Gannett Co. has revised the employment contracts of its CEO and CFO, essentially putting in place provisions that would accelerate payments of the duo’s deferred compensation and retirement plans if the company is sold. Gannett said the changes were made to comply with tax rules, and to clarify the definition of change in control.
The media company, however, did not indicate whether it is, or anticipates being, a target of a takeover offer. “A change in control of Gannett is not in the works or even anticipated,” chief executive Craig Dubow wrote in a note circulated to employees Friday, according to the Associated Press. “We were mandated to make these changes by the IRS,” spokeswoman Tara Connell told the wire service.
The company amended its February 2007 employment agreement with CFO Gracia C. Martore. It also revised a transitional compensation plan, supplemental executive retirement plan (SERP), deferred compensation plan (DCP), and other compensation plans agreed to in February with Dubow. The plans and agreements were modified, says Gannett, to comply with the requirements of Section 409A of the tax code, which deals with deferred compensation.
In particular, the amendments set new ownership levels for what constitutes a management buyout, thereby better defining what triggers accelerated payments. In addition, the modifications provide for a lump-sum payout of accrued SERP and DCP amounts following a change in control, allow for accelerated vesting of benefits for active SERP participants, and prohibit terminating or amending a SERP to reduce benefits in anticipation of a change in control. The revised plans became effective on August 7.