GCI New Gannett Co Inc

PROPOSAL 3—APPROVAL OF THE COMPANY’S 2015 OMNIBUS INCENTIVE COMPENSATION PLAN

Introduction

Prior to the separation, the Gannett Co., Inc. 2015 Omnibus Incentive Compensation Plan (the “2015 Plan”) was adopted and approved by the Board of Directors of the Company and the Company’s sole stockholder. The 2015 Plan is being presented for stockholder approval at the meeting so that the Company can grant awards under the 2015 Plan that satisfy the requirements for being treated as performance-based compensation under Internal Revenue Code Section 162(m). Additionally, stockholder approval of the 2015 Plan will permit the Company to award options that are treated as incentive stock options under Internal Revenue Code Section 422. A copy of the 2015 Plan is attached to this Proxy Statement as Appendix A, and the following summary of the principal features of the 2015 Plan is qualified in its entirety by reference to, and should be read in conjunction with, the 2015 Plan.

This proposal does not seek any amendment of the existing provisions of, or any performance measure contained within, the 2015 Plan. Rather, this proposal is being presented to stockholders solely to address the stockholder approval requirements of Code Sections 162(m) and 422 described herein.

Performance-Based Compensation under Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally prevents a publicly held corporation from deducting, for federal income tax purposes, compensation paid in excess of $1 million per year to any of its chief executive officer or three other most highly compensated executive officers, other than the chief financial officer. If certain conditions are met, compensation that qualifies as “performance-based” under Code Section 162(m) is excluded for purposes of calculating the $1 million limit. Among these conditions is the requirement that the corporation’s stockholders approve the material terms of the performance goals under which the compensation may be paid, including the employees eligible to receive the compensation, the performance measures on which the performance goals may be based, and the maximum amount that may be payable to an employee if the performance goal is attained. By approving this Plan, stockholders will be giving the Company the ability to grant awards under the 2015 Plan that qualify as “performance-based” compensation under Code Section 162(m). The rules and regulations promulgated under Code Section 162(m) are subject to change from time to time, sometimes with retroactive effect. There is no guarantee, therefore, that awards granted under the 2015 Plan that are intended to qualify for tax deductibility under Code Section 162(m) will ultimately be viewed as so qualifying by the Internal Revenue Service. In addition, not all awards under the 2015 Plan are intended to qualify as “performance-based” compensation under Code Section 162(m). Nothing in this proposal precludes the Company from having the flexibility, in its sole discretion, to grant awards under the 2015 Plan that do not meet the requirements for tax deductibility under Code Section 162(m).

Summary of the 2015 Plan

Purpose. The purpose of the 2015 Plan is to benefit and advance the interests of the Company and its subsidiaries and affiliates by making annual and long-term incentive compensation awards to certain employees and directors of the Company and its subsidiaries and affiliates as an additional incentive for them to make contributions to the Company’s financial success. In addition, the 2015 Plan facilitated the conversion of certain outstanding share-based awards previously granted by the Company’s former parent (including certain restricted stock, RSU, performance share and stock option awards) into awards denominated in shares of the Company in accordance with the terms of the separation agreement and employee matters agreement the Company entered into with TEGNA.

Administration. The 2015 Plan is generally administered by the Company’s Executive Compensation Committee (the “Committee”). The Committee is comprised entirely of independent directors. Subject to the terms of the 2015 Plan, the Committee may grant awards under the 2015 Plan; establish the terms and conditions of those awards; construe and interpret the 2015 Plan and any agreement or instrument entered into under the 2015 Plan; establish, amend or waive rules and regulations for the 2015 Plan’s administration; amend the terms and conditions of any outstanding award as provided in the 2015 Plan; and take all other actions it deems necessary for the proper operation or administration of the 2015 Plan. The Committee may delegate its authority under the 2015 Plan, subject to certain limitations.

Eligibility. Awards may be granted to employees of the Company, its subsidiaries and affiliates, and directors of the Company. The Committee generally decides who should receive awards and what kind of awards they should receive. The 2015 Plan does not limit the number of employees and affiliates who may receive awards. As of the date of this Proxy Statement, the Company and its subsidiaries and affiliates had nine non-employee directors and approximately 500 employees eligible to participate in the 2015 Plan.

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Authorized Number of Shares. Eleven million shares of Company common stock initially were reserved for issuance under the 2015 Plan. As of December 27, 2015, options, restricted stock, RSU and performance share awards and other awards were outstanding under the 2015 Plan with respect to 5,355,962 shares of common stock, and 5,644,038 shares of common stock were available for future awards under the 2015 Plan (assuming the maximum number of Performance Shares are issued upon vesting). The initial 11,000,000 share reservation was developed to accommodate the conversion of awards granted by the Company’s former parent in connection with the separation and to provide for another two to three years of equity grants.

The maximum number of shares for which awards may be granted under the 2015 Plan to any non-employee director in any calendar year is 50,000 shares of Company common stock.

Share Counting/Reacquired Shares. For purposes of counting the number of shares available for the grant of awards under the 2015 Plan, shares of Company common stock delivered (whether by actual delivery, attestation, or net exercise) to the Company by a participant to (1) purchase shares of Company common stock upon the exercise of an award, or (2) satisfy tax withholding obligations (including shares retained from the award creating the tax obligation) are not added back to the number of shares available for future awards. In addition, shares of Company common stock repurchased by the Company in the open market using the proceeds from the exercise of an award are not be added back to the number of shares available for future awards. If any award under the 2015 Plan is terminated, surrendered, canceled or forfeited, or if an award is settled in cash, the unused shares of Company common stock covered by such award are again available for grant under the 2015 Plan, subject, however, in the case of incentive stock options, to any limitations under the Internal Revenue Code.

Types of Awards. The Committee may grant the following types of awards under the 2015 Plan: stock options, stock appreciation rights, restricted stock, stock awards, RSUs, performance shares, performance units and cash-based awards. Each type of award is subject to a maximum limit on the grant that may be made to any one participant in a fiscal year.

Stock Options. A stock option is the right to purchase one or more shares of Company common stock at a specified price, as determined by the Committee. The Committee may grant non-qualified stock options and incentive stock options. A stock option is exercisable at such times and subject to such terms and conditions as the Committee determines. No more than 1,000,000 shares of Company common stock subject to stock options may be granted to any participant in a fiscal year. The exercise price of a stock option may not be less than 100% of the fair market value of a share of Company common stock on the date that the option is granted. No option may remain exercisable beyond ten years after its grant date. Incentive stock options may only be granted to employees of the Company or its affiliates or subsidiaries (provided that the affiliate or subsidiary is a type of entity whose employees can receive such options under the tax rules that apply to such awards), and the maximum number of shares that may be issued under incentive stock options cannot exceed 5,000,000.

Stock Appreciation Rights. A stock appreciation right (“SAR”) is a right to receive an amount in any combination of cash or Company common stock (as determined by the Committee) equal in value to the excess of the fair market value of the shares covered by such SAR on the date of exercise over the aggregate exercise price of the SAR for such shares. SARs may be granted freestanding or in tandem with related options. The exercise price of a SAR granted in tandem with an option will be equal to the exercise price of the related option, and may be exercised for all or part of the shares covered by such option upon surrender of the right to exercise the equivalent portion of the related option. The exercise price of a freestanding SAR may not be less than the fair market value of a share of Company common stock on the date the SAR is granted. No SAR may remain exercisable beyond ten years after its grant date. No more than 1,000,000 shares of Company common stock may be granted in the form of SARs to any participant in a fiscal year.

