-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, LWfQcRWGr4HXKF2ySH/kWBOupz6RnkGgSul8Why356sNbj2mK8+MV/lyR2WxST+B xig05TqjJpmxQLeXq/2obw== 0000039899-94-000003.txt : 19940323 0000039899-94-000003.hdr.sgml : 19940323 ACCESSION NUMBER: 0000039899-94-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19931226 FILED AS OF DATE: 19940322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GANNETT CO INC /DE/ CENTRAL INDEX KEY: 0000039899 STANDARD INDUSTRIAL CLASSIFICATION: 2711 IRS NUMBER: 160442930 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-06961 FILM NUMBER: 94517225 BUSINESS ADDRESS: STREET 1: 1100 WILSON BLVD CITY: ARLINGTON STATE: VA ZIP: 22234 BUSINESS PHONE: 7032846000 MAIL ADDRESS: STREET 1: 1100 WILSON BLVD. , 28TH FLOOR CITY: ARLINGTON STATE: VA ZIP: 22234 10-K 1 GANNETT CO., INC. 10K FILING Exhibit Index begins on page 11 -------------------- 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 EXHIBIT INDEX -------------
Exhibit Number Exhibit Location - ------- ------- -------- 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.
EX-3.1 2 EXHIBIT 3 TO GANNETT CO., INC. 10K 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 EX-3.1CONTINUED 3 EXHIBIT 3.1 CONTINUED TO GANNETT CO., INC. 10K 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 EX-3.2 4 EXHIBIT 3.2 TO GANNETT CO., INC. 10K 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. EX-4.1 5 EXHIBIT 4.1 TO GANNETT CO., INC. 10K 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 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 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 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 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, 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: EX-4.2 6 EXHIBIT 4.2 TO GANNETT CO., INC. 10K 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 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 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 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 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: 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, 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: EX-10.4 7 EXHIBIT 10.4 TO GANNETT CO., INC. 10K 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. EX-10.8 8 EXHIBIT 10.8 TO GANNETT CO., INC. 10K 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. EX-11 9 EXHIBIT 11 TO GANNETT CO., INC. 10K EXHIBIT 11 GANNETT CO., INC. Calculation of Earnings Per Share ---------------------------------
Fiscal Year Ended ----------------------------------------- December 26, December 27, December 29, 1993 1992 1991 ------------- ------------- ------------- 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 ============= ============= =============
EX-13 10 EXHIBIT 13 TO GANNETT CO., INC. 10K 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 CONSOLIDATED BALANCE SHEETS In thousands of dollars
Dec., 26, 1993 Dec., 27, 1992 --------------- --------------- 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 =============== ===============
Page 35 CONSOLIDATED BALANCE SHEETS In thousands of dollars
Dec., 26, 1993 Dec., 27, 1992 --------------- --------------- 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 =============== ===============
Page 36 CONSOLIDATED STATEMENTS OF INCOME In thousands of dollars
Fiscal year ended Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991 -------------- -------------- --------------- 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 ============== ============== ===============
Page 37 CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands of dollars
Fiscal year ended Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991 -------------- -------------- --------------- 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 ============== ============== ==============
Page 38 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY In thousands of dollars Fiscal years ended December 29, 1991, December 27, 1992, and December 26, 1993
Foreign Deferred Common stock Additional currency compensation $1 par paid-in Retained translation Treasury related value capital earnings adjustment stock to ESOP Total ------------- ------------- -------------- ----------- ----------- ------------ ------------ 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 ------------- ------------- -------------- ----------- ----------- ------------ ------------
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 11-YEAR SUMMARY In thousands of dollars except per share amounts
1993 1992 1991 1990 1989 1988 ----------- ------------ ------------ ------------- ------------ ----------- 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
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 Acquisitions 1989-1993
Year acquired Name Location Publication times or business - --------------- --------------------------------- ------------------------------- ----------------------------------- 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.
Dispositions 1989-1993
Year sold Name Location Publication times or business - --------------- --------------------------------- ------------------------------- --------------------------------- 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.
Page 60 QUARTERLY STATEMENTS OF INCOME In thousands of dollars
Fiscal year ended December 26, 1993 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total --------------- -------------- -------------- ------------- ------------- 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.
Page 61 QUARTERLY STATEMENTS OF INCOME In thousands of dollars
Fiscal year ended December 27, 1992 1st Quarter(1) 2nd Quarter(1) 3rd Quarter(1) 4th Quarter Total --------------- -------------- --------------- ------------- ------------- 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.
Page 62 SCHEDULES TO FORM 10-K INFORMATION In thousands of dollars
Balance at beginning Additions Retirements Other Balance at end Property, plant & equipment of period at cost or sales Changes of period - -------------------------------- -------------- ------------------ -------------- ------------ -------------- 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.
Valuation and qualifying accounts Allowance for doubtful receivables
Balance at beginning Additions charged to Additions recorded Deductions Balance at end of period costs and expenses upon acquisitions from reserves of period -------------------- -------------------- ------------------ ---------------- -------------- 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
Supplementary income statement information
Fiscal year ended Dec. 26, 1993 Dec. 27, 1992 Dec. 29, 1991 -------------------- ------------------ ---------------- 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 -------------------- ------------------ ----------------
Pages 64 - 66 MARKETS WE SERVE - 1993 Daily newspapers
State Circulation Circulation Circulation Joined Territory City Newspaper Morning Afternoon Sunday Founded Gannett * - -------------- --------------------- ------------------------------- ----------- ------------ ----------- ------- ------------- 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.
Pages 67 and 68 MARKETS WE SERVE - 1993
Operation Location and other information - ---------------------------------------- ------------------------------------------------------------------------------- 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.
MARKETS WE SERVE - 1993
** Television Weekly Joined State City Station Channel/Network Audience Founded Gannett * - ---------------- --------------------- ------------ ------------------ ----------- -------- -------------- 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.
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. EX-22 11 EXHIBIT 22 TO GANNETT CO., INC. 10K 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 EX-24 12 EXHIBIT 24 TO GANNETT CO., INC. 10K 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 EX-99 13 EXHIBIT 99 TO GANNETT CO., INC. 10K EXHIBIT 99 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:
Annual Report Page Table Description Representation Reference (in body of electronic format document) on Paper Copy - ---------- ----------------------------------------------- ------------------------------------------ 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
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