Company Name: Gannett Co., Inc. (Franciscan)
Public Availability Date: 02-12-1996
[INQUIRY LETTER 1]
NIXON, HARGRAVE, DEVANS & DOYLE LLP
SUITE 700
ONE THOMAS CIRCLE
WASHINGTON, D.C. 20005-5802
TELEPHONE(202) 457-5300 December 27, 1995 BY HAND DELIVERY
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 RE: Gannett Co., Inc./Stockholder Proposal Ladies and Gentlemen: I am writing on behalf of Gannett Co., Inc. (the "Company"). The Company has
received a letter from Rev. Claude Lenehan, OFM, Corporate Responsibility Agent,
Holy Name Province, Franciscans (the "Franciscan Proposal"), attached hereto as
Exhibit A, and a letter from Sister Lorena Reilly, General Treasurer of the
Sisters of Charity of Saint Elizabeth (the "Sisters of Charity Proposal"),
attached hereto as Exhibit B, each of which requests that the Company include
"resolutions" relating to controls on tobacco advertisements in the proxy
statement to be circulated to shareholders in connection with the Company's 1996
Annual Meeting. The Company believes that each of the proposals may be properly
omitted from the proxy statement in accordance with the Securities and Exchange
Commission's (the "Commission") rules and policies. Both proposals have been filed through the auspices of Father Michael Crosby and
the Tobacco Program of the Interfaith Center on Corporate Responsibility. As
described in greater detail herein, the Sisters of Charity Proposal and the
Franciscan Proposal are supported through related organizations and are
substantially similar. Both are aimed at restricting Outdoor tobacco
advertisements and other forms of tobacco advertising, particularly such forms
of advertising with special appeal to minors. In an attempt to avoid unnecessary
duplication, we have therefore chosen to address the basis for omitting both of
these Proposals in the text of this one letter. The Company believes that each of the Franciscan Proposal and the Sisters of
Charity Proposal may be properly omitted from the Company's proxy materials for
the 1996 Annual Meeting pursuant to Rule 14a-8(c)(12)(ii) because the proposals
each deal with substantially the same subject matter as proposals that were
submitted to the Company's shareholders in connection with the 1992 and 1993
Annual Meetings of the Company (the "1992 Proposal" and the "1993 Proposal",
respectively). Rule 14a-8(c)(12)(ii) permits the exclusion of stockholder
proposals dealing with "substantially the same subject matter as a prior
proposal submitted to security holders" if the proposal was submitted at two
meetings during the preceding five calendar years, the most recent submission
being within three years, and received at the time of its second submission less
than 6% of the total votes cast. The 1992 and 1993 Annual Meetings occurred
within the five year window of the 1996 Annual Meeting under Rule
14a-8(c)(12)(ii). The 1993 Proposal received less than 6% of the actual votes
cast (not including abstentions and broker non-votes), and is therefore within
the threshold required by Rule 14a-8(c)(12)(ii). I. BACKGROUND 1992 Proposal and 1993 Proposal Both the 1992 Proposal and the 1993 Proposal were submitted by The Province of
St. Joseph of the Capuchin Order, 1015 North Ninth Street, Milwaukee, Wisconsin,
53233, owner at the time of 190 shares of Common Stock of the Company. (See
Exhibits C and D, respectively). The Proposals were virtually identical. Both
requested that the Company prepare a research report on how cigarette
advertisements placed on Company owned billboards or in Company newspapers are
perceived by customers, and to research and evaluate what policies and practices
the Company might adopt to ensure that cigarette advertisers adhere to their
voluntary code of cigarette advertising. Franciscan Proposal The Franciscan Proposal requests that the Company create a "policy to become
proactive. . . to stop youth from smoking." Specifically, the proponent requests
the Company to consider: (i) featuring one counter-tobacco/cigarette
advertisement for every three advertisements sponsored by cigarette and
smokeless tobacco companies, including those related to sports' sponsorships;
and (ii) dedicating 3% of all revenues gained from advertising cigarette and
smokeless tobacco products to youth to a "third party" for use by such party to
run a national anti-smoking advertising campaign aimed at discouraging minors
from smoking. Sisters of Charity Proposal The Sisters of Charity Proposal requests that the Company voluntarily implement
by January 1, 1997 "key elements of, but not limited to, the FDA proposal
applicable to the Company's media outlets." In a supporting statement the
proponent requests the Company to consider: (i) the use of only black and white
advertisements in publications with 15% youth readership or more than 2,000,000