Restricted Stock/Stock Awards. Restricted stock is an award of Company common stock that is subject to a substantial risk of forfeiture for a period of time and such other terms and conditions as the Committee determines. A stock award is an award of Company common stock that is not subject to such a risk of forfeiture, but which may be subject to such other terms and conditions as the Committee determines. No more than 500,000 shares of Company common stock may be granted to any participant in a fiscal year pursuant to stock awards or awards of restricted stock.

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RSUs. A RSU is an award whose value is based on the fair market value of Company common stock and whose payment is conditioned on the completion of specified service requirements and such other terms and conditions as the Committee may determine. Payment of earned RSUs may be made in a combination of cash or shares of Company common stock (as determined by the Committee). The maximum aggregate grant of RSUs or performance shares that may be awarded to any participant in any fiscal year may not exceed 500,000 shares of Company common stock.

Performance Units/Shares and Cash-Based Awards. Performance Units/Shares and Cash Based Awards are other equity-type or cash-based awards that may be granted to participants. These awards may be valued in whole or in part by reference to, or are otherwise based on, the fair market value of Company common stock or other criteria established by the Committee and the achievement of performance goals. These awards are subject to such terms and conditions as the Committee determines. Performance goals may include a service requirement. Payment of earned performance units/shares and cash-based awards may be made in any combination of cash or shares of Company common stock (as determined by the Committee) that have an aggregate fair market value equal to the value of the earned awards at the close of the applicable performance period. The maximum aggregate grant of performance shares or RSUs that may be awarded to any participant in any fiscal year may not exceed 500,000 shares of Company common stock. The maximum aggregate amount of performance units or cash-based awards that may be awarded to any participant in any fiscal year may not exceed $10,000,000.

Adjustments. In the event of a change in the outstanding shares of Company common stock due to a stock split, stock dividend, recapitalization, merger, consolidation, spin-off, reorganization, repurchase or exchange of Company common stock or other securities, or other corporate transaction or event, the Committee shall take certain actions to prevent the dilution or enlargement of benefits under the 2015 Plan. These actions include adjusting (1) the number of shares of Company common stock that may be issued under the 2015 Plan (including the authorized share limitations); (2) the number of shares or price of shares subject to outstanding awards; and (3) the consideration to be paid upon the grant or exercise of any award.

Change in Control. Generally, in the event of a change in control of the Company, as defined in the 2015 Plan, unless otherwise specified in the award agreement, outstanding awards are not subject to accelerated vesting unless (a) they are not continued or assumed in connection with the change in control or (b) the holder has a qualifying termination of employment, as defined in the applicable award agreement, within two years following the change in control. Unless otherwise specified in the award agreement, if either condition described in (a) or (b) is satisfied, (1) all outstanding options and SARs will become immediately exercisable in full during their remaining term; (2) all restriction periods and restrictions imposed on non-performance based restricted stock awards will lapse; (3) all outstanding awards of performance-based restricted stock, performance units and performance shares will vest and be paid assuming achievement of all relevant target performance goals; (4) all RSUs will vest and be paid; and (5) all outstanding cash-based awards will vest and be paid (and, in the case of performance-based cash-based awards, based on an assumed achievement of all relevant target performance goals).

Performance Measures/Section 162(m). The 2015 Plan permits the Committee to make awards that are intended to be exempt from the deduction limitations under Section 162(m) of the Internal Revenue Code because they satisfy the requirements of performance-based compensation. The 2015 Plan lists the performance measures the Committee may use to make performance-based awards under Section 162(m). These performance measures include: (1) earnings per share (basic or diluted); (2) income before income taxes; (3) income from continuing operations; (4) net income or net income attributable to the Company; (5) operating income; (6) cash flow from operating activities, operating cash flow (defined as operating income plus non-cash charges for depreciation, amortization and impairment of operating assets) or free cash flow; (7) EBITDA, or net income attributable to the Company, before interest, taxes, depreciation/amortization; (8) return measures (including, but not limited to, return on assets, equity, capital or investment); (9) cash flow return on investments, which equals net cash flows divided by owner’s equity; (10) internal rate of return or increase in net present value; (11) dividend payments; (12) gross revenues; (13) gross margins; (14) operating measures such as trends in digital metrics, circulation, television ratings and advertising measures; (15) internal measures such as achieving a diverse workforce; (16) share price (including, but not limited to, growth measures and TSR) and market value; and (17) debt (including, but not limited to, measures such as debt (book value or face value) outstanding and debt to earnings before interest, taxes, depreciation and amortization). This wide range of potential performance goals is intended to ensure that the Company can readily adapt to changing business needs. The performance goals the Committee establishes for the performance measures described above which are based on operating results will be adjusted to take into account the effects of “Extraordinary Items” (as defined in the 2015 Plan), unless the Committee determines otherwise at the time the performance goals are established.

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Any of the above measures may be compared to peer or other companies. Additionally, performance measures may be set either at the consolidated level, segment level, division level, group level, or the business unit level and performance measures may be measured either annually or cumulatively over a period of years, on an absolute basis or relative to pre-established targets, to a previous year’s results or to a designated comparison group, in each case as specified by the Committee.

Corporate Governance Provisions. The 2015 Plan contains several other provisions intended to make sure that awards under the 2015 Plan comply with established principles of corporate governance. These provisions include:

Substitute Awards and Adjusted Awards. Substitute awards or adjusted awards may be granted under the 2015 Plan under certain circumstances such as a merger, acquisition, spin-off or other corporate event (for example, awards originally granted under the 2001 Omnibus Incentive Compensation Plan (Amended and Restated as of May 4, 2010) of the Company’s former parent were converted into awards in respect of Company common stock in connection with the separation) in which case certain of the limits and rules discussed above may not apply to such substitute or adjusted awards.

Transferability of Awards. Except as otherwise provided in an award agreement, awards may not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution. Except as otherwise provided in an award agreement, during the life of the participant, awards are exercisable only by the participant or such participant’s legal representative.

Provisions for Foreign Participants. The Committee may modify awards granted to participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the 2015 Plan to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefits or other matters.

Amendment and Termination. The Committee may amend or terminate the 2015 Plan at any time, but no such amendment or termination may adversely affect in any material way the rights of a participant with respect to an outstanding award without that participant’s consent. No awards may be granted on or after 10 years from the date the 2015 Plan was adopted. Stockholder approval is required for certain amendments to the 2015 Plan.

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Federal Income Tax Aspects of the 2015 Plan

This is a brief summary of the U.S. federal income tax aspects of awards that may be made under the 2015 Plan based on existing U.S. federal income tax laws as of the date of this Proxy Statement. This summary provides only the basic tax rules and is not intended as, and should not be relied upon, as tax guidance for participants in the 2015 Plan. It does not relate to the income tax circumstances of any individual participant or describe the implications, if any, of a number of special tax rules, including, without limitation, the alternative minimum tax, the golden parachute tax rules under Sections 280G and 4999 of the Internal Revenue Code, and foreign, state and local tax laws. In addition, this summary assumes that all awards are exempt from, or comply with, the rules under Section 409A of the Internal Revenue Code regarding nonqualified deferred compensation. Changes to the tax laws could alter the tax consequences described below.

Incentive Stock Options. The grant of an incentive stock option will not be a taxable event for the participant or for the Company. A participant will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of common stock received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain if the participant holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the “holding period requirement”). The Company will not be entitled to any business expense deduction with respect to the exercise of an incentive stock option, except as discussed below. For the exercise of an option to qualify for the foregoing tax treatment, the participant generally must exercise the option while the participant is our employee or an employee of our subsidiary or, if the participant has terminated employment, no later than three months after the participant terminated employment.

