. The undersigned
has reviewed Gannett's activities during
the preceding fiscal quarter, which has
consisted solely of a review of the
unaudited consolidated financial
statements of Gannett for said fiscal
quarter.
[Use for annual report] The undersigned, an officer of Gannett Co.,
Inc. ("Gannett") has executed this
Certificate pursuant to Section 8(b)(ii) of
the Revolving Credit Agreement dated as of
December 1, 1993 between Gannett and the
Banks parties thereto. The undersigned
has reviewed the activities of Gannett and
its Subsidiaries during the preceding
fiscal year, which has consisted solely of
a review of the audited consolidated
financial statements of Gannett for said
fiscal year.
The undersigned hereby CERTIFIES THAT, based upon the review described
above and a review of the Revolving Credit Agreement, nothing came to his
attention which caused him to believe that (i) Gannett has not fulfilled all of
its obligations under the Revolving Credit Agreement or (ii) there has
occurred an Event of Default as defined in said Agreement, or any condition,
event or act, which with notice or lapse of time or both, would constitute an
Event of Default, which has not been cured pursuant to the provisions of
said Agreement.
GANNETT CO., INC.
By ______________________________
Name:
Title:
Exhibit 10-4
Description of Supplemental Insurance Benefits
The Company provides additional life insurance coverage equal to
$200,000 to certain executives and $300,000 to certain executives of the
Company who are also on its Board of Directors. The Company provides
additional travel accident insurance equal to three times salary and most
recent bonus to certain executives, beyond the coverage provided to other
employees.
Exhibit 10-8
GANNETT CO., INC.
1987 DEFERRED COMPENSATION PLAN
Restated as of December 1, 1993
1.0 BACKGROUND
1.1 Introduction
The Gannett Co., Inc. 1987 Deferred Compensation Plan ("Plan")
provides the opportunity for Directors to defer all or part of their
fees and key employees to defer all or part of their salary, bonus
and/or shares of Gannett common stock issued pursuant to Stock
Incentive Rights under the Gannett Co., Inc. 1978 Long-Term Incentive
Plan ("Compensation") payable by Gannett Co., Inc. ("Company") to
future years as part of their financial planning.
2.0 EXPLANATION OF PLAN
2.1 Effective Date
The Plan will be effective upon adoption by the Board of Directors
and shall cover Compensation earned after July 1, 1987.
2.2 Eligibility
The Plan is available (a) to Directors of the Company and (b) to
officers and employees of the Company who reside in the United
States and who are designated as eligible by the Deferred Compensa-
tion Committee described in Section 3.4 ("Committee").
2.3 Interest in the Plan; Deferred Compensation Account
For each eligible person who elects to defer Compensation earned
during a year ("Participant"), separate Deferred Compensation
Accounts shall be established for that year for each type of Compen-
sation deferred. A Participant's interest in the Plan shall be the
Participant's right to receive payments under the terms of the Plan.
A Participant's payments from the Plan shall be based upon the value
attributable to the Participant's Deferred Compensation Accounts.
The value attributable to a Deferred Compensation Account on a par-
ticular date is equal to the value on that date of the hypothetical
investments held in that Account.
2.4 Amount of Deferral
(a) A Participant may elect to defer receipt of all or a part of his or
her Compensation provided that the minimum deferral for any type
of Compensation being deferred is $5,000 for the year of
deferral. In any year in which the percentage selected defers
less than $5,000 of the type of Compensation being deferred,
there shall be no deferral of that type of Compensation for that
year.
(b) Notwithstanding Section 2.4(a), Compensation shall not be
deferred to the extent that the deferral would cause the
Participant to have insufficient funds available to provide for
all withholdings he or she has authorized to be made or are
required by law to be made from his or her Compensation.
2.5 Time of Election of Deferral
(a) An election to defer Compensation must be made before the
Compensation is earned. In the case of salary and Directors'
fees, with the exception of 1987, the election to defer must be
made prior to the year in which the salary or Directors' fees will
be earned. In the case of bonuses, the election to defer must be
made by November 30th preceding the year in which the bonus will
be paid. In the case of SIRs, the election to defer must be made
no later than 12 full calendar months before the month in which
the SIRs would otherwise be paid. For 1987, an election to defer
salary or Directors' fees must be made prior to July 1 with
respect to salary or Directors' fees earned after that date.
(b) Once made, an election to defer for a particular year is
irrevocable.
(c) A Director may elect to defer Directors' fees payable for
services rendered after June 30, 1987, either under the terms of
this Plan or under the terms of Gannett Co., Inc. Plan for the
Deferral of Directors' fees adopted May 1, 1979 (the "Directors'
Plan"). Whenever a Director has an account under the Directors'
Plan, he or she may elect to have his or her account balance or
any part thereof under the Directors' Plan deemed invested in
the fund or funds available under this Plan, as designated by the
Director, or under the Directors' Plan. Such elections shall be
made by written notice to the Company, and shall be pursuant to
Section 2.7 of this Plan. Any amounts allocated to this Plan may
be allocated and reallocated as this Plan provides. Except for
these changes in computing future account balances, all other
terms and conditions of the Directors' Plan shall continue to
apply to amounts deferred under the Directors' Plan.
2.6 Accounts and Investments
(a) The right of any Participant to receive future payments under
the provisions of the Plan shall be a contractual obligation of
the Company but shall be subject to the claims of the creditors
of the Company against the general assets of the Company.
(b) The amount in a Deferred Compensation Account may, in the
Company's discretion, be placed in a trust (the "Rabbi Trust") but
will nevertheless continue to be subject to the claims of the
Company's creditors. In the Company's discretion, the deferred
amounts may (but need not) be invested in the funds selected by
Participants.
(c) The amount of Compensation or Stock deferred will be credited to
the Participant's Deferred Compensation Account as soon as
practical after the Compensation would have been paid had there
been no election to defer. The amounts credited will be deemed
invested in the fund or funds designated by the Participant from
among funds selected by the Committee, which may include the
following:
(i) money market funds;
(ii) bond funds;
(iii) equity funds; and
(iv) Gannett stock fund.
In the discretion of the Committee, funds may be added, deleted
or substituted from time to time.
(d) Information on the specific funds permitted under the Plan shall
be made available by the Committee to the Participants. If the
Committee adds, deletes or substitutes a particular fund, the
Committee shall notify Participants in advance of the change and
provide Participants with the opportunity to change their allo-
cations among funds in connection with such addition, deletion or
substitution.
(e) A Participant may allocate contributions to his or her Deferred
Compensation Accounts among the available funds pursuant to
such procedures and requirements as may be specified by the
Deferred Compensation Committee from time to time.
2.7 Participant's Option to Reallocate Amounts
A Participant may elect to reallocate amounts in his or her Deferred
Compensation Accounts among the available funds pursuant to such
procedures and requirements as may be specified by the Deferred
Compensation Committee from time to time.
2.8 Reinvestment of Income
Income distributed by a fund that is deemed to be held in a Deferred
Compensation Account shall be deemed reinvested in that fund as soon
as practicable under the terms of that fund.
2.9 Payment of Deferred Compensation
(a) No withdrawal may be made from the Participant's Deferred
Compensation Accounts except as provided in this Section.
(b) At the time the election to defer is made, the Participant shall
choose the date on which payment of the resulting value in the
Deferred Compensation Account is to commence, which date shall
be either April 1 or October 1 of the year specified by the
Participant ("Payment Commencement Date"). In the case of
Director Participants, the Payment Commencement Date shall be
no later than the first day of the month following the partici-
pant's retirement from the Board. In the case of key employee
Participants, the Payment Commencement Date shall be no later
than October 1 of the year following the year during which the key
employee becomes 65 years of age.
(c) At the time the election to defer is made, the Participant may
choose to receive payments either (i) in a lump sum, or (ii) if the
Payment Commencement Date is during a year during which the
Participant could have retired under a retirement plan of the
Company, in up to ten annual installments. The method of paying a
Deferred Compensation Account of a Participant shall be called
the "Method of Payment." The amount of any payment under the
Plan shall be the value attributable to the Deferred Compensa-
tion Account on the last day of the second month preceding the
month of the payment date, divided by the number of payments
remaining to be made including the payment for which the amount
is being determined.
(d) In the event of a Participant's death or total disability before
the Participant has received all of the Participant's Deferred
Compensation Accounts, the value of the Accounts (excluding the
amount being paid in installments described in the following sen-
tence) shall be paid either (i) in a lump sum, or (ii) in two to ten
annual installments commencing on the first day of April of the
year following the Participant's death or total disability, as
Participant at the time of deferral may elect. If Participant is
receiving installment payments from a Deferred Compensation
Account at the time of death or total disability, the balance in
that Account shall be paid to Participant's estate or to Partici-
pant over the installments remaining to be paid.
(e) A Participant may not change the Payment Commencement Date or
Method of Payment for a Deferred Compensation Account after an
election has been made. This shall not prevent the Participant
from choosing a different Payment Commencement Date and/or
Method of Payment for amounts to be deferred in subsequent
years.
(f) Notwithstanding any Payment Commencement Date or Method of
Payment selected by a Participant, if the Participant's employ-
ment with the Company terminates other than by reason of
(i) retirement pursuant to a retirement plan of the Company,
(ii) the Participant's death, or (iii) the Participant's total dis-
ability, then payment will be made to the Participant as follows.
The Company will have the option to make payment either in a lump
sum or in the number of annual installments previously selected
by the Participant. In either case, the Payment Commencement
Date shall be the first day of April or October of the year of
termination or of the year following the year of termination,
whichever is selected by the Company.
(g) If, in the discretion of the Committee, the Participant has a need
for funds due to an unforeseeable emergency which is caused by
an event beyond the Participant's control and that would result
in a financial hardship if the Participant were not permitted to
withdraw, a payment may be made to the Participant from his or
her Deferred Compensation Accounts at a date earlier than the
Payment Commencement Date. A payment based upon financial
hardship cannot exceed the amount required to meet the imme-
diate financial need created by the hardship. The Participant
requesting a hardship payment must supply the Committee with a
statement indicating the nature of the need created a financial
hardship, the fact that all other reasonably available resources
are insufficient to meet the need, and any other information
which the Committee decides is necessary to evaluate whether a
financial hardship exists.
(h) In the Company's discretion, payments from the Plan may be in
cash or in the kind of property represented by the fund or funds
selected by the Participant.
(i) All payments made by the Company or the Trust shall be subject
to all taxes required to be withheld under applicable laws and
regulations of any governmental authorities.
2.10 Manner of Electing Deferral, Choosing Investments and Choosing
Payment Options
(a) In order to make any elections or choices permitted hereunder,
the Participant must give written notice to the Committee. A
notice electing to defer Compensation shall specify:
(i) the percentage and type of Compensation to be deferred;
(ii) the funds chosen by the Participant;
(iii) the Method of Payment and the Method of Payment to the
Participant or the Participant's estate in the event of the
Participant's total disability or death; and
(iv) the Payment Commencement Date.
(b) An election by a Participant to defer Compensation (including the
selection of a Payment Commencement Date, choice of fund or
funds and Method of Payment) shall apply only to Compensation
deferred in the calendar year for which the election is effective.
(c) Prior to the commencement of each calendar year, the Company
will provide election forms to permit Participants to defer
Compensation to be earned during that calendar year.
(d) The last form received by the Company allocating a Deferred
Compensation Account among the funds available shall govern
until changed by the receipt by the Company of a subsequent
allocation form.
3.0 ADMINISTRATION OF THE PLAN
3.1 Statement of Account
Statements setting forth the values of the funds deemed to be held in
a Participant's Deferred Compensation Accounts will be sent to each
Participant quarterly or more often as the Committee may elect.
3.2 Assignability
No right to receive payments hereunder may be transferred, assigned,
or pledged by a Participant, except for transfers by will or by the
laws of descent and distribution.
3.3 Business Days
In the event any date specified herein falls on a Saturday, Sunday, or
legal holiday, such date shall be deemed to refer to the next business
day thereafter.
3.4 Administration
This Plan shall be administered by the Deferred Compensation Com-
mittee, which shall consist of three employees of the Company
appointed by the Chief Executive Officer. The Committee shall have
the authority to adopt rules and regulations for carrying out the
Plan, and interpret, construe and implement the provisions of the
Plan. The decisions of the Committee shall be final and binding on the
Participants.
3.5 Amendment
This Plan may at any time and from time to time be amended or termi-
nated by the Board of Directors or the Compensation Committee of the
Board of Directors of the Company. A change in the number or type of
funds available shall not be considered an amendment of the Plan. No
amendment or termination shall, without the consent of a Participant,
adversely affect such Participant's interest in the Plan.
3.6 Liability
(a) Except in the case of willful misconduct, no director or employee
of the Company shall be personally liable for any act done or
omitted to be done by such person with respect to this Plan.
(b) The Company shall indemnify, to the fullest extent permitted by
law, members of the Committee and directors and employees of the
Company, both past and present to whom are or were delegated
duties, responsibilities and authority with respect to the Plan,
against any and all claims, losses, liabilities, fines, penalties
and expenses (including, but not limited to, all legal fees relating
thereto), reasonably incurred by or imposed upon such persons,
arising out of any act or omission in connection with the opera-
tion and administration of the Plan, other than willful
misconduct.
EXHIBIT 11
<TABLE>
GANNETT CO., INC.
Calculation of Earnings Per Share
---------------------------------
<CAPTION>
Fiscal Year Ended
-----------------------------------------
December 26, December 27, December 29,
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
Income before cumulative effect of
accounting principle changes $397,752,000 $345,680,000 $301,649,000
Cumulative effect on prior years of
accounting principle changes for:
Income taxes 34,000,000
Retiree health and life
insurance benefits (180,000,000)
------------- ------------- -------------
Total (146,000,000)
------------- ------------- -------------
Net Income $397,752,000 $199,680,000 $301,649,000
============= ============= =============
Earnings per share:
Before cumulative effect of
accounting principle changes $2.72 $2.40 $2.00
Cumulative effect of
accounting principle changes (1.01)
------------- ------------- -------------
Net income per share $2.72 $1.39 $2.00
============= ============= =============
Weighted average number of common
shares outstanding 146,474,000 144,148,000 150,783,000
============= ============= =============
</TABLE>
EXHIBIT 13
Page 1
Company Profile
Gannett Co., Inc. is a diversified news and information company that
publishes newspapers, operates broadcasting stations and outdoor
advertising businesses, and is engaged in research, marketing, commercial
printing, a newswire service, data services and news programming. The
company has facilities in 41 states, the District of Columbia, Canada, Guam,
the U.S. Virgin Islands, Great Britain, France, Switzerland, Hong Kong and
Singapore.
Gannett's is the largest U.S. newspaper group, with 83 daily newspapers,
including USA TODAY, more than 50 non-daily publications and USA WEEKEND,
a weekly newspaper magazine. Total average paid daily circulation of
Gannett's daily newspapers in 1993 exceeded 6.3 million, more than any other
newspaper group.
Gannett owns and operates 10 television stations, six FM radio stations
and five AM radio stations in major markets. Gannett Outdoor Group is the
largest outdoor advertising group in North America, with operations in 11
states and Canada.
Gannett was founded by Frank E. Gannett in 1906 and incorporated in 1923.
The company went public in 1967. Its nearly 147 million shares of common
stock are held by more than 14,000 shareholders of record in all 50 states
and abroad. The company has 36,500 employees. Corporate headquarters is
located at Arlington, Va.
Page 20
Board of Directors - 1993
John J. Curley
Chairman, president and chief executive officer, Gannett Co., Inc. Formerly:
President and chief executive officer, Gannett Co., Inc. (1986-89); president
and chief operating officer (1984-86). Other directorships: Dickinson
College and Columbia University Boards of Trustees. Age 55. Term expires in
1996. (b,d,g,h)
Andrew F. Brimmer
President, Brimmer & Company, Inc. Other directorships: BankAmerica
Corporation and Bank of America NT&SA; BellSouth Corporation; BlackRock
Investment Income Trust, Inc.; Brimmer & Company, Inc.; Connecticut Mutual
Life Insurance Company; E.I. duPont de Nemours & Company; Navistar
International Corporation; PHH Corporation; UAL Corporation, Inc.; public
governor and vice chairman, Commodity Exchange, Inc.; and trustee of the
College Retirement Equities Fund. Age 67. Term expires in 1995. (a,f)
Meredith A. Brokaw
President, Penny Whistle Toys, Inc., New York City, and author. Other
directorships: National Home Library Board; Coro Foundation, New York City;
Conservation International, Washington, D.C. Age 53. Term expires in 1996.
(b,d,f)
Rosalynn Carter
Author and businesswoman; distinguished lecturer, Agnes Scott College,
Atlanta; fellow, Women's Studies Institute, Emory University, Atlanta.
Formerly: First Lady (1977-81). Other directorships: Carter Presidential
Center; Friendship Force International; adviser, Habitat for Humanity, Inc.;
trustee, The Menninger Foundation. Age 66. Term expires in 1994. (b,e,h)
Page 21
Peter B. Clark
Former chairman, president and chief executive officer, The Evening News
Association (1969-86). Formerly: Regents professor, Graduate School of
Management, University of California at Los Angeles (1987). Other
directorships: Trustee, Harper-Grace Hospital. Age 65. Term expires in
1996. (c,f)
Stuart T.K. Ho
Chairman of the board and president, Capital Investment of Hawaii, Inc., and
chairman of the board of Gannett Pacific Corporation, publisher of the
Company's Honolulu Advertiser and the Pacific Daily News at Agana, Guam.
Other directorships: Aloha Airgroup, Inc.; Bancorp Hawaii, Inc.; College
Retirement Equities Fund; Capital Investment of Hawaii, Inc. Age 58. Term
expires in 1995. (a,b,e)
John J. Louis Jr.
Founder of Combined Communications Corporation and chairman (1968-81).
Formerly: U.S. Ambassador to the United Kingdom of Great Britain and
Northern Ireland (1981-83). Other directorships: S.C. Johnson & Son, Inc.
Age 68. Term expires in 1996. (a,b,d)
Douglas H. McCorkindale
Vice chairman and chief financial and administrative officer, Gannett Co.,
Inc. Formerly: Vice chairman and chief financial officer, Gannett Co., Inc.
(1984-85). Other directorships: Rochester Telephone Corporation;
Continental Airlines, Inc.; and seven funds which are part of the Prudential
complex of mutual funds. Age 54. Term expires in 1995. (b,g,h)
Rollan D. Melton
Chairman and chief executive officer of Speidel Newspapers Inc., and
columnist, Reno (Nev.) Gazette-Journal. Other directorships: National
Judicial College; John Ben Snow Trust and Foundation. Age 61. Term expires
in 1995. (e,h)
Thomas A. Reynolds Jr.
Chairman emeritus of Chicago law firm of Winston & Strawn. Other
directorships: Jefferson Smurfit Group; Union Pacific Corp. Age 65. Term
expires in 1994. (a,b,c)
Carl T. Rowan
President, CTR Productions Inc.; author and lecturer; columnist, King
Features and the Chicago Sun-Times; television commentator,
Post-Newsweek Broadcasting; radio commentator, CTR Productions. Age 68.
Term expires in 1994. (d,e)
Dolores D. Wharton
Chairman and CEO, Fund for Corporate Initiatives, Inc. Other directorships:
COMSAT Corporation; Kellogg Company. Age 66. Term expires in 1994. (c,h)
(a) Member of Audit Committee.
(b) Member of Executive Committee.
(c) Member of Executive Compensation Committee.
(d) Member of Management Continuity Committee.
(e) Member of Public Responsibility Committee.
(f) Member of Personnel Practices Committee.
(g) Member of Gannett Management Committee.
(h) Member of Contributions Committee.
Page 22
Company and Divisional Officers
Gannett's principal management group is the Gannett Management Committee,
which coordinates overall management policies for the Company. The
members are identified below and on the previous pages.
The managers of the Company's various local operating units enjoy
substantial autonomy in local policy, operational details, news content and
political endorsements.
The Company's corporate headquarters staff includes specialists who
provide advice and assistance to the Company's operating units in various
phases of the Company's operations.
Below are brief descriptions of the business experience during the
last five years of the officers of the Company and the heads of its
national and regional divisions. Officers serve for a term of one year and
may be re-elected. Information about the two officers who serve as
directors (John J. Curley and Douglas H. McCorkindale) can be found on pages
20-21.
Christopher W. Baldwin, Vice president, taxes. Formerly: Director, taxes
(1979-1993). Age 50.
Thomas L. Chapple, General counsel and secretary. Formerly: Vice president,
associate general counsel and secretary (1981-1991). Age 46.
Richard L. Clapp, Vice president, compensation and benefits. Age 53.
Susan Clark-Jackson, President, Gannett West Newspaper Group, and
president and publisher, Reno (Nev.) Gazette-Journal. Age 47.
Michael J. Coleman, President, Gannett South Newspaper Group, and
president and publisher, FLORIDA TODAY at Brevard County. Formerly:
President, Gannett Central Newspaper Group, and president and publisher,
Rockford (Ill.) Register Star (1986-1991). Age 50.
Thomas Curley, President and publisher, USA TODAY. Formerly: President and
chief operating officer, USA TODAY (1986-1991). Thomas Curley is the brother
of John J. Curley. Age 45.*
Philip R. Currie, Vice president, news, Newspaper Division. Formerly: Vice
president, news, Gannett Community Newspapers (1986-89). Age 52.
Donald W. Davidson, President, Gannett Outdoor Group. Age 55.*
Gerry DeFrancesco, President, Gannett Radio. Formerly: President and
general manager, KIIS/KIIS-FM at Los Angeles (1991-1992); executive vice
president, Gannett Radio, and vice president and station manager,
KIIS/KIIS-FM (1991); vice president and operations manager, Pyramid
Broadcasting, Philadelphia, Pa. (1990-1991); vice president and station
manager, KIIS/KIIS-FM (1989-1990); vice president and general manager,
WDAE/WUSA-FM at Tampa, Fla. (1988-1989). Age 39.
