<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
GANNETT CO., INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[GANNETT LOGO]
March 17, 2000
Dear Shareholder:
On behalf of your Board of Directors and management, we cordially invite
you to attend the Annual Meeting of Shareholders to be held on Tuesday, May 2,
2000, at 10:00 a.m., at the Company's headquarters, 1100 Wilson Boulevard,
Arlington, Virginia.
At this meeting you will be asked to vote for the election of three
directors, for the election of PricewaterhouseCoopers as the Company's
independent auditors for 2000 and to amend the Company's Certificate of
Incorporation. These matters are discussed in detail in the attached proxy
statement.
Your Board of Directors believes these proposals are in the best interests
of the Company and its shareholders and recommends that you vote for them.
There also is one shareholder proposal that we understand will be presented
for consideration at the meeting. The shareholder proposal is discussed in the
attached proxy statement. Your Board believes this proposal is not in the best
interest of the Company and its shareholders and recommends that you vote
against it.
It is important that your shares be represented at the meeting whether or
not you plan to attend. Please note that this year you may vote your shares by
telephone or by mail. The toll-free telephone number and instructions are shown
on the enclosed proxy card. Alternatively, you can vote by signing and dating
the proxy card and returning it in the envelope provided.
An admission ticket is required for attendance at the Annual Meeting.
Please see page 1 of the proxy statement for instructions about obtaining
tickets.
Thank you for your continued support.
Cordially,
/s/ JOHN J. CURLEY /s/ DOUGLAS H. MCCORKINDALE
John J. Curley Douglas H. McCorkindale
Chairman and Chief Executive Officer Vice Chairman and President
1100 Wilson Boulevard, Arlington, VA 22234 (703) 284-6000
<PAGE> 3
[GANNETT LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 2, 2000
------------------------
To Our Shareholders:
The Annual Meeting of Shareholders of Gannett Co., Inc. will be held at the
Company's headquarters, 1100 Wilson Boulevard, Arlington, Virginia, at 10:00
a.m. on May 2, 2000 for the following purposes:
(1) to elect three directors;
(2) to act upon a proposal to elect PricewaterhouseCoopers as the
Company's independent auditors for the 2000 fiscal year;
(3) to amend the Company's Certificate of Incorporation to increase
the authorized shares of common stock;
(4) to consider a shareholder proposal; and
(5) to transact such other business, if any, as may properly come
before the meeting.
The Board of Directors has set the close of business on March 3, 2000 as
the record date to determine the shareholders entitled to notice of and to vote
at the meeting.
YOUR VOTE IS IMPORTANT. PLEASE FOLLOW THE INSTRUCTIONS ON THE NEXT PAGE TO
VOTE USING THE TOLL-FREE TELEPHONE NUMBER ON THE ENCLOSED PROXY CARD OR BY
SIGNING AND DATING THE PROXY CARD AND RETURNING IT PROMPTLY IN THE ENCLOSED
RETURN ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY REVOKE
YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE MEETING.
By Action of the Board of Directors
/s/ THOMAS L. CHAPPLE
Thomas L. Chapple
Secretary
Arlington, Virginia
March 17, 2000
<PAGE> 4
[GANNETT LOGO]
PROXY STATEMENT
2000 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Gannett for the Annual Meeting of
Shareholders to be held on May 2, 2000.
The Board set March 3, 2000 as the record date. Shareholders of record on
that date may attend and vote at the Annual Meeting. On that date, there were
270,000,105 shares of Common Stock outstanding and entitled to vote. Each share
is entitled to one vote.
Admission to the meeting is by ticket only. We will provide each
shareholder with one admission ticket. Either you or your proxy are allowed to
use your ticket. If you are a shareholder of record and plan to attend the
meeting, please check the appropriate box on your proxy card, and return it in
the enclosed return envelope. If you vote by telephone, you can request a ticket
when you vote. If you hold shares through an intermediary, such as a bank or
broker, and you plan to attend the meeting, you will need to send a written
request for a ticket, along with proof of share ownership, such as a bank or
brokerage firm account statement or a letter from the broker, trustee, bank or
nominee holding your shares, confirming ownership, to: Secretary, Gannett Co.,
Inc., 1100 Wilson Boulevard, Arlington, VA 22234. Requests for admission tickets
will be processed in the order in which they are received and must be received
by no later than April 25, 2000. If you decide not to attend the meeting, please
return your ticket to the Secretary, Gannett Co., Inc. at the above address.
You may grant a proxy either by signing a proxy card or by telephone.
Shares represented by proxies will be voted as directed by the shareholder on
the proxy card or by telephone. Unless you direct otherwise, your shares will be
voted for the Board's nominees for director, for the election of auditors, for
the amendment of the Certificate of Incorporation and against the shareholder
proposal. If you deliver a proxy by mail or by telephone, you have the right to
revoke it in writing (by another proxy bearing a later date), by phone (by
another call at a later date), by attending the meeting and voting in person, or
by notifying the Company before the meeting that you want to revoke it.
If you participate in the Company's Dividend Reinvestment or 401(k) Plans,
your Gannett stock in those plans can be voted on the proxy card accompanying
this Proxy Statement or by telephone. If no instructions are given by you,
shares held in the Dividend Reinvestment Plan will not be voted. All shares in
the 401(k) Plan for which no instructions are received will be voted by the
trustee of the 401(k) Plan in the same proportion as shares for which the
trustee receives instructions.
This Proxy Statement and the enclosed proxy card are being furnished to
shareholders on or about March 17, 2000.
<PAGE> 5
PROPOSAL 1--ELECTION OF DIRECTORS
YOUR BOARD
The Board of Directors is composed of 9 directors, but following the
retirement discussed below, its size will be reduced to 8 directors. The By-laws
of the Company provide that each director must own at least one thousand shares
of Gannett stock, and each director meets or exceeds this requirement. The Board
is divided into three classes, as equal in number as possible.
The Board of Directors conducts its business through meetings of the Board
and its committees. The Management Continuity Committee, the Executive
Compensation Committee, the Audit Committee and the Public Responsibility and
Personnel Practices Committee are four of those committees.
The Management Continuity Committee develops long-range management
succession plans and recommends to the Board candidates for nomination as
directors and for election as officers. In making recommendations for directors
for the 2001 Annual Meeting, the Committee will consider any written suggestions
of shareholders received by the Secretary of the Company by February 7, 2001.
The Committee members are Drew Lewis, Chair, H. Jesse Arnelle, Meredith A.
Brokaw and John J. Curley. This Committee met 5 times during 1999.
The Executive Compensation Committee makes recommendations concerning the
compensation and benefits of elected officers and senior executives and
administers the Company's executive incentive plans. The Committee members are
Stuart T.K. Ho, Chair, Samuel J. Palmisano and Karen Hastie Williams. None of
the members of the Committee is an employee of the Company. This Committee met 5
times during 1999.
The Audit Committee reviews the Company's auditing practices and procedures
and recommends independent auditors to be elected by the shareholders. The Audit
Committee members are Karen Hastie Williams, Chair, Stuart T.K. Ho, Drew Lewis,
Josephine P. Louis and Samuel J. Palmisano. None of the members of the Committee
is an employee of the Company. This Committee met 3 times during 1999.