If all of the foregoing requirements are met except the holding period requirement mentioned above, the participant will recognize ordinary income upon the disposition of the common stock in an amount generally equal to the excess of the fair market value of the common stock at the time the option was exercised over the option exercise price (but not in excess of the gain realized on the sale).

The balance of the realized gain, if any, will be capital gain. The Company will generally be allowed a business expense deduction when and to the extent the participant recognizes ordinary income, subject to the restrictions of Section 162(m) of the Internal Revenue Code.

Non-Qualified Options. The grant of a non-qualified stock option will not be a taxable event for the participant or the Company. Upon exercising a non-qualified option, a participant will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a non-qualified option, the participant will have a taxable capital gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares of common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised). Subject to the restrictions of Section 162(m) of the Internal Revenue Code, the Company will be entitled to a business expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.

Stock Appreciation Rights. There are no immediate tax consequences of receiving an award of stock appreciation rights under the 2015 Plan. Upon exercising a stock appreciation right, a participant will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Subject to the restrictions of Section 162(m) of the Internal Revenue Code, the Company will be entitled to a business expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.

Restricted Stock/Stock Awards. A participant who is awarded restricted stock will not recognize any taxable income for federal income tax purposes at the time of grant, provided that the shares of common stock are subject to restrictions (that is, the restricted stock is nontransferable and subject to a substantial risk of forfeiture). However, the participant may elect under Section 83(b) of the Internal Revenue Code to recognize ordinary income in the year of the award in an amount equal to the fair market value of the common stock on the date of the award (less the purchase price, if any), determined without regard to the restrictions. If the participant does not make such a Section 83(b) election, the fair market value of the common stock on the date the restrictions lapse (less the purchase price, if any) will be treated as ordinary income to the participant and will be taxable in the year the restrictions lapse. A participant who is awarded shares that are not subject to a substantial risk of forfeiture will recognize ordinary income equal to the fair market value of the shares on the date of the award. Subject to the restrictions of Section 162(m) of the Internal Revenue Code, the Company will be entitled to a business expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.

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RSUs, Performance Units/Shares and Cash-Based Awards. The taxation of these awards will depend on the specific terms of the award. Generally, the award of RSUs, Performance Units/Shares and Cash-Based Awards will have no federal income tax consequences for the Company or for the participant. Generally, the payment of the award is taxable to a participant as ordinary income. Subject to the restrictions of Section 162(m) of the Internal Revenue Code, the Company will be entitled to a business expense deduction in the same amount and generally at the same time as the participant recognizes ordinary income.

New Plan Benefits

As of the date of this Proxy Statement, no awards have been made under the 2015 Plan that are contingent upon stockholder approval of this proposal. Because awards under the 2015 Plan are discretionary, the benefits or amounts that may be received by or allocated to the following individuals or groups under the 2015 Plan are not presently determinable:

The Board of Directors unanimously recommends that the stockholders of the Company vote FOR approval of the 2015 Plan.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

In this Compensation Discussion and Analysis, references to the “Committee” are to the Executive Compensation Committee of the Company’s Board of Directors, and references to “NEOs” are to the Company’s named executive officers, who for the 2015 fiscal year were:

Impact of the Separation on Our Executive Compensation Program

On June 29, 2015, the Company completed the legal and structural separation of the publishing business from its former parent, TEGNA, and became an independent public company (the “separation”). The separation was effected by the distribution by TEGNA of 98.5% of the outstanding common stock of the Company to TEGNA’s stockholders. Each TEGNA stockholder of record as of the close of business on June 22, 2015, the record date for the separation, received one share of Company common stock for every two shares of TEGNA common stock held.

This Compensation Discussion and Analysis discusses, in part, the historical compensation philosophy, programs and practices of the Company’s former parent because, until the completion of the separation, decisions regarding the compensation of the NEOs were made primarily by the Executive Compensation Committee of the Company’s former parent (the “Parent Committee”) in implementing the executive compensation program of the Company’s former parent. In addition, as addressed in further detail throughout this Compensation Discussion and Analysis, our initial compensation programs following the separation were prescribed to a great extent by the terms of the Employee Matters Agreement (described elsewhere in this Proxy Statement), which among other items, provided for the conversion and/or adjustment of outstanding equity and incentive awards granted by the Company’s former parent to its senior executives who joined the Company in connection with the separation, and also required the Company to establish and maintain, through at least December 31, 2015, retirement benefit and executive severance arrangements with terms substantially the same as those provided by the Company’s former parent prior to the separation. As a result, the Company’s 2015 executive compensation program, at least as an initial matter, remained largely consistent with the executive compensation program in place at the Company’s former parent.

The separation also impacted the Company’s 2015 executive compensation program in that several NEOs, including Mr. Dickey, Ms. Engel, Mr. Zidich and Mr. Payne, entered into letter agreements with the Company or the Company’s former parent, as applicable, in contemplation of their service in executive roles with the Company following the separation. These agreements specified certain compensation payable to them for such service. The terms of these agreements are described under “Additional Information Regarding the Summary Compensation Table and the Grants of Plan-Based Awards Table” on page 58 of this Proxy Statement.

Elements of the Company’s Executive Compensation Program

The Company’s executive compensation program comprises the following core elements:

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Except for the Gannett Co., Inc. Executive Severance Plan and the Gannett Co., Inc. 2015 Change in Control Severance Plan, each of these plans was either assumed by the Company from the Company’s former parent in connection with the separation, or was newly created with terms and conditions that generally mirror the terms of the similar program or plan retained by the Company’s former parent. As a result, benefits available to our executives under these programs and plans generally track those to which the executives were entitled during their employment with the Company’s former parent. Taken together, the plans assist the Company in recruiting and retaining employees and in providing leadership stability and long-term commitment from its executives.

Compensation Governance

Committee Responsibilities

The Committee oversees the Company’s executive compensation program and is responsible for:

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Guiding Principles

In making its NEO compensation decisions, the Committee is guided by the following principles:

Compensation-Related Governance Practices

The Board’s commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by the Committee. The Company’s compensation-related governance practices and policies of note include the following:

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How the Committee Determines NEO Compensation

The Committee determines NEO compensation in its sole discretion based on its business judgment, informed by the experience of the Committee members, input from the Committee’s independent consultant, the Committee’s assessment of the NEOs and the Company’s performance and achievement of its strategic plan. While the Committee takes management recommendations into account when determining NEO compensation, the Committee relies primarily on its collective judgment of the performance of the Company and the NEOs in light of the challenges confronting our core businesses and our progress toward achieving the Company’s strategic plan. The Committee does not focus on any one particular objective, formula or financial metric, but rather on what it considers to be value-added quantitative and qualitative goals in furtherance of our compensation guiding principles described under “Compensation Governance—Guiding Principles” in this “Compensation Discussion and Analysis.”

Factors Considered by the Committee

Key Performance Indicators . The Committee uses key performance indicators (“KPIs”) as its principal evaluation tool for NEO compensation decisions. KPIs consist of individually designed qualitative and quantitative goals organized around individual, operating unit and/or Company performance in the areas of profit, product and people. Quantitative KPIs include, where appropriate, revenue, adjusted EBITDA, operating income and digital goals for the Company and the respective divisions and functions over which each NEO has operational or overall responsibility. Qualitative KPIs include, where appropriate, measures of leadership, innovation, collaboration, new products and programs in support of the Company’s strategic plan, diversity initiatives, First Amendment activities, and other significant qualitative objectives. The CEO’s KPIs are heavily weighted toward the Company’s financial performance, TSR, and the execution of a strategic plan that positions the Company for the future.

