Performance Shares Award Agreement – Gannett Co. Inc.
AWARD AGREEMENT
PERFORMANCE SHARES
The Executive Compensation Committee of the Gannett Board of Directors has
approved your opportunity to receive Performance Shares (referred to herein as
“Performance Shares”) under the 2001 Omnibus Incentive Compensation Plan
(Amended and Restated as of May 4, 2010), as set forth below.
This Award Agreement and the enclosed Terms and Conditions effective as of ,
20 , constitute the formal agreement governing this award.
Please sign both copies of this Award Agreement to evidence your agreement
with the terms hereof. Keep one copy and return the other to the undersigned.
Please keep the enclosed Terms and Conditions for future reference.
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Employee: |
Location: |
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Grant Date: __/__/__ |
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Performance Period Commencement Date: __/__/__
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Performance Period End Date: |
__/__/__ [The date that is three years after the Performance Period |
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Performance Share Payment Date: |
__/__/__ [On a date that is within two and one-half months after the |
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Target Number of Performance Shares: *
* The actual number of Performance Shares you may receive will be adjusted
upward or downward depending on the Company153s performance versus certain
designated companies and your continued employment with the Company, as more
fully explained in the enclosed Terms and Conditions.
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Gannett Co., Inc. |
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By: |
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Employee153s Signature |
Roxanne V. Horning |
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Senior Vice President/Human Resources |
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PERFORMANCE SHARES
TERMS AND CONDITIONS
Under the
Gannett Co., Inc.
2001 Omnibus Incentive Compensation Plan (Amended
and Restated as of May 4, 2010)
These Terms and Conditions, dated , 20 , govern the right of the employee
(the “Employee”) designated in the Award Agreement dated coincident with these
Terms and Conditions to receive Performance Shares (referred to herein as
“Performance Shares”). Generally, the Employee will not receive any Performance
Shares unless the specified service and performance requirements set forth
herein are satisfied. The Performance Shares are granted under, and are subject
to, the Gannett Co., Inc. (the “Company”) 2001 Omnibus Incentive Compensation
Plan (Amended and Restated as of May 4, 2010) (the “Plan”). Terms used herein
that are defined in the Plan shall have the meaning ascribed to them in the
Plan. If there is any inconsistency between these Terms and Conditions and the
terms of the Plan, the Plan153s terms shall supersede and replace the conflicting
terms herein.
1. Grant of Performance Shares. Pursuant to the provisions of (i) the
Plan, (ii) the individual Award Agreement governing the grant, and (iii) these
Terms and Conditions, the Employee may be entitled to receive Performance
Shares. Each Performance Share that becomes payable shall entitle the Employee
to receive from the Company one share of the Company153s common stock (“Common
Stock”) upon the expiration of the Incentive Period. The actual number of
Performance Shares an Employee will receive will be calculated in the manner
described in these Terms and Conditions, including Exhibit A, and may be
different than the Target Number of Performance Shares set forth in the Award
Agreement.
2. Incentive Period. Except as otherwise provided in Section 13 below,
the Incentive Period in respect of the Performance Shares shall commence on the
Performance Period Commencement Date specified in the Award Agreement and end on
the Performance Period End Date specified in the Award Agreement.
3. No Dividend Equivalents. No dividend equivalents shall be paid to
the Employee with regard to the Performance Shares.
4. Delivery of Shares. The Company shall deliver to the Employee a
certificate or certificates, or at the election of the Company make an
appropriate book-entry, for the number of shares of Common Stock equal to the
number of Performance Shares that have been earned based on the Company153s
performance during the Incentive Period as set forth in Exhibit A and
satisfaction of the terms and conditions set forth herein, which number of
shares shall be reduced by the value of all taxes which the Company is required
by law to withhold by reason of such delivery. Such delivery shall take place on
the Performance Share Payment Date. An Employee shall have no further rights
with regard to the Performance Shares once the underlying shares of Common Stock
have been delivered.
5. Forfeiture and Cancellation of Right to Receive Performance
Shares.
(a) Termination of Employment. Except as provided in Sections 6, 13
and 14 below an Employee153s right to receive Performance Shares shall
automatically be cancelled upon the Employee153s termination of employment (as
well as an event that results in the Employee153s employer ceasing to be a
subsidiary of the Company) prior to the Performance Period End Date, and in such
event the Employee shall not be entitled to receive any shares of Common Stock
in respect thereof.