Thomas J. Farrell, President, Gannett New Media Group. Formerly: Executive
vice president, general manager, USA TODAY (1986-1992); publisher, Baseball
Weekly, and chairman, USA TODAY Sky Radio (1991-1992); president, Gannett
New Media Group (1990-1992). Age 49.*
Millicent A. Feller, Senior vice president, public affairs and government
relations. Formerly: Vice president, public affairs and government
relations (1986-1991). Age 46.*
Lawrence P. Gasho, Vice president, financial analysis. Age 51.
George R. Gavagan, Vice president/corporate accounting services.
Formerly: Assistant controller (1986-1993). Age 47.
George N. Gill, Vice president, Gannett Metro Newspaper Group, and
president and publisher, The Courier-Journal at Louisville, Ky. Formerly:
President and publisher, The Courier-Journal. Age 59. He retired August 1,
1993.
Page 23
John B. Jaske, Senior vice president, labor relations and assistant general
counsel. Formerly: Vice president, labor relations and assistant general
counsel (1980-1991). Age 49.
Madelyn P. Jennings, Senior vice president, personnel. Age 59.*
Kristin H. Kent, Vice president, senior legal counsel. Formerly: Senior legal
counsel (1986-1993). Age 43.
Gracia C. Martore, Vice president, treasury services. Formerly: Assistant
treasurer (1985-1993). Age 42.
William Metzfield, President, Gannett Supply Corp., and vice president,
purchasing, Gannett Co., Inc. Age 52.
Larry F. Miller, Senior vice president, financial planning and controller.
Formerly: Vice president, financial planning and controller (1986-1991). Age
55.*
Peter S. Prichard, Senior vice president, news/chief news executive,
Gannett, and editor, USA TODAY. Formerly: Senior editor, News, USA TODAY
(1988); managing editor, special projects, USA TODAY (1987-1988). Age 49.*
W. Curtis Riddle, President, Gannett East Newspaper Group, and president
and publisher, Lansing (Mich.) State Journal. Formerly: President, Gannett
Central Newspaper Group (1991-1993), and president and publisher, Lansing
(Mich.) State Journal (1990-1993); vice president, Gannett Central Newspaper
Group (1989-1991); president and publisher, Lafayette (Ind.) Journal and
Courier (1988-1990); assistant to the publisher, The Cincinnati Enquirer
(1987-1988). Age 42.
Carleton F. Rosenburgh, Senior vice president, Gannett Newspaper Division.
Formerly: Vice president/circulation (1986-1991). Age 54.
Gary F. Sherlock, Vice president, Gannett Metro Newspaper Group, and
president and publisher, Gannett Suburban Newspapers. Formerly: Executive
vice president, advertising, Newspaper Division (1988-90); president,
Gannett National Newspaper Sales (1986-90). Age 48.
Mary P. Stier, President, Gannett Central Newspaper Group, and president
and publisher, Rockford (Ill.) Register Star. Formerly: Vice president,
Gannett Central Newspaper Group (1990-1993), and president and publisher,
Rockford (Ill.) Register Star (1991-1993); publisher, Iowa City Press-Citizen
(1987-1991). Age 36.
Jimmy L. Thomas, Senior vice president, financial services and treasurer.
Formerly: Vice president, financial services and treasurer (1980-1991). Age
52.*
Ronald Townsend, President, Gannett Television. Formerly: President and
general manager, WUSA-TV at Washington, D.C. (1987-89). Age 52.*
Wendell J. Van Lare, Vice president, labor counsel. Formerly: Director, labor
relations (1980-1993). Age 48.
Frank J. Vega, President and chief executive officer, Detroit Newspaper
Agency. Formerly: President, Gannett South Newspaper Group, and publisher
and CEO, FLORIDA TODAY at Brevard County, Fla. (1985-1991). Age 45.
Cecil L. Walker, President, Gannett Broadcasting Division. Formerly: Acting
president, Gannett Television (1986). Age 57.*
Barbara W. Wall, Vice president, senior legal counsel. Formerly: Senior legal
counsel (1990-1993); assistant general counsel (1985-1990). Age 39.
Gary L. Watson, President, Gannett Newspaper Division. Formerly: President,
Gannett Community Newspaper Group (1985-1990). Age 48.*
Susan V. Watson, Vice president, investor relations. Age 41.
* Member of the Gannett Management Committee.
Page 25
Gannett common stock prices
Restated to reflect the 2-for-1 stock split effective January 6, 1987, and
the 3-for-2 stock split effective January 5, 1984. High-low range by
quarters based on NYSE-composite closing prices.
Year Quarter Low High
- ------- --------- --------- ---------
1983 first $17.13 $21.92
second $21.09 $24.00
third $19.75 $23.17
fourth $18.75 $21.59
1984 first $16.88 $21.69
second $18.13 $21.63
third $19.44 $23.69
fourth $21.38 $25.25
1985 first $23.57 $29.38
second $27.38 $31.50
third $27.25 $32.88
fourth $26.63 $31.25
1986 first $29.63 $37.00
second $34.25 $43.56
third $33.19 $42.75
fourth $33.88 $38.25
1987 first $35.94 $49.63
second $43.75 $54.88
third $48.50 $55.25
fourth $31.75 $52.75
1988 first $33.75 $39.50
second $29.38 $35.63
third $30.50 $34.25
fourth $32.38 $35.00
1989 first $34.63 $38.25
second $36.63 $48.50
third $43.64 $49.88
fourth $39.50 $45.25
1990 first $39.50 $44.38
second $35.50 $42.25
third $29.88 $37.50
fourth $30.63 $37.75
1991 first $35.75 $42.63
second $39.75 $44.38
third $39.38 $46.63
fourth $35.88 $42.25
1992 first $42.25 $47.88
second $41.50 $49.13
third $43.88 $48.25
fourth $46.00 $53.63
1993 first $50.63 $55.38
second $47.50 $54.75
third $47.75 $51.38
fourth $47.50 $58.13
1994 first $54.00 $58.38 *
* Through February 22, 1994
Page 26
Management's responsibility for financial statements
The management of the Company has prepared and is responsible for the
consolidated financial statements and related financial information
included in this report. These financial statements were prepared in
accordance with generally accepted accounting principles. These financial
statements necessarily include amounts determined using management's
best judgments and estimates.
The Company's accounting and other control systems provide
reasonable assurance that assets are safeguarded and that the books and
records reflect the authorized transactions of the Company. Underlying the
concept of reasonable assurance is the premise that the cost of control
not exceed the benefit derived. Management believes that the Company's
accounting and other control systems appropriately recognize this
cost/benefit relationship.
The Company's independent accountants, Price Waterhouse, provide an
independent assessment of the degree to which management meets its
responsibility for fairness in financial reporting. They regularly evaluate
the Company's system of internal accounting control and perform such tests
and other procedures as they deem necessary to reach and express an
opinion on the financial statements. The Price Waterhouse report appears
on page 47.
The Audit Committee of the Board of Directors is responsible for
reviewing and monitoring the Company's financial reports and accounting
practices to ascertain that they are appropriate in the circumstances. The
Audit Committee consists of four non-management directors, and meets
regularly to discuss audit and financial reporting matters with
representatives of financial management, the internal auditors and the
independent accountants. The internal auditors and the independent
accountants have direct access to the Audit Committee to review the
results of their examinations, the adequacy of internal accounting
controls and the quality of financial reporting.
By s/ John J. Curley By s/ Douglas H. McCorkindale
----------------------- ------------------------------
John J. Curley Douglas H. McCorkindale
Chairman, President and Vice Chairman, Chief Financial
Chief Executive Officer and Administrative Officer
Management's discussion and analysis of results of operations and
financial position
Basis of reporting
Following is a discussion of the key factors which have affected the
Company's business over the last three years. This commentary should be
read in conjunction with the Company's financial statements, the 11-year
summary of operations and the Form 10-K information that appear in the
following sections of this report.
The Company's fiscal year ends on the last Sunday of the
calendar year. Each of its fiscal years 1991-1993 encompasses a 52-week
period.
Acquisitions and dispositions
On January 30, 1993, the Company completed the acquisition of the Honolulu
Advertiser and the sale of the Honolulu Star-Bulletin. The acquisition of
the morning publication Advertiser was for approximately $250 million.
Consideration for this purchase included the issuance of approximately
1,980,000 shares of the Company's common stock and the assumption of
certain liabilities of the acquired business. Concurrent with these
transactions, the Honolulu joint operating agreement was amended to
provide the Company with a greater share of profits from the operation.
This acquisition is reflected in the 1993 financial statements under
the purchase method of accounting.
In the fourth quarter of 1993, the Company sold its radio stations in
Kansas City and St. Louis, Mo. The Company also provided for the pending
sale of its television station in Boston, which is expected to be completed
in early 1994. The Company recognized a minor net gain on these
transactions which is reflected in non-operating income.
Changes in accounting principles
In 1992, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS 106), and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
Under the provisions of SFAS 106, the Company is required to
recognize the cost of postretirement medical and life insurance benefits on
an accrual basis over the working lives of employees expected to receive
such benefits. Prior to the adoption of SFAS 106, the Company recognized
the cost of these benefits as payments were made on behalf of retirees.
As permitted under SFAS 106, the Company recognized the Accumulated
Postretirement Benefit Obligation as of the beginning of fiscal 1992 of
$295 million as a change in accounting principle. On an after-tax basis, this
non-cash charge was $180 million or $1.25 per share.
Page 27
Ongoing operating costs for 1992 under SFAS 106 were $6 million
greater than under the previous cash basis method. On an after-tax basis,
these charges totaled $4 million or $.03 per share. Further information
concerning SFAS 106 can be found in Note 6 to the Consolidated Financial
Statements.
Under the provisions of SFAS 109, the Company adjusted previously
recorded deferred taxes to reflect currently enacted statutory tax rates.
The Company has reflected the cumulative effect of adopting SFAS 109 as a
change in accounting principle at the beginning of fiscal 1992. This
adjustment was recorded as a non-cash credit to earnings of $34 million or
$.24 per share. Prior years' financial statements were not restated. The
adoption of SFAS 109 had no effect on the provision for income taxes for
1992.
Results of operations
Consolidated summary
In millions of dollars
1993 Change 1992 Change 1991 Change
------- ------- ------- ------- ------- -------
Operating revenues $3,642 5% $3,469 3% $3,382 -2%
Operating income $714 16% $617 10% $559 -18%
Income before
cumulative effect
of accounting changes $398 15% $346 15% $302 -20%
Net income $398 99% $200 -34% $302 -20%
A discussion of the operating results of each of the Company's principal
business segments and other factors affecting financial results follows.
Newspapers
In addition to its local newspapers, the Company's newspaper publishing
operations include USA TODAY, USA WEEKEND and Gannett Offset commercial
printing. Newspaper publishing operating results for the last three years
were as follows:
In millions of dollars
1993 Change 1992 Change 1991 Change
------- ------- ------- ------- ------- -------
Revenues $3,014 5% $2,858 3% $2,767 -
Expenses $2,337 4% $2,250 1% $2,222 3%
------- ------- ------- ------- ------- -------
Operating income $677 11% $608 12% $545 -12%
======= ======= ======= ======= ======= =======
Newspaper operating revenues: Newspaper operating revenues are
derived principally from advertising and circulation sales, which accounted
for 67% and 28%, respectively, of total newspaper revenue in 1993. Other
newspaper publishing revenues are mainly from commercial printing
business.
The table below presents these revenue components for the last
three years:
Newspaper publishing revenues, in millions of dollars
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Advertising $2,005 7% $1,882 2% $1,853 -3%
Circulation $839 4% $807 4% $777 6%
Commercial printing
and other $170 1% $169 23% $137 7%
-------- ------- ------- ------- ------- -------
Total $3,014 5% $2,858 3% $2,767 -
======== ======= ======= ======= ======= =======
In the tables that follow, newspaper advertising linage, circulation
volume statistics and related revenue results are presented on a pro
forma basis for newspapers owned at the end of 1993.
Advertising revenue, in millions of dollars (pro forma)
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Local $779 1% $770 - $774 -
National $290 4% $279 8% $259 -11%
Classified $612 6% $575 3% $561 -9%
-------- ------- ------- ------- ------- -------
Total Run-of-Press $1,681 3% $1,624 2% $1,594 -5%
Preprint and other
advertising $324 9% $299 8% $277 6%
-------- ------- ------- ------- ------- -------
Total ad revenue $2,005 4% $1,923 3% $1,871 -4%
======== ======= ======= ======= ======= =======
Advertising linage, in millions of inches (pro forma)
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Local 32.1 -2% 32.6 -2% 33.4 -9%
National 2.0 -1% 2.0 -7% 2.2 -13%
Classified 28.9 5% 27.5 5% 26.3 -6%
-------- ------- ------- ------- ------- -------
Total Run-of-Press 63.0 1% 62.1 - 61.9 -8%
Preprint 64.3 8% 59.4 8% 55.0 2%
-------- ------- ------- ------- ------- -------
Total ad linage 127.3 5% 121.5 4% 116.9 -4%
======== ======= ======= ======= ======= =======
Newspaper advertising revenues increased $123 million or 7% in 1993.
On a pro forma basis, which reflects the purchase of the Honolulu
Advertiser as if it occurred at the beginning of 1992, newspaper ad
revenues rose $82 million or 4% for 1993. Total advertising linage rose 5%
for the year.
Page 28
"Run-of-press" (ROP) advertising linage, which appears within
the bodies of the Company's newspapers, was 1% higher than 1992. ROP
classified linage increased 5%, while local linage and national linage
declined 2% and 1%, respectively. Preprint linage, which includes local and
national supplements that are inserted into the Company's newspapers,
rose 8% for the year. At USA TODAY, ad revenues and linage rose 9%.
The growth in newspaper ad revenues in 1993 reflects the improved
national economic climate. Business trends for important retail
advertisers improved. In classified, improving trends continued in the
automotive and employment categories. The Company remains cautious about
the direction of general economic conditions in 1994, but expects a modest
increase in overall ad revenue.
Newspaper circulation revenues rose $32 million or 4% for 1993. On a
pro forma basis, circulation revenues rose 2%. The Company continued its
efforts to increase circulation and household penetration at all of its
local daily and Sunday newspapers. Average paid circulation grew at 49% of
the Company's daily newspapers and 57% of its Sunday newspapers in 1993.
Pro forma circulation volume for the Company's local newspapers is
summarized in the table below:
Average net paid circulation, in thousands
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Local Newspaper
Morning 3,089 0.4% 3,077 0.6% 3,058 0.3%
Evening 1,250 -3.4% 1,295 -3.2% 1,338 -2.6%
-------- ------- ------- ------- ------- -------
Total daily 4,339 -0.8% 4,372 -0.6% 4,396 -0.6%
Sunday 6,165 0.3% 6,143 0.7% 6,100 0.3%
While overall daily circulation for the Company's local newspapers
declined 0.8%, that decline was principally among the Company's afternoon
newspapers, including The Detroit News, for which circulation declined 7%.
The Company increased circulation prices at certain of its local
newspapers during 1993. The Company expects further circulation growth
for its morning newspapers and plans circulation price increases at certain
newspapers in 1994.
USA TODAY reported an average daily paid circulation of 1,973,296 in
the ABC Publisher's statement for the six months ended September 26, 1993,
which, subject to audit, is a 2.5% increase over the year-ago period. For
the full year, USA TODAY circulation volume increased nearly 2% and
circulation revenues grew 2%.
Newspaper advertising revenues increased $29 million or 2% in 1992.
On a pro forma basis, which excludes 1991 revenues from the Arkansas
Gazette in Little Rock which was sold that year, newspaper advertising
revenues rose $52 million or 3% in 1992. Total advertising linage rose 4%
for the year. "Run-of-press" (ROP) advertising linage was even with 1991.
ROP local linage declined 3% and national linage declined 9%, while
classified linage increased 4%. Preprint linage rose 9% for the year. At USA
TODAY, ad revenues rose 5% and linage rose 4%. At USA WEEKEND, ad revenues
rose 16%.
The growth in newspaper ad revenues in 1992 reflected slightly
improved economic conditions and positive trends for classified ads.
Newspaper circulation revenues rose $30 million or 4% for 1992. On a
pro forma basis, circulation revenues rose 5%. The Company increased
circulation at 53% of its local daily newspapers and 66% of its Sunday
newspapers.
Excluding The Detroit News, overall daily and Sunday circulation for
the Company's local newspapers rose slightly less than 1% in 1992. USA
TODAY reported an average daily paid circulation of 1,924,958 in the ABC
Publisher's Statement for the six months ended September 27, 1992, a 6%
increase over the comparable period of 1991. Circulation revenues at USA
TODAY rose 6% for the year.
Newspaper advertising revenues declined $65 million or 3% in 1991.
Total advertising linage declined 4% for the year. ROP advertising declined
8% as classified linage was 7% lower, local linage declined 9% and national
linage was off 13%. Preprint linage rose 2% for the year. At USA TODAY,ad
revenues and linage declined 4% in 1991.
Demand for newspaper advertising in 1991 was affected by the
recession in the national economy. Customers in retail businesses
curtailed spending on newspaper advertising. Classified ads declined in all
important categories. The decline in revenues and linage was most
pronounced for newspapers in the Northeast and Mid-Atlantic areas.
Newspaper circulation revenues rose $47 million or 6% in 1991.
Sixty-three percent of the Company's local daily newspapers and 74% of its
Sunday newspapers increased average paid circulation for the full year,
compared with 1990. Excluding The Detroit News, overall daily and Sunday
circulation for the Company's local newspapers rose 1% in 1991.
USA TODAY reported an average daily paid circulation of 1,812,395 in
the ABC Publisher's Statement for the six months ended September 29, 1991,
a 1% decrease from the comparable period of 1990. USA TODAY's average
daily paid circulation for the full year 1991, however, rose nearly 2%.
Circulation revenues also rose 2% in 1991.
Newspaper advertising revenues in millions
Newspaper
advertising
Year revenues
- ------ ------------
1984 $1,064
1985 $1,214
1986 $1,589
1987 $1,787
1988 $1,909
1989 $2,018
1990 $1,917
1991 $1,853
1992 $1,882
1993 $2,005
Page 29
Newspaper circulation revenues in millions
Newspaper
circulation
Year revenues
- ------ ------------
1984 $419
1985 $465
1986 $576
1987 $645
1988 $686
1989 $718
1990 $730
1991 $777
1992 $807
1993 $839
Newspaper operating expenses: Newspaper operating expenses rose
$86 million or 4% in 1993. On a pro forma basis, operating expenses rose 3%.
Newsprint costs rose 3% for the year, reflecting higher prices and higher
consumption. The Company expects newsprint prices to rise in 1994.
Payroll costs for the newspaper segment rose 3% for the year.
Year-end employment levels declined slightly from 1992. Employment levels
are not expected to change significantly in 1994.
Newspaper operating expenses rose $28 million or 1% in 1992.
Newsprint costs declined 15%, reflecting significantly lower average prices
for the year, and slightly higher consumption. Payroll costs for the
newspaper segment rose 5% for 1992. Year-end employment levels were up
slightly.
Operating cost comparisons for 1992 were favorably affected by the
sale of the Arkansas Gazette in 1991, however, costs from new commercial
printing business and other new business activities were offsetting.
Newspaper operating costs in 1991 rose $63 million or 3% from 1990.
Operating expenses of new businesses in the newspaper segment were the
principal factors for the increase in costs. Newsprint costs declined 4%
for the year, reflecting lower prices and consumption. Payroll costs for
the newspaper segment rose 4% for the year. Employment levels increased
slightly.
Newspaper operating income: Operating income for the newspaper
segment rose $70 million or 11% in 1993. Revenue gains at most of the
Company's local newspapers, led by classified advertising, coupled with only
modest growth in costs, anchored the strong performance. Most of the
Company's local newspapers reported higher earnings in 1993, with the
larger newspapers posting the strongest gains.
USA TODAY recorded its first annual profit in 1993, fueled by a 9%
increase in advertising revenues and effective controls over costs, which
declined slightly.
Operating income for the newspaper segment for 1992 increased $63
million or 12% over 1991. Lower newsprint costs and the favorable effects of
the sale of the Arkansas Gazette in 1991 contributed to the improvement.
Many of the Company's local newspapers reported profit gains in 1992. USA
TODAY, USA WEEKEND and Gannett Offset also reported improved financial
results for the year.
Operating income for the newspaper segment declined $72 million or
12% for 1991. Soft demand for advertising led to lower results at most of
the Company's newspapers, including USA TODAY.
Other developments: On August 30, 1991, the Company acquired the
Times Journal Company located in Springfield, Va., which included a
commercial printing operation, The Journal Newspapers and a telephone
database service. On December 26, 1991, the Company sold The Journal
Newspapers. Consideration for this purchase (net of the proceeds from the
sale of The Journal Newspapers) totaled $35 million and included shares of
the Company's common stock and the assumption of certain obligations of
the acquired businesses.
On October 18, 1991, the Company sold its newspaper in Little Rock,
Ark., for $69 million in cash. Operating results for 1991 were not materially
affected by this sale transaction, however, operating income comparisons
for the fourth quarter of 1991 and the first three quarters of 1992 were
favorably affected because of losses of this newspaper.
During 1993, 1992 and 1991, the Company also purchased certain other
publications which are included in the newspaper publishing segment. These
purchases in the aggregate were not material.
In April 1991, the Company successfully launched USA TODAY Baseball
Weekly, which in 1993 achieved an average paid circulation of more than
280,000.
Broadcasting
Broadcasting operations at the end of the Company's 1993 fiscal year
included 10 television stations and 11 radio stations. The Company's radio
stations in Kansas City and St. Louis were sold in the fourth quarter of
1993. Also in 1993, the Company provided for the sale of its television
station in Boston, which is expected to close in early 1994.
Over the last three years, the Company's broadcasting revenues,
expenses and operating income were as follows:
In millions of dollars
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Revenues $397 7% $371 4% $357 -10%
Expenses $310 2% $305 3% $295 -5%
-------- ------- ------- ------- ------- -------
Operating income $87 31% $66 7% $62 -29%
======== ======= ======= ======= ======= =======
Total broadcasting revenues rose $27 million or 7% for 1993.
Television revenues rose 7% and radio revenues rose 8%. On a pro forma
basis, radio station revenues rose 15%.