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Financial Measures . The Committee also considers the financial performance of the Company using the following financial measures: total revenues, operating income, net income attributable to Gannett, income from continuing operations, earnings per share, return on equity, operating cash flow, free cash flow, free cash flow per diluted share, after tax cash flow per share, operating income as a percentage of sales, debt to earnings before interest, taxes, depreciation and amortization, stock price and market value. No one measure is given greater weight than the others. In assessing these financial performance measures, the Committee compares them to management budgets approved by the Board at the beginning of the year and the Company’s financial results from prior years. The Committee selected these financial measures because it considers them to be broad enough to capture the most significant financial aspects of an organization as large as ours yet also focused enough to represent the financial measures that we believe drive our financial success.

Other Qualitative Considerations . In addition, the Committee evaluates the Company’s progress toward the goals of its strategic plan, as well as the achievement of qualitative goals including leadership in defending the First Amendment, promoting an ethical Company work environment and diverse workforce, and maintaining its reputation as a good corporate citizen of the local, national and international communities in which it does business.

Comparative Market Data. The Company compares its NEO salaries, bonuses and equity compensation to those of companies in the media sector and other companies with comparable revenues and ratios of profits to revenues in order to get a general understanding of the compensation structures maintained by similarly situated companies and to confirm that the elements of our compensation program—and the range of amounts we pay our executives for each element—are appropriate in the context of the broad market reference points provided by the Comparative Market Data described below. The Company does not, however, target elements of compensation to a certain range, percentage or percentile within the Comparative Market Data.

To that end, management of the Company’s former parent provided the Parent Committee with a report regarding, among other things, executive compensation trends and practices, which the Parent Committee reviewed and used in its decisions affecting the 2015 base salaries and long-term equity awards granted January 1, 2015 to executives of the Company’s former parent. Management of the Company’s former parent also reviewed data from the Towers Watson Media Compensation Survey, the Towers Watson General Industry Executive Compensation Survey, the Croner Digital Content and Technology Survey and proxy data from Equilar, a widely used source of executive compensation information (collectively, “Comparative Market Data”).

Similar Comparative Market Data was provided to the Company’s Committee to assist it in making decisions relating to 2015 annual bonuses as well as in setting 2016 base salaries and in determining the long-term incentive awards made to the Company’s NEOs.

Say-on-Pay Results and Stockholder Engagement Efforts. In evaluating executive compensation programs, policies and practices, and in making decisions impacting 2015 NEO compensation, both the Parent Committee (prior to the separation) and the Company’s Committee (following the separation) noted that the executive compensation program developed and implemented by the Company’s former parent, on which the Company’s initial executive compensation has generally been modeled, has been well received by stockholders. At the Company’s former parent’s 2015 annual meeting of stockholders, approximately 96% of the votes cast were in favor of the Company’s former parent’s Say on Pay proposal. The Committee likewise will consider the outcome of the Company’s Say on Pay votes when making future NEO compensation decisions.

The Company is committed to the interests of its stockholders and recognizes that communicating with stockholders on a regular basis is a critical component of the Company’s corporate governance program. As part of this commitment, the Company actively engages with its stockholders in order to fully understand their viewpoints concerning the Company, to garner feedback on what the Company can do better and to help stockholders understand Company performance and strategy. In addition to answering questions from stockholders on its quarterly earnings calls, management regularly engages with investors by participating in industry media conferences. Management also meets in person and by telephone with many stockholders at other times throughout the year to solicit input and answer questions on a variety of topics. Management shares stockholder viewpoints with the Board and the Committee takes this feedback into account when it reviews the Company’s executive compensation program.

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The Company also has a policy that all directors attend the Annual Meeting of Stockholders, which presents stockholders the ability to interact with the Board at the Annual Meeting. For those who are unable to attend any of our investor meetings, transcripts of all management presentations are available on our website at www.gannett.com. Any stockholder who has an inquiry or meeting request is invited to contact Michael Dickerson, Vice President of Investor Relations, at 703-854-6815.

Base Salary

Base salaries compensate executives for service in their executive roles and are set based on the following factors:

As noted above, the 2015 base salaries for Mr. Dickey, Ms. Engel, Mr. Zidich and Mr. Payne that became effective upon the separation were determined through negotiations of the respective letter and similar agreements prescribing the terms of their employment in their executive roles with the Company following the separation.

The “Summary Compensation Table” on page 56 of this Proxy Statement reports the 2015 base salary earned by each NEO for the entire year, including the amounts paid by the Company’s former parent for service during the pre-separation period.

Annual Bonuses

NEOs participate in an annual bonus program, which offers an incentive opportunity linked to attainment of the Company’s annual financial and qualitative performance goals and each executive’s KPIs set for that year. Bonuses are designed to reflect individual and Company performance during the past year and therefore can vary significantly in amount from year to year.

The Committee, in consultation with its independent compensation consultant, considers bonus guidelines developed by our President and CEO in conjunction with our Chief People Officer and other members of our human resources team. These guideline amounts are calculated by multiplying the NEO’s base salary by a target percentage, which takes into account:

In addition, the letter and similar agreements described under “Additional Information Regarding the Summary Compensation Table and the Grants of Plan-Based Awards Table” on page 58 of this Proxy Statement established bonus parameters for Mr. Dickey, Ms. Engel, Mr. Zidich and Mr. Payne.

In making final 2015 bonus determinations, the Committee considered, among other items described above, the following significant achievements:

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Based on the foregoing, the Committee awarded 2015 annual bonuses to our NEOs as follows:

The Committee determined that these bonus amounts were appropriate given the Committee’s assessment of the NEOs’ performance against their respective KPIs, the financial performance of the Company and the divisions and operations for which they are responsible, and the Company’s progress toward the goals of its strategic plan.

Long-Term Incentives

Equity-based awards recognize the performance of certain executives who drive the development and execution of our business strategies and goals. The primary purposes of these awards are to align further the executive’s interests with those of the Company’s stockholders and the Company’s longer-term objectives, to drive stockholder return, to foster executive stock ownership and to promote retention.

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Overview of 2015 Long-Term Incentives for NEOs

During 2015, the long-term equity component of the compensation received by the NEOs comprised annual grants of Performance Shares and RSUs in amounts approved by the Parent Committee in December 2014 and granted as of January 1, 2015, and special, one-time RSU awards approved by the Company’s Committee in July 2015 to provide additional long-term incentives to certain members of the Gannett Executive Team in respect of their assumption of additional responsibilities with the Company following the separation.

Set forth below is a summary of the key terms of the Performance Shares and RSUs, followed by further information as to the process followed by the Parent Committee and the Company’s Committee in determining the relative size of the various awards. The “Summary Compensation Table” on page 56 of this Proxy Statement reports the entire grant date fair value of awards made to the NEOs in 2015, including the fair values of awards approved and granted by the Parent Committee in 2015 during the pre-separation period.

Impact of the Separation on Long-Term Incentives

The Employee Matters Agreement provided for the conversion of the outstanding awards granted under the Company’s former parent’s equity compensation programs into adjusted awards relating to shares of TEGNA and/or Company common stock, as described below. The adjusted awards generally are subject to substantially the same terms, vesting conditions, post-termination exercise rules and other restrictions that applied to the original award immediately before the separation. The following paragraphs summarize the adjustments made to outstanding equity awards held by the Company’s current and former employees at the time of the separation.