The Public Responsibility and Personnel Practices Committee monitors the
Company's performance in meeting its obligations of fairness in internal and
external matters and under its equal employment opportunity programs. The
Committee's members are Josephine P. Louis, Chair, H. Jesse Arnelle and Meredith
A. Brokaw. None of the members of the Committee is an employee of the Company.
This Committee met once during 1999.
At each Annual Meeting of Shareholders, one class of directors is elected
for a three-year term. The Board of Directors held 7 meetings during 1999, and
all of the directors attended at least 75% of the total meetings of the Board
and any committee on which they served, except Mrs. Williams who attended 14 of
a total of 19 Board and committee meetings.
NOMINEES
The Board intends to nominate the three persons named below for election
this year. All three nominees are currently directors. If they are elected,
their term will run until the Annual Meeting in 2003 or until their successors
are elected. The Company's By-laws provide that a director must retire on or
before the annual meeting following his or her 70th birthday or, in the case of
directors who are also employees, his or her 65th birthday. Josephine P. Louis
reached age 70 earlier this year and will retire from the Board at this meeting.
Drew Lewis, if elected this year, would retire at the Annual Meeting in 2002, as
he turns 70 after next year's Annual Meeting.
The Board believes that all the nominees will be available and able to
serve as directors. If any nominee is unable to serve, the Board may do one of
three things. The Board may recommend a
2
<PAGE> 6
substitute nominee, reduce the number of directors to eliminate the vacancy, or
fill the vacancy later. The shares represented by all valid proxies may be voted
for the election of a substitute if one is nominated.
The three nominees with the highest number of votes will be elected. If a
shareholder, present in person or by proxy, withholds a vote from one or more
directors, the shareholder's shares will not be counted in determining the votes
for those directors. If a shareholder holds shares in a broker's account and has
given specific voting instructions, the shares will be voted as the shareholder
directed. If no instructions are given, under New York Stock Exchange rules the
broker may decide how to vote on the Board nominees.
The principal occupations and business experience of the management
nominees and of the continuing directors are described below.
THE FOLLOWING HAVE BEEN NOMINATED FOR ELECTION AT THE 2000 ANNUAL MEETING:
H. JESSE ARNELLE
Mr. Arnelle, 66, is of counsel to Womble, Carlyle, Sandridge & Rice,
Winston-Salem, North Carolina. He was senior partner at the law firm of Arnelle,
Hastie, McGee, Willis & Greene from 1985 to 1995, and was of counsel to the firm
from 1995 to 1997. He is the Immediate Past Chairman of the Board of Trustees of
Pennsylvania State University and is a director of FPL Group, Inc., Textron
Corporation, Eastman Chemical Co., Armstrong World Industries, Waste Management,
Inc. and Union Pacific Resources Group, Inc. He has been a director since March,
1999.
DREW LEWIS
Mr. Lewis, 68, is the former Chairman and Chief Executive Officer of Union
Pacific Corporation. He served as the United States Secretary of Transportation
from 1981 to 1983. He is a director of Union Pacific Resources Group Inc.,
American Express Company, Millenium Bank, and the FPL Group, Inc. He has been a
director of Gannett since 1995.
KAREN HASTIE WILLIAMS
Ms. Williams, 55, is a Partner at the law firm of Crowell & Moring,
Washington, D.C. Ms. Williams is a director of Crestar Financial Services
Corporation, Continential Airlines, Inc., Fannie Mae, and Washington Gas Light
Company. She has been a director since 1997.
THE FOLLOWING DIRECTORS ARE SERVING ON THE BOARD FOR A TERM THAT ENDS AT
THE 2001 ANNUAL MEETING:
STUART T.K. HO
Mr. Ho, 64, is Chairman of the Board and President of Capital Investment of
Hawaii, Inc. Mr. Ho is a director of Aloha Airgroup, Inc. and Pacific Century
Financial Corporation. He is also a trustee of the College Retirement Equities
Fund and a trustee of a number of mutual funds in the family of TIAA-CREF
Institutional Mutual Funds. He has been a director of the Company since 1984.
DOUGLAS H. MCCORKINDALE
Mr. McCorkindale, 60, is Vice Chairman and President of Gannett. He was
Vice Chairman and Chief Financial and Administrative Officer from 1985 to 1997.
He has served the Company in various other executive capacities since 1971. He
is a director of Continental Airlines, Inc. and Global Crossing Ltd. and a
director or trustee of a number of investment companies in the family of
Prudential Mutual Funds. He has been a director of Gannett since 1977.
3
<PAGE> 7
THE FOLLOWING DIRECTORS ARE SERVING ON THE BOARD FOR A TERM THAT ENDS AT
THE 2002 ANNUAL MEETING:
MEREDITH A. BROKAW
Mrs. Brokaw, 59, is the founder of Penny Whistle Toys, Inc., in New York
City, and is the author of children's books. She is a director of Conservation
International, Washington, D.C. and Women's First Health Care. She has been a
director of Gannett since 1983.
JOHN J. CURLEY
Mr. Curley, 61, is Chairman and Chief Executive Officer of Gannett. He was
Chairman, President and Chief Executive Officer from 1989 to 1997, President and
Chief Executive Officer of the Company from 1986 to 1989 and President and Chief
Operating Officer from 1984 to 1986. He has served the Company in various other
executive capacities since 1983 and has been a director since 1983.
SAMUEL J. PALMISANO
Mr. Palmisano, 48, is Senior Vice President and Group Executive for IBM
Enterprise Systems Group and serves on IBM's Corporate Executive Committee. He
was Senior Vice President and Group Executive for IBM's Personal Computer
Company from 1997 to 1998. He held various other senior executive positions
since 1994 with responsibility for IBM's worldwide strategic outsourcing
business. He has been a director of Gannett since 1998.
SECURITIES OWNED BY GANNETT MANAGEMENT
The following table shows the number of shares of Gannett common stock
beneficially owned by all directors and by the five most highly compensated
executive officers. The table is correct as of March 3, 2000:
<TABLE>
<CAPTION>
NAME OF OFFICER OR DIRECTOR TITLE SHARES OWNED
--------------------------- ----- ------------
<S> <C> <C>
John J. Curley......................... Chairman and CEO 1,745,712
Douglas H. McCorkindale................ Vice Chairman and President 1,475,526
Gary L. Watson......................... President/Newspaper Division 309,329
Cecil L. Walker........................ President/Broadcasting Division 131,939
Thomas Curley.......................... Senior Vice
President/Administration, and
President and Publisher, USA
TODAY 190,570
H. Jesse Arnelle....................... Director 1,046
Meredith A. Brokaw..................... Director 11,875
Stuart T.K. Ho......................... Director 18,199
Drew Lewis............................. Director 12,000
Josephine P. Louis..................... Director 116,130
Samuel J. Palmisano.................... Director 1,161
Karen H. Williams...................... Director 1,000
5,466,458
All directors and executive officers as
a group (37 persons including those
named above).........................
</TABLE>
Each person listed owns less than 1% of Gannett's outstanding shares. All
directors and executive officers as a group beneficially owned 5,466,458 shares
on March 3, 2000. This represents 2% of the outstanding shares. The following
shares are included because they may be acquired under stock options by May 3,
2000: Mr. John J. Curley--1,301,250; Mr. McCorkindale--1,036,250; Mr.
Watson--253,540; Mr. Walker--87,455; Mr. Thomas Curley--142,065; all executive
officers as a group--3,905,890. For all shares owned, each director or executive
officer possesses sole voting power and sole investment power, except for Mr.