readers under age 18; (ii) prohibiting advertising of giveaway products like
caps or gym bags that carry cigarette or smokeless tobacco product brand names
or logos; and (iii) banning Outdoor advertising of cigarette or smokeless
tobacco products within 1,000 feet of schools and playgrounds and permitting
only black and white advertisements for all other means of Outdoor advertising. II. BASIS FOR OMISSION - RULE 14a-8(c)(12)(ii) Interpretation of "Substantially the Same Subject Matter" and the Policies
Embodied in Rule 14a-8(c)(12) Although there is no single standard for determining if one shareholder proposal
deals with "substantially the same subject matter" as another proposal, the
Commission staff (the "Staff") has in the past interpreted that phrase as
requiring that the proposal be "virtually the same" or "almost identical" both
in form and substance to a previous proposal to be excludable. However, in 1983,
the Commission adopted the current wording of Rule 14a-8(c)(12) with the purpose
of thwarting possible abuses of the Rule which permitted proponents simply to
recast the form of a proposal in a way designed to defeat any argument that any
two proposals were virtually identical. In Securities Exchange Act Release No.
34-20091, the Commission indicated its hopes and judgments under the Rule would
be based on a consideration of the substantive concerns raised by a proposal
rather than the specific language or actions proposed. Following adoption of the
new wording, the Commission has evidenced a commitment to an expansive
interpretation of Rule 14a-8(c)(12) particularly in the context of proposals
which are all aimed at the same social issue. Application of Rule 14a-8(c)(12) to Proposals Regarding Tobacco Advertisements The commitment of the Commission to excluding repeat submissions on the basis of
similar substantive concerns, notwithstanding differences in specific language
or implementation activities, has been evidenced specifically in the context of
proposals relating to tobacco advertisements and the cessation of tobacco
operations. In Philip Morris Companies, Inc. (February 11, 1994) the Staff
agreed with the registrant that a basis existed under Rule 14a-8(c)(12) for
excluding proposals relating, generally, to tobacco advertising. The Staff
concluded that all of the relevant proposals dealt with different aspects of the
registrant's advertising policies, but all of the proposals were aimed at
substantially the same issue (i.e., tobacco advertising) and were therefore
deemed to be of substantially similar subject matter for purposes of Rule
14a-8(c)(12). The proposal under consideration requested that the registrant
adopt a policy of placing health warnings on all promotional items and
advertisements for its tobacco products. Earlier proposals dealt with, among
other related issues, adherence to a voluntary code of cigarette advertising,
putting global health warnings in tobacco advertisements and the creation of a
review committee to study and report on how the registrant's tobacco
advertisements influenced minors. Similarly, in American Brands, Inc. (February 10, 1994) the Staff agreed that
there was a basis under Rule 14a-8(c)(12) for excluding a proposal asking the
registrant to direct its' insurance subsidiary to commission a report relating
to smoking on the grounds that the proposal dealt with substantially the same
subject matter as prior proposals requesting that the company cease the
production and marketing of tobacco products. While a more recent proposal
requested that the registrant's insurance subsidiary issue a report and the
prior proposals were directed at the production and marketing of tobacco
products by another of the registrant's subsidiaries, the Staff concluded that
the ultimate objective of all three proposals was to challenge the registrant's
continued involvement in the tobacco business. The Commission has taken a similar position regarding the exclusion of proposals
relating to the same social issue in contexts other than tobacco advertisements
and operations. See also, The Gillette Company (February 25, 1993) (proposal
requesting review of the use of live animals in safety-testing deals with
substantially the same subject matter as previous animal testing proposals, even
though proposals concerned different reporting requirements and committees); and
The Interpublic Group of Companies (April 3, 1992) (proposal requesting that
registrant issue a report on its South African operations deals with
substantially the same subject matter as proposals in prior years requesting
that the registrant divest its South African operations and terminate all
economic ties with South Africa). III. OMISSION OF THE INSTANT PROPOSALS We believe the position taken by the Commission in Philip Morris Companies, Inc.