Treatment of Awards Granted Prior to 2015

Restricted Stock and RSU Awards. Each outstanding restricted stock or RSU award granted by the Company’s former parent prior to 2015 was converted into an award consisting of shares of both TEGNA common stock and shares of the Company’s common stock. The number of shares of TEGNA common stock subject to each award was the same as the number subject to the award prior to the separation, while the number of shares of the Company’s common stock subject to the award was determined based on the number of the Company’s shares distributed per share of the Company’s former parent in the separation.

Performance Share Awards. Each outstanding performance share award granted by the Company’s former parent prior to 2015 was converted in the same manner as each outstanding restricted stock or RSU award granted prior to 2015.

Stock Option Awards. Each outstanding stock option award granted by the Company’s former parent prior to 2015 was converted into an award of options to purchase both shares of TEGNA common stock and shares of the Company’s common stock. The number of shares and exercise prices of each option award were adjusted in a manner intended to preserve the aggregate intrinsic value of the original stock option as measured immediately before and immediately after the separation, subject to rounding.

Treatment of Awards Granted in 2015

RSU Awards Held by Company Employees. Each outstanding RSU award granted by the Company’s former parent in 2015 prior to the separation and held by an employee or director who is employed by, or a director of, the Company following the separation or a former employee of the Company’s business was converted into an award denominated in shares of the Company’s common stock, with the number of shares subject to the award adjusted in a manner intended to preserve the aggregate intrinsic value of the original RSU award as measured immediately before and immediately after the separation, subject to rounding.

Performance Share Awards Held by Company Employees. Each outstanding performance share award granted by the Company’s former parent in 2015 prior to the separation and held by a Company employee following the separation was converted in the same manner as outstanding RSU awards granted to Company employees or directors in 2015.

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Performance Shares

General Terms of the Performance Share Program. Under the Performance Share Plan, the Company may issue shares of Company common stock (“Performance Shares”) to senior executives following the completion of a three-year period beginning on the grant date (each, an “Incentive Period”). Generally, if an executive remains in continuous employment with the Company during the Incentive Period, the number of Performance Shares that the executive will receive will be determined based upon how the Company’s TSR compares to the TSRs of a group of peer companies (the “TSR Peer Group”) established by the Committee, with assistance from its independent compensation consultant, for the applicable Incentive Period. By tying the payout of the Performance Shares to the Company’s TSR, a purely objective standard, the Committee is aligning executive compensation with stockholders’ interests.

For each grant of Performance Shares, the Company’s TSR is ranked against the TSR of each company in the TSR Peer Group over the Incentive Period. For purposes of the Performance Share Plan, a company’s TSR equals a fraction, the numerator of which is the company’s stock price change plus the dividends paid on such stock (which are assumed to be reinvested in the stock) from the first day of the Incentive Period to the applicable measurement date, and the denominator of which is the company’s closing stock price on the business day preceding the first day of the Incentive Period.

In connection with the separation, the Parent Committee and the board of directors of the Company’s former parent approved modifications to the Performance Share Program that affected the calculation of the “Company’s TSR” for purposes of the 2013-2015, 2014-2016 and 2015-2017 Incentive Periods, as follows:

For each Incentive Period, the Committee will calculate the number of Performance Shares earned by multiplying the target number of Performance Shares (as specified in the executive’s award agreement) by a percentage determined by the number of TSR Peer Group companies whose performance is exceeded by the Company’s TSR during the Incentive Period. The percentages for each Incentive Period are set forth on the following table, with percentiles between the thresholds determined by straight line interpolation:

Relative TSR performance is measured at the end of each of the last four quarters in the Incentive Period, and the average results of these measurements are used to calculate the number of Performance Shares that an executive earns, so that the calculation does not solely rely upon the applicable company’s stock price on the first day and the last day of the Incentive Period.

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With certain exceptions noted in the section below entitled “Other Potential Post-Employment Payments” for terminations due to death, disability, retirement (defined as 65 years of age or at least 55 years of age with at least 5 years of service) or a change in control, Performance Shares generally vest on the expiration of the Incentive Period only if the executive continues to be employed by the Company through the last day of the Incentive Period. After the end of the Incentive Period, each executive who is entitled to Performance Shares based on the satisfaction of the applicable service and performance requirements will receive the number of Performance Shares that the executive has earned, less withholding taxes. Dividends are not paid or accrued on Performance Shares.

The Performance Share Plan has additional rules that affect calculations in the event of the bankruptcy or change in control of a TSR Peer Group company during an Incentive Period:

The number of Performance Shares granted to an executive will be reduced if the price of the shares when paid exceeds 300% of the price of the shares on the first day of the Incentive Period. The price of the shares on the first day of the Incentive Period generally is equal to the closing price of a share of Company common stock on the last trading day prior to that date. However, as a result of the separation, for the 2013-2015 and 2014-2016 Incentive Periods, the “first day price” is equal to the closing price of a share of the Company’s former parent’s common stock on the last trading day of December 2012 ($18.01) and December 2013 ($29.58), respectively. As noted above, as a consequence of the separation, the “first day price” for the 2015-2017 Incentive Period was derived by adjusting the closing price of a share of the Company’s former parent’s common stock on December 31, 2014 by the relative value of a share of the Company’s stock immediately following the separation to the value of a share of the Company’s former parent immediately prior to the separation. As a consequence of this adjustment, the “first day price” for the 2015-2017 Incentive Period is $11.23.

TSR Peer Groups. The TSR Peer Group for the 2015-2017 Incentive Period, as adjusted in respect of the separation as described above, comprises the following companies:

The TSR Peer Group for the 2014-2016 Incentive Period comprises the following companies:

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The TSR Peer Group for the 2013-2015 Incentive Period comprises the following companies:

Impact of Certain Peer Group Transactions on the 2013-2015 Performance Share Awards

Belo Corp.: Based upon the rules of the Performance Share Plan described above, as a result of the Company’s former parent’s acquisition of Belo Corp. during Year 1 of the 2013-2015 Incentive Period, Belo Corp. was excluded from the TSR Peer Group companies for the 2013-2015 Incentive Period.

News Corporation: Effective June 28, 2013, News Corporation contributed certain newspaper and other businesses to a new company, “new” News Corporation, and spun-off the new company to its stockholders. Pursuant to the terms of the spin-off, a stockholder of “old” News Corporation, which was renamed Twenty-First Century Fox, received 1/4 share of “new” News Corporation for each share of “old” News Corporation the stockholder owned prior to the spin-off. Accordingly, for the 2013-2015 awards, the TSR of “old” News Corporation was calculated by assuming that a share of “old” News Corporation held as of the effective date of the spin-off was converted into one share of Twenty-First Century Fox and a 1/4 share of “new” News Corporation.

Media General, Inc.: Effective November 12, 2013, Media General merged with and was acquired by New Young Broadcasting Holding Co., Inc. As a result of the transaction taking place during Year 1 of the 2013-2015 Incentive Period, Media General was excluded from the TSR Peer Group companies for the 2013-2015 Incentive Period.