For television, local and national ad revenues rose 11% and 3%,
respectively. Television revenue results for 1993 were particularly strong
in light of 1992's election year and Olympics advertising. Both television
and radio revenue
Page 30
gains reflect generally improved ratings for the
Company's stations and stronger demand for advertising time.
The sharp improvement in operating earnings for broadcasting
reflects gains in nearly all of the Company's television and radio station
markets.
Total broadcasting revenues rose $13 million or 4% for 1992.
Television revenues rose 6%, while radio revenues declined 5%. For
television, local and national revenues grew 7% and 5%, respectively.
Political advertising and advertising associated with the Winter and
Summer Olympics contributed to television's revenue growth for the year.
For radio, continued softness in demand for advertising, along with format
changes at certain stations, were the principal factors in the revenue
decline. Operating income for broadcast in 1992 reflects gains in earnings
at most of the Company's television stations, while earnings were lower at
most of the Company's radio stations.
Revenues from broadcasting declined $40 million or 10% in 1991;
television and radio revenues were down 9% and 13%, respectively. For
television, local revenues declined 7%, while national revenues were 13%
below 1990. Operating costs for television declined in 1991. Operating
income results from television were significantly lower in 1991, reflecting
the difficult revenue environment. Most of the Company's television
stations reported lower earnings in 1991. Operating income from radio also
declined in 1991, reflecting lower results in both Los Angeles and Chicago,
the Company's largest markets.
Broadcasting revenues in millions
Broadcasting
Year revenues
- ------ ------------
1984 $233
1985 $265
1986 $351
1987 $357
1988 $391
1989 $408
1990 $397
1991 $357
1992 $371
1993 $397
Outdoor advertising
The Company's outdoor advertising business includes operations in 17 major
market areas in the U.S. and most major markets in Canada.
Over the last three years, the revenues, expenses and operating
income for outdoor advertising were as follows:
In millions of dollars
1993 Change 1992 Change 1991 Change
-------- ------- ------- ------- ------- -------
Revenues $231 -4% $241 -7% $260 -4%
Expenses $216 -7% $233 -5% $244 4%
-------- ------- ------- ------- ------- -------
Operating income $15 81% $8 -48% $16 -57%
======== ======= ======= ======= ======= =======
Outdoor revenues declined $11 million or 4% in 1993. U.S. operations
again experienced a significant loss in revenues from the tobacco industry,
and revenues from Southern California operations were lower because of
continuing economic difficulties. Revenue comparisons are also affected by
the sale in August 1992 of the Company's outdoor business in Phoenix. On a
pro forma basis, outdoor ad revenues declined 2%.
Outdoor operating costs were 7% below 1992 levels, reflecting
benefits of a restructuring at the end of 1992. For transit operations,
certain franchise costs were renegotiated and lowered significantly for
1993.
Because of cost reductions, operating profit for Outdoor rose $7
million or 81% in 1993. All of the larger outdoor markets reported improved
results except Southern California.
Outdoor revenues declined $19 million or 7% in 1992. Revenues from
operations in California were lower because of poor economic conditions,
and U.S. operations experienced a significant loss in advertising by the
tobacco industry. The decline in revenue also reflects the sale of the
Phoenix outdoor operation. Operating profit for outdoor declined 48% in
1992 as most major U.S. operations reported lower earnings. Financial
results from the Company's Canadian subsidiary improved in 1992.
Outdoor revenues declined $11 million or 4% in 1991. Revenue losses
were centered in Canadian operations, where recessionary conditions were
severe and a goods and services tax disrupted advertising spending
patterns. Outdoor operating costs rose 4% in 1991. Operating profit for
outdoor declined 57% as most of the Company's outdoor businesses reported
lower earnings. Sharply lower results in Canada, however, were the
principal cause of the earnings decline.
Outdoor advertising revenues in millions
Outdoor
advertising
Year revenues
- ------ ------------
1984 $200
1985 $208
1986 $211
1987 $202
1988 $227
1989 $258
1990 $271
1991 $260
1992 $241
1993 $231
Page 31
In recent years, outdoor revenues and operating income have been
adversely affected by reduced ad expenditures by the tobacco industry,
which is among the principal sources of national revenues. The Company
expects further, but smaller, reductions in ad spending by this industry in
1994.
Consolidated operating expenses
Over the last three years, the Company's consolidated operating expenses
were as follows:
In millions of dollars
1993 Change 1992 Change 1991 Change
------- ------- ------- ------- ------- -------
Cost of sales $2,067 2% $2,025 - $2,022 2%
Selling, general
and admin. expenses $650 3% $629 5% $601 3%
Depreciation $164 5% $157 -1% $158 3%
Amortization of
intangible assets $45 11% $41 - $41 -
Cost of sales for 1993 rose $43 million or 2%, reflecting modest
increases in newsprint and payroll costs for newspapers, lower television
programming costs and broad reductions in outdoor costs. The increase in
selling, general and administrative (SG&A) costs in 1993 of $21 million or 3%
relates to generally higher sales activity for newspapers and broadcasting
and savings in outdoor from restructuring.
The increase in depreciation in 1993 reflects recent capital
expenditures and the acquisition of the Honolulu Advertiser. The increase
in the amortization of intangible assets in 1993 reflects the acquisition of
the Honolulu Advertiser.
At the end of 1993, the Company lowered the discount rate used in the
valuation of the Gannett Retirement Plan from 8.5% to 7%. As a result,
pension expense will increase significantly in 1994. In early 1994, the
Company contributed $46 million to the Gannett Retirement Plan. Pension
matters are discussed further in Note 5 to the financial statements.
Cost of sales for 1992 was favorably affected by lower newsprint
costs and the sale of the Arkansas Gazette in 1991. Greater sales and
promotion costs and costs of new businesses contributed to the increase
in SG&A expenses for 1992.
For 1991, cost of goods sold and SG&A expenses rose due principally
to operating expenses of new businesses.
Payroll and newsprint costs, the largest elements of the Company's
operating expenses, are presented below, expressed as a percentage of
total pre-tax operating expenses.
1993 1992 1991
------- ------- -------
Payroll and employee benefits 44.0% 43.8% 42.0%
Newsprint and other
production material 17.4% 17.3% 19.1%
Non-operating income and expense
Interest expense for 1993 was even with last year. Higher average interest
rates resulting from new fixed rate debt were offset by lower average
borrowings. The Company's financing activities are discussed in further
detail in the Financial Position section of this report.
Interest expense was sharply lower for 1992, declining $20 million or
28%. Average borrowings were slightly above 1991 levels, but average
interest rates were significantly lower. Non-operating income was down
from 1991 because of a gain recognized that year on the sale of The Culver
Studios.
Interest expense declined slightly in 1991. While the Company
increased its borrowings to finance the purchase of its shares from the
former Gannett Foundation, average interest rates were significantly
lower than in 1990.
Provision for income taxes
The Company's effective income tax rate was 40.5% in 1993, 39.8% in 1992 and
40.0% in 1991.
In August 1993, the statutory federal corporate income tax rate was
raised from 34% to 35%. The provision for income taxes for 1993 includes
the effect of this higher rate on pre-tax income for 1993 as well as an
adjustment to the Company's deferred tax liabilities.
Net income and income before cumulative effect of accounting principle
changes
In millions
Net
Year income
- ------ --------
1984 $224
1985 $253
1986 $276
1987 $319
1988 $364
1989 $398
1990 $377
1991 $302
1992 $200 *
1993 $398
* Income before accounting principle changes was $346
Net income rose $52 million or 15% in 1993, excluding the cumulative effect
of accounting principle changes recognized in 1992 (discussed on page 26).
On a per share basis, net income reached $2.72, up 13% from $2.40 in 1992
before accounting changes. Solid profit gains from the newspaper,
broadcast and outdoor business segments contributed to 1993's record
earnings performance.
The average number of shares outstanding for 1993 totaled
146,474,000, 1.6% higher than in 1992, reflecting the shares issued in
connection with the acquisition of the Honolulu Advertiser.
Income before the non-recurring charge for accounting principle
changes rose $44 million to $346 million in 1992, a 15% increase, reflecting
improved newspaper and broadcast
Page 32
earnings, and lower interest expense. On
a per share basis before the cumulative effect of accounting changes, the
Company earned $2.40, up 20% from $2.00 in 1991. In addition, ongoing
operating costs for 1992 under SFAS 106 for retiree benefits were $6
million greater than under the previous cash basis method. On an after-tax
basis, these charges totaled $4 million or $.03 per share.
The average number of shares outstanding for 1992 totaled
144,148,000, down 4% from 1991, reflecting the purchase of shares from the
former Gannett Foundation in June 1991.
Net income for 1992 was $200 million or $1.39 per share, which
reflected the non-recurring charge of $146 million or $1.01 per share for
the aforementioned accounting principle changes.
Net income for 1991 was $302 million, 20% below the prior year,
reflecting lower operating earnings in all three business segments. Net
income per share fell 15% to $2.00 in 1991, down from $2.36 in 1990. The
average number of common shares outstanding for 1991 totaled 150,783,000,
down 6% from 1990, reflecting the purchase of shares from the former
Gannett Foundation.
In percentages
Return on
sales
(before cumulative
effect of
accounting
Year changes)
- ------ ------------------
1984 11.4
1985 11.5
1986 9.9
1987 10.4
1988 11.0
1989 11.3
1990 11.0
1991 8.9
1992 10.0
1993 10.9
Financial Position
Liquidity and capital resources
The principal change in the Company's financial position during 1993 was the
net pay-down of long-term debt of $230 million from year-ago levels from
operating cash flow.
During the last two years, the Company has reduced its long-term
debt by $485 million.
The increase in property, plant and equipment in 1993 reflects capital
spending of $132 million and the acquisition of the Honolulu Advertiser. The
increase in intangible assets also reflects this acquisition.
Cash flow from operating activities totaled $670 million in 1993 and
$545 million in 1992. Working capital, or the excess of current assets over
current liabilities, totaled $303 million at the end of 1993, compared with
$200 million at the end of 1992. Certain key measurements of the elements
of working capital for the last three years are presented in the following
chart:
1993 1992 1991
--------- -------- ----------
Current ratio 1.7-to-1 1.5-to-1 1.4-to-1
Accounts receivable turnover 8.0 7.9 7.6
Newsprint inventory turnover 9.9 10.6 9.3
A summary of debt transactions in 1993 follows:
In millions
Long-term debt at end of 1992 $1,081
Debt assumed in connection with acquisition 142
New fixed-rate borrowings 525
Pay-down of long-term debt (897)
--------
Long-term debt at end of 1993 $851
========
The fixed-rate borrowings include $275 million in long-term notes
issued in March 1993 at 5.25%, which are repayable in full on March 1, 1998,
and $250 million in long-term notes issued in April 1993 at 5.85%, which are
repayable in full on May 1, 2000. These notes were issued under
registration statements with the Securities and Exchange Commission.
Proceeds were used to repay commercial paper obligations.
The Company's operations have historically generated strong
positive cash flow, which, along with the Company's program of issuing
commercial paper and maintaining bank revolving credit agreements, has
provided adequate liquidity to meet the Company's requirements, including
requirements for acquisitions.
Commercial paper obligations were reduced by $752 million in 1993 and
$253 million in 1992.
During 1991, commercial paper obligations increased by $695 million
mainly to finance the purchase of common shares from the former Gannett
Foundation and the retirement of $200 million of long-term notes.
The Company regularly issues commercial paper for cash requirements
and maintains revolving credit agreements equal to or in excess of any
commercial paper outstanding. The Company's commercial paper has been
rated A-1+ and P-1 by Standard and Poor's Corporation and Moody's
Investors Service, Inc., respectively. Further, the Company has filed a
shelf registration statement with the Securities and Exchange Commission
under which up to $500 million of additional debt securities may be issued.
The Company's Board of Directors has established a maximum aggregate
level of $1.85 billion for amounts which may be raised through borrowings or
the issuance of equity securities.
Note 4 to the Company's financial statements on page 41 of this
report provides further information concerning commercial paper
transactions and the Company's revolving credit agreements.
Page 33
The Company has a capital expenditure program (not including business
acquisitions) of approximately $150 million planned for 1994, including
approximately $25 million for land and buildings or renovation of existing
facilities, $112 million for machinery and equipment, $6 million for vehicles
and $7 million for outdoor advertising structures or improvements to
existing structures. Management reviews the capital expenditure program
periodically and modifies it as required to meet current business needs. It
is expected that the 1994 capital program will be funded from operating
cash flow.
Capital stock
During 1993, the Company issued 1,980,000 shares of its common stock as
partial consideration for the acquisition of the Honolulu Advertiser.
During 1991, the Company issued 399,137 shares of common stock in
connection with the acquisition of the Times Journal Company. The shares
issued for these acquisitions were formerly held as treasury stock.
In June 1991, the Company acquired 15,940,679 shares, or
approximately 10% of its common stock, held by the former Gannett
Foundation, for $670 million in cash. These shares were recorded as
treasury stock.
In 1988, the Company's Board of Directors authorized the repurchase
of up to 7.5 million shares of its outstanding common stock. During the
period 1988-1991 the Company purchased 4,530,200 shares of its common
stock under this program at a cost of $158 million. No purchases were made
under this program during 1992 or 1993.
Certain of the shares acquired by the Company have been reissued for
acquisitions or in settlement of employee stock awards. The remaining
shares are held as treasury stock. The Company may purchase additional
shares from time to time.
An employee 401(k) Savings Plan was established in 1990 which includes
a Company matching contribution in the form of Gannett stock. To fund the
Company's matching contribution, an Employee Stock Ownership Plan (ESOP)
was formed which acquired 1,250,000 shares of Gannett stock from the
Company for $50 million. The stock purchase was financed with a loan from
the Company.
Before cumulative effect of accounting changes, in percentages
Return on
shareholders'
Year equity
- ------- ----------------
1984 20.7
1985 21.0
1986 20.4
1987 21.0
1988 21.5
1989 21.0
1990 18.6
1991 16.7
1992 21.2
1993 21.9
The Company's common stock outstanding at December 26, 1993 totaled
146,966,857 shares, compared with 144,401,718 shares at December 27, 1992.
The increase is due to shares issued for the acquisition of the Honolulu
Advertiser, stock options and stock incentive rights.
Dividends
Dividends declared on common stock amounted to $191 million in 1993,
compared with $182 million in 1992, reflecting increased shares outstanding
and an increase in the dividend rate.
Dividends
declared
Year per share
- ------- ----------
1984 $0.665
1985 $0.765
1986 $0.860
1987 $0.940
1988 $1.020
1989 $1.110
1990 $1.210
1991 $1.240
1992 $1.260
1993 $1.300
In October 1993, the quarterly dividend was increased from $.32 to
$.33 per share.
Cash Dividends Quarter Payment date Per share
- -------------- ----------- -------------- ---------
1993 4th Quarter Jan. 3, 1994 $0.33
3rd Quarter Oct. 1, 1993 $0.33
2nd Quarter July 1, 1993 $0.32
1st Quarter April 1, 1993 $0.32
1992 4th Quarter Jan. 4, 1993 $0.32
3rd Quarter Oct. 1, 1992 $0.32
2nd Quarter July 1, 1992 $0.31
1st Quarter April 1, 1992 $0.31
Effects of inflation and changing prices
The Company's results of operations and financial condition
have not been significantly affected by inflation and changing prices. In
all three of its business segments, subject to normal competitive
conditions, the Company generally has been able to pass along rising costs
through increased selling prices. Further, the effects of inflation and
changing prices on the Company's property, plant and equipment and related
depreciation expense have been reduced as a result of an ongoing capital
expenditure program and because of the availability of replacement assets
with improved technology and efficiency.
Page 34
<TABLE>
CONSOLIDATED BALANCE SHEETS
In thousands of dollars
<CAPTION>
Dec., 26, 1993 Dec., 27, 1992
--------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash $32,461 $31,672
Marketable securities, at cost, which
approximates market 43,034 41,657
Trade receivables (less allowance for
doubtful receivables of $13,915 and $12,241,
respectively) 449,063 431,293
Other receivables 135,036 23,008
Inventories 53,094 48,087
Prepaid expenses 45,269 55,730
--------------- ---------------
Total current assets 757,957 631,447
--------------- ---------------
Property, plant and equipment:
Land 131,676 101,313
Buildings and improvements 689,103 661,337
Advertising display structures 262,145 262,145
Machinery, equipment and fixtures 1,673,237 1,618,776
Construction in progress 38,449 49,771
--------------- ---------------
Total 2,794,610 2,693,342
Less accumulated depreciation (1,316,341) (1,218,051)
--------------- ---------------
Net property, plant and equipment 1,478,269 1,475,291
--------------- ---------------
Intangible and other assets:
Excess of acquisition cost over the
value of assets acquired (less amortization
of $396,915 and $361,204, respectively) 1,501,102 1,364,883
Investments and other assets (Note 5) 86,470 137,388
--------------- ---------------
Total intangible and other assets 1,587,572 1,502,271
--------------- ---------------
Total assets $3,823,798 $3,609,009
=============== ===============
</TABLE>
Page 35
<TABLE>
CONSOLIDATED BALANCE SHEETS
In thousands of dollars
<CAPTION>
Dec., 26, 1993 Dec., 27, 1992
--------------- ---------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt (Note 4) $164 $267
Accounts payable
Trade 169,425 153,484
Other 17,783 30,102
Accrued liabilities
Compensation 53,922 46,746
Interest 11,774 4,491
Other 74,761 56,681
Dividend payable 48,399 46,221
Income taxes (Note 7) 5,760 25,837
Deferred income 73,151 67,722
--------------- ---------------
Total current liabilities 455,139 431,551
--------------- ---------------
Deferred income taxes (Note 7) 205,314 93,439
Long-term debt (Note 4) 850,686 1,080,756
Postretirement medical and life insurance
liabilities (Note 6) 308,024 304,863
Other long-term liabilities 96,715 118,299
--------------- ---------------
Total liabilities 1,915,878 2,028,908
--------------- ---------------
Shareholders' equity (Notes 4 and 8):
Preferred stock, par value $1: Authorized,
2,000,000 shares: Issued, none
Common stock, par value $1: Authorized,
400,000,000 shares: Issued, 162,211,590 shares 162,212 162,212
Additional paid-in capital 70,938 40,506
Retained earnings 2,366,246 2,158,583
Foreign currency translation adjustment (9,442) (6,548)
--------------- ---------------
2,589,954 2,354,753
Less Treasury stock, 15,244,733 shares and
17,809,872 shares, respectively, at cost (643,787) (733,196)
Deferred compensation related to ESOP (Note 8) (38,247) (41,456)
--------------- ---------------
Total shareholders' equity 1,907,920 1,580,101
--------------- ---------------
Commitments and contingent liabilities (Note 9)
--------------- ---------------
Total liabilities and shareholders' equity $3,823,798 $3,609,009
=============== ===============
</TABLE>
Page 36
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>
Fiscal year ended
Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991
-------------- -------------- ---------------
<S> <C> <C> <C>
Net operating revenues:
Newspaper advertising $2,005,037 $1,882,114 $1,852,591
Newspaper circulation 838,706 807,093 777,221
Broadcasting 397,204 370,613 357,383
Outdoor advertising 230,771 241,313 260,120
Other 169,903 167,824 134,720
-------------- -------------- ---------------
Total 3,641,621 3,468,957 3,382,035
-------------- -------------- ---------------
Operating Expenses:
Cost of sales and operating expenses,
exclusive of depreciation 2,067,244 2,024,601 2,022,389
Selling, general and administrative expenses,
exclusive of depreciation 650,390 629,202 600,946
Depreciation 164,420 157,242 158,389
Amortization of intangible assets 45,215 40,629 41,364
-------------- -------------- ---------------
Total 2,927,269 2,851,674 2,823,088
-------------- -------------- ---------------
Operating Income 714,352 617,283 558,947
-------------- -------------- ---------------
Non-operating income (expense):
Interest expense (51,250) (50,817) (71,057)
Interest income 4,493 5,430 8,443
Other 857 2,384 6,416
-------------- -------------- ---------------
Total (45,900) (43,003) (56,198)
-------------- -------------- ---------------
Income before income taxes 668,452 574,280 502,749
Provision for income taxes (Note 7) 270,700 228,600 201,100
-------------- -------------- ---------------
Income before cumulative effect of accounting
principle changes 397,752 345,680 301,649
-------------- -------------- ---------------
Cumulative effect on prior years of accounting
principle changes for:
Income taxes (Note 7) 34,000
Retiree health and life insurance
benefits (Note 6) (180,000)
-------------- -------------- ---------------
Total (146,000)
-------------- -------------- ---------------
Net Income $397,752 $199,680 $301,649
============== ============== ===============
Earnings per share:
Before cumulative effect of accounting
principle changes $2.72 $2.40 $2.00
Cumulative effect of accounting principle changes (1.01)
-------------- -------------- ---------------
Net income per share $2.72 $1.39 $2.00
============== ============== ===============
</TABLE>
Page 37
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands of dollars
<CAPTION>
Fiscal year ended
Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991
-------------- -------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $397,752 $199,680 $301,649
Adjustments to reconcile net income to
operating cash flows:
Cumulative effect on prior years of accounting
principle changes (Notes 6 and 7) 146,000
Depreciation 164,420 157,242 158,389
Amortization of intangibles 45,215 40,629 41,364
Deferred income taxes 20,315 (17,227) (10,800)
Loss (gain) on sale of assets (8,307) 2,172 (20,035)
Other, net 44,339 23,186 14,762
Changes in assets and liabilities, net of
effect of acquisitions:
Decrease (increase) in receivables (18,273) (12,607) 19,548
Decrease (increase) in inventories (1,709) 3,405 13,858
Decrease in film broadcast rights, net of liabilities 51 12,696 151
Increase (decrease) in accounts payable (3,270) (5,418) 5,368
Increase (decrease) in interest and taxes payable 16,117 (23,025) (59,849)
Change in other assets and liabilities, net 13,610 18,222 (3,201)
-------------- -------------- --------------
Net cash provided by operating activities 670,260 544,955 461,204
-------------- -------------- --------------
Cash flows from investing activities:
Purchase of property, plant and equipment (132,122) (154,072) (192,392)
Payments for acquisitions, net of cash acquired (5,291) (591) (3,491)
Decrease (increase) in partnership and other investments (167) (5,000) 64,806
Proceeds from sale of assets 20,531 28,535 71,236
Collection of long-term receivables 2,998 6,880 793
-------------- -------------- --------------
Net cash used for investing activities (114,051) (124,248) (59,048)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds from long-term debt 525,000 737,922
Payments of long-term debt (897,942) (254,731) (271,727)
Dividends paid (188,425) (180,029) (192,530)
Common stock transactions, net 9,899 21,227 (662,368)
-------------- -------------- --------------
Net cash used for financing activities (551,468) (413,533) (388,703)
-------------- -------------- --------------
Effect of currency exchange rate change (2,575) (4,518) 982
Net increase in cash and cash equivalents 2,166 2,656 14,435
Cash and cash equivalents at beginning of year 73,329 70,673 56,238
-------------- -------------- --------------
Cash and cash equivalents at end of year $75,495 $73,329 $70,673
============== ============== ==============
</TABLE>
Page 38
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
In thousands of dollars
Fiscal years ended
December 29, 1991,
December 27, 1992,
and December 26, 1993
<CAPTION>
Foreign Deferred
Common stock Additional currency compensation
$1 par paid-in Retained translation Treasury related
value capital earnings adjustment stock to ESOP Total
------------- ------------- -------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance: Dec. 30, 1990 $162,212 $39,748 $2,025,503 $33 ($116,440) ($47,979) $2,063,077
Net income, 1991 301,649 301,649
Dividends declared, 1991:
$1.24 per share (187,088) (187,088)
Treasury stock acquired (671,833) (671,833)
Stock options exercised (3,964) 8,846 4,882
Stock issued under
incentive plan (473) 5,055 4,582
Stock issued in connection
with acquisition 2,274 15,726 18,000
Tax benefit derived from
stock incentive plans 2,183 2,183
Compensation expense
related to ESOP 3,235 3,235
Tax benefit from ESOP 589 589
Foreign currency
translation adjustment 211 211
------------- ------------- -------------- ----------- ----------- ------------ ------------
Balance: Dec. 29, 1991 162,212 40,357 2,140,064 244 (758,646) (44,744) 1,539,487
------------- ------------- -------------- ----------- ----------- ------------ ------------
Net income, 1992 199,680 199,680
Dividends declared, 1992:
$1.26 per share (181,697) (181,697)
Stock options exercised (3,198) 19,813 16,615
Stock issued under
incentive plan (1,025) 5,637 4,612
Tax benefit derived from
stock incentive plans 4,372 4,372
Compensation expense
related to ESOP 3,288 3,288
Tax benefit from ESOP 536 536
Foreign currency
translation adjustment (6,792) (6,792)
------------- ------------- -------------- ----------- ----------- ------------ ------------
Balance: Dec. 27, 1992 162,212 40,506 2,158,583 (6,548) (733,196) (41,456) 1,580,101
------------- ------------- -------------- ----------- ----------- ------------ ------------
Net income, 1993 397,752 397,752
Dividends declared, 1993:
$1.30 per share (190,604) (190,604)
Stock options exercised (2,967) 15,412 12,445
Stock issued under
incentive plan (1,463) 5,586 4,123
Tax benefit derived from
stock incentive plans 3,767 3,767
Stock issued in connection
with acquisition 31,095 68,411 99,506
Compensation expense
related to ESOP 3,209 3,209
Tax benefit from ESOP 515 515
Foreign currency
translation adjustment (2,894) (2,894)
------------- ------------- -------------- ----------- ----------- ------------ ------------
Balance: Dec. 26, 1993 $162,212 $70,938 $2,366,246 ($9,442) ($643,787) ($38,247) $1,907,920
------------- ------------- -------------- ----------- ----------- ------------ ------------
</TABLE>
Page 39
Notes to consolidated financial statements
Note 1
Summary of significant accounting policies
Fiscal year: The Company's fiscal year ends on the last Sunday of the
calendar year. Each of the fiscal years 1991-1993 encompasses a 52-week
period.
