GANNETT CO., INC. DEFERRED COMPENSATION PLAN
Amendment No. 2 to January 1, 1997 Restatement
This Amendment No. 2 to the Restated Gannett Co., Inc. 1987
Deferred Compensation Plan (the "Plan") is adopted pursuant to the
action of the Executive Compensation Committee of the Board of
Directors of the Company on July 26, 1999, and is effective on that date.
1. Section 1.1 is amended by adding the following new sentence
immediately after the first sentence thereof:
The term "Compensation" also shall include (1) ordinary income
that arises upon the exercise of a stock option as more fully
described in Section 2.11; and (2) such other forms of taxable
income derived from the performance of services for the Company
as may be designated by the Deferred Compensation Committee
and which may be deferred pursuant to such special terms and
conditions as the Committee may establish.
2. Section 2.5(a) is amended by adding the following new
paragraph at the end:
Notwithstanding the foregoing, in his or her first year of eligibility
an employee or Director may make a deferral election within 30
days of first becoming eligible. This initial deferral may relate only
to Compensation attributable to the period following the deferral
election.
3. Section 2.9(g) is amended by adding the following new
paragraph:
A Participant with a financial need that fails to meet the
unforeseeable emergency standard may elect to withdraw funds
from the Participant's Deferred Compensation Account prior to the
date specified in the Participant's election form subject to the
following conditions: (1) premature withdrawals may be made only
in a lump sum and only in an amount in excess of $10,000; (2) only
one premature withdrawal may be made in a calendar year; (3) the
Participant must suspend further deferrals for the remainder of the
calendar year of the withdrawal; and (4) ten percent of the amount
withdrawn shall be irrevocably forfeited to the Company.
4. Article 2.0 is amended by adding the following new Section 2.11:
2.11 Deferrals of Stock Option Compensation
A Participant, by authorization of, or pursuant to procedures
established by, the Committee, may elect to defer ordinary
income imputed to the Participant upon the exercise of a
stock option issued pursuant to any Company-sponsored
stock option plan in accordance with guidelines established
by the Committee and the general terms of this Plan except
as such general terms are modified as follows:
an election to defer stock option income shall be
effective only if made at least six months prior to the
exercise date of the option and in the calendar year
preceding the year of the exercise date. An election
to defer stock option income shall constitute an
amendment of the exercise date of the option so that
the option may not be exercised prior to the date six
months subsequent to the date of the notice of
deferral. Notwithstanding the foregoing, a Participant
may elect to defer income on the exercise of any
option in calendar year 1999 provided that such
election is made within 30 days after the adoption of
this Section 2.11 and is effective only with respect to
option exercises that are made at least four months
after the date of a participant's deferral election. An
election to defer option income in 1999 shall
constitute an amendment of the Stock Option
Agreement related to such option so that the option
may not be exercised prior to the date four months
subsequent to the date of the notice of deferral.
a deferral election with respect to any shares
received upon a stock option exercise shall require
the deferral of all income with respect to that
exercise.
an election to defer stock option income shall be
deemed to constitute a direction by the Participant to
have the Company defer to this Plan the number of
shares (carried to the nearest one ten thousandth of
a share) equal in value to the income that would
otherwise have been realized by the Participant
pursuant to his stock option exercise with the ultimate
payment of such deferred shares to be made in
accordance with the terms of this Plan. All such
deferrals shall be invested in the Gannett stock fund
during the entire deferral period and shall be paid out
in kind on the Payment Commencement Date.
if payments of deferred shares are made in
installments, each installment payment shall be
rounded as necessary to provide payment only of a
whole number of shares except that any
fractional shares payable in the final installment shall
be paid in cash.
5. Article 3.0 is amended by adding to the end thereof the following new
Section 3.7:
3.7 Change in Control
(a) Legal Expense. If, with respect to any alleged failure by the
Company to comply with any of the terms of this Plan
subsequent to a change in control, a Participant or
beneficiary hires legal counsel or institutes any negotiations
or institutes or responds to legal action to assert or defend
the validity of, enforce his rights under, obtain benefits
promised under or recover damages for breach of the terms
of this Plan, the Company shall pay, as they are incurred, a
Participant's or beneficiary's actual expenses for attorneys'
fees and disbursements, together with such additional
payments, if any, as may be necessary so that the net after-
tax payments to the Participant or beneficiary equal such
fees and disbursements.
(b) Appointment of Independent Fiduciary. Following a change
in control, the Board may appoint an independent fiduciary
which, upon appointment, shall assume and have sole
responsibility and discretion to act on the following matters
in lieu of action by the Company, Committee or trustee (but
not in lieu of participant elections) as may otherwise be
assigned to such parties under other provisions of the Plan:
(1) determination of eligibility for benefit entitlement; (2)
determination of the amount, timing and form of benefit
payment; (3) direction of any trustee of assets held with
respect to the Plan on matters relating to benefit entitlement
and payment and on matters relating to the investment of
plan assets.
(c) Change in Control Definition.
(1) As used in this Plan, a "change in control"
shall be deemed to have occurred under any one or more of
the following conditions:
(i) if, within three years of any merger,
consolidation, sale of a substantial part of the
Company's assets, or contested election, or
any combination of the foregoing transactions
(a "Transaction"), the persons who were
directors of the Company immediately before
the Transaction shall cease to constitute a
majority of the Board of Directors (x) of the
Company or (y) of any successor to the
Company, or (z) if the Company becomes a
subsidiary of or is merged into or consolidated
with another corporation, of such corporation.
(The Company shall be deemed a subsidiary
of such other corporation if such other
corporation owns or controls, directly or
indirectly, a majority of the combined voting
power of the outstanding shares of the capital
stock of the Company entitled to vote generally
in the election of directors ("Voting Stock"));
(ii) if, as a result of a Transaction, the Company
does not survive as an entity, or its shares are
changed into the shares of another
corporation;
(iii) if any "person" (as that term is used in Section
13(d) or 14(d)(2) of the Securities Exchange
Act of 1934) becomes a beneficial owner
directly or indirectly of securities of the
Company representing 20% or more of the
combined voting power of the Company's
Voting Stock;
(iv) if three or more persons are elected directors
of the Company despite the opposition of a
majority of the directors of the Company then
in office; or
(v) upon determination by the Executive
Compensation Committee that a change in
control has occurred, if such a person as
defined in subparagraph (iii) above becomes
the beneficial owner directly or indirectly of
securities of the Company representing from
12% up to 20% of the combined voting power
of the Company's Voting Stock.
GANNETT CO., INC.
/s/Richard L. Clapp
By: _____________________
Name: Richard L. Clapp
Title: Senior Vice President/
Human Resources