Journal Communications, Inc.: Effective March 25, 2015, E.W. Scripps acquired Journal Communications, Inc. in connection with the merger of the broadcast assets of the two companies and the spin-off of their respective newspapers to form Journal Media Group. As a result of the transaction taking place after Year 1 of the 2013-2015 Incentive Period, Journal Communications’ relative TSR performance was fixed below the TSR position of the Company for the 2013-2015 Incentive Period based on TSR results through the day immediately preceding the announcement of the acquisition.

E.W. Scripps: As noted above, E.W. Scripps spun-off its newspaper business in connection with its acquisition of Journal Communications, Inc. to form Journal Media Group. As a result, effective March 25, 2015, the TSR of E.W. Scripps was calculated by assuming that a share of pre-spin E.W. Scripps held as of the effective date of the spin-off was converted into one share of post-spin E.W. Scripps and a 1/4 share of Journal Media Group.

2013-2015 TSR Performance

As of December 31, 2015, comparing the “Company TSR” calculated as described above to the TSR of the
2013-2015 TSR Peer Group companies at the end of each of the last four quarters in the 2013-2015 Incentive Period resulted in a payout percentage of 168%. Accordingly, Performance Shares (paid in shares of both TEGNA common stock and the Company’s common stock) were awarded to participating executives at a level equal to 168% of the target number of Performance Shares granted to them in connection with the 2013-2015 Incentive Period.

RSUs

RSUs generally represent the right to receive a share of Company stock at a specified date, provided certain service requirements are satisfied. The Company’s former parent established a practice, which the Company’s Committee also has adopted, of granting RSUs with four-year terms, longer than the three-year term often used by companies for RSU grants, to help retain executives over an extended period of time. As described above, RSU awards granted by the Company’s former parent and held by persons now employed by the Company were converted at the time of the separation into RSU awards denominated in whole or in part in Company shares, but the vesting and other terms and conditions of the original awards generally were not changed as a result of the separation. RSUs granted during or before 2014 which are held by the Company’s NEOs generally vest on a “cliff” basis. RSUs granted in 2015, whether before or after the separation, generally vest in four equal annual installments, with vested shares being delivered to the executive upon the earliest to occur of (1) the executive’s termination of employment, (2) a change in control of the Company and (3) four years after the grant date. As discussed in the section below entitled “Other Potential Post-Employment Payments,” special vesting rules apply to RSUs upon death, disability, retirement or a change in control.

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Beginning with grants made on or after January 1, 2016, RSUs generally will vest in four equal annual installments, with vested shares being delivered to the executive shortly after each vesting event. Additionally, for RSU awards granted on or after January 1, 2016, a change in control of the Company will only accelerate full vesting of RSU awards to executives if the awards are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) in connection with the change in control or the recipient has a qualifying termination of employment within two years following the date of the change in control.

RSU awards will generally be subject to a minimum vesting period requiring at least one year of service, though the Committee may adopt shorter vesting periods or provide for accelerated vesting after less than one year in the following circumstances: (1) in connection with terminations of employment due to death, disability, retirement or other circumstances that the Committee determines to be appropriate; (2) in connection with a change in control in which the award is not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company); (3) for grants made in connection with an acquisition by the Company in substitution for pre-existing awards; or (4) for new hire inducement awards or off cycle awards.

Long-Term Equity Awards Assumed or Made in 2015

January 1, 2015 Grants. For the January 1, 2015 grants, the Parent Committee considered the total long-term equity award target values developed by the Company’s former parent’s President and CEO and other members of the Company’s former parent’s management team, none of whom joined the Company in connection with the separation. These target values were calculated by multiplying the NEO’s base salary by a target percentage, which took into account:

Based on these factors, management of the Company’s former parent recommended the total long-term equity award target values for the Company’s NEOs. Using these long-term equity award target value recommendations as a guideline, in December 2014 the Parent Committee approved 2015 total long-term award values for Messrs. Dickey, Payne and Walker, who were executives of the Company’s former parent prior to the separation, and for Ms. Engel, whose hiring was contemplated at the time of such approval. The 2015 long-term equity award target value for Mr. Zidich, who was not an executive officer prior to the separation, was determined by the President and CEO of the Company’s former parent. The Parent Committee adopted a philosophy that having executives receive a higher proportion of their long-term awards as Performance Shares (which are performance-based) rather than RSUs (which are time-based) strengthens the pay for performance aspect of the long-term incentive program. The Company’s Committee concurs with this philosophy.

On January 1, 2015, the first day of the 2015-2017 Incentive Period, the long-term equity award value was translated into an award of Performance Shares for each executive based on the present value per share of the expected payout of the Performance Shares, as calculated using the Monte Carlo valuation method, and an award of RSUs based upon the Company’s former parent’s closing stock price on December 31, 2014. Following the adjustment of these 2015 awards in connection with the separation, each NEO holds Performance Shares for the 2015-2017 Incentive Period, at target, and RSUs awarded as of January 1, 2015, as shown in the table below. The “Summary Compensation Table” gives effect to the full grant date fair value of these awards, measured assuming the target level of performance is achieved.

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Post-Separation RSU Awards . Following the separation, in July 2015, the Committee approved special, one-time RSU awards to certain of the Company’s executives. Vesting of these awards is generally consistent with the RSU awards received by the Company’s other NEOs in January 2015. The goals of these awards were to provide additional long-term incentives to these executives in respect of their assumption of additional responsibilities with the Company following the separation, to enhance the degree of alignment of the executives with the Company’s stockholders, and to provide a further retention incentive to them. The Committee noted that such awards were consistent with practices observed in connection with other large spin-off transactions. Mr. Dickey received an award of 31,362 RSUs; Ms. Engel received an award of 15,681 RSUs; and Mr. Zidich received an award of 26,882 RSUs.

Benefits and Perquisites

The Company’s NEOs are provided a limited number of personal benefits and perquisites (described in footnote 4 to the Summary Compensation Table). The Committee’s objectives in providing these benefits are to provide protections for the Company’s NEOs and their families, to complement other compensation components, and to help minimize distractions from our executives’ attention to important Company initiatives.

The personal benefits and perquisites the Company provides to its NEOs, including medical, life insurance and disability plans, are generally the same as those offered to other similarly situated senior executives. For additional information about these and other post-employment benefits, see the benefits discussion under the “Other Potential Post-Employment Payments” section on page 63 of this Proxy Statement.

Supplemental Executive Medical Plan

The Supplemental Executive Medical Plan provides supplemental medical benefits to qualifying executives and their eligible dependents. Executives and their eligible dependents must be enrolled in other primary medical coverage that constitutes minimum essential coverage under the Affordable Care Act (“Other Primary Medical Coverage”) in order to participate. Where the Other Primary Medical Coverage is Medicare, the individual must be enrolled in Medicare Parts A, B, and D (or an equivalent Medicare plan, such as a Medicare Advantage plan with prescription drug coverage).

The plan covers qualifying executive’s out-of-pocket medical expenses for any covered medical expense that are not paid under the executive’s Other Primary Medical Coverage. No benefits are payable with respect to certain enumerated expenses. Plan benefits are provided through a contract of insurance, and are limited to those benefits provided in accordance with the terms of the insurance contract. Mr. Dickey is the only NEO who participates in this plan.

2015 Key Executive Life Insurance Plan

Under the Key Executive Life Insurance Plan (“KELIP”), the Company will pay premiums (or make cash payments in lieu of premiums) on individual life insurance policies owned by the executive. The obligation to pay premiums (or make cash payments in lieu of premiums) may continue for a limited period of time post termination for participants who terminate employment after attaining age 55 and completing at least 5 years of service. Mr. Dickey is the only NEO who participates in the KELIP.