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(b) Recovery of Performance Shares in Restatement Situations. The
Company will, to the extent permitted or required by governing law or
regulations, as may be amended from time to time, or its recoupment or clawback
policy, as may be amended from time to time, require reimbursement of any
Performance Shares paid to the Employee after the date hereof where (a) the
Company is required to prepare an accounting restatement due to material
non-compliance with any financial reporting requirements under the securities
laws; (b) the payment of the Performance Shares was predicated upon the
Company153s financial results; and (c) a lower payment would have been made to the
Employee based upon the restated financial results. In each such instance, the
Company will seek to recover the Employee153s relevant Performance Shares paid
over a period of no less than three years prior to the restatement, regardless
of whether the Employee is then employed by the Company.
6. Death, Disability, Retirement. Except as provided in Sections 13 or
14 below, in the event that the employment of the Employee shall terminate prior
to the Performance Period End Date by reason of death, permanent disability (as
determined under the Company153s Long Term Disability Plan), termination of
employment after attaining age 65, or termination of employment after both
attaining age 55 and completing at least 5 years of service, the Employee (or in
the case of the Employee153s death, the Employee153s estate or designated
beneficiary) shall be entitled to receive at the Performance Share Payment Date
the number of shares of Common Stock equal to the product of (i) the total
number of shares in respect of such Performance Shares which the Employee would
have been entitled to receive upon the expiration of the Incentive Period had
the Employee153s employment not terminated, and (ii) a fraction, the numerator of
which shall be the number of full calendar months between the Performance Period
Commencement Date and the date that employment terminated, and the denominator
of which
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shall be the number of full calendar months from the Performance Period
Commencement Date to the Performance Period End Date. [Alternative Section 6 for
awards of Performance Shares to the Company153s CEO: Termination of
Employment. Any right to receive Performance Shares shall not be partially
or fully cancelled upon a voluntary or involuntary termination of employment
during the Incentive Period. Instead, the Employee153s right to receive
Performance Shares will be determined assuming that the Employee remains in
continuous employment through the Incentive Period.]
7. Non-Assignability. Performance Shares may not be transferred,
assigned, pledged or hypothecated, whether by operation of law or otherwise, nor
may the Performance Shares be made subject to execution, attachment or similar
process.
8. Rights as a Shareholder. The Employee shall have no rights as a
shareholder by reason of the Performance Shares.
9. Discretionary Plan; Employment. The Plan is discretionary in nature
and may be suspended or terminated by the Company at any time. With respect to
the Plan, (a) each grant of Performance Shares is a one-time benefit which does
not create any contractual or other right to receive future grants of
Performance Shares, or benefits in lieu of Performance Shares; (b) all
determinations with respect to any such future grants, including, but not
limited to, the times when the Performance Shares shall be granted, the number
of Performance Shares, and the Incentive Period, will be at the sole discretion
of the Company; (c) the Employee153s participation in the Plan shall not create a
right to further employment with the Employee153s employer and shall not interfere
with the ability of the Employee153s employer to terminate the Employee153s
employment relationship at any time with or without cause; (d) the Employee153s
participation in the Plan is voluntary; (e) the Performance Shares are not part
of normal and expected
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compensation for purposes of calculating any severance, resignation,
redundancy, end of service payment, bonuses, long-service awards, pension or
retirement benefits, or similar payments; and (f) the future value of the
Performance Shares is unknown and cannot be predicted with certainty.
10. Effect of Plan and these Terms and Conditions. The Plan is hereby
incorporated by reference into these Terms and Conditions, and these Terms and
Conditions are subject in all respects to the provisions of the Plan, including
without limitation the authority of the Executive Compensation Committee of the
Company (the “Committee”) in its sole discretion to make interpretations and
other determinations with respect to all matters relating to the applicable
Award Agreements, these Terms and Conditions, the Plan and awards made pursuant
thereto. These Terms and Conditions shall apply to the grant of Performance
Shares made to the Employee on the date hereof and shall not apply to any future
grants of Performance Shares made to the Employee.
11. Notices. Notices hereunder shall be in writing and if to the
Company shall be addressed to the Secretary of the Company at 7950 Jones Branch
Drive, McLean, Virginia 22107, and if to the Employee shall be addressed to the
Employee at his or her address as it appears on the Company153s records.
12. Successors and Assigns. The applicable Award Agreement and these
Terms and Conditions shall be binding upon and inure to the benefit of the
successors and assigns of the Company and, to the extent provided in Section 6
hereof, to the estate or designated beneficiary of the Employee.
13. Change in Control Provisions.
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Notwithstanding anything to the contrary in these Terms and Conditions, the
following provisions shall apply to the right of an Employee to receive
Performance Shares under the attached Award Agreement.
(a) Definitions.