Ho, who shares investment and voting power with respect to 2,000 shares held in
trust.
4
<PAGE> 8
Some shares have not been listed above because the director or executive
officer has disclaimed beneficial ownership. Ownership of the following shares
is disclaimed because they are held in the names of family members or in trust:
Mr. McCorkindale--874; Mr. Watson--24; all directors and executive officers as a
group--41,145.
Also included among the shares listed above are the following shares which
are held for individual deferred compensation accounts by The Northern Trust
Company, as Trustee of the Gannett 1987 Deferred Compensation Plan: Mr.
McCorkindale--76,316; Mr. Watson--16,422; Mr. Walker--15,994; Mr. Thomas
Curley--13,022; Mr. Arnelle--38; Mrs. Brokaw--9,875; Mr. Ho--15,629; Mr.
Palmisano--161; all directors and executive officers as a group--271,916.
The shares reported above do not include 1,242,254 shares owned on March 3,
2000 by the Gannett Retirement Plan Trust. The following officers of the Company
serve on the Benefit Plans Committee, which has the power to direct the voting
of those shares: John J. Curley, Douglas H. McCorkindale, Richard L. Clapp
(Senior Vice President, Human Resources), Larry F. Miller (Executive Vice
President and Chief Financial Officer), and Gracia C. Martore (Treasurer and
Vice President/Investor Relations).
COMPENSATION OF DIRECTORS
The Company pays its directors an annual fee and meeting fees. The annual
fee is $45,000. Each director receives $1,500 for each Board meeting attended.
Each committee chair also receives an annual fee of $5,000 and each committee
member, including the chair, receives $1,000 for each committee meeting
attended. Directors who are employees of the Company receive no director fees.
Directors may elect to defer their fees under the 1987 Deferred Compensation
Plan, which provides for eight investment options, including mutual funds and a
Gannett Common Stock fund.
In 1987, the Company established a Retirement Plan for Directors in which
non-employee members of the Board of Directors could participate. In 1996, the
Board terminated this Plan as to any new directors. The annual benefit under the
Plan is equal to a percentage of the director's highest annual compensation
during the ten years of service preceding the director's retirement from the
Board as follows: 10 years or more, 100%; nine years, 90%; eight years, 80%;
seven years, 70%; six years, 60%; five years, 50%; and less than five years, 0%.
The annual benefit will be paid each quarter for 10 years except for lump sum
payments in the event of death.
COMPENSATION OF GANNETT MANAGEMENT
The Executive Compensation Committee (the "Committee") of the Board of
Directors is responsible for Gannett's compensation and stock ownership programs
for executive officers. The Committee is composed entirely of independent
outside directors. The following is the Committee's report on its compensation
decisions in 1999:
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
COMPENSATION POLICY: PAY FOR PERFORMANCE
The Executive Compensation Committee continues to place heavy emphasis on
the principle of pay for performance.
One important aspect of pay for performance is the Committee's continued
emphasis on long-term stock compensation, which is consistent with the
Committee's policy of tying the interests of the senior executives closely with
those of the Company's shareholders and creating a greater incentive for key
executives to manage the Company so as to increase shareholder value.
5
<PAGE> 9
Stock compensation includes long-term awards under the 1978 Executive
Long-Term Incentive Plan, payment of 25% of an executive's bonus in Gannett
stock, and minimum stock ownership guidelines for all executive officers.
THE ELEMENTS OF COMPENSATION AT GANNETT
The compensation program for executive officers is composed of three
elements: salaries, annual bonuses under the Company's Executive Incentive Bonus
Plan, and long-term stock awards under the 1978 Executive Long-Term Incentive
Plan.
These elements of compensation are designed to provide incentives to
achieve both short-term and long-term objectives and to reward exceptional
performance. Salaries and bonuses result in immediate pay for performance, while
the value of stock awards depends upon long-term results. These elements of
compensation are discussed in detail below.
This year, the Committee reaffirmed the following Compensation Policy which
was originally adopted in 1992 and which guides the Committee in its
compensation decisions:
Compensation Policy
The Gannett Board of Directors' Executive Compensation Committee has in
place a compensation program which it believes to be fair to employees and
shareholders and externally competitive and reasonable.
The program is designed to attract, motivate, reward and retain the
broad-based management talent required to achieve corporate objectives and
increase shareholder value. It consists of cash compensation, including
salary and bonus, to reward short-term performance, and long-term stock
awards, including stock incentive rights and stock options, to promote
long-term results.
The Executive Compensation Committee believes that management should
benefit together with shareholders as the Company's stock increases in
value.
To encourage growth in shareholder value, stock options and, except for
certain officers and key executives, stock incentive rights are granted to
key management personnel who are in a position to make a substantial
contribution to the long-term success of the Company. These stock awards
mature and grow in value over time and for that reason represent
compensation which is attributable to service over a period of years. This
focuses attention on managing the Company from the perspective of an owner
with an equity stake in the business.
In making its compensation decisions, compensation comparisons are made
with companies Gannett's size and with companies in news, information and
communications. The Executive Compensation Committee reviews the Company's
and its competitors' earnings to determine where Gannett falls with regard
to the group. The comparison spans one to four years, the same length of
time as stock incentive rights and stock options vest. How the Company's
stock has performed over a similar period of time is also reviewed and
taken into account in the overall compensation plan.
A job grading system is used to make equitable grants. At the lower end of
the management grades, more emphasis is placed on cash and stock incentive
rights with the bonus target increasing through the grades. Options are
given in larger amounts at higher grade levels because these performers can
more directly influence long-term results.
COMPENSATION DECISIONS IN 1999
In 1999, the Committee applied the Compensation Policy and continued to
emphasize the important link between the compensation of its executive officers
and the Company's performance
6
<PAGE> 10
relative to its business objectives and its competitors' performance. The
Company's material business objectives are increasing shareholder value,
performance against budget, product quality and employee development.
In making its compensation decisions, the Committee considered the
Company's performance in the following areas: earnings per share, operating
income as a percentage of sales, return on assets, return on equity, operating
cash flow, stock price, and market value. In addition, the Committee considered
management's recommendations for individual compensation awards. The Committee
also compared the Company's performance to that of its competitors and noted the
Company's record profits, revenues and earnings per share. Companies with
comparable revenues or profits in other industries also were surveyed to ensure
that executive compensation was competitive in the overall marketplace. The
Committee believes that the Company should compensate its executives better than
its competitors in order to continue to attract and retain the most talented
people. (References to "competitors" are to the peer group companies named on
page 11.)
While the Committee considered these individual and Company performance
factors in making individual compensation decisions, the Committee applied its
own subjective good judgment in making final determinations.
In 1999, the Committee continued to emphasize key executives' ownership of
Gannett common stock as a component of their compensation. The Committee
continued to oversee the executive share ownership guidelines for the five
highest-paid officers and their ownership of Gannett common stock equal to three
times their salary range midpoint and for other key executives and their
ownership of Gannett common stock equal to their salary range midpoint. All of
these officers and key executives exceed these stock ownership guidelines, with
the exception of certain executives who recently became subject to these
guidelines.
The Committee took into account the deductibility of compensation
expenditures under section 162(m) of the Internal Revenue Code. The Committee
does not believe that rigid compliance with these tax law requirements is always
consistent with sound executive compensation practices intended to improve
shareholder value. $2,102,700 of Chairman and Chief Executive Officer John J.