Post-Termination Pay

The Company sponsors a tax-qualified defined benefit retirement plan, the Gannett Retirement Plan (“GRP”), and a nonqualified retirement plan, the Gannett Supplemental Retirement Plan (“SERP”). The Company also offers a tax-qualified defined contribution plan, the Gannett 401(k) Savings Plan (“401(k) Plan”), as well as a nonqualified deferred compensation plan, the Gannett Co., Inc. 2015 Deferred Compensation Plan (“DCP”), each of which is described below. In addition, the Company has assumed or implemented a transition plan specifically relating to the separation, an executive severance plan, and change-in-control severance plans, each of which plans is described below and under “Other Potential Post-Employment Payments” on page 63 of this Proxy Statement. These transition and severance plans, together with the GRP and SERP, assist the Company in recruiting and retaining employees and in providing leadership stability and long-term commitment.

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Gannett Retirement Plan and Supplemental Retirement Plan

In connection with the separation, the Company assumed the GRP and certain liabilities of the Company’s former parent under the SERP, including those relating to the Company’s executives. The SERP is a nonqualified retirement plan that provides eligible employees with retirement benefits that cannot be provided under the GRP due to the Internal Revenue Code, which limits the compensation that can be recognized under qualified retirement plans and imposes limits on the amount of benefits which can be paid. Accordingly, benefits under the SERP are tied to benefits under the GRP. The GRP is a qualified defined benefit pension plan that provides retirement income to the majority of the Company’s U.S.-based employees who were employed before benefits were frozen on August 1, 2008, at which time most participants ceased to earn additional benefits for compensation or service earned on or after that date.

The GRP provides benefits for employees based upon years of credited service, and the highest consecutive five-year average of an employee’s compensation out of the final ten years of credited service, referred to as final average earnings, or FAE. Subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans other than the Gannett Deferred Compensation Plan. Until benefits commence, participants’ frozen benefits under the GRP are periodically adjusted to reflect increases in a specified cost-of-living index.

Effective January 1, 1998, a significant change was made to the GRP for service after that date. Certain employees who were either retirement-eligible or had a significant number of years of service were “grandfathered” in the plan provisions applicable to them prior to the change (pre-1998 plan provisions). Other employees were transitioned to the post-1997 plan provisions under the GRP.

The pre-1998 GRP provisions provide for a benefit that is expressed as a monthly annuity at normal retirement equal to a gross benefit reduced by a portion of the participant’s Social Security benefit. Generally, a participant’s annual gross benefit is calculated by multiplying the participant’s years of credited service by specified percentages (generally 2% for each of a participant’s first 25 years of credited service and 0.7% for years of credited service in excess of 25) and multiplying such amount by the participant’s FAE. Benefits under the pre-1998 GRP provisions are paid in the form of monthly annuity payments for the life of the participant and, if applicable, the participant’s designated beneficiary. The pre-1998 GRP provisions provide for early retirement subsidies for participants who terminate employment after attaining age 55 and completing five years of service and elect to commence benefits before age 65. Under these provisions, a participant’s gross benefit that would otherwise be paid at age 65 is reduced by 4% for each year the participant retires before age 65. If a participant terminates employment after attaining age 60 with 25 years of service, the participant’s gross benefit that would otherwise be paid at age 65 is reduced by 2.5% for each year the participant retires before age 65.

The post-1997 GRP provisions provide for a benefit under a pension equity formula, which generally expresses a participant’s benefit as a current lump sum value based on the sum of annual percentages credited to each participating employee. The percentages increase with years of service, and, in some circumstances, with age. Upon termination or retirement, the total percentages are applied to a participant’s FAE resulting in a lump sum benefit value. The pension equity benefit can be paid as either a lifetime annuity or a lump sum.

The GRP benefits for Mr. Dickey and Mr. Zidich are calculated under the post-1997 GRP provisions. However, as noted below, the SERP benefits for Mr. Dickey and Mr. Zidich are calculated under the pre-1998 GRP provisions. Ms. Engel, Mr. Payne and Mr. Walker are not eligible for GRP or SERP benefits.

For some participants, including Mr. Dickey and Mr. Zidich, the SERP also provides a benefit equal to the difference between the benefits calculated under the pre-1998 GRP formula and the amount they will receive from the GRP under the post-1997 formula. For all SERP participants, the benefit calculated under the applicable SERP formula is reduced by benefits payable from the GRP.

In conjunction with the decision to freeze benefits under the GRP, it was also decided to make changes to benefits under the SERP. Generally, SERP participants whose SERP benefits were calculated under the pre-1998 GRP formula continue to accrue benefits under the SERP. However, their benefits for credited service after August 1, 2008 are calculated at a rate that is one-third less than the pre-August 1, 2008 rate. Mr. Dickey and Mr. Zidich were affected by this change. Mr. Dickey and Mr. Zidich are eligible for early retirement under the pre-1998 GRP formula that applies to them under the SERP.

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Effective August 1, 2008, SERP participants whose SERP benefits were not calculated under the pre-1998 GRP formula had their SERP benefits frozen such that they ceased to earn additional benefits for compensation or service earned on or after that date. Until benefits commence, such participants’ frozen benefits are periodically adjusted to reflect increases in a specified cost-of-living index.

SERP benefits are generally paid in the form of a lump sum amount when a participant separates from service or, if later, the date the participant attains age 55, except that payment is accelerated in the event that the Company undergoes a change in control. In order to comply with federal tax laws, certain executives’ SERP benefits cannot be paid within the first six months after their separation from service with the Company. Mr. Dickey and Mr. Zidich are fully vested in their SERP and GRP benefits.

Defined Contribution Retirement Plans

Most of the Company’s employees based in the United States may participate in the 401(k) Plan, which permits eligible participants to make pre-tax contributions and provides for matching and other employer contributions. New participants as well as participants whose benefits have been frozen under the GRP and, if applicable, the SERP, commenced receiving higher matching contributions under the 401(k) Plan. At that time, the matching contribution rate generally increased from 50% of the first 6% of compensation that an employee elects to contribute to the plan to 100% of the first 5% of compensation. During 2015, Ms. Engel and Mr. Payne received matching contributions under the new formula, and Mr. Dickey and Mr. Zidich received matching contributions under the old formula. The Company also makes additional employer contributions to the 401(k) Plan on behalf of certain employees, but none of the NEOs. For purposes of the 401(k) Plan and subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans. Company contributions under the 401(k) Plan vest 25% after one year of service, 50% after two years of service and 100% after three years of service. For these purposes, service with the Company’s former parent is credited. As of the date of this Proxy Statement, Company contributions are 100% vested for Mr. Dickey, Mr. Zidich and Mr. Payne, and 25% vested for Ms. Engel.

Employees in the U.K. may participate in the Newsquest Stakeholder pension plan, a defined contribution scheme, which permits eligible participants to make contributions and provides for employer contributions. Employer contributions vary by eligibility, the highest level of employer contributions is a match of up to 100% of the first 6% of the employee earnings subject to adjustments for qualified earnings. Mr. Walker participates in this plan.

Deferred Compensation Plan

In connection with the separation, the Company and the DCP assumed certain liabilities of the Company’s former parent under its deferred compensation plan, including those relating to the Company’s executives. Each executive who participates in the DCP may elect to defer all or a portion of his or her compensation under the DCP, so long as the minimum deferral is $5,000 for each form of compensation (base salary and bonus) for the year of deferral. The amounts deferred by each executive are vested and will be deemed invested in the fund or funds designated by such executive from the investment options specified under the plan. The DCP is designed for executives resident in the United States; accordingly, Mr. Walker does not participate in the DCP.