Consolidation: The consolidated financial statements include the
accounts of the Company and its subsidiaries after elimination of all
significant intercompany transactions and profits.
Operating agencies: Six of the Company's subsidiaries are
participants in joint operating agencies. Each joint operating agency
performs the production, sales and distribution functions for the
subsidiary and another newspaper publishing company under a joint
operating agreement. The Company includes its appropriate portion of the
revenues and expenses generated by the operation of the agencies on a
line-by-line basis in its statement of income.
Inventories: Inventories, which consist principally of newsprint,
printing ink, plate material and production film for the Company's newspaper
publishing operations, are valued at the lower of cost (first-in, first-out)
or market.
Property and depreciation: Property, plant and equipment is recorded
at cost, and depreciation is provided generally on a straight-line basis
over the estimated useful lives of the assets. The principal estimated
useful lives are: buildings and improvements, 10 to 40 years; machinery,
equipment and fixtures, four to 25 years; outdoor advertising display
structures, five to 30 years. Major renewals, improvements, relocation of
outdoor advertising structures and interest incurred during the
construction period of major additions are capitalized. Expenditures for
the removal of outdoor advertising structures, maintenance, repairs and
minor renewals are charged to expense as incurred.
Excess of acquisition cost over fair value of assets acquired: The
excess of acquisition cost over the fair value of assets acquired
represents the cost of intangible assets at the time the subsidiaries were
purchased. In accordance with Opinion 17 of the Accounting Principles Board
of the American Institute of Certified Public Accountants, the excess
acquisition cost of subsidiaries arising from acquisitions accounted for as
purchases since October 31, 1970 ($1.82 billion at December 26, 1993) is
being amortized over a 40-year period on a straight-line basis. Management
continually reviews the appropriateness of the carrying value of the
excess acquisition cost of its subsidiaries and the related amortization
periods.
Other assets: The Company's television stations are parties to
program broadcast contracts. These contracts are recorded at the gross
amount of the related liability when the programs are available for
telecasting. Program assets are classified as current (as a prepaid
expense) or noncurrent (as an other asset) in the consolidated balance
sheet, based upon the expected use of the programs in succeeding years.
The amount charged to expense appropriately matches the cost of the
programs with the revenues associated with them. The liability for these
contracts is classified as current or noncurrent in accordance with the
payment terms of the contracts. The payment period generally coincides
with the period of telecast for the programs, but may be shorter.
Retirement plans: Pension costs under the Company's retirement plans
are actuarially computed. It is the policy of the Company to fund costs
accrued under its qualified pension plans.
Postretirement benefits other than pensions: In 1992, the Company
adopted the provisions of Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" (SFAS 106).
Under the provisions of SFAS 106, the Company recognizes the cost of
postretirement medical and life insurance benefits on an accrual basis
over the working lives of employees expected to receive such benefits.
Prior to the adoption of SFAS 106, the Company recognized the cost of
these benefits as payments were made on behalf of retirees.
As permitted under SFAS 106, the Company recognized the Accumulated
Postretirement Benefit Obligation as of the beginning of fiscal 1992.
Income taxes: The Company accounts for certain income and expense
items differently for financial reporting purposes than for income tax
reporting purposes. Deferred income taxes are provided in recognition of
these temporary differences.
In 1992, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), and
adjusted previously recorded deferred taxes to reflect then-enacted tax
rates. The Company has reflected the effect of adopting SFAS 109 as a
change in accounting principle at the beginning of fiscal 1992.
Per share amounts: All income per share amounts are based on the
weighted average number of common shares outstanding during the year.
Foreign currency translation: The income statement of Mediacom, the
Company's Canadian outdoor advertising operation, has been translated to
U.S. dollars using the average currency exchange rates in effect during the
year. Mediacom's balance sheet has been translated using the currency
exchange rate as of the end of the accounting period. The impact of
currency exchange rate changes on the translation of Mediacom's balance
sheet has been charged directly to shareholders' equity.
Page 40
Note 2
Acquisitions and dispositions
1993: In January 1993, the Company completed the acquisition of the
Honolulu Advertiser and the sale of the Honolulu Star-Bulletin.
Consideration for this purchase was approximately $250 million and
included the issuance of 1,980,000 shares of the Company's common stock
from treasury valued at approximately $100 million and the assumption of
certain liabilities of the acquired business. Concurrent with these
transactions, the Honolulu joint operating agreement was amended to
provide the Company with a greater share of profits from the operation.
Proceeds from the sale of the Honolulu Star-Bulletin in excess of carrying
value were accounted for as a reduction in the acquisition cost of the
Honolulu Advertiser.
In the fourth quarter of 1993, the Company sold its radio stations in
Kansas City and St. Louis, Mo. The Company also provided for the pending
sale of its television station in Boston, which is expected to be completed
in early 1994. The Company recognized a minor net gain on these
transactions which is reflected in non-operating income.
1992: In August 1992, the Company sold its outdoor operation in
Phoenix, Ariz. Operating results for 1992 were not materially affected by
this transaction.
1991: On August 30, 1991, the Company acquired the Times Journal
Company located in Springfield, Va., which included a commercial printing
operation, The Journal Newspapers and a telephone database service. On
December 26, 1991, the Company sold The Journal Newspapers. Consideration
for this purchase (net of the proceeds from the sale of The Journal
Newspapers) totaled $35 million and included shares of the Company's
common stock and the assumption of certain obligations of the acquired
businesses.
On October 18, 1991, the Company sold its newspaper in Little Rock,
Ark., for $69 million in cash. Operating results for 1991 were not materially
affected by this transaction.
During 1993, 1992 and 1991, the Company also purchased certain other
publications which are included in the newspaper publishing segment.
All acquisitions discussed above were accounted for by the purchase
method and, accordingly, operations for the purchased companies are
included in the financial statements from the dates of acquisition. Pro
forma results of operations, assuming these acquisitions were made at the
beginning of the year previous to the year in which the transactions were
consummated, are not materially different from reported results of
operations.
Note 3
Statement of cash flows
For purposes of this statement, the Company considers its
marketable securities, which are readily convertible into cash (with
original maturity dates of less than 90 days) and consist of short-term
investments in government securities, commercial paper and money market
funds, as cash equivalents.
Cash paid in 1993, 1992 and 1991 for income taxes and for
interest (net of amounts capitalized) was as follows:
In thousands of dollars
1993 1992 1991
--------- --------- ----------
Income taxes $249,858 $274,741 $271,188
Interest $43,967 $50,871 $73,394
In 1993, the Company issued 1,980,000 shares of its common stock from
treasury valued at approximately $100 million in connection with the
acquisition of the Honolulu Advertiser and assumed net liabilities totaling
approximately $150 million. Refer to Note 2 for more information on this
transaction.
In 1993, 1992 and 1991, the Company issued 146,371 shares, 142,383
shares and 126,789 shares, respectively, in settlement of previously
granted stock incentive rights. The compensation liability for these rights
of $7 million for 1993 and 1992 and $6 million for 1991 was transferred to
shareholders' equity at the time the shares were issued.
In 1991, the Company issued 399,137 shares of its common stock with a
value of $18 million in connection with the acquisition of the Times Journal
Company. The Company assumed net liabilities totaling $17 million in
connection with this and other acquisitions in 1991. Refer to Note 2 for
more information concerning this transaction.
Page 41
Note 4
Long-term debt
The long-term debt of the Company is summarized below.
In thousands of dollars
Dec. 26, 1993 Dec. 27, 1992
-------------- --------------
Unsecured promissory notes $239,118 $991,211
Notes due 2/1/96, interest at 9.55% 17,260 17,260
Notes due 3/12/96, interest at 9.5% 42,200 42,200
Notes due 3/1/98, interest at 5.25% 272,836 -
Notes due 5/1/00, interest at 5.85% 249,418 -
Secured obligations due through
2011, interest averaging 6.3% at
Dec. 26, 1993 and Dec. 27, 1992,
varying annual installments 12,196 12,366
Unsecured obligations 17,427 17,500
Other indebtedness 395 486
--------------- --------------
850,850 1,081,023
Less amount included in
current liabilities (164) (267)
--------------- --------------
Total long-term debt $850,686 $1,080,756
=============== ==============
The unsecured promissory notes at December 26, 1993 were due from
December 27, 1993 to January 24, 1994 with rates varying from 3.1% to 3.23%.
The unsecured promissory notes at December 27, 1992 were due from
January 5, 1993 to January 28, 1993 with interest rates varying from 3.35%
to 3.75%.
The maximum amount of such promissory notes outstanding at the end
of any period during 1993 was $1.071 billion and during 1992 was $1.219
billion. The daily average outstanding balance was $584 million during 1993
and $1.124 billion during 1992. The weighted average interest rate was 3.17%
for 1993 and 3.75% for 1992.
The unsecured obligations are due from 1994 to 2009 and bear
interest at varying rates. At December 26, 1993 and December 27, 1992, the
weighted average interest rates were 4.5% and 4.6%, respectively.
At December 26, 1993, the Company had a total of $1.5 billion of credit
available under two revolving credit agreements. One agreement for $1
billion provides for a revolving credit period which permits borrowings up
to the maximum commitment from time to time. The revolving credit period
extends to December 1, 1998.
The second agreement is a 364-day revolving credit agreement which
provides for borrowings up to $500 million. This agreement extends to
December 1, 1994.
Commitment fee rates are 0.125% for the $1 billion agreement and
0.09% for the $500 million agreement. At the option of the Company, the
interest rate on borrowings under the agreements may be at the prime rate,
at 0.165% above the London Interbank Offered Rate or at 0.29% above a
certificate of deposit-based rate. The prime rate was 6.0% at December 26,
1993 and December 27, 1992.
The revolving credit agreements contain restrictive provisions that
relate primarily to the maintenance of net worth of $1.2 billion. At
December 26, 1993 and December 27, 1992, net worth was $1.9 billion and $1.58
billion, respectively.
At December 26, 1993, the unsecured promissory notes are supported
by the $1 billion revolving credit agreement and, therefore, are classified
as long-term debt.
Approximate annual maturities of long-term debt, assuming that the
Company had used the $1 billion revolving credit agreement as of the
balance sheet date to refinance existing unsecured promissory notes on a
long-term basis, are:
In thousands of dollars
1994 $164
1995 91
1996 59,542
1997 90
1998 512,661
Later years 278,302
---------
Total $850,850
=========
Note 5
Retirement plans
The Company and its subsidiaries have various retirement and profit
sharing plans, including plans established under collective bargaining
agreements and separate plans for joint operating agencies, under which
substantially all full-time employees are covered. The Gannett Retirement
Plan is the Company's principal retirement plan and covers most of the
employees of the Company and its subsidiaries. Benefits under the Gannett
Retirement Plan are based on years of service and final average pay. The
Company's pension plan assets include insurance contracts, marketable
securities including common stocks, bonds and U.S. government obligations
and interest-bearing deposits.
The Company's pension cost for 1993, 1992 and 1991 consists of the
following:
In thousands of dollars
1993 1992 1991
--------- ---------- ---------
Service cost-benefits earned
during the period $33,627 $31,230 $24,971
Interest cost on projected
benefit obligation 63,067 58,220 48,838
Actual return on plan assets (98,622) (25,656) (147,855)
Net amortization and
deferral of actuarial gains 19,473 (54,469) 80,288
--------- ---------- ---------
Net pension expense for
Company-sponsored
retirement plans 17,545 9,325 6,242
Union and other
pension cost 7,399 8,582 6,999
--------- ---------- ---------
Net pension cost $24,944 $17,907 $13,241
========= ========== =========
Page 42
The majority of the Company's pension plans, including the Gannett
Retirement Plan, have plan assets that exceed accumulated benefit
obligations. There are certain plans, however, with accumulated benefit
obligations which exceed plan assets. The following tables summarize the
funded status of the Company's pension plans and the related amounts that
are recognized in the consolidated balance sheet:
In thousands of dollars
Dec. 26, 1993 Plans for which Plans for which
assets exceed accumulated
accumulated benefits
benefits exceed assets
----------------- -----------------
Actuarial present value
of benefit obligations:
Vested benefit obligation $655,550 $21,616
================= =================
Accumulated benefit obligation $706,654 $22,493
================= =================
Projected benefit obligation ($918,059) ($33,940)
Plan assets at market value 789,534 -
----------------- -----------------
Projected benefit obligation
in excess of plan assets (128,525) (33,940)
Unrecognized net loss 183,177 7,026
Unrecognized prior service cost 15,197 1,530
Unrecognized net (asset)
obligation at year-end (46,176) 2,844
----------------- -----------------
Pension asset (liability)
reflected in consolidated
balance sheet $23,673 ($22,540)
================= =================
In thousands of dollars
Dec. 27, 1992 Plans for which Plans for which
assets exceed accumulated
accumulated benefits
benefits exceed assets
----------------- -----------------
Actuarial present value
of benefit obligations:
Vested benefit obligation $494,461 $19,156
================= =================
Accumulated benefit obligation $531,655 $19,776
================= =================
Projected benefit obligation ($711,906) ($26,991)
Plan assets at market value 724,977 -
----------------- -----------------
Projected benefit obligation
less than (in excess of)
plan assets 13,071 (26,991)
Unrecognized net loss 64,066 1,993
Unrecognized prior service cost 17,565 1,737
Unrecognized net (asset)
obligation at year-end (57,706) 3,579
----------------- -----------------
Pension asset (liability)
reflected in consolidated
balance sheet $36,996 ($19,682)
================= =================
The projected benefit obligation was determined using an assumed
discount rate of 7% at the end of 1993 and 8.5% at the end of 1992. The
assumed rate of compensation increase was 5% at the end of 1993 and 6% at
the end of 1992. The assumed long-term rate of return on plan assets used
in determining pension cost was 10%. Pension plan assets include 590,700
shares of the Company's common stock valued at $34 million at the end of
1993 and 1,090,700 shares valued at $56 million at the end of 1992.
Note 6
Postretirement benefits other than pensions
The Company provides health care and life insurance benefits to certain
retired employees. Employees become eligible for benefits after meeting
certain age and service requirements.
In 1992, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS 106). Under SFAS 106, the cost of
providing retiree health care and life insurance benefits is actuarially
determined and accrued over the service period of the active employee
group. Prior to 1992, retiree health care and life insurance benefits were
expensed as claims and premiums were paid.
As permitted by SFAS 106, the Company elected to fully recognize the
Accumulated Postretirement Benefit Obligation as of the beginning of fiscal
1992 of $295 million as a change in accounting principle. On an after-tax
basis, this non-cash charge was $180 million, or $1.25 per share. In addition,
operating results for 1992 reflect incremental after-tax costs of $4
million or 3 cents per share for postretirement benefit costs recorded
under the new accounting rule.
The following table sets forth the amounts included in the
Consolidated Balance Sheet at December 26, 1993 and December 27, 1992 for
postretirement medical and life insurance liabilities:
In thousands of dollars
Accumulated postretirement
benefit obligation Dec. 26, 1993 Dec. 27, 1992
--------------- --------------
Retirees ($168,190) ($137,383)
Fully eligible active plan participants (32,553) (45,777)
Other active plan participants (70,531) (57,823)
--------------- --------------
(271,274) (240,983)
Unrecognized net loss 22,294 -
Unrecognized prior service credit (59,044) (63,880)
--------------- --------------
Accrued postretirement benefit cost ($308,024) ($304,863)
=============== ==============
Page 43
Postretirement benefit cost for health care and life insurance for
the years ended December 26, 1993 and December 27, 1992 included the
following components:
In thousands of dollars
1993 1992
---------- ----------
Service costs-benefits earned during the period $4,055 $4,553
Interest cost on accumulated postretirement
benefit obligation 18,997 17,732
Net amortization and deferral (4,768) (4,261)
---------- ----------
Net periodic postretirement benefit cost $18,284 $18,024
========== ==========
For 1991, the cost of postretirement medical and life insurance
benefits recognized on a cash basis was $7 million.
At December 26, 1993, the accumulated postretirement benefit
obligation was determined using a discount rate of 7% and a health care
cost trend rate of 12.9% for pre-age 65 benefits, decreasing to 5.5% in the
year 2007 and thereafter. For post-age 65 benefits, the health care cost
trend rate used was 12.1%, declining to 5.5% in the year 2003 and
thereafter.
The accumulated postretirement benefit obligation at December 27,
1992 was determined using a discount rate of 8.5% and a health care cost
trend rate of 14% for pre-age 65 benefits, decreasing to 6.5% in the year
2007 and thereafter. For post-age 65 benefits, the health care cost trend
rate used was 13%, declining to 6.5% in the year 2003 and thereafter.
The Company's policy is to fund the above-mentioned benefits as
claims and premiums are paid.
The effect of a 1% increase each year in the health care cost trend
rate used would result in increases of approximately $19 million in the 1993
accumulated postretirement benefit obligation and $2 million in the
aggregate service and interest components of the 1993 expense.
During 1992, the Company amended its retiree medical insurance plan
to provide limits on the Company's share of the cost of such benefits it will
pay to future retirees. Amendments were also made which related the
Company's share of retiree cost to employee retirement age and length of
service.