Curley's 1999 compensation and $842,100 of Vice Chairman and President Douglas
H. McCorkindale's 1999 compensation was non-deductible for income tax purposes
under Section 162(m). The Committee anticipates that future compensation of
certain key executives will include some amounts that likewise are not
deductible.
BASE SALARIES: TO ATTRACT AND RETAIN MANAGEMENT TALENT
Base salaries are designed to help attract and retain management talent.
They are derived in part from salary range guidelines developed for each
position in accordance with the Company's Compensation Policy. The salary ranges
are periodically reviewed and compared to the salaries paid for comparable
positions by the Company's competitors and with other companies of comparable
size in the media industry. Companies with comparable revenues or profits in
other industries are also surveyed to ensure that salary ranges are competitive
in the overall marketplace.
Other factors used to establish competitive salary ranges include internal
job values, as determined by senior management, and the state of the economy in
the Company's markets. The Company is significantly larger than its competitors
and in 1999 had record profits, revenues and earnings per share. Those factors
and general compensation practices in the media industry have led the Company to
place its management salaries above the median for the comparative companies.
In establishing salaries for executive officers, the Committee considered
the Company's performance, individual performance and experience, and the chief
executive officer's recommen-
7
<PAGE> 11
dations. The most important factor, however, was the Committee members'
judgments about the appropriate level of salary to motivate and reward
individual executives. The salaries for the five highest paid officers of the
Company, including the chief executive officer, are as follows:
<TABLE>
<CAPTION>
NAME 1998 SALARY 1999 SALARY
---- ----------- -----------
<S> <C> <C>
John J. Curley............................... $900,000 $1,000,000
Douglas H. McCorkindale...................... $800,000 $ 900,000
Gary L. Watson............................... $525,000 $ 560,000
Cecil L. Walker.............................. $440,000 $ 475,000
Thomas Curley................................ $420,000 $ 450,000
</TABLE>
Mr. Curley and Mr. McCorkindale have employment contracts, described more
fully on pp. 14 and 15, which provide for minimum salary levels but which had no
other impact on the Committee's deliberations.
EXECUTIVE INCENTIVE BONUS PLAN: TO MOTIVATE YEAR-TO-YEAR
Annual bonuses paid under the Executive Incentive Bonus Plan focus
performance, motivate executive officers and reward them for good performance.
The goal of the Executive Incentive Bonus Plan is to reward higher performing
operating units and individuals with a greater percentage of the total bonus
fund available. Bonus amounts can be and are quite volatile. Bonuses are
determined by an individual performance rating that is applied to a potential
bonus range established as a percentage of salary.
The bonuses for 1999 were determined on the basis of individual performance
in the areas of profit, product and people and, depending on the executive's
responsibilities, the performance of the executive's business unit and/or the
Company's overall performance. First, division performance was evaluated, and
the available bonus fund was allocated by division. Second, each operating
unit's performance was assessed, followed by individual performance evaluations
conducted by senior management. Individual bonus amounts then were determined.
The Committee's review of the bonuses was subjective, based on its knowledge of
the Company, its regular contact with the executives throughout the year and a
review of performance. No relative ranking of these various factors was applied.
In furtherance of the Committee's goal of increasing the stock ownership by
key executives, 25% of the bonuses for 1999 were paid to them in the form of
Gannett common stock. This continues a practice established in 1994. The pre-tax
value of the bonuses awarded to the five highest paid officers of the Company
are as follows:
<TABLE>
<CAPTION>
1998 BONUS 1999 BONUS
----------------------- -----------------------
NAME CASH GCI SHARES CASH GCI SHARES
---- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
John J. Curley............... $1,125,000 5,763 $1,500,000 7,952
Douglas H. McCorkindale...... $1,068,000 5,475 $1,293,750 6,858
Gary L. Watson............... $ 356,250 1,825 $ 412,500 2,186
Cecil L. Walker.............. $ 315,000 1,613 $ 356,250 1,888
Thomas Curley................ $ 300,000 1,536 $ 356,250 1,888
</TABLE>
LONG-TERM STOCK INCENTIVE PLAN: TO PROMOTE LONG-TERM GROWTH
Long-term stock awards under the 1978 Executive Long-Term Incentive Plan
are based on the performance of Gannett common stock and are designed to align
the executives' interests with those of the Company's shareholders. They are
granted to key executives who are in a position to make a substantial
contribution to the long-term success of the Company, so as to promote the
8
<PAGE> 12
long-term objectives of the Company. These stock awards may grow in value over
time and for that reason represent compensation which is attributed to service
over a period of years.
It is the Committee's view that executive officers should benefit together
with shareholders as the Company's stock increases in value. Stock awards
successfully focus executives' attention on managing the Company from the
perspective of an owner with an equity stake in the business.
In recent years, the Committee has used two kinds of long-term stock
awards: non-qualified stock options and stock incentive rights ("SIRs"). A
non-qualified stock option is the right to purchase shares of common stock of
the Company within a fixed period of time (eight years for grants through 1995
and ten years thereafter) at the fair market value on the date of grant. A stock
incentive right is the right to receive shares of common stock of the Company
conditioned on continued employment throughout a specified period (typically
four years). Stock incentive rights are not awarded to most executive officers.
The Committee decides whether to grant individual long-term stock awards
and the amount of the awards. Long-term stock awards are based on the grade
level of the executive, after an annual examination of the competitive
marketplace. The Company evaluated the competitive marketplace by examining the
Company's competitors and by using a Towers Perrin Survey of Media Companies. As
is the case with annual bonuses, the Committee relies in large part on the
recommendations of senior management as to the appropriate level of individual
awards to lower level executives.
Long-term awards are not automatically awarded to each executive each year.
Awards are based on past and expected performance as subjectively evaluated by
management in making recommendations and by the Committee in approving them.
Executives who can more directly influence the overall performance of the
Company are the principal recipients of long-term awards.
The following chart shows the number of stock options awarded to the five
highest paid officers of the Company, including the chief executive officer:
<TABLE>
<CAPTION>
1998 1999
NAME OPTIONS OPTIONS
---- ------- -------
<S> <C> <C>
John J. Curley.......................................... 225,000 275,000
Douglas H. McCorkindale................................. 175,000 225,000
Gary L. Watson.......................................... 82,500 84,000
Cecil L. Walker......................................... 49,500 68,000
Thomas Curley........................................... 38,500 53,000
</TABLE>
CHIEF EXECUTIVE OFFICER COMPENSATION
As it does each year, the Committee thoroughly reviewed the compensation of
John J. Curley, Chairman and Chief Executive Officer of the Company and its
highest compensated officer. In determining Mr. Curley's compensation, the
Committee reviewed the performance of the Company and its earnings per share,
return on assets, return on equity, operating cash flow, operating income as a
percent of sales, stock price, and market value. For the 1999 fiscal year,
diluted earnings per share from continuing operations, excluding a net
non-operating gain from an exchange of television stations, increased 14.9%,
from $2.74 to $3.15. Operating income from continuing operations as a percent of
sales increased from 28.4% to 29.7%. In addition, the Company's stock price,
excluding dividends, increased 26.4%, from $64.50 to $81.56. The Company's peer
group, consisting of the S&P Publishing/Newspaper Index and the S&P Publishing
Index, excluding dividends, increased 28.6% and the S&P 500 Index, excluding
dividends, increased 19.5%. Cumulatively, over the last five years, excluding
dividends, the Company's stock price increased 206.3%, the peer group increased
194.6% and the S&P 500 Index increased 219.9 %. In 1999, the Company's total
market value increased from $18.0 billion to $22.7 billion. Each of these
factors was
9
<PAGE> 13
subjectively evaluated by the Committee members without giving particular weight
to any one or more factors.