As used in Article 15 of the Plan and in these Terms and Conditions, a
“Change in Control” shall mean the first to occur of the following:
(i) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (A) the then-outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this Section, the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or one of its affiliates or (iv) any acquisition
pursuant to a transaction that complies with Sections 13(a)(iii)(A),
13(a)(iii)(B) and 13(a)(iii)(C);
(ii) individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election or nomination for election by the Company153s
stockholders was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though
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such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
(iii) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its subsidiaries (each, a “Business Combination”), in
each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
or entity resulting from such Business Combination (including, without
limitation, a corporation or entity that, as a result of such transaction, owns
the Company or all or substantially all of the Company153s assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or any corporation or entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then-outstanding shares of common stock of the corporation or
entity resulting from such Business
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Combination or the combined voting power of the then-outstanding voting
securities of such corporation or entity, except to the extent that such
ownership existed prior to the Business Combination, and (C) at least a majority
of the members of the board of directors of the corporation or entity resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
(b) Acceleration Provisions. In the event of the occurrence of a
Change in Control, the vesting of the Performance Shares shall be accelerated
and, if such Change in Control constitutes a “change in control event” within
the meaning of Section 409A of the Code, there shall be paid out to the Employee
within thirty (30) days following the effective date of the Change in Control,
the full number of shares of Common Stock subject to the Performance Shares
based on the Company153s performance as of the date of the Change in Control as
described in Exhibit A. In the event of the occurrence of a Change in Control
that is not a “change in control event” within the meaning of Section 409A of
the Code, the vesting of the Performance Shares shall be accelerated and the
Performance Shares shall be paid out at the earlier of the Employee153s
termination of employment (subject to Section 17) or the Performance Share
Payment Date.
(c) Legal Fees. The Company shall pay all legal fees, court costs,
fees of experts and other costs and expenses when incurred by Employee in
connection with any actual, threatened or contemplated litigation or legal,
administrative or other proceedings involving the provisions of this Section 13,
whether or not initiated by the Employee. The Company agrees to pay such
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amounts within 10 days following the Company153s receipt of an invoice from the
Employee, provided that the Employee shall have submitted an invoice for such
amounts at least 30 days before the end of the calendar year next following the
calendar year in which such fees and disbursements were incurred.
14. Employment Agreements or Similar Agreements. The provisions of
Sections 5, 6 and 13 of these Terms and Conditions shall not be applied to or
interpreted in a manner which would decrease the rights held by, or the payments
owing to, an Employee under an employment agreement, termination benefits
agreement or similar agreement with the Company that pre-exists the Grant Date
and contains specific provisions applying to Plan awards in the case of any
change in control or similar event or termination of employment, and if there is
any conflict between the terms of such employment agreement or termination
benefits agreement and the terms of Sections 5, 6 or 13, the employment
agreement or termination benefits agreement shall control. [Additional language
for awards of Performance Shares to the Company153s CEO: For the avoidance of
doubt, this award shall not be treated as an award under the Long Term Incentive
Plan or any successor or replacement plan].
15. Grant Subject to Applicable Regulatory Approvals. Any grant of
Performance Shares under the Plan is specifically conditioned on, and subject
to, any regulatory approvals required in the Employee153s country. These approvals
cannot be assured. If necessary approvals for grant or payment are not obtained,
the Performance Shares may be cancelled or rescinded, or they may expire, as
determined by the Company in its sole and absolute discretion.
16. Applicable Laws and Consent to Jurisdiction. The validity,
construction, interpretation and enforceability of this Agreement shall be
determined and governed by the laws of the State of Delaware without giving
effect to the principles of conflicts of law. For the
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purpose of litigating any dispute that arises under this Agreement, the
parties hereby consent to exclusive jurisdiction in Virginia and agree that such
litigation shall be conducted in the courts of Fairfax County, Virginia or the
federal courts of the United States for the Eastern District of Virginia.
17. Compliance with Section 409A. This Award is intended to comply
with the requirements of Section 409A, and shall be interpreted and administered
in accordance with that intent (e.g., the definition of “termination of
employment” (or similar term used herein) shall have the meaning ascribed to
“separation from service” under Section 409A). If any provision of these Terms
and Conditions would otherwise conflict with or frustrate this intent, the
provision shall not apply. If the Employee is a “specified employee” (within the
meaning of Code Section 409A and the regulations and guidance issued thereunder
(“Section 409A”)) and if delivery of shares is being made in connection with the
Employee153s separation from service other than by reason of the Employee153s death,
delivery of the shares shall be delayed until six months and one day after the
Employee153s separation from service with the Company (or, if earlier than the end
of the six-month period, the date of the Employee153s death).
