MEMORANDUM

To:

All Guild Employees

From:

Stan Wischnowski

Date:

May 21, 2015

Re:

Collective Bargaining Negotiations Update

Up until now, I have refrained from communicating directly with you about Guild
negotiations; in part, because I believe that speaking directly with your representatives at the
bargaining table is the most effective means to reach an agreement. However, I wanted to ensure
that each of you understands the Companys current offer to your Union.
Let me state at the outset that we fully and completely recognize our obligation to bargain
with the Guild leadership and this communication is not, in any way, intended to bypass or
otherwise circumvent that obligation.

I simply want you to have a clear and accurate

understanding of our offer.

The Company has, in good faith, participated in more than 25 bargaining sessions since
November 18, 2014. The Company approached these sessions in a collaborative, problem
solving manner and has not tried to create artificial negotiation deadlines. We have reviewed a
wide range of issues and potential solutions with your Union bargaining committee.
The Company is seeking efficiencies and flexibility to address opportunities and
challenges faced by our industry. Throughout these talks, both sides have acknowledged that we
are negotiating against a very challenging economic backdrop for the news industry as well as
our Company.

Numerous provisions have been tentatively agreed upon with your

representatives. However, other critical issues were not resolved prior to the February 8, 2015

expiration date of the current Collective Bargaining Agreement. Because of our commitment to
reaching an agreement, the Company agreed to extensions through May 24, 2015 to provide both
sides more time to continue negotiations in the hope that those important issues can be resolved.
As we approach that date, the Company has informed the Guild that it is willing to extend the
current Collective Bargaining Agreement for another 30 days in order to work together to resolve
these negotiations. We do not believe that threats of a strike will resolve the issues we are
discussing.
Our current proposal to the Guild includes the following major items:

A 48% increase in the hourly rate that the Company contributes to the Guild Health &
Welfare plan. The increase in contributions is in addition to the approximately $2.9
million that the Company currently contributes to the Guilds H&W plan on an annual
basis. As a result of the Companys proposal, the Companys hourly rate contributions
would increase to $2.51 per hour for individual coverage (from the current $1.70 per
hour) and $7.56 per hour for family coverage (from the current $5.13 per hour).

Ending of furloughs and diverting the compensation associated with ending furloughs to
the Guild Health & Welfare Fund.

A three-year agreement, which we believe is significant given the current state of the
industry and which we believe demonstrates the trust we have in the future of the
enterprise.

An annual profit-sharing plan based upon the Companys net income. The Company has
proposed that it would, at the Guilds direction on an annual basis, divert any such profit
sharing payments to the Guild Health & Welfare Fund.

Creation of minimum wage scales and annual step levels for Philly.com employees - as
well as the addition of nearly a dozen articles from the main unit contract.

A one-year no layoff guarantee (retroactive to the expiration date of the existing

agreement, February 9, 2015).

Compensation to Guild newsroom members who take on added responsibilities covering

management functions on weekends.

Modified reduction in force language which permits the Company to exercise some
discretion in making layoff decisions, rather than simply utilizing the traditional last in,
first out approach, in the event that a future reduction in force becomes necessary.
It is important to note that the existing Guild Agreement already allows the Company to

implement a reduction in force. The current proposal, therefore, does not in any way increase
the Companys ability to reduce its work force if it deems such action to be necessary. However,
we need the ability to attract, retain and develop the best individuals to meet the formidable
challenges ahead and a system that only serves to protect low performers is unfair to the
individuals who strive to help our organization succeed into the future. In recent years and
months, numerous news organizations across the country have reached agreements with their
Guild units that recognize this reality. In fact, the reduction in force proposals that we have been
discussing with the Guild are similar to those which have been adopted recently by other major
metropolitan news organizations who recognize that survival in the digital age requires a work
force with a multitude of skill sets.
We are fully committed to reaching an agreement with the Guild that is fair to our
employees and, at the same time, enhances the Companys ability to build upon the significant
progress that we have made over the past year. Our mission of creating award-winning
journalism that our readers demand and deserve can only be realized if we create a business
model that is truly sustainable and positions us to be an agile and nimble enterprise, designed to
meet the ever-changing challenges and opportunities we face in the years ahead.