The Committee concluded that 1999 was another year of record revenues and
earnings for the Company, and Mr. Curley's bonus and salary reflected these
results.
To assess the competitiveness of Mr. Curley's compensation, the Committee
surveyed the compensation levels of chief executive officers of the Company's
competitors and of companies with revenues or profits comparable to that of the
Company. Mr. Curley's compensation was above the median for the chief executive
officers surveyed. The Committee decided that the level of Mr. Curley's
compensation is appropriate given the Company's size, its performance and the
industries in which it operates. As a general matter, media industry companies,
particularly broadcasting companies, tend to compensate executives at a higher
level than industrial or commercial enterprises. In particular, the Committee
noted that the Company's revenue is significantly larger than that of its
competitors and its net income and earnings per share set new records.
In recognition of Mr. Curley's superior performance and consistent with the
Committee's goal of increasing the ownership of Gannett Common Stock by key
officers as discussed above, the Committee awarded Mr. Curley 275,000 stock
options in December 1999. It is the Committee's view that the award of these
stock options is an effective way of continuing to tie Mr. Curley's financial
interests to those of the Company's shareholders, since the value of these stock
options is directly linked to increases in shareholder value. Unless the price
of the Company's stock increases, his stock options will be valueless.
In short, the Committee believes that the Company's performance, Mr.
Curley's performance, and the competitive market warrant the compensation
package approved for him.
Executive Compensation Committee
Stuart T.K. Ho, Chair
Samuel J. Palmisano
Karen Hastie Williams
10
<PAGE> 14
COMPARISON OF SHAREHOLDER RETURN
The following graph compares the performance of the Company's Common Stock
during the period December 31, 1994 to December 31, 1999 with the S&P 500 Index
and a "peer group" combining the companies on the S&P Publishing/Newspaper Index
(Dow Jones & Co., Inc., Gannett Co., Inc., Knight-Ridder, Inc., The New York
Times Company, Times Mirror Company, and Tribune Company) and on the S&P
Publishing Index (The McGraw-Hill Companies, Inc. and Meredith Corporation).
The S&P 500 Index includes 500 U.S. companies in the industrial,
transportation, utilities and financial sectors and is weighted by market
capitalization. The S&P Publishing/Newspaper Index and the S&P Publishing Index
also are weighted by market capitalization.
The graph depicts the results of investing $100 in the Company's Common
Stock, the S&P 500 Index, and the peer group at closing prices on December 31,
1994. It assumes that dividends were reinvested quarterly with respect to the
Company's Common Stock, daily with respect to the S&P 500 Index and monthly with
respect to the S&P Publishing/Newspaper Index and the S&P Publishing Index.
<TABLE>
<CAPTION>
GANNETT CO., INC. S&P 500 INDEX PEER GROUP
----------------- ------------- ----------
<S> <C> <C> <C>
Dec 1994 100.00 100.00 100.00
Dec 1995 118.14 137.58 130.42
Dec 1996 147.04 169.17 157.81
Dec 1997 246.29 225.60 242.98
Dec 1998 260.14 290.08 259.64
Dec 1999 332.78 351.12 340.56
</TABLE>
11
<PAGE> 15
SUMMARY COMPENSATION TABLE
The following table provides a summary of compensation paid to the CEO and
the four other most highly compensated executive officers of the Company for
services rendered to the Company over the past three fiscal years.
<TABLE>
<CAPTION>
LONG-
TERM
COMPEN-
SATION
ANNUAL COMPENSATION AWARDS(3)
---------------------------------------- ----------
OTHER
ANNUAL SECURITIES ALL OTHER
COMPEN- UNDERLYING COMPEN-
NAME AND SALARY BONUS(1) SATION(2) OPTIONS SATION(4)
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
------------------ ---- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
John J. Curley..................................... 1999 1,000,000 2,000,000 4,800 275,000 97,928
(Chairman and CEO) 1998 900,000 1,500,000 6,866 225,000 92,408
1997 900,000 1,250,000 4,796 170,000 77,365
Douglas H. McCorkindale............................ 1999 900,000 1,725,000 8,608 225,000 70,974
(Vice Chairman and President) 1998 800,000 1,425,000 12,883 175,000 60,768
1997 750,000 1,175,000 11,924 140,000 43,141
Gary L. Watson..................................... 1999 560,000 550,000 4,800 84,000 36,709
(President/Newspaper Division) 1998 525,000 475,000 8,557 82,500 34,628
1997 500,000 400,000 6,298 55,600 26,494
Cecil L. Walker.................................... 1999 475,000 475,000 5,187 68,000 41,245
(President/Broadcasting Division) 1998 440,000 420,000 4,800 49,500 35,973
1997 415,000 350,000 4,200 33,700 23,339
Thomas Curley(5)................................... 1999 450,000 475,000 4,800 53,000 26,252
(Senior Vice President/Administration of Gannett 1998 420,000 400,000 5,455 38,500 23,886
and President & Publisher USA TODAY) 1997 375,000 335,000 4,977 28,200 15,171
</TABLE>
- ---------------
(1) Bonus awards may be in the form of cash, deferred cash or shares of Gannett
Common Stock. Bonuses to executive officers were paid 25% in Gannett Common
Stock and 75% in cash or deferred cash.
(2) This column includes amounts paid by the Company under the Medical
Reimbursement Plan and amounts paid in cash to reimburse the five named
officers for the tax impact of certain perquisites.
(3) Under the Company's 1978 Executive Long-Term Incentive Plan, stock awards in
the form of stock options, alternate appreciation rights, performance bonus
units, and option surrender rights may be granted to key management
personnel who are in a position to make a substantial contribution to the
long-term success of the Company.
(4) This column includes the annual premiums paid by the Company on life
insurance policies which are individually owned by the five named officers,
as follows: John J. Curley--$93,128; Mr. McCorkindale--$66,174; Mr.
Watson--$31,909; Mr. Walker--$36,445; and Thomas Curley--$21,452. The column
also includes a matching contribution of $4,800 in Gannett Common Stock
received by each of the five named officers under its 401(k) plan.
(5) John J. Curley and Thomas Curley are brothers.
12
<PAGE> 16
OPTION GRANT TABLE
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO OR BASE
GRANTED EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME (#) IN FISCAL YEAR ($/SH) DATE PRESENT VALUE ($)
---- ---------- -------------- -------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
John J. Curley................... 275,000 9.57% $74.50 12/07/09 $6,886,000
Douglas H. McCorkindale.......... 225,000 7.83% $74.50 12/07/09 $5,634,000
Gary L. Watson................... 84,000 2.92% $74.50 12/07/09 $2,103,360
Cecil L. Walker.................. 68,000 2.37% $74.50 12/07/09 $1,702,720
Thomas Curley.................... 53,000 1.84% $74.50 12/07/09 $1,327,120
</TABLE>
This table shows stock options awarded to the five named officers in 1999.
Stock options vest in 25% increments each year after the date of grant.