Note 7
Income taxes
The sources of income before income taxes consist of the following:
In thousands of dollars
1993 1992 1991
---------- --------- ---------
Domestic $650,896 $559,971 $489,928
Foreign 17,556 14,309 12,821
---------- --------- ---------
Total $668,452 $574,280 $502,749
========== ========= =========
The provision for income taxes on income before the cumulative
effects of accounting principle changes consists of the following:
In thousands of dollars
1993 Current Deferred Total
---------- --------- ----------
Federal $204,733 $19,333 $224,066
State 38,750 1,232 39,982
Foreign 6,902 (250) 6,652
---------- --------- ----------
Total $250,385 $20,315 $270,700
========== ========= ==========
In thousands of dollars
1992 Current Deferred Total
---------- --------- ----------
Federal $200,192 ($14,381) $185,811
State 40,343 (2,846) 37,497
Foreign 5,292 - 5,292
---------- --------- ----------
Total $245,827 ($17,227) $228,600
========== ========= ==========
In thousands of dollars
1991 Current Deferred Total
---------- --------- ----------
Federal $179,042 ($8,635) $170,407
State 33,342 (2,027) 31,315
Foreign (484) (138) (622)
---------- --------- ----------
Total $211,900 ($10,800) $201,100
========== ========= ==========
The provision for income taxes exceeds the U.S. federal statutory tax
rate as a result of the following differences:
Fiscal year 1993 1992 1991
---------- --------- --------
U.S. statutory tax rate 35.0% 34.0% 34.0%
Increase (decrease) in
taxes resulting from:
State income taxes net of
federal income tax benefit 3.9% 4.3% 4.2%
Goodwill amortization not
deductible for tax purposes 1.6% 2.0% 2.4%
Other, net 0.0% -0.5% -0.6%
---------- --------- --------
Effective tax rate 40.5% 39.8% 40.0%
========== ========= ========
Page 44
In 1992, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
Under the provisions of SFAS 109, the Company adjusted previously
recorded deferred taxes to reflect then-enacted statutory rates. The
Company has reflected the cumulative effect of adopting SFAS 109 as a
change in accounting principle at the beginning of 1992. This adjustment was
recorded as a non-cash credit to earnings of $34 million or $.24 per share.
Prior years' financial statements were not restated; however, previously
reported first quarter 1992 results have been restated to reflect this
adjustment. The adoption of SFAS 109 had no effect on the provision for
income taxes for 1992.
Deferred income taxes reflect temporary differences in the
recognition of revenue and expense for tax reporting and financial
statement purposes.
Deferred tax liabilities and assets were comprised of the following at
the end of 1993 and 1992:
In thousands of dollars
Dec. 26, 1993 Dec. 27, 1992
-------------- -------------
Liabilities:
Accelerated depreciation $223,000 $239,000
Accelerated amortization of
deductible intangibles 88,000 -
Pension 20,000 15,000
Other 39,512 23,100
-------------- -------------
Total deferred tax liabilities 370,512 277,100
-------------- -------------
Assets:
Accrued compensation costs (18,000) (26,000)
Postretirement medical and life (119,000) (122,000)
Other (28,198) (35,661)
-------------- -------------
Total deferred tax assets (165,198) (183,661)
-------------- -------------
Net deferred tax liabilities $205,314 $93,439
============== =============
Note 8
Capital stock, stock options, incentive plans
During 1988, the Company's Board of Directors authorized the repurchase of
up to 7.5 million shares of its outstanding common stock. During the period
1988-1991 the Company purchased 4,530,200 shares of its common stock
under this program at a cost of $158 million. No shares were purchased
under this program in 1992 or 1993. In June 1991, the Company acquired
15,940,679 shares, or approximately 10% of its common stock, held by the
former Gannett Foundation, for $670 million in cash. These share purchases
were recorded as treasury stock.
In January 1993, the Company issued 1,980,000 shares of its common
stock from treasury as partial consideration for the purchase of the
Honolulu Advertiser. The Company issued 399,137 shares of treasury stock
in connection with the acquisition of the Times Journal Company in 1991.
(Refer to Note 2 for further information concerning these transactions.)
Certain of the shares acquired by the Company have been reissued in
settlement of employee stock awards or were sold to an Employee Stock
Ownership Plan which was established in 1990. The remaining shares are held
as treasury stock.
The weighted average number of common shares outstanding used in
the computation of earnings per share was 146,474,000 in 1993, 144,148,000
in 1992 and 150,783,000 in 1991.
The Company's 1978 Executive Long-term Incentive Plan (the 1978 Plan)
provides for the granting of stock options, stock incentive rights and
option surrender rights to executive officers and other key employees.
Stock options are granted to purchase common stock of the Company
at not less than 100% of the fair market value on the day the option is
granted. The exercise period is eight years with the options becoming
exercisable at 25% per year after a one-year waiting period.
Stock incentive rights entitle the employee to receive for each such
right, without payment, one share of common stock at the end of an
incentive period, conditioned upon the employee's continued employment
throughout the incentive period. The incentive period, which is determined
by the Committee, is normally four years. During the incentive period, the
employee receives cash payments for each incentive right equivalent to the
cash dividend the Company would have paid had the employee owned the
shares of common stock issuable under the incentive rights.
Page 45
In July 1989, the Board of Directors approved an amendment to the
1978 Plan to provide that all outstanding awards will be vested if there is
a change in control of the Company. Under the amendment, stock options
become 100% exercisable immediately upon a change in control. Option
surrender rights related one-for-one to all outstanding stock options
have been awarded, which are effective only in the event of a change in
control and entitle the employee to receive cash for option surrender
rights equal to 100% of the difference between the exercise price of the
related stock option and the change-in-control price (which is the highest
price paid for a share of stock as part of the change in control). The
amendment also provides for the payment in cash of the value of stock
incentive rights based on the change-in-control price.
Awards made under the 1978 Plan were as follows:
1993 1992 1991
--------- -------- --------
Stock options 761,910 957,675 547,815
Stock incentive rights 163,702 484,295 319,715
Awards reflected above for 1991 relate to the four-year employment
period 1991-1994. Awards for 1992 include 505,665 stock options and 244,730
stock incentive rights that relate to the four-year period 1993-1996, and
452,010 stock options and 239,565 stock incentive rights that relate to the
four-year period 1992-1995. Awards for 1993 are for the four-year
employment period 1994-1997.
At the beginning of the Company's 1994 fiscal year, 131,655 shares of
common stock were issued in settlement of previously granted stock
incentive rights.
With respect to awards under the 1978 Plan, the Company has recorded
as compensation expense $11 million for 1993, $10 million for 1992 and $4
million for 1991. Under the 1978 Plan, the Company has accrued liabilities
aggregating $24 million at December 26, 1993 and $22 million at December 27,
1992.
A summary of the Company's stock option activity appears below:
Number Option price
Stock options of shares per share
- -------------------- ------------ -------------
Balance outstanding
Dec. 30, 1990 2,172,685 $18.00-54.63
Granted 547,815 36.13-46.13
Exercised (249,816) 18.00-43.75
Expired or canceled (63,562) 30.88-54.63
------------ -------------
Balance outstanding
Dec. 29, 1991 2,407,122 19.54-47.00
Granted 957,675 43.88-51.38
Exercised (549,740) 19.54-43.75
Expired or canceled (40,706) 34.88-44.75
------------ -------------
Balance outstanding
Dec. 27, 1992 2,774,351 30.88-51.38
Granted 761,910 49.00-55.50
Exercised (421,458) 30.88-47.38
Expired or canceled (73,411) 36.13-51.38
------------ -------------
Balance outstanding
Dec. 26, 1993 3,041,392 $30.88-55.50
============ =============
Options were exercisable for 1,299,908 shares at December 26, 1993
and 1,133,077 shares at December 27, 1992. Shares available for future
grants under the 1978 Plan totaled 2,805,985 at December 26, 1993.
On July 1, 1990, the Company established a 401(k) Savings Plan, which
includes a Company matching contribution in the form of Gannett stock. To
fund the Company's matching contribution, an Employee Stock Ownership Plan
(ESOP) was formed which acquired 1,250,000 shares of Gannett stock from the
Company for $50 million. The stock purchase was financed with a loan from
the Company. Compensation expense related to the ESOP, based on the
number of common shares allocated to employee 401(k) accounts and cash
contributed for withdrawals, was $2.2 million in 1993 and 1992, and $1.8
million in 1991.
In May 1990, the Board of Directors declared a dividend distribution
of one Preferred Share Purchase Right ("Right") for each common share held,
payable to shareholders of record on June 8, 1990. The Rights become
exercisable when a person or group of persons acquires or announces an
intention to acquire ownership of 15% or more of the Company's common
shares. Holders of the Rights may acquire an interest in a new series of
junior participating preferred stock, or they may acquire an additional
interest in the Company's common shares at 50% of the market value of the
shares at the time the Rights are exercised. The Rights are redeemable by
the Company at any time prior to the time they become exercisable, at a
price of $.01 per Right.
Page 46
Note 9
Commitments, contingent liabilities and other matters
Litigation: The Company and a number of its subsidiaries are defendants in
judicial and administrative proceedings involving matters incidental to
their business. The Company's management does not believe that any
material liability will be imposed as a result of these matters.
Leases: Approximate future minimum annual rentals payable under
non-cancelable operating leases are as follows:
In thousands of dollars
1994 $39,170
1995 38,286
1996 37,182
1997 35,272
1998 30,401
Later years 112,012
---------
Total $292,323
=========
Total minimum annual rentals have not been reduced for future
minimum sublease rentals aggregating approximately $4 million. Total rental
costs were $100 million for 1993, $109 million for 1992 and $111 million for
1991.
In December 1990, the Company adopted a Transitional Compensation
Plan ("Plan") which provides termination benefits to key executives whose
employment is terminated under certain circumstances within two years
following a change in control of the Company. Benefits under the Plan
include a severance payment of up to three years' compensation and
continued life and medical insurance coverage.
Other matters: Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments," requires the
Company to disclose the estimated fair value of its financial instruments.
For financial instruments other than long-term debt, including cash
and cash equivalents, trade and other receivables, current maturities of
long-term debt and other long-term liabilities, the amounts reported on the
balance sheet approximate fair value.
The Company estimates the fair value of its long-term debt, based on
borrowing rates currently available, to be $862 million, compared with the
carrying amount of $851 million.
Statement of Financial Accounting Standards No. 112, "Employer's
Accounting for Postemployment Benefits," requires the accrual method of
accounting to be adopted for such benefits no later than the Company's
1994 fiscal year. The Company is currently evaluating this Statement and
does not believe its adoption will have a material effect on its financial
position or results of operations.
Note 10
Business segment information
The Company is a diversified information company with three principal
business segments in 41 states and the District of Columbia, two U.S.
territories, Canada, Great Britain, France, Hong Kong, Singapore and
Switzerland. The newspaper segment consists of 83 daily newspapers in 34
states and two U.S. territories, including USA TODAY, a national,
general-interest daily newspaper; and USA WEEKEND, a magazine supplement
for newspapers. The newspaper segment also includes non-daily
publications, an international survey firm and a nationwide network of
offset presses for commercial printing.
The broadcasting segment's principal activities include the operation
of television and radio stations. At the end of 1993 the Company owned 10
television stations and 11 radio stations. Refer to Note 2 for a discussion
of the sale of certain broadcast stations.
The outdoor advertising segment involves the selling of advertising
space on outdoor advertising structures and transit and transit shelter
advertising operations in 11 states and Canada.
Separate financial data for each of the Company's three business
segments is presented on page 51. In that presentation, operating revenues
by industry segment include both sales to unaffiliated customers, as
reported in the Company's consolidated statements of income, and
intersegment sales, which are accounted for at prices charged unaffiliated
customers. Operating income represents total revenue less operating
expenses, depreciation and amortization of intangibles. In determining
operating income by industry segment, general corporate expenses,
interest expense and other income and expense items of a non-operating
nature are not considered. Corporate assets include cash and marketable
securities, certain investments, long-term receivables and plant and
equipment primarily used for corporate purposes. Interest capitalized has
been included as a corporate capital expenditure for purposes of segment
reporting.
Page 47
Report of independent accountants
To the Board of Directors and
Shareholders of Gannett Co., Inc.
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, changes in shareholders' equity
and cash flows present fairly, in all material respects, the financial
position of Gannett Co., Inc., and its subsidiaries at December 26, 1993 and
December 27, 1992, and the results of their operations and their cash flows
for each of the three years in the period ended December 26, 1993, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
As discussed in Notes 6 and 7 to the financial statements,
the Company adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
and Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," in 1992.
By s/ Price Waterhouse
-------------------
Price Waterhouse
Washington, D.C.
January 27, 1994
Pages 48 and 49
<TABLE>
11-YEAR SUMMARY
In thousands of dollars except per share amounts
<CAPTION>
1993 1992 1991 1990 1989 1988
----------- ------------ ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net operating revenues:
Newspaper advertising $2,005,037 $1,882,114 $1,852,591 $1,917,477 $2,018,076 $1,908,566
Newspaper circulation 838,706 807,093 777,221 730,426 718,087 685,663
Broadcasting 397,204 370,613 357,383 396,693 408,363 390,507
Outdoor advertising 230,771 241,313 260,120 271,366 257,890 226,532
Other 169,903 167,824 134,720 125,659 115,773 103,217
----------- ------------ ------------ ------------- ------------ -----------
Total (Notes a and b, see page 50) 3,641,621 3,468,957 3,382,035 3,441,621 3,518,189 3,314,485
----------- ------------ ------------ ------------- ------------ -----------
Operating Expenses:
Costs and expenses 2,717,634 2,653,803 2,623,335 2,568,744 2,571,617 2,449,587
Depreciation 164,420 157,242 158,389 153,211 149,893 136,861
Amortization of intangible assets 45,215 40,629 41,364 40,825 40,168 40,312
----------- ------------ ------------ ------------- ------------ -----------
Total 2,927,269 2,851,674 2,823,088 2,762,780 2,761,678 2,626,760
----------- ------------ ------------ ------------- ------------ -----------
Operating Income 714,352 617,283 558,947 678,841 756,511 687,725
Non-operating income (expense):
Interest expense (51,250) (50,817) (71,057) (71,567) (90,638) (88,557)
Other 5,350 7,814 14,859 10,689 (18,364) 8,292
----------- ------------ ------------ ------------- ------------ -----------
Income before income taxes 668,452 574,280 502,749 617,963 647,509 607,460
Provision for income taxes 270,700 228,600 201,100 241,000 250,000 243,000
----------- ------------ ------------ ------------- ------------ -----------
Income before cumulative effect of accounting
principle changes 397,752 345,680 301,649 376,963 397,509 364,460
Cumulative effect on prior years of accounting
principle changes for:
Income taxes 34,000
Retiree health and life insurance benefits (180,000)
----------- ------------ ------------ ------------- ------------ -----------
Net Income $397,752 $199,680 $301,649 $376,963 $397,509 $364,460
=========== ============ ============ ============= ============ ===========
Per share amounts (1)
Income before cumulative effect of accounting
principle changes $2.72 $2.40 $2.00 $2.36 $2.47 $2.26
Net income $2.72 $1.39 $2.00 $2.36 $2.47 $2.26
Dividends declared 1.30 1.26 1.24 1.21 1.11 1.02
Shareholders' equity (3) 12.98 10.94 10.71 12.98 12.40 11.09
Weighted average number of common and common
equivalent shares outstanding in thousands (2) 146,474 144,148 150,783 160,047 161,253 161,622
Financial position:
Current assets $757,957 $631,447 $636,101 $668,690 $671,030 $665,031
Current Liabilities 455,139 431,551 443,835 500,203 477,822 500,835
Working capital 302,818 199,896 192,266 168,487 193,208 164,196
Long-term debt excluding current maturities 850,686 1,080,756 1,335,394 848,633 922,470 1,134,737
Shareholders' equity 1,907,920 1,580,101 1,539,487 2,063,077 1,995,791 1,786,441
Total assets 3,823,798 3,609,009 3,684,080 3,826,145 3,782,848 3,792,820
Selected financial percentages and ratios
Percentage increase (decrease):
Earnings after tax (4) 15.1% 14.6% -20.0% -5.2% 9.1% 14.1%
Earnings per share (4) 13.3% 20.0% -15.3% -4.5% 9.3% 14.1%
Dividends declared per share 3.2% 1.6% 2.5% 9.0% 8.8% 8.5%
Book value per share 18.6% 2.1% -17.5% 4.7% 11.8% 11.6%
Credit ratios
Long-term debt to shareholders' equity 44.6% 68.4% 86.7% 41.1% 46.2% 63.5%
Times interest expense earned 14.0X 12.3X 8.1X 9.6X 8.1X 7.9X
1987 1986 1985 1984 1983
----------- ------------ ------------ ------------- ------------
Net operating revenues:
Newspaper advertising $1,787,077 $1,588,985 $1,213,577 $1,064,056 $933,432
Newspaper circulation 645,356 575,806 464,976 418,552 361,135
Broadcasting 356,815 351,133 265,480 232,748 192,874
Outdoor advertising 201,771 210,572 207,572 199,570 183,795
Other 88,428 75,001 57,816 45,271 32,410
----------- ------------ ------------ ------------- ------------
Total (Notes a and b, see page 50) 3,079,447 2,801,497 2,209,421 1,960,197 1,703,646
----------- ------------ ------------ ------------- ------------
Operating Expenses:
Costs and expenses 2,257,304 2,061,789 1,601,372 1,423,088 1,246,554
Depreciation 124,485 111,229 85,512 75,922 67,012
Amortization of intangible assets 36,595 31,980 18,017 14,591 14,392
----------- ------------ ------------ ------------- ------------
Total 2,418,384 2,204,998 1,704,901 1,513,601 1,327,958
----------- ------------ ------------ ------------- ------------
Operating Income 661,063 596,499 504,520 446,596 375,688
Non-operating income (expense):
Interest expense (85,681) (79,371) (25,926) (24,190) (26,331)
Other 15,013 23,076 6,183 8,428 18,908
----------- ------------ ------------ ------------- ------------
Income before income taxes 590,395 540,204 484,777 430,834 368,265
Provision for income taxes 271,000 263,800 231,500 206,900 176,600
----------- ------------ ------------ ------------- ------------
Income before cumulative effect of accounting
principle changes 319,395 276,404 253,277 223,934 191,665
Cumulative effect on prior years of accounting
principle changes for:
Income taxes
Retiree health and life insurance benefits
----------- ------------ ------------ ------------- ------------
Net Income $319,395 $276,404 $253,277 $223,934 $191,665
=========== ============ ============ ============= ============
Per share amounts (1)
Income before cumulative effect of accounting
principle changes $1.98 $1.71 $1.58 $1.40 $1.20
Net income $1.98 $1.71 $1.58 $1.40 $1.20
Dividends declared 0.94 0.86 0.765 0.665 0.61
Shareholders' equity (3) 9.94 8.88 7.93 7.13 6.39
Weighted average number of common and common
equivalent shares outstanding in thousands (2) 161,704 161,380 160,466 160,224 159,942
Financial position:
Current assets $601,220 $570,589 $473,394 $394,222 $334,991
Current Liabilities 474,775 432,327 303,142 293,423 231,612
Working capital 126,445 138,262 170,252 100,799 103,379
Long-term debt excluding current maturities 1,094,321 1,201,370 491,565 188,724 294,853
Shareholders' equity 1,609,394 1,433,781 1,275,213 1,141,964 1,022,289
Total assets 3,510,259 3,365,903 2,313,218 1,812,200 1,689,556
Selected financial percentages and ratios
Percentage increase (decrease):
Earnings after tax (4) 15.6% 9.1% 13.1% 16.8% 6.2%
Earnings per share (4) 15.8% 8.2% 12.9% 16.7% 6.2%
Dividends declared per share 9.3% 12.4% 15.0% 9.0% 5.2%
Book value per share 11.9% 11.7% 11.5% 11.5% 9.6%
Credit ratios
Long-term debt to shareholders' equity 68.0% 83.8% 38.6% 16.6% 29.0%
Times interest expense earned 7.9X 7.8X 19.7X 18.8X 15.0X
(1) Per share amounts have been based upon average number of shares
outstanding during each year, giving retroactive effect to adjustments in (2).
(2) Shares outstanding have been converted to a comparable basis by
reflecting retroactively shares issued for a 2-for-1 stock split effective
January 6, 1987 and a 3-for-2 stock split effective January 5, 1984.
(3) Based upon year-end shareholders' equity and shares outstanding.
(4) Before cumulative effect of accounting principle changes (refer to
Notes 6 and 7 to the consolidated financial statements).
Page 50
Notes to 11-year summary
(a) The Company and its subsidiaries made the acquisitions listed at
right during the period. The results of operations of these acquired
businesses are included in the accompanying financial information from the
date of purchase. Note 2 of the consolidated financial statements on page
40 contains further information concerning certain of these acquisitions.
(b) During the period, the Company sold substantially all of the
assets or capital stock of certain other subsidiaries and divisions of
other subsidiaries for which the revenues and contributions to
consolidated net income were not material. Note 2 of the consolidated
financial statements on page 40 contains further information concerning
certain of these dispositions.
1983
April 13 WTCN-TV now KARE-TV, Minneapolis-St.Paul
June 23 WLVI-TV, Boston
1984
June 27 WDAE-AM, Tampa
Dec. 3 KKBQ/KKBQ-FM, Houston
1985
March 15 Triangle Sign Company
March 29 Family Weekly magazine, now USA WEEKEND
July 1 The Des Moines Register and The Jackson Sun
Nov. 27 Peekskill Star Corporation
1986
Jan. 3 KTKS-FM now KHKS-FM, Dallas
Feb. 18 The Evening News Association
July 14 The Courier-Journal and Louisville Times Company
July 29 KCMO-AM and KBKC-FM now KCMO-FM, Kansas City
Sept. 16 KHIT-FM, Seattle
Dec. 1 Arkansas Gazette Company
1987
July 15 Gannett Direct Marketing Services, Inc.
1988
Feb. 1 WFMY-TV, Greensboro, N.C.
WTLV-TV, Jacksonville, Fla.
July 1 New York Subways Advertising Co., Inc.
and related companies
1989
Oct. 31 Rockford Magazine
Nov. 6 Outdoor advertising displays merged into New Jersey Outdoor
1990
March 28 Great Falls (Mont.) Tribune
May 17 Ye Olde Fishwrapper
June 18 The Shopper Advertising, Inc.
Sept. 7 Desert Community Newspapers
Dec. 27 North Santiam Newspapers
Dec. 28 Pensacola Engraving Co.
1991
Feb. 11 The Add Sheet
April 3 New Jersey Publishing Co.
Aug. 30 The Times Journal Co., including The Journal Newspapers,
The Journal Printing Co. (now Springfield Offset)
and Telematch
Oct. 3 Gulf Breeze Publishing Co.
1992
April 24 Graphic Publications, Inc.
1993
Jan. 30 Honolulu Advertiser
April 24 Tulare Advance-Register
</TABLE>
Page 51
Form 10-K information
Business of the company
Gannett Co., Inc. is a diversified information company that operates
primarily in the U.S. Approximately 98% of its revenues are from domestic
operations. Its foreign operations are primarily in Canada, but it also
conducts business in certain European, Asian and other foreign markets.