and American Brands, Inc. clearly establishes a basis for omission of the
Franciscan Proposal and the Sisters of Charity Proposal under Rule
14a-8(c)(12)(ii) because each such Proposal is substantially similar to the
subject matter of each of the 1992 Proposal and the 1993 Proposal and the voting
and timing requirements of Rule 14a-8(c)(12)(ii) have otherwise been satisfied.
Besides generally having the same focus (tobacco advertising) and the same
general social purpose (curtailing the appeal of smoking through restrictions on
advertising), there is express overlap in various aspects of the Proposals
including the Outdoor advertising of tobacco products and medical effects of
cigarette smoking.. Moreover, in one way or another, all of the Proposals deal
with discouraging minors from smoking and specifically target Outdoor
advertising means. We therefore respectfully request that the Commission concur
in the Company's decision to omit the Proposal under Rule 14a-8(c)(12)(ii). Enclosed with this letter for filing pursuant to Rule 14a-8(d) are six copies of
(i) the Sisters of Charity Proposal and the Franciscan Proposal and material
accompanying each of the Proposals as received from the proponents and (ii) this
letter which sets forth the reason why management of the Company has concluded
that the omissions are proper. This letter is filed 80 days prior to the
Company's mailing of its proxy statement, in compliance with the above stated
rule. In addition, we have notified the proponents of the Company's intention to
omit their respective Proposals from its proxy materials by forwarding to each
of them a copy of this letter. If you have any questions or comments, please feel free to contact the
undersigned at (202) 457-5389. Very truly yours, Joseph H. Reynolds Attachments cc: Rev. Claude Lenehan, OFM
Corporate Responsibility Agent,
Holy Name Province, Franciscans Sister Lorena Reilly
General Treasurer
Sisters of Charity of Saint Elizabeth Thomas L. Chapple, Gannett Co., Inc.
Senior Vice President and General Counsel
[INQUIRY LETTER 2]
MINISTRY OF THE WORD
67 ARBOR DRIVE
P. O. BOX 40
HO-HO-KUS, NJ 07423-0040
TELEPHONE(201) 612-9763 November 16, 1995 Mr. Thomas L. Chapple, Senior Vice President
General Counsel & Secretary
Gannett
1100 Wilson Blvd.
Arlington, VA 22234 Dear Mr. Chapple: The Province of the Most Holy Name of Jesus of the Order of Friars Minor in the
USA, (Franciscans) is the beneficial owner of 900 shares of stock in Gannett.