Accordingly, 25% of the stock options granted in the last fiscal year may be
exercised on December 7, 2000, 50% on December 7, 2001, 75% on December 7, 2002,
and 100% on December 7, 2003. Certain executive officers may transfer stock
options to family members. For each stock option granted last year, an option
surrender right ("OSR") was granted in tandem. In the event of a change in
control of the Company, the holder of an OSR has the right to receive the
difference between the exercise price of the accompanying stock option and the
fair market value of the underlying stock at that time. Upon the exercise of an
OSR or a stock option, the accompanying stock option or OSR is automatically
cancelled.
"Grant Date Present Value" has been calculated using the Black-Scholes
model of option valuation. The assumptions used in calculating these values are:
a dividend yield of 1.38%, expected volatility of 22.31%, a risk-free interest
rate of 6.34% and a 7-year expected life. The calculated value of the options on
the grant date was determined to be $25.04 per option.
On December 26, 1999, 16,872,659 shares of Gannett common stock were
available for grants under the 1978 Executive Long-Term Incentive Plan. At that
time, there were 12,406,416 options outstanding with a weighted average exercise
price of $52.57. The expiration dates range from December 7, 2000 to December 7,
2009.
STOCK OPTION TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END
SHARES (#) ($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John J. Curley....... 150,000 $8,102,714 1,301,250 1,900,000 $60,661,641 $8,358,360
Douglas H.
McCorkindale....... 100,000 $5,481,250 1,036,250 1,520,000 $48,203,516 $6,759,610
Gary L. Watson....... 38,000 $1,527,286 253,540 447,260 $10,743,676 $2,681,261
Cecil L. Walker...... 38,000 $1,489,019 87,455 222,240 $ 3,059,404 $1,729,662
Thomas Curley........ -- -- 153,065 259,620 $ 6,749,398 $1,391,391
</TABLE>
13
<PAGE> 17
EMPLOYMENT CONTRACTS, RETIREMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Company has a Transitional Compensation Plan (the "Plan") which
provides certain payments to key executives of the Company and its subsidiaries
who are terminated without cause within two years after a change in control.
Participants who choose to leave their employment within 30 days after the first
anniversary of the change in control also qualify for payments under the Plan. A
participant entitled to compensation will receive (i) all payments and benefits
earned through the date of termination; (ii) a severance payment of two to three
years' salary and bonus compensation, depending on years of service; (iii) life
insurance and medical benefits for the same period; (iv) extra retirement plan
benefits as though employment had continued for such two-to-three-year period;
and (v) an amount that, after taxes, will equal the amount of any excise tax
imposed on the severance payment under Section 4999 of the Internal Revenue Code
of 1986. All executive officers included in the Compensation Tables are covered
by the Plan.
If there is a change in control of the Company, as defined in the
Transitional Compensation Plan, options become exercisable in full and stock
incentive rights become payable. In addition, the 1978 Executive Long-Term
Incentive Plan provides for option surrender rights to be granted in tandem with
stock options. In the event of a change in control, option surrender rights
permit the employee to receive a payment equal to the spread between the option
exercise price and the highest price paid for Company shares in connection with
the change in control. If option surrender rights are exercised, the related
options and performance units are cancelled.
The Company has a contract with John J. Curley that provides for his
employment as Chairman, President and Chief Executive Officer, or in such other
senior executive position as is mutually agreed upon, until January 1, 2004 (his
normal retirement date). During his employment, Mr. Curley will receive an
annual salary of $800,000 or such greater amount as the Board of Directors
determines and an annual bonus if the Board of Directors decides to pay him one.
If Mr. Curley's employment is terminated by the Company without cause, he will
be entitled to receive his salary for the balance of the term, subject to
certain conditions. The contract also allows him to terminate his employment if
there has been a change in control of the Company, as defined in the contract.
If within two years after a change in control he terminates his employment or if
his employment is terminated by the Company without cause, he will be entitled
to: (i) continued payment of his salary and bonus; (ii) continued insurance and
similar benefits; (iii) a supplemental retirement benefit to make up the
difference between his actual payments under the Company's retirement plans and
the payments that would have been made under the plans if he had remained an
employee through the contract term; (iv) to the extent allowed under the 1978
Executive Long-Term Incentive Plan or other plans, he also will be entitled
immediately to exercise in full, or receive the value of, all stock options
under those plans; and (v) a "gross-up" payment for taxes payable by Mr. Curley
as a result of all these benefits. The post-employment benefits and payments
described in this paragraph are in addition to Mr. Curley's benefits under the
Gannett Retirement Plan and Gannett Supplemental Retirement Plan. The tax laws
deny an income tax deduction to a company for payments that are contingent upon
a change in control if those payments have a present value of more than three
times the employee's average annual compensation for the last five years and are
made under an agreement like the employment agreements described in this Proxy
Statement. Further, if this rule disallows an income tax deduction for any
portion of these change in control payments to Mr. Curley, the amount of the
disallowance will increase the portion of his annual compensation that would be
nondeductible under section 162(m) of the Internal Revenue Code.
Senior company executives, including Mr. Curley, are participants in the
Company's Transitional Compensation Plan described above. This plan provides
benefits in the event of a change in control comparable to those under Mr.
Curley's employment agreement. Mr. Curley's participation in that plan would
continue after his employment contract ends as long as he continues as an
employee of the Company.
14
<PAGE> 18
The Company has a contract with Mr. McCorkindale that provides for his
employment as Vice Chairman and Chief Financial and Administrative Officer or in
such other senior executive position as is mutually agreed upon, until the
earlier of July 1, 2004 (his normal retirement date) or four years after notice
of termination. In August 1997, the Board elected Mr. McCorkindale to the office
of Vice Chairman and President of the Company. During his employment, Mr.
McCorkindale will receive an annual salary of $650,000 or such greater amount as
the Board of Directors shall determine and an annual bonus if the Board of
Directors so determines. If Mr. McCorkindale's employment is terminated without
cause, he will be entitled to receive his annual salary for the balance of the
term, subject to certain conditions. His contract also provides for arrangements
in the event of a change in control of the Company like those described above
for Mr. Curley. Mr. McCorkindale also is a participant in the Transitional
Compensation Plan.
PENSION PLANS
The Company's executive officers participate in the Gannett Retirement
Plan, a defined benefit pension plan which is qualified under Section 401 of the
Internal Revenue Code, and the Gannett Supplemental Retirement Plan, an
unfunded, nonqualified plan. The annual pension benefit under the plans, taken
together, is largely determined by the number of years of employment multiplied
by a percentage of the participant's final average earnings (during the
executive officer's five highest consecutive years). The Internal Revenue Code
places limitations on the amount of pension benefits that may be paid under
qualified plans. Any benefits payable above those limitations will be paid under
the Gannett Supplemental Retirement Plan.
The table below may be used to calculate the approximate annual benefits
payable at retirement at age 65 under these two retirement plans to the
individuals named in the above Summary Compensation Table in specified
compensation and years-of-service classifications (subject to a reduction equal
to 50% of the Social Security Primary Insurance Amount payable).