Its corporate headquarters is in Arlington, Va., near Washington, D.C. It was
incorporated in New York in 1923 and was reincorporated in Delaware in
1972.
The Company's principal business segments are newspaper publishing,
broadcasting and outdoor advertising.
The Company's newspapers make up the largest newspaper group in the
U.S. in circulation. The Company operates 83 daily newspapers, with a total
average daily circulation of more than 6.3 million for 1993, including USA
TODAY. The Company also publishes USA WEEKEND, a weekend newspaper
magazine, and a number of non-daily publications.
On December 26, 1993, the broadcasting division included 10 television
stations in markets with more than 11 million households and 11 radio
stations in markets with a listening population of more than 36 million.
The outdoor division is the largest in North America, with operations
in 11 states and Canada. It includes 12 outdoor advertising companies,
transit and transit shelter advertising operations, and a printing division.
The Company also owns the following: Gannett News Service, which
provides news services for its newspaper operations; Gannett National
Newspaper Sales, which markets the Company's nationwide newspaper
advertising resources; Gannett Offset, which coordinates the sale,
marketing and production of commercial offset printing done for national
and regional customers at many of Gannett's newspapers with offset
presses and at the Company's offset printing facilities in Chandler, Ariz.,
Miramar, Fla., Nashville, Tenn., Atlanta, Ga., St. Louis, Mo., Norwood, Mass.,
and Springfield, Va.; Louis Harris & Associates, the international opinion
research firm; electronic information services, including USA TODAY Hot
Lines and USA TODAY Sports and Information Center; USA TODAY Sky Radio, an
audio news and entertainment service for commercial airlines; Gannett
Direct Marketing Services, a direct marketing company with operations in
Louisville, Ky.; Telematch, a telephone database service; Gannett Community
Directories of New Jersey, yellow-pages publishing; The Add Sheet, a group
of weekly advertising shoppers; and Gannett TeleMarketing, a telephone
sales and marketing business.
Business segment financial information
Selected financial information for the Company's three business segments
is presented below. For a description of the accounting policies related
to this information, see Note 10 to the Company's Consolidated Financial
Statements. The Company's business segments have seasonal aspects with
peak revenue generally occurring in the fourth and, to a lesser extent, the
second fiscal quarters.
In thousands of dollars
Business segment financial information
1993 1992 1991
------------ ----------- -----------
Operating revenues:
Newspaper publishing $3,013,646 $2,857,839 $2,766,564
Broadcasting 397,204 370,613 357,383
Outdoor advertising 230,771 241,313 260,120
Intersegment items - (808) (2,032)
------------ ----------- -----------
$3,641,621 $3,468,957 $3,382,035
------------ ----------- -----------
Operating income:
Newspaper publishing $677,285 $607,637 $544,660
Broadcasting 86,686 66,181 61,666
Outdoor advertising 14,799 8,191 15,851
Corporate (64,418) (64,726) (63,230)
------------ ----------- -----------
$714,352 $617,283 $558,947
------------ ----------- -----------
Identifiable assets:
Newspaper publishing $2,548,143 $2,360,546 $2,388,965
Broadcasting 685,230 721,675 746,859
Outdoor advertising 263,286 279,236 313,868
Corporate 327,139 247,552 234,388
------------ ----------- -----------
$3,823,798 $3,609,009 $3,684,080
------------ ----------- -----------
Depreciation and amortization:
Newspaper publishing $147,524 $135,076 $138,897
Broadcasting 31,449 31,249 28,408
Outdoor advertising 18,616 19,594 20,864
Corporate 12,046 11,952 11,584
------------ ----------- -----------
$209,635 $197,871 $199,753
------------ ----------- -----------
Capital expenditures:
Newspaper publishing $111,111 $122,684 $134,507
Broadcasting 9,144 17,606 36,439
Outdoor advertising 7,528 8,473 13,242
Corporate 4,339 5,309 8,204
------------ ----------- -----------
$132,122 $154,072 $192,392
------------ ----------- -----------
Page 52
Newspaper publishing
On December 26, 1993, the Company operated 83 daily newspapers, including
USA TODAY, and a number of non-daily local publications, in 34 states, Guam
and the U.S. Virgin Islands. The Newspaper Division is headquartered in
Arlington, Va., and on December 26, 1993, it had approximately 32,300
full-time and part-time employees. Newspaper operating revenues
accounted for approximately 82% of the Company's net operating revenues
in 1991 and 1992, and 83% in 1993.
The Company's newspaper operations include the Metro Group,
composed of newspapers serving larger metropolitan areas; four regional
groups (East, South, Central and West) made up of newspapers in
medium-sized and smaller markets; and USA TODAY.
USA TODAY was introduced on September 15, 1982, as the country's
first national, general-interest daily newspaper. It is available in all
50 states and is available to readers on the day of publication in the
top 100 metropolitan markets in the U.S.
USA TODAY is produced at facilities in Arlington, Va., and is
transmitted via satellite to offset printing plants around the country. It
is printed at Gannett plants in 21 U.S. markets and under contract at offset
plants in 11 other U.S. markets.
USA TODAY is sold at newsstands and vending machines, Monday through
Friday, at 50 cents a copy. Mail subscriptions are available nationwide and
abroad, and home and office delivery is offered in many markets.
Approximately 61% of its net paid circulation results from single-copy
sales at newsstands or vending machines and the remainder is from home and
office delivery, mail and other sales.
USA TODAY's financial results improved in 1993, as advertising and
circulation revenues rose 9% and 2%, respectively, and costs declined
slightly. As a result, the paper reported its first profitable year in 1993.
USA TODAY International, published separately from USA TODAY, is
printed from satellite transmission under contract in London, Zurich and
Hong Kong, and operates in Europe, the Middle East, Africa and Asia. It is
available in more than 90 foreign countries.
The Gannett News Service is headquartered in Arlington, Va., and has
bureaus in nine other states (see page 67 for more information). Gannett
News Service provides national and regional news coverage and sports,
features, photo and graphic services to Gannett newspapers.
The newspaper publishing segment also includes USA WEEKEND, which is
distributed as a weekend newspaper supplement in 401 newspapers
throughout the country, with a total circulation of 17.9 million at the end
of 1993.
At the end of 1993, 50 of the Company's daily newspapers, including
USA TODAY, were published in the morning and 33 were published in the
evening.
At all of its newspaper operations, the Company is striving to
improve customer service and product quality with a view toward better
serving readers and advertisers. New products are being developed at
several of the Company's newspapers, including zoned community editions,
new monthly and weekly editions and special niche publications. Gannett
Community Directories of New Jersey published 37 separate yellow-page
directories with added features, including coupons, maps and expanded use
of color. The yellow-page directories published in Binghamton and Elmira,
N.Y., produced increased advertising and market share along with greater
popularity among users.
In 1993, the Company's newspapers refined strategies to improve
editorial quality and focus content on the needs of the individual
communities they serve. They updated their approaches to NEWS 2000, a
program launched in 1991 to help each newspaper better address community
interests, and increased training for newsroom managers and
professionals.
In June 1992, the Company introduced ADvance, a program to develop
marketing partnerships with advertisers and enhance the skills of
newspaper sales and marketing staffs. ADvance is designed to expand and
diversify the base of newspaper advertisers. Its premise is a better
understanding of advertisers' businesses and objectives and the
development of programs responsive to advertisers' needs. The Company has
undertaken significant training efforts to implement ADvance concepts and
will continue to do so in 1994.
All of the Company's daily newspapers receive the Gannett News
Service. In addition, all subscribe to The Associated Press, and some
receive various supplemental news and syndicated features services.
The senior executive of each newspaper is the publisher, and the
newspapers have advertising, business, circulation, editorial, market
development and production departments.
Technological advances in recent years have had an impact on the way
newspapers are produced. Computer-based text editing systems capture
drafts of reporters' stories and are then used to edit and produce type
for transfer by a photographic process to printing plates. All of the
Company's daily newspapers are produced by this method. "Pagination"
enables editors to create a newspaper page by computer, avoiding all or
part of the manual "paste-up" of the page before it can be converted into a
printing plate. The Company uses pagination systems at 44 newspaper
plants.
Page 53
Gannett began to install production versions of a voice-activated
system which can substitute for traditional keyboard text entry. Five
newsrooms now have 12 systems in use and more are planned. NEWSworks, the
newsroom story planning system that is designed to add functionality to
existing newsroom systems, is being tested in Poughkeepsie, N.Y. Gannett
began to test a multi-media archive system late in 1993 and also an
investigative reporting program to help reporters analyze public records.
The Mobile Advertising Sales System, a lap-top personal computer for our
advertising sales staffs, was successfully tested in Rochester and installation
is planned at additional newspapers in 1994.
Fifty-one daily newspaper plants print by the offset process, and 20
plants print using various letterpress processes.
Improved technology for all of the newspapers has resulted in
greater speed and accuracy and in a reduction in the number of production
hours worked per page. In 1993, the production hours worked per page were
reduced by 5%.
The principal sources of newspaper revenues are circulation and
advertising.
Circulation: The following table summarizes the circulation volume
and revenues of the newspapers owned by the Company at the end of 1993.
USA TODAY circulation is included in this table.
This table assumes that all newspapers owned by the Company at the
end of 1993 were owned during all years shown:
Circulation: newspapers owned on Dec. 26, 1993
Circulation Daily Sunday
revenues net paid net paid
in thousands circulation circulation
-------------- ------------ ------------
1993 $838,706 6,338,000 6,165,000
1992 $818,260 6,339,000 6,143,000
1991 $782,435 6,272,000 6,100,000
1990 $735,368 6,267,000 6,082,000
1989 $725,584 6,340,000 5,583,000
The Company emphasized improving customer service and increasing
circulation and household penetration at all of its newspaper operations in
1993 and will continue to do so in 1994.
Forty of the Company's local newspapers reported gains in daily
circulation during 1993, and 38 increased Sunday circulation.
Home delivery prices for the Company's newspapers are established
individually for each newspaper and range from $1.25 to $3.00 per week in
the case of daily newspapers and from $.57 to $2.00 per copy for Sunday
newspapers.
Additional information about the circulation of the Company's
newspapers may be found on page 28 and on pages 64-66 of this annual
report.
Advertising: Advertising revenues are generated through the sale of
retail (local), classified and national advertising. A detailed analysis of
newspaper advertising revenues is presented on pages 27 and 54 of this
report.
Retail advertising is display advertising associated with local
merchants, such as department and grocery stores. Classified advertising
includes the ads listed together in sequence by the nature of the ads, such
as automobile sales, real estate sales and "help wanted." National
advertising is display advertising principally from advertisers who are
promoting products or brand names on a nationwide basis. Retail and
national advertising may appear in the newspaper itself or in preprinted
sections. Generally there are different rates for each category of
advertising, and the rates for each newspaper are set independently,
varying from city to city. The newspapers have advertising departments
that solicit retail, classified and national advertising.
Gannett National Newspaper Sales also solicits national advertisers
and certain national and regional retail advertisers. The newspapers have
made continuing efforts to serve their readers and advertisers by
introducing total market coverage programs and by targeting specific
market segments desired by many advertisers through the use of specially
zoned editions and other special publications.
Classified revenue rose for the year, reflecting continued growth in
the employment and automotive categories. Real estate advertising was
down slightly, reflecting the slow recovery of home sales. Retail (local)
run-of-press advertising (ROP) improved slightly for the year. There was
consistent growth of medium and small advertisers throughout the year.
Preprint revenues grew as well in 1993, as certain multi-market
advertisers continued to convert their ad spending from ROP to preprint.
Overall, general economic conditions for newspaper advertising
improved. Metro newspapers, which were hardest hit by the recession,
experienced the greatest turnaround in advertising revenues. Regionally,
the Central region performed the strongest for the second consecutive
year. While overall advertising revenue was up in the West, California
newspapers for much of the year lagged the rest of the country because of
difficult economic conditions there. For 1994, Gannett anticipates modest
overall advertising revenue growth to result from the expected
continuation of the national economic recovery.
The following chart summarizes the advertising linage (in six-column
inches) and advertising revenues of the newspapers owned by the Company
at the end of 1993. Again, this chart assumes that all of the newspapers
owned at the end of 1993 were owned throughout the years shown:
Page 54
Advertising: newspapers owned on Dec. 26, 1993
Advertising
revenues Inches of
in thousands advertising
-------------- ------------
1993 $2,004,939 127,322,000
1992 $1,923,153 121,578,000
1991 $1,870,682 116,906,000
1990 $1,940,440 121,196,000
1989 $2,032,458 126,299,000
Competition: The Company's newspapers compete with other media for
advertising principally on the basis of their advertising rates and their
performance in helping sell the advertisers' products or services. They
compete for circulation principally on the basis of their content and their
price. While most of the Company's newspapers do not have daily newspaper
competitors that are published in the same city, in certain of the Company's
larger markets, there is such direct competition. Most of the Company's
newspapers compete with other newspapers published in nearby cities and
towns and with free distribution and paid advertising weeklies.
At the end of 1993, The Cincinnati Enquirer, The Detroit News, the El
Paso (Texas) Times, the Honolulu Advertiser, The Tennessean at Nashville and
the Tucson (Ariz.) Citizen were published under joint operating agreements
with non-Gannett newspapers located in the same cities. All of these
agreements provide for joint business, advertising, production and
circulation operations and a contractual division of profits. The editorial
and reporting staffs of the Company's newspapers, however, are separate
and autonomous from those of the non-Gannett newspapers.
On January 30, 1993, the Company completed the acquisition of the
Honolulu Advertiser and the sale of the Honolulu Star-Bulletin. The
acquisition of the morning publication Advertiser was for approximately
$250 million. Concurrent with these transactions, the Honolulu joint
operating agreement was amended to provide the Company with a greater
share of profits from the operation.
On March 31, 1991, the Shreveport, La., joint operating agreement was
terminated and the Shreveport Journal, the non-Gannett newspaper in the
agreement, ceased publication. The partners in this agreement will continue
their contractual division of profits through December 25, 1994.
Through internal development programs and acquisitions, the Company
continues to explore new opportunities in news, information and
communications businesses. Recent business developments include USA
TODAY Baseball Weekly, which was successfully launched in 1991; USA TODAY
Sky Radio, which began satellite distribution of news and entertainment
programming to commercial airlines in 1992; Telematch, a telephone database
service; as well as publishing and electronic information services.
Properties: Generally, the Company owns the plants that house all
aspects of the newspaper publication process. In the case of USA TODAY, at
December 26, 1993, 11 non-Gannett printers were used to print the
newspaper in the U.S. in markets where there are no Company newspapers
with appropriate facilities. Three non-Gannett printers in foreign
countries are used to print USA TODAY International. USA WEEKEND is also
printed under contract with a commercial printing company. Many of the
Company's newspapers also have outside news bureaus and sales offices,
which generally are leased. In a few cities, two or more of the Company's
newspapers share combined facilities; and in two locations, facilities are
shared with other newspaper properties under joint operating agreements.
The Company's newspaper properties have rail siding facilities or access to
main roads for newsprint delivery purposes and are conveniently located
for distribution purposes.
During the past five years, new or substantial additions or
remodeling of existing newspaper facilities have been completed or are at
some stage of construction at 12 of the Company's newspaper operations.
During 1993, facility expansion and renovations in Detroit, Fort Myers and
Gainesville were completed. As part of the Company's annual capital
expenditure program, its properties are improved or upgraded on a regular
basis. The Company's facilities are adequate for present operations.
Raw materials: Newsprint is the basic raw material used to
publish newspapers. During 1993, the Company's newsprint consumption was
approximately 894,000 short-tons, including the Company's portion of
newsprint consumed at joint operating agencies, consumption by USA
WEEKEND, and USA TODAY tonnage consumed at non-Gannett print sites. The
Company purchases newsprint from 29 North American and offshore
suppliers under contracts which expire at various times through 2010.
During 1993, all of the Company's newspapers used some recycled
newsprint. For the year, approximately 68% of the Company's newsprint
consumption contained recycled content. The Company expects to further
increase its newsprint consumption from recycled sources.
In 1993, newsprint supplies were ample and the weighted average
newsprint price was slightly higher than in 1992. The Company believes the
available sources of newsprint, together with present inventories, will
continue to be adequate to supply the needs of its newspapers. The
Company expects newsprint prices to rise in 1994.
Regulation: Gannett is committed to protecting the environment. Our
goal is to ensure that Gannett facilities are in compliance with federal,
state and local environmental laws and to incorporate appropriate
environmental practices and standards in our newspaper, broadcast and
outdoor advertising operations. The Company employs a corporate
environmental manager responsible not only for regulatory compli-
Page 55
ance but also for preventive measures. The Company is one of the industry lead-
ers in the use of recycled newsprint. From 1989 to 1993, the Company increased
usage of newsprint containing recycled content from 42,000 tons in 1989
to more than 600,000 tons in 1993. The Company's newspapers use inks,
photographic chemicals, solvents and fuels. The use and disposal of these
substances may be regulated by federal, state and local agencies. The
Company believes it is taking effective measures regarding the disposal of
these compounds, including returning material to manufacturers for
recycling. Any release into the environment may create obligations to
private and governmental entities under a variety of statutes and rules
regulating the environment, including the issuance of permits.
Several of the Company's newspaper subsidiaries have been included
among the potentially responsible parties in connection with the alleged
disposal of ink or other chemical wastes at disposal sites which have been
subsequently identified as inactive hazardous waste sites by the U.S.
Environmental Protection Agency or comparable state agencies. The
Company does not believe that these matters will have any significant
impact on its financial condition.
Broadcasting
On December 26, 1993, the Company's television division, headquartered in
Arlington, Va., included 10 television stations, in markets with a total of
more than 11 million households. The Company's radio division now includes 11
radio stations in eight markets with a listening population of more than 36
million.
The Company's radio stations in Kansas City and St. Louis were sold in
the fourth quarter of 1993. Also in 1993, the Company provided for the sale
of its television station in Boston, which is expected to close in early
1994.
Exclusive rights to market and distribute USA TODAY Radio, a news and
information script service, were licensed to ABC Radio Networks. ABC Radio
Networks began broadcast and delivery of the USA TODAY service to
approximately 2,000 radio affiliates in 1987.
At the end of 1993, the broadcasting division had approximately 2,000
full-time and part-time employees. Broadcasting revenues accounted for
approximately 11% of the Company's net operating revenues in 1991, 1992 and
1993.
The principal sources of the Company's broadcasting revenues are: 1)
local advertising focusing on the immediate geographic area of the
stations; 2) national advertising; 3) compensation paid by the networks for
carrying commercial network programs; and 4) payments by advertisers to
television stations for other services, such as the production of
advertising material. The advertising revenues derived from a station's
local news programs make up a significant part of its total revenues.
Advertising rates charged by a television station are based
primarily upon the station's ability to attract viewers, demographics and
the number of television households in the area served by the station.
Practically all national advertising is placed through advertising
representatives. Local advertising time is sold by each station's own sales
force.
Generally, a network provides programs to its affiliated television
stations, sells commercial advertising announcements within the network
programs and compensates the local stations by paying an amount based on
the television station's network affiliation agreement. Each radio station
with a network affiliation is paid a flat annual fee under its affiliation
agreement. Local programming quality and the geographic coverage of its
signal are key factors in a radio station's competitive position within the
market. Since most radio programming originates locally, network affiliation
has little effect on a radio station's competitive position.
Programming: The costs of locally produced and purchased syndicated
programming are a significant portion of television operating expenses.
Syndicated programming costs are determined based upon largely
uncontrollable market factors, including demand from the independent and
affiliated stations within the market and in some cases from cable
operations. In recent years, the Company's television stations have
increased their locally produced news and entertainment programming in an
effort to provide programs that distinguish the stations from the
competition and to better control costs.
Properties: The Company's broadcasting facilities are
adequately equipped with the necessary television and radio broadcasting
equipment. The Company owns transmitter sites in 13 locations and leases
sites in nine others.
During the past five years, new broadcasting facilities
have been built in Denver and Washington, D.C. Substantial additions or
remodelings were completed in Austin, Texas, Greensboro, N.C., and
Jacksonville, Fla. The Company's broadcast facilities are adequate for
present purposes.
Competition: In each of its broadcasting markets, the Company's
stations compete for revenues with other network-affiliated and
independent television and radio broadcasters and with other advertising
media, such as cable television, newspapers, magazines and outdoor
advertising. The Company's broadcasting stations compete principally on
the basis of their market share, advertising rates and audience
composition.
Network programming constitutes a substantial part of the programs
broadcast on the Company's network-affiliated television stations, and the
Company's competitive position is directly affected by viewer acceptance
of network programming. Local news has been most important to a station's
success and there is a growing emphasis on other forms of local
programming as well as continuing involvement in the local community.
Page 56
Other sources of present and potential competition for the Company's
broadcasting properties include pay cable, home video and audio recorders
and video disc players, direct broadcast satellite and low-power
television. Some of these competing services have the potential of
providing improved signal reception or increased home entertainment
selection, and they are continuing development and expansion.
Regulation: The Company's television and radio stations are operated
under the authority of the Federal Communications Commission (FCC) under
the Communications Act of 1934, as amended (Communications Act), and the
rules and policies of the FCC (FCC Regulations).
Under the Communications Act, television broadcast licenses are
granted for a maximum period of five years and radio licenses are granted
for a maximum period of seven years. Television and radio broadcast
licenses are renewable upon application to the FCC and in the past usually
have been renewed except in rare cases in which a conflicting application,
a petition to deny, a complaint or an adverse finding as to the licensee's
qualifications has resulted in loss of the license. Petitions to deny
license renewal are currently pending against two of the Company's radio
facilities and two television stations, but in the Company's judgment none
of the petitions has merit. No competing applications are pending with
respect to any of the Company's stations. The Company believes it is in
substantial compliance with all applicable provisions of the
Communications Act and FCC Regulations.