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Exhibit A
Performance Share Calculation
The number of Performance Shares to which the Employee will be entitled to
receive if the Employee satisfies the applicable service requirements will be
calculated based on how the Company153s Total Shareholder Return compares to the
Total Shareholder Return of the Comparator Companies during the Incentive Period
(i.e., the Company153s Total Shareholder Return will be ranked against the Total
Shareholder Return of the Comparator Companies). Specifically, the Committee
shall calculate the number of Performance Shares that may be paid to the
Employee by multiplying the Employee153s Target Number of Performance Shares by
the applicable percentage determined under the following chart:
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Company153s Percentile in 3-Year TSR vs. Comparator Companies |
Resulting Shares Earned (% of Target) |
Value of Each Share Earned |
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90th or above |
200% |
Each share earned is also impacted by share price change during the cycle |
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70th |
150% |
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50th |
100% |
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30th |
50% |
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<30th |
0% |
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Straight-line interpolation between points |
Total Shareholder Return will be calculated from the first day of the
Incentive Period to the applicable measurement date. For purposes of calculating
the payout, the Company153s performance versus the Comparator Companies will be
based on the average payout that would be made based on the Company153s cumulative
Total Shareholder Return relative to the Comparator Companies at the end of each
of the last 4 quarters of the Incentive Period (i.e., the Company153s Total
Shareholder Return will be compared to the Total Shareholder Return of each
Comparator Company on the last four quarters in the Incentive Period and the
average of such results will be used to calculate the payout).
Other Rules:
1. The maximum share price used to determine the value of the shares earned
(but not the relative Total Shareholder Return calculation itself) will be 300%
of the price of the shares on the Performance Period Commencement Date. For
example, if the Company153s share price is $10 on the Performance Period
Commencement Date, the Employee153s Target Number of Shares is 100, the Employee
earns 200% of the Target Number of Shares (or 200 shares), the value of such
shares on the Performance Share Payment Date is $50, the number of the shares
will be reduced because the value of the shares on the Performance Share Payment
Date exceeds 300% of the value of the shares on the Performance Period
Commencement Date. Specifically, the award to the Employee would be reduced to
120 shares (i.e., (200 shares x (300% x $10)/$50)).
2. Comparator Companies that go bankrupt (and thus no longer traded) during
the Incentive Period will remain in the group at -100% Total Shareholder Return.
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3. Comparator Companies that are acquired will be treated in one of two ways:
(a) If acquired during the first year of the Incentive Period, the Comparator
Company will be excluded from all calculations.
(b) If acquired after the first year of the Incentive Period, the positioning
of the Comparator Company will be fixed above or below the Company based on the
Company153s and the Comparator Company153s Total Shareholder Returns through the day
preceding the acquisition announcement.
Definitions:
Total Shareholder Return means a fraction whose numerator is the stock price
change plus dividends paid on such stock (which are assumed to be reinvested in
the stock) and whose denominator is the stock price on the Performance Period
Commencement Date.
Comparator Companies means the New York Times Co., McClatchy Co., Lee
Enterprises Inc., E.W. Scripps, Media General, A.H. Belo Corp., Journal
Communications Inc., Belo Corp., Washington Post, Meredith Corp., News Corp.,
Yahoo Inc., Discovery Communications Inc., and Monster Worldwide Inc.
Change In Control
In the event of a Change in Control to the Company and provided that the
Employee153s right to receive Performance Shares has not previously been
cancelled, the number of Performance Shares an Employee may be paid will be
calculated based on the Company153s relative Total Shareholder Return positioning
on the date of the Change in Control and there will be no four quarter
averaging. Notwithstanding the foregoing, if the Change in Control occurs in the
first six (6) months of the Incentive Period, the Employee will, instead,
receive the Target Number of Performance Shares as set forth in the Employee153s
Award Agreement; provided that the Employee153s right to receive Performance
Shares has not previously been cancelled.
Code Section 162(m)
This Award is intended to comply with the requirements of Internal Revenue
Code Section 162(m) and the provisions of this Award shall be interpreted and
administered consistently with that intent. In that light, the following rules
shall apply to the award:
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(a) |
The Committee shall have the authority to adjust the number of Performance |
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(b) |
The aggregate grant with respect to awards of Performance Shares or |
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Stock Units made in any one fiscal year to any one participant under the Plan
may not exceed the value of five hundred thousand (500,000) Shares.
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(c) |
Before any Performance Shares are paid to the Employee, the Committee will |
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