<TABLE>
<CAPTION>
FINAL 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
AVERAGE OF CREDITED OF CREDITED OF CREDITED OF CREDITED OF CREDITED
EARNINGS SERVICE SERVICE SERVICE SERVICE SERVICE
-------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
700,000........ 210,000 280,000 350,000 374,500 399,000
800,000........ 240,000 320,000 400,000 428,000 456,000
900,000........ 270,000 360,000 450,000 481,500 513,000
1,000,000...... 300,000 400,000 500,000 535,000 570,000
1,500,000...... 450,000 600,000 750,000 802,500 855,000
2,000,000...... 600,000 800,000 1,000,000 1,070,000 1,140,000
2,500,000...... 750,000 1,000,000 1,250,000 1,330,000 1,415,000
3,000,000...... 900,000 1,200,000 1,500,000 1,600,000 1,700,000
</TABLE>
Final Average Earnings includes salaries and bonuses shown on page 12. The
credited years of service as of the end of the last fiscal year for the five
executive officers named in the Compensation Tables are as follows: John J.
Curley--30, Mr. McCorkindale--28, Mr. Watson--30, Mr. Walker--27, and Thomas
Curley--27.
PROPOSAL 2--ELECTION OF INDEPENDENT AUDITORS
The Company's independent auditors are PricewaterhouseCoopers, independent
accountants. At the Annual Meeting, the shareholders will vote on a proposal to
elect independent auditors for the Company's fiscal year ending December 31,
2000. The Audit Committee of the Board has recommended that
PricewaterhouseCoopers be re-elected as independent auditors for 2000. The Board
unanimously recommends that shareholders vote FOR this proposal. Proxies
solicited by the Board will be voted FOR PricewaterhouseCoopers unless otherwise
indicated.
15
<PAGE> 19
Representatives of PricewaterhouseCoopers will be present at the Annual
Meeting to make a statement, if they wish, and to respond to appropriate
questions from shareholders.
PROPOSAL 3--PROPOSED INCREASE IN AUTHORIZED SHARES OF
GANNETT COMMON STOCK
The Board of Directors unanimously recommends that the shareholders
consider and vote in favor of a proposal to amend the Company's Restated
Certificate of Incorporation to increase the authorized number of shares of
Gannett Common Stock from 400,000,000 shares to 800,000,000 shares. As of March
3, 2000, 270,000,105 shares were issued and outstanding out of the currently
authorized 400,000,000 shares. Of the remaining authorized shares, approximately
17 million are reserved for issuance in connection with the Company's
stock-based compensation plans.
During 1997, the Company effected a 2-for-1 stock split following a
significant increase in the market price of the Company's stock. If the Board
were to determine that it again would be appropriate to effect a similar stock
split, there presently are not enough available authorized shares for such a
split. Having said that, no specific transaction is presently contemplated which
would result in the issuance of any of the additional shares of Gannett Common
Stock upon approval of this proposal. While the presently authorized shares
would satisfy the Company's needs for the immediate future, the Board of
Directors believes that the number of authorized shares should be increased to
provide for greater long range flexibility for use in connection with possible
stock dividends, stock splits, or distributions to shareholders and other
corporate purposes and in the negotiation of such acquisitions as may appear
favorable and/or for future financing. Such an increase would potentially save
the Company the expense and delay of calling a special meeting of shareholders
to secure shareholder authorization each time a specific need arises. Shares of
authorized Common Stock, including the proposed additional shares, would be
available for issuance by action of the Board of Directors without shareholder
approval unless required by law or by the regulations of the New York Stock
Exchange. Shares issued in connection with certain employee benefit plans also
may require shareholder approval.
The additional shares for which authorization is sought will be identical
to the shares of Common Stock now authorized and outstanding, and this proposal
will not affect the rights of holders of the Common Stock. Issuance of
additional stock could have a dilutive effect on earnings per share or on the
stock ownership or voting rights of a shareholder. Under certain circumstances,
the Company could use the additional unissued stock to create impediments for
persons seeking to acquire control of the Company. However, the proposed
increase in the common stock is not designed to deter or prevent a change of
control. The holders of the Company's Common Stock have no preemptive rights.
Financial statements are not included in this Proxy Statement as they are not
deemed material for the exercise of prudent judgment on this proposal.
The Board recommends that shareholders vote FOR this proposal. The
affirmative vote of a majority of the outstanding shares entitled to vote at the
meeting is required for approval of the proposal. Proxies solicited by the Board
of Directors will be voted FOR proposal 3 unless otherwise indicated. If a
shareholder, present in person or by proxy, abstains from voting, the
shareholder's shares will not be voted. An abstention from voting has the same
legal effect as a vote "AGAINST" a proposal. If a shareholder holds shares in a
broker's account and has given specific voting instructions, the shares will be
voted in accordance with those instructions. If no voting instructions are
given, the shareholder's shares will not be voted with respect to the proposal
and will not be counted in determining the number of shares entitled to vote on
the proposal.
16
<PAGE> 20
SHAREHOLDER PROPOSAL
The Company has received the following shareholder proposal. The Board of
Directors recommends a vote AGAINST the proposal, and your proxy will be so
voted unless you specify otherwise.
PROPOSAL 4--EEO REPORTING AND AMERICAN INDIANS
Mercy Health Services, 34605 Twelve Mile Road, Farmington Hills, Michigan
48331-3221, beneficial owner of 3,000 shares of Gannett Common Stock, has
notified the Company that it intends to present the following proposal for
consideration at the meeting.
RESOLVED: The company prepare at reasonable cost a report, omitting where
appropriate confidential information, that includes the following:
1. A report shall include the EEO-1 report in the standard federal
government categories according to their gender and races in each
of the nine major EEOC defined job categories for the previous
three years.
2. A description of how the company is working to increase its
business with female and minority suppliers and service providers.
3. Report any federal audit, Corporate Management Review, and Letter
of Compliance with corrective measures enacted to protect the
company's government contracts and legal penalties.
Statement by Shareholder in Support of the Resolution
Equal Employment Opportunity is a key issue for many shareholders. The 1995
bipartisan Glass Ceiling Commission study explains that a positive diversity
record has a positive impact on the bottom line. While women and minorities
comprise 57 percent of the U.S. workforce the Commission found that they
represent only 3 percent of executive management positions. By far the most
vulnerable and most excluded from corporate diversity initiatives are American
Indians.
Corporations have discontinued discriminating images and names like Black
Sambo and Frito Bandito while similar discriminatory images and names against
American Indians, like "redskin" and "chief wahoo," remain in use. "Redskin"
originated from 1800s businessmen who coined the term from their dealing with
animal skins (deerskin and bearskin) and "red" from the dried blood of the
scalps of Indian men, women and children. Businesses used actual heads of Indian
men, women and children or images and names to attract their customers.
Every major American Indian organization including the National Congress of
American Indians, National Indian Education Association and Society of American
Indian Psychiatrists has called for an end to American Indian negative
images/names.
Workplace discrimination has created a significant burden for shareholders
because of the high cost of litigation, potential loss of government contracts,
and the financial consequences of a damaged corporate image resulting from
discrimination complaints. For example:
1) In 1996 Texaco settled the largest racial discrimination lawsuit in
U.S. history, costing a reported $170 million to the company and
stockholders. Texaco's public image was tarnished and the company
faced a consumer boycott.
2) In 1997 Denny's reported it was still trying to win back its
minority customers, dating back to the 1992 discrimination
complaints against Denny's.
17
<PAGE> 21
3) A U.S. Patent and Trademark lawsuit by American Indians resulted in
the Washington football team losing nine corporate patents because
of the offensive name and images.
4) Chicago area American Indian fireman won a 1998 discrimination case
because six supervisors failed to stop offensive negative names and
images about American Indians in the workplace.