FCC Regulations also prohibit concentrations of broadcasting control
and regulate network programming and syndication of programs. FCC
Regulations governing multiple ownership prohibit the common ownership or
control of most communications media serving common market areas (for
example, television and radio, except that waivers can be sought for
television and radio ownership in the top 25 markets; television and daily
newspapers; radio and daily newspapers; or television and cable television)
and limit the number of broadcast interests held by any person to a
maximum of 12 television stations (subject to certain restrictions with
respect to the size of the audience reached by the stations), 18 AM radio
stations and 18 FM radio stations.
Other matters: Gannett Broadcasting, along with CBS Radio and
Westinghouse Electric subsidiaries Group W Radio and Xetron Corporation,
have formed a partnership, USA Digital Radio, to develop in-band on-channel
AM and FM digital audio broadcasting (DAB) systems. During 1993, the
partnership substantially completed prototypes of AM and FM DAB. USA
Digital Radio's systems, along with those of competing developers, have
been submitted for testing and evaluation by the National Radio Systems
Committee. Additionally, USA Digital Radio's success is dependent on FCC
approval of its techniques for broadcasting DAB within the AM and FM radio
bands.
Additional information about the Company's television and radio
stations may be found on page 68 of this annual report.
Outdoor advertising
At the end of 1993, the Company's outdoor advertising division,
headquartered in New York City, included 12 outdoor advertising companies
operating in 17 major markets in the U.S. and most major markets in Canada,
and a printing division. The outdoor division had approximately 1,600
full-time and part-time employees at the end of 1993. The group accounted
for approximately 8% of the Company's net operating revenues in 1991, 7% in
1992 and 6% in 1993.
The Company derives its outdoor advertising revenues from leasing
space on its approximately 44,000 advertising displays. These displays fall
into four major groups: poster panels, bulletins, transit shelter displays
and other displays.
Poster panels (28% of outdoor revenues): Poster panels include
standardized posters, which are approximately 12 feet high and 25 feet
long, eight-sheet posters, which are 6 feet high and 12 feet long (also
known as junior posters) and smaller posters displayed in shopping centers
and airports. Posters are sold in packages based on daily exposure
opportunities, usually for 30-day increments. They feature lithographed
or silk-screened advertising copy, posted on the surface of the board.
Bulletins (41% of outdoor revenues): Bulletins typically are 14 feet
high and 48 feet long. They are sold on a unit basis, typically for four to 12
months. Most are rotated to a different location every 60 days.
"Permanent" bulletins, however, do not rotate. They tend to have more
viewers and are higher priced than rotating bulletins. The surface of the
board is usually hand painted by skilled company artists, computer painted
or covered with lithographed paper. The Company pioneered the use of
Superflex and Uniface, flexible vinyl faces for bulletins, which provide a
more attractive advertising surface. The flexible vinyl faces also are
compatible with new computer printing technology. Additionally, the Company
offers backlights, which are rear-illuminated units on major arterial
highways with the advertising message air-brushed, computer-painted or
silk-screened on translucent plastic. These are available in both the USA
and Canada.
Transit shelter displays (19% of outdoor revenues): These primarily
include internally illuminated 4-foot-by-5-foot posters displayed on
public transit shelters in several major cities in the U.S. and Canada.
Page 57
Other displays (12% of outdoor revenues): This category includes
poster advertising throughout the New York City subway system and on
buses in Detroit and Rochester, N.Y. Printing division revenues also are
categorized here.
Monthly advertising rates for each of these outdoor advertising
media are based on such factors as the size of the advertising display,
visibility, cost of leasing, construction and maintenance and the number of
people who have the opportunity to see the advertising message. The latter
is measured by the Traffic Audit Bureau (USA) or the Canadian Outdoor
Measurement Bureau.
Revenues: The principal source of national outdoor advertising
revenues has been the tobacco industry. In recent years, the tobacco
industry has reduced its advertising expenditures significantly. To
partially replace this business, the Company has obtained additional
advertising from packaged-goods advertisers, as well as the more
traditional sources of automotive, supermarkets, media, financial, fashion,
entertainment and issue-oriented advertising. Outdoor revenues declined
$11 million or 4% in 1993. U.S. operations again experienced a significant
loss in revenues from advertising by the tobacco industry and revenues
from Southern California operations were lower because of continuing
economic difficulties. Revenue comparisons are also affected by the sale in
August 1992 of the Company's outdoor business in Phoenix. On a pro forma
basis, outdoor ad revenues declined 2%.
The Company also formed and operates Outdoor Network, USA, which
includes 52 independent outdoor companies operating in 91 of the top 100
markets. Gannett Outdoor develops advertising nationally on behalf of the
group, providing a central source to clients for market information and
research, and providing single-invoice billing. The network's benefits are
simplicity in planning and buying the medium, proof of performance audits,
creative assistance and strengthened client service. The objective is to
bring these benefits to bear in developing new and lasting sources of
national business for network members.
Properties: In the conduct of its outdoor business, the Company
constructs advertising display structures on land or buildings owned by
the Company or leased from others. These leases are for varying terms and
generally have renewal options. At the end of 1993, the Company leased
approximately 21,000 sign locations. The Company owns approximately 600
parcels of varying sizes on which it maintains sign structures.
Advertising displays placed in public transit areas are subject to
the terms of separate contracts with various municipal authorities. These
contracts are for varying periods and require payments to the
municipalities which are generally based on a percentage of the Company's
revenue from the displays. The Company's outdoor facilities and displays
are adequate for present operations.
Competition: The Company encounters direct competition in all of its
principal outdoor advertising market areas. In most of its markets, the
Company is among the larger competitors in terms of the number of
advertising displays. The Company's outdoor operations also compete for
revenues with newspapers, magazines, television, radio and other
advertising media.
Regulation: Federal agencies from time to time propose restrictions
upon the tobacco industry and other businesses that use outdoor
advertising, which could affect the outdoor industry. A prohibition of
advertising for tobacco products in Canada was phased in over the years
1988-1990. Effective January 1, 1993, New York City regulations prohibit the
advertising of tobacco products on the city's subway system.
In many localities in which the Company operates, outdoor advertising is
the object of restrictive, and in some cases prohibitive, zoning
regulations. Management expects federal, state and local regulations to
continue to be a significant factor in the operation of the Company's
outdoor advertising business. It is not possible to predict the extent to
which such regulations could affect future earnings.
Corporate facilities
The Company leases office space for its headquarters in Arlington, Va., and
also owns data processing facilities in nearby Maryland. The capital
expenditure program for 1991, 1992 and 1993 included amounts for leasehold
improvements, land, building, furniture, equipment and fixtures for
headquarters operations. Headquarters facilities are adequate for
present operations. In early March 1994, the Company signed an agreement to
purchase 30 acres of land in Fairfax County, Va., for possible use as a
future site for corporate headquarters and perhaps other operations.
Page 58
Employee relations
On December 26, 1993, the Company and its subsidiaries had 36,500 full-time
and part-time employees. On the basis of hours worked, the Company
employed the equivalent of 32,600 full-time employees. Six of the Company's
newspapers are published together with non-Company newspapers pursuant
to joint operating agreements, and the employment numbers above include
the Company's pro-rata share of employees at those operations.
Approximately 20% of those employed by the Company and its
subsidiaries are represented by labor unions. They are represented by 162
local bargaining units affiliated with 18 international unions under
collective bargaining agreements. These agreements conform generally with
the pattern of labor agreements in the newspaper, broadcasting and
outdoor advertising industries. The Company does not engage in
industrywide or companywide bargaining. From time to time, the Company has
had strikes involving its operations, but the strikes have not significantly
affected its operations. The Company strives to maintain good
relationships with its employees and has been successful in doing so.
The Company provides competitive group life and medical insurance
programs for full-time employees at each location. The Company pays a
substantial portion of these costs. Beginning in 1990, however, most
employees began making contributions to cover a portion of the annual
increase in medical insurance cost. Virtually all of the Company's units
provide retirement or profit-sharing plans which cover eligible full-time
employees.
In 1990, the Company established a 401(k) Savings Plan
which is available to most of its employees.
Acquisitions and dispositions 1989-1993
The growth of the Company has resulted from acquisitions of
businesses, as well as from internal expansion. Its significant
acquisitions since the beginning of 1989 are shown on the next page. The
Company has disposed of several businesses during this period, which also
are listed on the next page.
Page 59
<TABLE>
Acquisitions 1989-1993
<CAPTION>
Year acquired Name Location Publication times or business
- --------------- --------------------------------- ------------------------------- -----------------------------------
<S> <C> <C> <C>
1989 Rockford Magazine Rockford, Ill. Local monthly magazine
Outdoor advertising displays New Jersey Outdoor advertising
merged into New Jersey Outdoor
1990 Great Falls Tribune Great Falls, Mont. Daily and Sunday
Ye Olde Fishwrapper Port Clinton, Ohio Monthly
The Shopper Advertising, Inc. Port Huron, Mich. Weekly
Desert Community Newspapers Palm Springs, Calif. Weeklies
North Santiam Newspapers Salem, Ore. Weeklies
Pensacola Engraving Co. Pensacola, Fla. Commercial printing
1991 The Add Sheet Columbia, Mo. Weekly advertising shopper
New Jersey Publishing Co. Paramus, N.J. Yellow-page directories
The Times Journal Co. Springfield, Va. Daily newspapers, commercial
printing and telephone data service
Gulf Breeze Publishing Gulf Breeze, Fla. Weekly
USA TODAY Sky Radio (1) Arlington, Va. Live news programming for
commercial airlines
1992 Graphic Publications, Inc. Richmond, Ind. Weekly
1993 Honolulu Advertiser Honolulu, Hawaii Daily
Tulare Advance-Register Tulare, Calif. Daily
(1) Business formed in 1991 under a partnership agreement in which Gannett Co., Inc. holds a majority interest.
</TABLE>
<TABLE>
Dispositions 1989-1993
<CAPTION>
Year sold Name Location Publication times or business
- --------------- --------------------------------- ------------------------------- ---------------------------------
<S> <C> <C> <C>
1989 Fremont Tribune Fremont, Neb. Daily
Sturgis Journal Sturgis, Mich. Daily
El Diario-La Prensa New York, N.Y. Daily and Sunday
The New Mexican Santa Fe, N.M. Daily and Sunday
1990 KNUA-FM Seattle, Wash. Radio station
1991 Arkansas Gazette Company Little Rock, Ark. Daily and Sunday
Journal Newspapers Springfield, Va. Daily
1992 Phoenix Outdoor Phoenix, Ariz. Outdoor advertising
1993 Honolulu Star-Bulletin Honolulu, Hawaii Daily
KCMO/KCMO-FM Kansas City, Mo. Radio stations
KUSA/KSD-FM St. Louis, Mo. Radio stations
WLVI-TV (2) Boston, Mass. Television station
(2) Sale pending and expected to be completed in early 1994.
</TABLE>
Page 60
<TABLE>
QUARTERLY STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>
Fiscal year ended December 26, 1993
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
--------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net operating revenues:
Newspaper advertising $465,072 $513,226 $475,509 $551,230 $2,005,037
Newspaper circulation 210,053 210,124 207,558 210,971 838,706
Broadcasting 82,876 109,017 92,207 113,104 397,204
Outdoor advertising 47,825 63,987 60,063 58,896 230,771
Other 38,904 41,415 41,195 48,389 169,903
--------------- -------------- -------------- ------------- -------------
Total 844,730 937,769 876,532 982,590 3,641,621
--------------- -------------- -------------- ------------- -------------
Operating expenses:
Cost of sales and operating
expenses, exclusive of depreciation 509,377 517,941 507,291 532,635 2,067,244
Selling, general and administrative
expenses, exclusive of depreciation 163,007 166,242 154,499 166,642 650,390
Depreciation 40,947 41,098 40,687 41,688 164,420
Amortization of intangible assets 11,279 11,404 11,114 11,418 45,215
--------------- -------------- -------------- ------------- -------------
Total 724,610 736,685 713,591 752,383 2,927,269
--------------- -------------- -------------- ------------- -------------
Operating Income 120,120 201,084 162,941 230,207 714,352
Non-operating income (expense):
Interest expense (11,045) (13,504) (13,590) (13,111) (51,250)
Other 1,492 1,848 3,429 (1,419) 5,350
--------------- -------------- -------------- ------------- -------------
Total (9,553) (11,656) (10,161) (14,530) (45,900)
--------------- -------------- -------------- ------------- -------------
Income before income taxes 110,567 189,428 152,780 215,677 668,452
Provision for income taxes 44,225 75,775 64,000 86,700 270,700
--------------- -------------- -------------- ------------- -------------
Net income $66,342 $113,653 $88,780 $128,977 $397,752
=============== ============== ============== ============= =============
Net income per share (1) $0.46 $0.78 $0.61 $0.88 $2.72
=============== ============== ============== ============= =============
(1) As a result of rounding, the total of the four quarters' earnings per share does not equal the earnings per share
for the year.
</TABLE>
Page 61
<TABLE>
QUARTERLY STATEMENTS OF INCOME
In thousands of dollars
<CAPTION>
Fiscal year ended December 27, 1992
1st Quarter(1) 2nd Quarter(1) 3rd Quarter(1) 4th Quarter Total
--------------- -------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net operating revenues:
Newspaper advertising $426,789 $487,063 $453,512 $514,750 $1,882,114
Newspaper circulation 199,193 201,296 200,739 205,865 807,093
Broadcasting 78,849 97,528 89,353 104,883 370,613
Outdoor advertising 52,059 66,770 62,485 59,999 241,313
Other 36,231 39,482 42,520 49,591 167,824
--------------- -------------- --------------- ------------- -------------
Total 793,121 892,139 848,609 935,088 3,468,957
Operating expenses:
Cost of sales and operating
expenses, exclusive of depreciation 488,961 503,876 506,568 525,196 2,024,601
Selling, general and administrative
expenses, exclusive of depreciation 149,925 163,108 151,574 164,595 629,202
Depreciation 40,484 39,851 39,940 36,967 157,242
Amortization of intangible assets 10,140 10,138 10,110 10,241 40,629
--------------- -------------- --------------- ------------- -------------
Total 689,510 716,973 708,192 736,999 2,851,674
--------------- -------------- --------------- ------------- -------------
Operating Income 103,611 175,166 140,417 198,089 617,283
Non-operating income(expense):
Interest expense (14,450) (14,009) (11,424) (10,934) (50,817)
Other 1,580 1,899 2,513 1,822 7,814
--------------- -------------- --------------- ------------- -------------
Total (12,870) (12,110) (8,911) (9,112) (43,003)
--------------- -------------- --------------- ------------- -------------
Income before income taxes 90,741 163,056 131,506 188,977 574,280
Provision for income taxes 36,190 65,220 52,390 74,800 228,600
--------------- -------------- --------------- ------------- -------------
Income before cumulative effect of
accounting principle changes 54,551 97,836 79,116 114,177 345,680
Cumulative effect on prior years of
accounting principle changes for:
Income taxes 34,000 - - - 34,000
Retiree health and life insurance benefits (180,000) - - - (180,000)
--------------- -------------- --------------- ------------- -------------
Total (146,000) - - - (146,000)
--------------- -------------- --------------- ------------- -------------
Net income (loss) ($91,449) $97,836 $79,116 $114,177 $199,680
=============== ============== =============== ============= =============
Earnings per share:
Before cumulative effect of
accounting principle changes $0.38 $0.68 $0.55 $0.79 $2.40
Cumulative effect of accounting
principle changes (1.01) - - - (1.01)
--------------- -------------- --------------- ------------- -------------
Net income (loss) per share ($0.63) $0.68 $0.55 $0.79 $1.39
=============== ============== =============== ============= =============
(1) Restated from previously issued quarterly statements to reflect changes in accounting
principles retroactive to the first quarter of 1992.
Refer to Notes 6 and 7 of the financial statements for further discussion of these
accounting principle changes.
</TABLE>
Page 62
<TABLE>
SCHEDULES TO FORM 10-K INFORMATION
In thousands of dollars
<CAPTION>
Balance at
beginning Additions Retirements Other Balance at end
Property, plant & equipment of period at cost or sales Changes of period
- -------------------------------- -------------- ------------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec. 29, 1991
Land $92,561 $3,624 $1,970 $402 $94,617
Buildings & improvements 559,642 69,640 14,595 (1,143) 613,544
Advertising display structures 277,380 1,657 7,256 346 272,127
Machinery, equipment & fixtures 1,475,721 106,090 69,162 868 1,513,517
Construction in progress and
deposits on contracts 67,659 32,277 3 (220) 99,713
-------------- ------------------ -------------- ------------ --------------
$2,472,963 $213,288 (A)(E) $92,986 $253 (D) $2,593,518
============== ================== ============== ============ ==============
Dec. 27, 1992
Land $94,617 $8,069 $809 ($564) $101,313
Buildings & improvements 613,544 51,631 3,502 (336) 661,337
Advertising display structures 272,127 6,602 12,575 (4,009) 262,145
Machinery, equipment & fixtures 1,513,517 155,442 50,012 (171) 1,618,776
Construction in progress and
deposits on contracts 99,713 (49,212) (384) (1,114) 49,771
-------------- ------------------ -------------- ------------ --------------
$2,593,518 $172,532 (B)(E) $66,514 ($6,194) (D) $2,693,342
============== ================== ============== ============ ==============
Dec. 26, 1993
Land $101,313 $31,647 $1,284 $0 $131,676
Buildings & improvements 661,337 34,823 6,778 (279) 689,103
Advertising display structures 262,145 5,454 3,696 (1,758) 262,145
Machinery, equipment & fixtures 1,618,776 118,924 65,651 1,188 1,673,237
Construction in progress and
deposits on contracts 49,771 (9,193) 485 (1,644) 38,449
-------------- ------------------ -------------- ------------ --------------
$2,693,342 $181,655 (C)(E) $77,894 ($2,493) (D) $2,794,610
============== ================== ============== ============ ==============
Page 63
Accumulated depreciation and Balance at Additions charged
amortization of property, beginning to costs Retirements Other Balance at end
plant and equipment of period and expenses or sales Changes of period
- -------------------------------- -------------- ------------------ -------------- ------------ --------------
Dec. 29, 1991
Buildings & improvements $183,155 $25,640 $4,198 ($3,527) $201,070
Advertising display structures 112,694 14,282 4,082 187 123,081
Machinery, equipment & fixtures 704,991 118,467 42,424 3,423 784,457
-------------- ------------------ -------------- ------------ --------------
$1,000,840 $158,389 (F) $50,704 $83 (D) $1,108,608
============== ================== ============== ============ ==============
Dec. 27, 1992
Buildings & improvements $201,070 $25,793 $1,447 $2,104 $227,520
Advertising display structures 123,081 13,404 3,969 (2,043) 130,473
Machinery, equipment & fixtures 784,457 118,045 39,420 (3,024) 860,058
-------------- ------------------ -------------- ------------ --------------
$1,108,608 $157,242 (F) $44,836 ($2,963) (D) $1,218,051
============== ================== ============== ============ ==============
Dec. 26, 1993
Buildings & improvements $227,520 $26,617 $3,310 $24 $250,851
Advertising display structures 130,473 13,039 3,067 (920) 139,525
Machinery, equipment & fixtures 860,058 124,764 58,474 (383) 925,965
-------------- ------------------ -------------- ------------ --------------
$1,218,051 $164,420 (F) $64,851 ($1,279) (D) $1,316,341
============== ================== ============== ============ ==============
Notes
(A) Includes assets at acquisition net of adjustments for prior years' acquisitions $20,896
(B) Includes assets at acquisition net of adjustments for prior years' acquisitions $18,460
(C) Includes assets at acquisition net of adjustments for prior years' acquisitions $49,533
(D) Net effect of current foreign currency translation adjustment.
(E) Includes capitalized interest of $4,951 in 1992, $2,440 in 1992 and $268 in 1993.
(F) Generally the rates of depreciation range from 2.5% to 10% for buildings and improvements,
3.3% to 20% for advertising display structures and 4% to 25% for machinery, equipment and fixtures.