The DCP provides company contributions on behalf of certain employees whose benefits under the Company’s 401(k) Plan are capped by Internal Revenue Code rules that limit the amount of compensation that can be taken into account when calculating benefits under a qualified plan. Generally, company contributions to the DCP are calculated by applying the same formula that applies to an employee’s matching and additional employer contributions under the 401(k) Plan to the employee’s compensation in excess of the Internal Revenue Code compensation limit. However, participants are not required to make elective contributions to the DCP to receive an employer contribution under the DCP. Company contributions under the DCP vest 25% after one year of service, 50% after two years of service and 100% after three years of service. Executives who accrue benefits under the SERP, including Mr. Dickey and Mr. Zidich, do not receive company contributions under the DCP. Ms. Engel receives Company contributions under the DCP and is 25% vested in such benefits.

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Amounts that a participant elects to defer into the DCP are generally paid at the time and in the form elected by the participant, provided that if the participant terminates employment before attaining age 55 and completing five years of service, benefits are generally paid in a lump sum amount upon such termination (although for pre-2005 deferrals the Company’s Executive Compensation Committee may pay such deferrals in five annual installments). The DCP permits participants to receive in-service withdrawals of participant contributions for unforeseeable emergencies and certain other circumstances. Prior to when the deferrals are made, a participant may make a special election as to the time and form of payment for benefits that become payable due to the participant’s death or disability if payments have not already commenced, and deferrals will be paid in accordance with such elections under those circumstances. Company contributions to the DCP are generally paid in the form of a lump sum amount when a participant separates from service. The payment of post-2004 company and participant DCP contributions is accelerated in the event that the Company undergoes a change in control.

Change in Control Plans and Arrangements

The Company has adopted, or otherwise has in place, various plans intended to assure that the Company would have the continued dedication of, and the availability of objective advice and counsel from, key executives of the Company notwithstanding the possibility, threat or occurrence of a change in control and such plans are intended to promote the retention and continuity of the executives and certain key executives of the Company.

Transitional Compensation Plan

In connection with the separation, the Company adopted the 2015 Transitional Compensation Plan (“TCP”) similar in many respects to a plan previously implemented by the Company’s former parent. The TCP provides severance pay to participating key executives of the Company in the event the executive is involuntarily terminated without “cause,” or terminates for “good reason” within two years after a change in control of the Company or is terminated in anticipation of a change in control. Mr. Dickey is the only NEO who participates in the TCP.

Following is a summary of several key terms of the TCP:

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An executive entitled to compensation under the TCP would receive benefits including:

The Company has notified participants that the TCP will be terminated effective December 31, 2016, at which time participants in the TCP generally will be transitioned to become participants in the CIC Severance Plan described below, but with certain benefits (including severance payment multiples) comparable to those to which the TCP participants were entitled under the TCP.

2015 Change in Control Severance Plan

Following the separation, the Company adopted the 2015 Change in Control Severance Plan (“CIC Severance Plan”) which provides severance pay to participating key executives of the Company in the event the executive is involuntarily terminated without “cause,” or terminates for “good reason” within two years after a “change in control” of the Company, or is terminated in anticipation of a “change in control” of the Company.

Following is a summary of several key terms of the CIC Severance Plan:

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If triggered upon a qualifying termination of employment, benefits under the CIC Severance Plan include:

Benefits are subject to the participant executing a release and agreeing to certain restrictive covenants.

Ms. Engel, Mr. Zidich and Mr. Walker are participants in the CIC Severance Plan, and each of their “multipliers” (as described above) is two (2). Mr. Zidich is a “Grandfathered Participant” under the Company’s SERP, whereas neither Ms. Engel nor Mr. Walker is a “Grandfathered Participant.”

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Severance Plans and Arrangements upon an Involuntary Termination

Gannett Leadership Team Transition Severance Plan

Under the Gannett Leadership Team Transition Severance Plan, a participant who experiences an involuntary termination of employment without cause in connection with the separation prior to June 29, 2016 would be entitled to a lump sum cash severance payment equal to the product of (a) a severance multiple and (b) the sum of the participant’s annual base salary and annual bonus earned for the most recent fiscal year of the Company’s former parent or the Company, as applicable, preceding the termination (or, if greater, the average annual bonuses earned over the three fiscal years preceding the termination). The severance multiple is one for participants with less than 15 years of service and 1.5 for participants with 15 years or more of service. The severance payment is contingent upon the participant’s execution of a separation agreement containing a release of claims in favor of the Company’s former parent and the Company and their affiliates and covenants restricting the participant’s competition, solicitation of employees and disparagement of the Company and its affiliates. The separation agreement also contains a release of claims by the Company, the Company’s former parent and their affiliates in favor of the participant and a covenant restricting the Company’s disparagement of the participant. In the event that a participant experiences a termination under circumstances that entitles the participant to compensation and benefits under this plan and the TCP, the participant will receive compensation and benefits under the TCP and not under this plan.

Mr. Dickey participates in this severance plan through June 29, 2016.

Executive Severance Plan

Under the Executive Severance Plan, a participant who experiences an involuntary termination of employment without cause is entitled to a lump sum cash severance payment equal to the product of (a) a “severance multiple” and (b) the participant’s annual base salary. The “severance multiple” means (i) with respect to the President and Chief Executive Officer of the Company, three (3); and (ii) with respect to other participants, either two (2) or one (1) as assigned to the participant. Additionally, the participant is entitled to a prorated portion of the participant’s annual bonus for the fiscal year in which the participant is terminated based on actual performance.

The severance payment is contingent upon the participant’s execution of a separation agreement containing a release of claims in favor of the Company and its affiliates and covenants restricting the participant’s competition, disclosure of confidential information, solicitation of employees and disparagement of the Company and its affiliates. The separation agreement also contains a release of claims by the Company, the Company’s former parent and their affiliates in favor of the participant and a covenant restricting the Company’s disparagement of the participant. In the event that a participant experiences a termination under circumstances that entitles the participant to compensation and benefits under the Executive Severance Plan and the TCP or the CIC Severance Plan (collectively, the “Transitional Plans”), the participant shall receive compensation and benefits under the Transitional Plans and not under the Executive Severance Plan.

Ms. Engel, Mr. Zidich, and Mr. Walker are participants in the Executive Severance Plan, and each of their “severance multiples” (as described above) is two (2). Mr. Dickey will participate in this plan beginning June 30, 2016.

Other Compensation Policies

As described above, the Committee has approved a change in its policy relating to vesting of equity awards upon a change in control. For awards granted on or after January 1, 2016, a change in control of the Company will only accelerate full vesting of equity awards to executives if the awards are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) in connection with the change in control or the recipient has a qualifying termination of employment within two years following the date of the change in control.

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Tax Considerations

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid to a company’s CEO and its three other most highly compensated executive officers other than the CFO for any fiscal year. However, Section 162(m) exempts qualifying performance-based compensation from the deduction limit if specified requirements are met. The Committee may structure certain performance-based compensation, including future Performance Shares and annual bonuses, to executive officers who may be subject to Section 162(m) in a manner that is intended to satisfy those requirements. However, the Committee reserves the authority to award non-deductible compensation in circumstances as it deems appropriate. Because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, no assurance can be given, notwithstanding the Company’s efforts, that compensation intended to satisfy the requirements for deductibility under Section 162(m) does in fact do so.