5) The Los Angeles School district, largest in the country, banned
derogatory consumer products, names and images of American Indians
from the school system.
We believe negative images and names of American Indians are contrary to
corporate business interests and create a negative social, educational and
working environment for Indian and non-Indian people.
Statement by the Board of Directors Against the Resolution
Your Board of Directors believes that the Company's diversity efforts are
exemplary and that the actions outlined in this proposal are unnecessary.
We agree with the shareholder proponent that a positive diversity record
has a positive impact on a company's bottom line. Gannett's Ethics Policy states
that "We believe respect for others and our commitment to diversity represent
vital strengths of our Company." The Company's diversity program, developed in
1980 and implemented in all Gannett operating units, is dedicated to the upward
mobility of women and minorities to management and professional positions.
Diversity committees appointed at each operating unit continually develop
programs to foster an environment where employees can contribute to their
fullest potential.
The Company's efforts in achieving a diverse workforce have been recognized
by, among others, Working Mother magazine by its inclusion of Gannett on its
list of the 100 Best Companies for Working Mothers during all 14 years of this
survey. Also, Fortune magazine has named the Company one of the 50 Best
Companies for Asians, Blacks and Hispanics.
With respect to the specific diversity-related actions recommended by the
shareholder proponent:
1. The Company already files annual EEO-1 reports on the gender and
race of Company employees with Federal agencies.
2. The Company, through its purchasing subsidiary, Gannett Supply
Corporation, encourages and monitors the efforts of the Company's
operating units to use female and minority suppliers. In fact, in
1999, the Company purchased goods and services from over 28,000
female- and minority-owned suppliers.
3. Those operating units of the Company that have contracts with the
federal government are obligated to adhere to the applicable
federal compliance regulations.
In light of the foregoing, your Board believes that the actions proposed by
the shareholder proponent are unnecessary and recommends that shareholders vote
against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 4, AND YOUR PROXY
WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
The affirmative vote of a majority of the shares present in person or by
proxy and entitled to vote on the proposal at the meeting will constitute
approval of the shareholder proposal. Proxies solicited by the Board of
Directors will be voted AGAINST proposal 4 unless otherwise indicated. If a
shareholder, present in person or by proxy, abstains from voting, the
shareholder's shares will not be voted. An abstention from voting has the same
legal effect as a vote "against" a proposal. If a shareholder holds shares in a
broker's account and has given specific voting instructions, the
18
<PAGE> 22
shares will be voted in accordance with those instructions. If no voting
instructions are given, the shareholder's shares will not be voted with respect
to the proposal and will not be counted in determining the number of shares
entitled to vote on the proposal.
OTHER MATTERS
As of the date of this Proxy Statement, the Board does not intend to
present any matter for action at the Annual Meeting other than as set forth in
the Notice of Annual Meeting. If any other matters properly come before the
meeting, it is intended that the holders of the proxies will act in accordance
with their best judgment.
To be eligible for inclusion in the proxy materials for the Company's 2001
Annual Meeting, shareholder proposals must be received at the Company's
principal executive offices by November 17, 2000. A shareholder who wishes to
present a proposal at the Company's 2001 Annual Meeting, but who does not
request that the Company solicit proxies for the proposal, must submit the
proposal to the Company's principal executive offices by February 7, 2001.
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by mail, certain of the officers and employees of
the Company, without extra compensation, may solicit proxies personally, by
telephone or other means. The Company also will request brokerage houses,
nominees, custodians and fiduciaries to forward soliciting materials to the
beneficial owners of stock held of record and will reimburse them for forwarding
the materials. In addition, Georgeson Shareholder Communications, Inc., New
York, New York, has been retained to aid in the solicitation of proxies at a fee
of $15,000, plus out of pocket expenses.
Copies of the 1999 Annual Report have been mailed to shareholders.
Additional copies may be obtained from the Secretary, Gannett Co., Inc., 1100
Wilson Boulevard, Arlington, Virginia 22234.
March 17, 2000
19
<PAGE> 23
----------------------
COMPANY #
CONTROL #
----------------------
VOTING INSTRUCTIONS FOR GANNETT CO., INC.'S
2000 ANNUAL MEETING OF SHAREHOLDERS
Gannett Co., Inc. shareholders may vote their shares for matters to be covered
at the Company's 2000 Annual Meeting of Shareholders using a toll-free telephone
number. Of course, if you prefer, you can vote using the attached proxy card.
Below are the instructions for voting by phone or in writing.
VOTE BY PHONE 1-800-240-6326
Use any touch tone telephone to vote your proxy at any time 24 hours a day,
7 days a week, until 12:00 p.m. on May 1, 2000. Have your proxy card in hand
when you call. You will be prompted to enter the 3-digit Company Number and your
7-digit Control Number which are located above, and then to follow the simple
voting instructions. If you would like to attend the meeting, you will have the
opportunity to request a ticket at the end of the telephone call.
VOTE BY MAIL
Mark, sign and date the attached proxy card and return it in the enclosed
postage-paid envelope.
IF YOU VOTE BY PHONE, PLEASE DO NOT MAIL YOUR PROXY CARD.
THANK YOU FOR VOTING.
\/ Please detach here \/
<TABLE>
<S> <C>
___ ___
| |
| |
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2 AND 3.
1. ELECTION OF DIRECTORS: Nominees are: 01 H. Jesse Arnelle [ ] VOTE FOR all nominees [ ] VOTE WITHHELD
02 Drew Lewis except those I have from all nominees
03 Karen Hastie Williams listed below
(Instructions: To withhold authority to vote for any individual ---------------------------------------------
nominee, write the number(s) in the box provided to the right.) | |
---------------------------------------------
2. PROPOSAL TO ELECT PricewaterhouseCoopers as the Company's Auditors. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO INCREASE Authorized Shares of Common Stock. [ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD RECOMMENDS A VOTE "AGAINST" PROPOSAL 4.
4. SHAREHOLDER PROPOSAL concerning American Indians. [ ] FOR [ ] AGAINST [ ] ABSTAIN
THE PROXIES are authorized to vote in their discretion upon such other business, if any, as may properly come before the
meeting.
Address change? Mark Box [ ] Indicate changes below. [ ] I PLAN TO ATTEND THE MEETING, AND I REQUEST A TICKET.
Date
-----------------------------------------
---------------------------------------------
| |
| |
---------------------------------------------
SIGNATURE(S) IN BOX
Please sign EXACTLY as name appears at the left.
Joint owners each should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full related title.
| |
| |
---- ----
</TABLE>
<PAGE> 24
GANNETT CO., INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS -- MAY 2, 2000
The undersigned hereby appoints John J. Curley and Douglas H.
McCorkindale, or either of them, attorneys and proxies each with power of
substitution to represent the undersigned at the Annual Meeting of Shareholders
of the Company to be held on May 2, 2000 and at any adjournment or adjournments
thereof, with all the power that the undersigned would possess if personally
present, and to vote all shares of stock that the undersigned may be entitled to
vote at said meeting, as designated on the reverse, and in accordance with their
best judgment in connection with such other business as may come before the
meeting.
PLEASE CAST YOUR VOTES ON THE REVERSE SIDE OR BY TELEPHONE AS DESCRIBED
ON THE REVERSE SIDE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2
AND 3 AND AGAINST PROPOSAL 4. TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, JUST SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED. UNLESS
MARKED OTHERWISE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS.
-------------
SEE REVERSE
SIDE
-------------