</TABLE>
<TABLE>
Valuation and qualifying accounts
Allowance for doubtful receivables
<CAPTION>
Balance at beginning Additions charged to Additions recorded Deductions Balance at end
of period costs and expenses upon acquisitions from reserves of period
-------------------- -------------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C> <C>
Year ended Dec. 29, 1991 $10,698 $26,122 $24,351 $12,469
Year ended Dec. 27, 1992 $12,469 $22,010 $22,238 $12,241
Year ended Dec. 26, 1993 $12,241 $20,505 $473 $19,304 $13,915
</TABLE>
<TABLE>
Supplementary income statement information
<CAPTION>
Fiscal year ended
Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991
-------------------- ------------------ ----------------
<S> <C> <C> <C>
Maintenance and repairs $45,004 $44,555 $38,851
Taxes other than payroll and income tax:
Property $20,855 $18,313 $16,365
Other 9,157 7,699 7,961
-------------------- ------------------ ----------------
$30,012 $26,012 $24,326
-------------------- ------------------ ----------------
</TABLE>
Pages 64 - 66
<TABLE>
MARKETS WE SERVE - 1993
Daily newspapers
<CAPTION>
State Circulation Circulation Circulation Joined
Territory City Newspaper Morning Afternoon Sunday Founded Gannett *
- -------------- --------------------- ------------------------------- ----------- ------------ ----------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arizona Tucson Tucson Citizen 49,570 1870 1976 (46)
California Marin County Marin Independent Journal 41,382 43,015 1861 1980 (67)
Palm Springs The Desert Sun 48,237 50,253 1927 1986 (78)
Salinas The Californian 23,333 1871 1977 (53)
San Bernardino The San Bernardino County Sun 85,623 97,961 1894 1969 (23)
Stockton The Stockton Record 54,631 60,207 1895 1977 (48)
Tulare Tulare Advance-Register 8,771 1882 1993 (83)
Visalia Visalia Times-Delta 22,772 1859 1977 (54)
Colorado Fort Collins Fort Collins Coloradoan 26,126 32,437 1873 1977 (55)
Connecticut Norwich Norwich Bulletin 33,478 38,206 1791 1981 (70)
Delaware Wilmington The News Journal 126,540 148,545 1871 1978 (61)
Florida Brevard County FLORIDA TODAY 86,138 113,355 1966 1966 (21)
Fort Myers News-Press 95,400 116,589 1884 1971 (37)
Pensacola Pensacola News Journal 63,117 84,096 1889 1969 (24)
Georgia Gainesville The Times 22,908 27,020 1947 1981 (69)
Guam Agana Pacific Daily News 25,107 22,989 1944 1971 (36)
Hawaii Honolulu Honolulu Advertiser 104,188 195,777 1856 1993 (82)
Idaho Boise The Idaho Statesman 64,291 85,685 1864 1971 (29)
Illinois Danville Commercial-News 22,539 24,997 1866 1934 (7)
Rockford Rockford Register Star 77,679 90,478 1855 1967 (22)
Indiana Lafayette Journal and Courier 38,307 44,901 1829 1971 (30)
Marion Chronicle-Tribune 20,720 25,043 1867 1971 (33)
Richmond Palladium-Item 19,687 24,988 1831 1976 (45)
Iowa Des Moines The Des Moines Register 187,294 323,235 1849 1985 (74)
Iowa City Iowa City Press-Citizen 16,310 1860 1977 (57)
Kentucky Louisville The Courier-Journal 238,079 328,472 1868 1986 (80)
Louisiana Monroe The News-Star 39,148 46,818 1890 1977 (60)
Shreveport The Times 82,244 102,923 1871 1977 (59)
Michigan Battle Creek Battle Creek Enquirer 28,185 38,011 1900 1971 (31)
Detroit The Detroit News 370,184 1873 1986 (77)
The Detroit News and Free Press 1,181,213
Lansing Lansing State Journal 70,985 95,034 1855 1971 (28)
Port Huron Times Herald 31,169 39,412 1900 1970 (25)
Minnesota St. Cloud St. Cloud Times 28,531 36,544 1861 1977 (52)
Mississippi Hattiesburg Hattiesburg American 26,254 29,195 1897 1982 (72)
Jackson The Clarion-Ledger 110,364 129,009 1837 1982 (71)
Missouri Springfield Springfield News-Leader 62,139 103,249 1893 1977 (51)
Montana Great Falls Great Falls Tribune 34,275 41,210 1885 1990 (81)
Nevada Reno Reno Gazette-Journal 66,813 84,891 1870 1977 (47)
New Jersey Bridgewater The Courier-News 49,761 54,369 1884 1927 (5)
Camden Courier-Post 87,984 98,626 1875 1959 (11)
Vineland The Daily Journal 19,275 1864 1986 (79)
New York Binghamton Press & Sun-Bulletin 70,815 91,910 1904 1943 (9)
Elmira Star-Gazette 35,654 50,383 1828 1906 (1)
Ithaca The Ithaca Journal 19,444 1815 1912 (2)
Niagara Falls Niagara Gazette 26,686 28,965 1854 1954 (10)
Poughkeepsie Poughkeepsie Journal 44,399 62,082 1785 1977 (50)
Rochester Democrat and Chronicle 137,578 258,389 1833 1928 (6)
Times-Union 67,394 1918 1918 (3)
Saratoga Springs The Saratogian 12,651 14,429 1855 1934 (8)
Utica Observer-Dispatch 53,740 67,668 1817 1922 (4)
Gannett Suburban Newspapers:
Mamaroneck The Daily Times 5,714 5,759 1879 1964 (18)
Mount Vernon The Daily Argus 7,298 9,535 1892 1964 (17)
New Rochelle The Standard-Star 11,124 12,205 1908 1964 (15)
Ossining The Citizen-Register 6,156 7,614 1847 1964 (19)
Peekskill The Star 6,414 9,117 1922 1985 (76)
Port Chester The Daily Item 9,289 10,370 1885 1964 (16)
Tarrytown The Daily News 3,668 4,399 1897 1964 (20)
West Nyack-Rockland Rockland Journal-News 41,928 53,082 1850 1964 (13)
White Plains The Reporter Dispatch 47,536 59,189 1829 1964 (12)
Yonkers The Herald Statesman 24,847 33,812 1852 1964 (14)
Ohio Chillicothe Chillicothe Gazette 16,394 1800 1977 (58)
Cincinnati The Cincinnati Enquirer 203,222 356,948 1841 1979 (63)
Fremont The News-Messenger 13,620 1856 1975 (41)
Marietta The Marietta Times 13,418 1864 1974 (40)
Port Clinton News Herald 6,183 1864 1975 (42)
Oklahoma Muskogee Muskogee Daily Phoenix
and Times-Democrat 19,139 20,686 1888 1977 (56)
Oregon Salem Statesman Journal 61,946 71,310 1851 1974 (39)
Pennsylvania Chambersburg Public Opinion 21,283 1869 1971 (27)
Lansdale The Reporter 19,005 1870 1980 (68)
North Hills North Hills News Record 27,663 27,094 1962 1976 (44)
Tarentum Valley News Dispatch 36,519 35,138 1891 1976 (43)
South Dakota Sioux Falls Argus Leader 50,707 74,477 1881 1977 (49)
Tennessee Jackson The Jackson Sun 38,899 44,187 1848 1985 (75)
Nashville The Tennessean 144,067 281,023 1812 1979 (64)
Texas El Paso El Paso Times 67,154 101,643 1879 1972 (38)
Vermont Burlington The Burlington Free Press 53,870 68,012 1827 1971 (26)
Virgin Islands St. Thomas The Virgin Islands Daily News 15,826 1930 1978 (62)
Virginia Arlington USA TODAY 2,000,821 1982 1982 (73)
Washington Bellingham The Bellingham Herald 26,994 34,484 1890 1971 (34)
Olympia The Olympian 35,357 44,248 1889 1971 (32)
West Virginia Huntington The Herald-Dispatch 41,796 49,675 1909 1971 (35)
Wisconsin Green Bay Green Bay Press-Gazette 60,964 87,265 1915 1980 (65)
Wausau Wausau Daily Herald 25,487 30,662 1903 1980 (66)
* Number in parentheses notes chronological order in which existing newspapers joined Gannett.
</TABLE>
Pages 67 and 68
<TABLE>
MARKETS WE SERVE - 1993
<CAPTION>
Operation Location and other information
- ---------------------------------------- -------------------------------------------------------------------------------
<S> <C>
Non-daily publications Weekly, semi-weekly or monthly publications in Arizona, Arkansas,
California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa,
Kentucky, Michigan, Minnesota, Mississippi, Missouri, New Jersey,
New York, Ohio, Oklahoma, Oregon, Pennsylvania, Vermont, Virginia,
Washington, West Virginia and Wisconsin
USA TODAY Headquarters: Arlington, Va.
Print sites Arlington, Texas; Atlanta; Batavia, N.Y.; Brevard County, Fla.;
Chandler, Ariz.; Chicago; Columbia, S.C.; Fort Collins, Colo.;
Fort Myers, Fla.; Gainesville, Ga.; Greensboro, N.C.; Hattiesburg,
Miss.; Kankakee, Ill.; Lansdale, Pa.; Lawrence, Kan.; Mansfield, Ohio; Marin
County, Calif.; Miramar, Fla.; Nashville, Tenn.; Norwood, Mass.; Olympia,
Wash.; Pasadena, Texas; Port Huron, Mich.; Richmond, Ind.;
Rockaway, N.J.; St. Cloud, Minn.; St. Louis; Salt Lake City; San
Bernardino, Calif.; Springfield, Va.; Tarentum, Pa.; White Plains, N.Y.
International print sites Hong Kong; London, England; Lucerne, Switzerland
Regional offices Atlanta; Boston; Buffalo, N.Y.; Charlotte, N.C.; Chicago; Cincinnati;
Cleveland; Columbus, Ohio; Dallas; Denver; Detroit; Houston; Indianapolis;
Kansas City, Mo.; Los Angeles; Milwaukee; Minneapolis-St. Paul; Miramar, Fla.;
Nashville, Tenn.; New Orleans; Orlando, Fla.; Philadelphia; Phoenix,
Ariz.; Pittsburgh; Port Washington, N.Y.; St. Louis; San Francisco; Seattle;
Springfield, Va.; Union, N.J.
Advertising offices Arlington, Va.; Atlanta; Boston; Chicago; Dallas; Detroit; Hong Kong;
London, England; Los Angeles; New York, N.Y.
USA TODAY Baseball Weekly Circulation 280,000
Editorial and advertising offices Arlington, Va.
USA WEEKEND Circulation 17.9 million in 401 newspapers
Advertising offices Chicago; Detroit; Los Angeles; New York, N.Y.
Editorial and production offices Arlington, Va.
USA TODAY Sky Radio
Broadcast studios, business/
operations offices Arlington, Va.
Advertising offices Arlington, Va.; Chicago; Los Angeles; New York, N.Y.
Gannett Direct Marketing Services, Inc. Headquarters: Louisville, Ky.
Gannett International Headquarters: New York, N.Y.
International offices Hong Kong; London, England; Singapore; Zurich, Switzerland
Products USA TODAY International Edition; USA TODAY
International/Gannett News Service
Gannett National Newspaper Sales Headquarters: New York, N.Y.
Regional offices Chicago; Dallas; Detroit; Los Angeles; Melbourne, Fla.
Gannett New Business and
Product Development Headquarters: Arlington, Va.
Gannett/USA TODAY Sports
and Information Center Headquarters: Greensboro, N.C.
Products Radio and on-line computer information services
Gannett/USA TODAY
Information Center Headquarters: Arlington, Va.
Products Telephonic information services
Gannett News Service Headquarters: Arlington, Va.
Bureaus Albany, N.Y.; Baton Rouge, La.; Columbus, Ohio; Harrisburg, Pa.;
Indianapolis; Olympia, Wash.; Sacramento, Calif; Springfield, Ill.;
Tallahassee, Fla.
Gannett Offset Headquarters: Springfield, Va.
Offset sites Atlanta; Chandler, Ariz.; Miramar, Fla.; Nashville, Tenn.;
Norwood, Mass.; Olivette, Mo.; Springfield, Va.
Gannett Outdoor Group Headquarters: New York, N.Y.
Outdoor and Transit operations Berkeley, Calif.; Chicago; Denver; Detroit; Fairfield, N.J.;
Flint, Mich.; Grand Rapids, Mich.; Houston; New Haven, Conn.;
Kansas City, Mo.; Lakewood, N.J.; Los Angeles; New York, N.Y.;
Philadelphia; Rochester, N.Y.; St. Louis; Sacramento, Calif.;
San Diego; San Francisco
Outdoor Network, USA Headquarters: New York, N.Y.
Sales offices Chicago; Detroit; Los Angeles; New York, N.Y.; San Francisco
Mediacom, Inc. Headquarters: Toronto, Ontario
Mediacom operations Mississauga, Montreal, Quebec City, Toronto, Winnipeg
and 26 other Canadian cities
Gannett Satellite Information Network Headquarters: Arlington, Va.
Gannett TeleMarketing, Inc. Headquarters: Arlington, Va.
Operations Cincinnati; Nashville, Tenn.; Silver Spring, Md.
GANNETTWORK Headquarters: New York, N.Y.
Sales offices Chicago; New York, N.Y.; San Francisco
Louis Harris & Associates
Offices New York, N.Y.; London, England; Paris, France
Telematch Headquarters: Springfield, Va.
</TABLE>
<TABLE>
MARKETS WE SERVE - 1993
<CAPTION>
**
Television Weekly Joined
State City Station Channel/Network Audience Founded Gannett *
- ---------------- --------------------- ------------ ------------------ ----------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Arizona Phoenix KPNX-TV Channel 12/NBC 972,000 1953 1979 (3)
Colorado Denver KUSA-TV Channel 9/ABC 1,249,000 1952 1979 (2)
District of
Columbia Washington WUSA-TV Channel 9/CBS 1,922,000 1949 1986 (7)
Florida Jacksonville WTLV-TV Channel 12/NBC 466,000 1957 1988 (9)
Georgia Atlanta WXIA-TV Channel 11/NBC 1,630,000 1948 1979 (1)
Massachusetts Boston WLVI-TV *** Channel 56/Ind. 1,565,000 1953 1983 (6)
Minnesota Minneapolis-St. Paul KARE-TV Channel 11/NBC 1,312,000 1953 1983 (5)
North Carolina Greensboro WFMY-TV Channel 2/CBS 594,000 1949 1988 (10)
Oklahoma Oklahoma City KOCO-TV Channel 5/ABC 542,000 1956 1979 (4)
Texas Austin KVUE-TV Channel 24/ABC 348,000 1971 1986 (8)
**
Radio Weekly Joined
State City Station Channel/Network Audience Founded Gannett *
- ---------------- --------------------- ------------ ------------------ ----------- -------- --------------
California Los Angeles KIIS 1150 Khz 30,600 1927 1979 (3)
KIIS-FM 102.7 Mhz 1,917,600 1961 1979 (1)
San Diego KSDO 1130 Khz 308,000 1947 1979 (5)
KCLX-FM 102.9 Mhz 191,300 1963 1979 (4)
Florida Tampa-St. Petersburg WDAE 1250 Khz 27,500 1922 1984 (8)
WUSA-FM 100.7 Mhz 275,400 1951 1980 (7)
Illinois Chicago WGCI 1390 Khz 280,000 1923 1979 (6)
WGCI-FM 107.5 Mhz 953,100 1959 1979 (2)
Texas Dallas KHKS-FM 106.1 Mhz 573,800 1950 1986 (11)
Houston KKBQ 790 Khz 8,000 1944 1984 (10)
KKBQ-FM 92.9 Mhz 411,900 1962 1984 (9)
* Number in parentheses notes chronological order in which existing stations joined Gannett.
** Weekly audience for television stations is number of TV households reached, according
to the November 1993 Nielsen book.
Weekly audience for radio stations is number of different listeners age 12 and up
reached, according to the Fall 1993 Arbitron book.
*** Sale pending.
</TABLE>
INFORMATION ON BACK COVER
GCI
Gannett Co., Inc. shares are traded on the New York Stock Exchange with the
symbol GCI.
The Annual Meeting
The annual meeting of shareholders will be held at 10 a.m., Tuesday,
May 3,1994, at Gannett headquarters, 1100 Wilson Boulevard, Arlington, Va.
Form 10-K
Information provided by Gannett in its Form 10-K annual report to the
Securities and Exchange Commission has been incorporated in this report.
Copies of the complete 1993 Form 10-K annual report may be obtained by writing
the Secretary, Gannett Co., Inc., 1100 Wilson Boulevard, Arlington, Va. 22234.
Transfer Agent and Registrar
Norwest Bank Minnesota, N.A.
Gannett Co., Inc. Headquarters
1100 Wilson Boulevard
Arlington, Va. 22234
703-284-6000
This annual report was written and produced by employees of Gannett.
Senior Vice President/Public Affairs and Government Relations
Mimi Feller
Director/Public Affairs and Editor/Annual Report
Sheila Gibbons
Vice President/Investor Relations
Susan Watson
Vice President/Corporate Accounting Services
George Gavagan
Manager/Consolidation Accounting
Julie Valpey
Manager/Publications
Ashley Weissenburger
Art Director
Michael Abernethy
Printing
Monroe Litho Rochester, N.Y.
Exhibit 22
LIST OF SUBSIDIARIES
UNIT STATE OF INCORPORATION
- --------------------------------------- ----------------------
CALIFORNIA NEWSPAPERS, INC. CALIFORNIA
CAPE PUBLICATIONS, INC. FLORIDA
CHILDREN'S EDITION, INC. KENTUCKY
CITIZEN PUBLISHING COMPANY ARIZONA
COMBINED COMMUNICATIONS CORPORATION ARIZONA
COMBINED COMMUNICATIONS CORPORATION OKLAHOMA
OF OKLAHOMA, INC.
COURIER BROADWAY CORP. KENTUCKY
COURIER-JOURNAL AND LOUISVILLE TIMES KENTUCKY
COMPANY
DAILY NEWS PUBLISHING CO., INC. VIRGIN ISLANDS
DES MOINES REGISTER AND TRIBUNE CO. IOWA
THE DESERT SUN PUBLISHING COMPANY CALIFORNIA
THE DETROIT NEWS, INC. MICHIGAN
DETROIT NEWSPAPER AGENCY MICHIGAN
EL PASO TIMES, INC. DELAWARE
ELEVEN-FIFTY CORP. DELAWARE
FEDERATED PUBLICATIONS, INC. DELAWARE
FORT COLLINS NEWSPAPERS INC. COLORADO
GANNETT DIRECT MARKETING SERVICES, INC. KENTUCKY
GANNETT INTERNATIONAL COMMUNICATIONS, INC. DELAWARE
GANNETT MASSACHUSETTS BROADCASTING, INC. MASSACHUSETTS
GANNETT NATIONAL NEWSPAPER SALES, INC. DELAWARE
GANNETT OUTDOOR CO. OF TEXAS TEXAS
GANNETT PACIFIC CORPORATION HAWAII
GANNETT RIVER STATES PUBLISHING CORPORATION ARKANSAS
GANNETT SATELLITE INFORMATION NETWORK, INC. DELAWARE
GANNETT SUPPLY CORPORATION DELAWARE
GANNETT T/G SUBSIDIARY, INC. CALIFORNIA
GANNETT TELEMARKETING, INC. DELAWARE
GANNETT TEXAS BROADCASTING, INC. TEXAS
GUAM PUBLICATIONS, INCORPORATED HAWAII
HAWAII NEWSPAPER AGENCY LIMITED PARTNERSHIP DELAWARE
KPNX BROADCASTING COMPANY ARIZONA
KVUE-TV, INC. MICHIGAN
LOUIS HARRIS AND ASSOCIATES, INC. DELAWARE
LOUIS HARRIS FRANCE S.A.R.L. FRANCE
LOUIS HARRIS INTERNATIONAL, INC. DELAWARE
MCCLURE NEWSPAPERS, INC. DELAWARE
MEDIACOM INC. CANADA
MEDIACOM INDUSTRIES INC. CANADA
NEW YORK SUBWAYS ADVERTISING CO., INC. ARIZONA
NEWS-PRESS PUBLISHING COMPANY FLORIDA
OKLAHOMA PRESS PUBLISHING COMPANY OKLAHOMA
OPINION RESEARCH LTD. UNITED KINGDOM
PACIFIC MEDIA, INC. DELAWARE
PACIFIC AND SOUTHERN COMPANY, INC. DELAWARE
PENSACOLA NEWS-JOURNAL INC. FLORIDA
PRESS-CITIZEN COMPANY INC. IOWA
RENO NEWSPAPERS, INC. NEVADA
ST. CLOUD NEWSPAPERS INC. MINNESOTA
SALEM COUNTY SAMPLER, INC. NEW JERSEY
SALINAS NEWSPAPERS INC. CALIFORNIA
SHELTER MEDIA COMMUNICATIONS, INC. CALIFORNIA
SHELTER MEDIA OF ARIZONA, INC. ARIZONA
SHINY ROCK MINING CORPORATION OREGON
SIOUX FALLS NEWSPAPERS INC. SOUTH DAKOTA
SOUTHLAND PUBLISHING COMPANY DELAWARE
SPEIDEL NEWSPAPERS INC. DELAWARE
THE STATESMAN-JOURNAL COMPANY OREGON
STOCKTON NEWSPAPERS INC. CALIFORNIA
THE SUN COMPANY OF SAN BERNARDINO, CALIFORNIA
CALIFORNIA
TELEVISION 12 OF JACKSONVILLE, INC. FLORIDA
THE TIMES HERALD COMPANY MICHIGAN
TNI PARTNERS ARIZONA
USA TODAY INTERNATIONAL CORPORATION DELAWARE
USA WEEKEND, INC. DELAWARE
VISALIA NEWSPAPERS INC. CALIFORNIA
WFMY TELEVISION CORP. NORTH CAROLINA
Exhibit 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-58686)
and in the Registration Statements on Form S-8 (Nos. 2-63038, 2-84088, 33-
15319, 33-16790, 33-28413, 33-35305 and 33-50813) of Gannett Co., Inc. of
our report dated January 27, 1994 appearing on page 47 of the Annual
Report to Shareholders which is incorporated in this Annual Report on Form
10-K. We also consent to the incorporation by reference of our report on
the Financial Statement Schedules, which appears on page 8 of this Form 10-
K.
s/ PRICE WATERHOUSE
PRICE WATERHOUSE
Washington, D.C.
March 21, 1994
EXHIBIT 99
<TABLE>
Descriptions of graphics presented in the paper copy of Gannett Co., Inc.'s
Annual Report for fiscal year ended December 26, 1993, are as follows:
<CAPTION>
Annual
Report
Page Table Description Representation
Reference (in body of electronic format document) on Paper Copy
- ---------- ----------------------------------------------- ------------------------------------------
<S> <C> <C>
25 common stock prices by quarters bar graph
for years 1983 through February 22, 1994,
based on NYSE-composite closing prices
28 newspaper advertising revenues in millions bar graph
for years 1984 through 1993
29 newspaper circulation revenues in millions bar graph
for years 1984 through 1993
30 broadcasting revenues in millions bar graph
for years 1984 through 1993
30 outdoor advertising revenues in millions bar graph
for years 1984 through 1993
31 net income and income before cumulative bar graph
effect of accounting principle changes
in millions
for years 1984 through 1993
32 return on sales (before cumulative effect bar graph
of accounting changes) in percentages
for years 1984 through 1993
33 return on shareholders' equity (before bar graph
cumulative effect of accounting changes)
in percentages
for years 1984 through 1993
33 dividends declared per share bar graph
for years 1984 through 1993
64 map is not in the body of the electronic Markets We Serve - 1993
format document, however, the tables on map of United States (including
pages 64 - 68 list Gannett markets served Alaska and excluding Hawaii)
designating locations of daily
newspapers, USAT print sites, television
stations, radio stations, outdoor
operations and GNS bureaus
64 inset box is not in the body of the electronic box inset of additional operations
format document, however, the tables on (outside of the continental United States
pages 64 - 68 list Gannett markets served and Alaska)
Newspapers:
Guam, Hawaii, Virgin Islands
Outdoor:
Canada
USAT print sites:
England, Hong Kong, Switzerland
</TABLE>