Verification of ownership is enclosed. We are filing the enclosed resolution for
action at the next stockholder meeting. We submit it for inclusion in the proxy
statement under Rule 14 a-8 of the general rules and regulations of the
Securities Exchange Act of 1934. We would appreciate your indicating in the
proxy statement that we are a sponsor of this resolution. From our statement on corporate responsibility, the Franciscans "seek to call
attention to the social and moral consequences of corporate business practices
and policies through education and concrete action." A representative of the filers will attend the stockholders meeting to move the
resolution as required by the SEC Rules. We will continue to hold shares in the
company through the stockholders meeting. Please feel free to call me if you
have any questions. Thank you very much. Sincerely, Rev. Claude Lenehan, OFM
Corporate Responsibility Agent,
Holy Name Province, Franciscans Enclosures
Sent Federal Express GANNETT
MAKING A POSITIVE CONTRIBUTION TO YOUTH CESSATION OF SMOKING AND TOBACCO USE WHEREAS tobacco is a "gateway drug" for teenagers;
-- An estimated 62 percent of all smokers began using tobacco by age 15;
-- 3,000 minors begin smoking daily; nearly 1,000 of them will eventually die as
a result. Currently, more than 4 million children and adolescents smoke
cigarettes, and 1 million adolescent boys use smokeless tobacco. Between 1991
and 1994, the percentage of eighth graders smoking increased 30 percent; the
percentage of tenth graders smoking increased 22 percent;
-- Tobacco products are among the most heavily advertised products in our
country. In 1993, the tobacco industry spent $6.2 billion on advertising and
promoting cigarettes and smokeless tobacco. Tobacco advertising expenditures
increased more than 1,500 percent between 1970 (the year before television and
radio advertising was banned) and 1992;
-- In 1989, the Surgeon General concluded tobacco advertising and promotion do
appear to stimulate cigarette consumption;
-- An estimated 3% of all sales of cigarettes and smokeless tobacco are to
underage smokers;
-- The Centers for Disease Control reported that 85 percent of underage smokers
who purchase their own cigarettes purchase one of the three most heavily
advertised brands: Marlboro, Camel, and Newport. This contrasts to only
one-third of adults who smoke;
-- While our media features advertisements for cigarettes and tobacco products,
we rarely make it available for free counter-cigarette and tobacco
advertisements. Yet, in the late 1960s the FCC ruled under equal access that the
electronic media were required to place one anti-smoking commercial for every 3
cigarette/tobacco ads run;
-- Most agree that the tobacco industry's own Code of Conduct is being violated
when cigarette advertisements associate smoking with happiness, sophistication,
good health, youthful vigor, sports and leisure activities, sexual attraction
and independence -- all themes that strongly appeal to teens and young adults; RESOLVED that shareholders request the Board voluntarily to create a policy to
become proactive in the Company's effort to stop youth from smoking. In
implementing this recommended policy, shareholders ask the Board to consider:
1) Featuring one counter-tobacco/cigarette ad for every three ads sponsored by
cigarette and smokeless tobacco companies, including those related to sports'
sponsorships;
2) That the 3% which represents sales of cigarettes and smokeless tobacco to
youth be noted by the company giving 3% of all revenues gained from advertising
such to a third party which will:
a) Use the funds to run a national anti-smoking advertising campaign aimed at
discouraging minors from smoking with a goal of reducing the number of underage
smokers.
b) The campaign will be evaluated after 3 years to determine its effectiveness. SUPPORTING STATEMENT Increasingly, investors, individually and institutionally, are concerned that
companies in which they hold stocks benefit from profits generated from tobacco
sales to minors. However, instead of divesting from such companies, they are
using their influence to keep youth from smoking, such as this shareholder
resolution. If you agree with this proposal, please support it by voting "yes"
on this resolution.
[STAFF REPLY LETTER]
February 12, 1996 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Gannett Co., Inc. (the "Company")
Incoming letter dated December 27, 1995 The proposal requests that the board voluntarily create a policy to be proactive
in the Company's effort to stop youth from smoking by adopting suggested
advertising guidelines. There appears to be some basis for your view that the proposal may be omitted
from the Company's 1996 proxy materials under Rule 14a-8(c)(12)(ii) as dealing
with substantially the same subject matter as prior proposals, submitted at two
meetings during the last five years, which received at the time of its latest
submission, less than 6% of the total number of votes cast. Accordingly, the
Division will not recommend any enforcement action to the Commission if the
Company omits the subject proposal from its proxy materials in reliance on Rule
14a-8(c)(12)(ii). Sincerely, Andrew A. Gerber
Attorney-Advisor
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