SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to Rule 240.14a-12

GateHouse Media, Inc.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
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	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):a
	(4)		Proposed maximum aggregate value of transaction:
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	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

 

To Our Stockholders:

 

I am pleased to invite you to attend the annual meeting of stockholders of GateHouse Media, Inc. to be held on May 26, 2011 at 9:00 a.m., in the Board Room at GateHouse Media, Inc., located at 350 WillowBrook Office Park, Fairport, New York 14450.

 

Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.

 

Your vote is important. Whether or not you plan to attend the annual meeting, we hope you will vote as soon as possible. You may vote by telephone, by internet or by mailing a proxy or voting instruction card. Voting by phone, by internet or by written proxy will ensure your representation at the annual meeting regardless of whether you attend in person. Please review the instructions on the proxy or voting instruction card regarding each of these voting options.

 

Thank you for your continued support and interest in GateHouse Media, Inc.

 

Sincerely,

 

Michael E. Reed

Chief Executive Officer

 

2011 ANNUAL MEETING OF STOCKHOLDERS

 

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

 

TABLE OF CONTENTS

 

GATEHOUSE MEDIA, INC.
350 WillowBrook Office Park
Fairport, New York 14450
(585) 598-0030

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

By order of the Board of Directors,

 

 

 

This notice of annual meeting and proxy statement and form of proxy are being distributed on or about April 12, 2010.

 

 

The Board of Directors (the ”Board”) of GateHouse Media, Inc., a Delaware corporation (hereafter referred to as “GateHouse Media,” the “Company,” “our” or “we”), is providing these proxy materials to you in connection with GateHouse Media’s annual meeting of stockholders, which will take place on May 26, 2011 at 9:00 a.m. The meeting will be held in the Board Room at our principal executive office, located at 350 WillowBrook Office Park, Fairport, New York 14450. As a stockholder, you are invited to attend the annual meeting and are entitled to and requested to vote on the items of business described in this proxy statement.

 

 

Under rules recently adopted by the U.S. Securities and Exchange Commission (“SEC”), we are now furnishing proxy materials to our stockholders on the internet, rather than mailing printed copies of those materials to each stockholder. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you request one. Instead, the Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review the proxy materials on the internet. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. We anticipate that the Notice of Internet Availability of Proxy Materials will be mailed to stockholders and the proxy materials will be available on our internet website on or about April 11, 2011.

 

 

The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, GateHouse Media’s Board and Board committees, the compensation of directors and certain executive officers for fiscal 2010, and other required information.

 

 

A copy of our 2010 Annual Report, which includes our 2010 Form 10-K, is available on our website under the Investors tabs at www.gatehousemedia.com. Stockholders may request a free copy of our 2010 Annual Report, which includes our 2010 Form 10-K, by contacting

 

GateHouse Media, Inc.,

Attn: Investor Relations,

350 WillowBrook Office Park,

Fairport, New York 14450

 

or by contacting us at (585) 598-0030.

 

 

You may receive more than one Notice of Internet Availability of Proxy Materials or, if you previously elected to receive printed proxy materials, a set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate Notice of Internet Availability of Proxy Materials or voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Notice of Internet Availability of Proxy Materials or proxy card. Please complete, sign, date and return each GateHouse Media proxy card and voting instruction card that you receive or vote by using the telephone for each proxy card and voting instruction card you receive.

If you are a stockholder of record and would like to only receive one Notice of Internet Availability of Proxy Materials or one set of proxy materials, please contact us at GateHouse Media, Inc., Attn: Investor Relations, 350 WillowBrook Office Park, Fairport, New York 14450 or (585) 598-0030. If you hold your shares in street name through a stock broker, bank or other nominee and would like to only receive one Notice of Internet Availability of Proxy Materials or one set of proxy materials, then you must contact your stock broker, bank or other nominee to make such a request.

 

 

The items of business scheduled to be voted on at the annual meeting are:

 

 

We also will consider any other business that is properly presented at the annual meeting.

 

 

Our Board recommends that you vote your shares “FOR” the nominees to the Board, and “FOR” the ratification of EY as our independent registered public accounting firm for the 2011 fiscal year.

 

 

Each share of GateHouse Media common stock issued and outstanding as of the close of business on March 28, 2011 is entitled to one vote on all items being voted upon at the annual meeting. You may vote all shares owned by you as of the Record Date, including (a) shares held directly in your name as the stockholder of record and (b) shares held for you as the beneficial owner through a broker, trustee or other nominee such as a bank. On the Record Date, we had 58,078,607 shares of common stock issued and outstanding.

 

 

Shares held in your name as the stockholder of record may be voted in person at the annual meeting. Shares held beneficially in street name may be voted in person at the annual meeting only if you obtain a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the annual meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the meeting.

 

 

 

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered a stockholder of record with respect to those shares and the Notice of Internet Availability of Proxy Materials has been sent directly to you by American Stock Transfer & Trust Company. Please carefully consider the information contained in this proxy statement and, whether or not you plan to attend the meeting, vote by one of the above methods so that we can be assured of having a quorum present at the meeting and so that your shares may be voted in accordance with your wishes even if you later decide not to attend the annual meeting.

 

If like most stockholders of GateHouse Media, you hold your shares in street name through a stock broker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of shares, and the Notice of Internet Availability of Proxy Materials is being forwarded to you by Broadridge Financial Solutions, Inc. Please carefully consider the information contained in this proxy statement and, whether or not you plan to attend the meeting, vote by one of the above methods so that we can be assured of having a quorum present at the meeting and so that your shares may be voted in accordance with your wishes even if you later decide not to attend the annual meeting.

 

 

If you hold shares as the stockholder of record, your vote by proxy must be received before the polls close at the annual meeting. If you hold shares beneficially in street name, please follow the voting instructions provided by your broker, trustee or nominee.

 

 

If you are the stockholder of record, you may revoke your proxy (i) by granting a new proxy bearing a later date (which automatically revokes the earlier proxy), (ii) by providing a written notice of revocation to the Corporate Secretary at the address noted below in response to Question 24 prior to the annual meeting, or (iii) by attending the annual meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically make that request at the annual meeting. For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker, trustee or nominee in accordance with the instructions for the voting instruction card, or, if you have obtained a legal proxy from your broker or nominee giving you the right to vote your shares, by attending the meeting and voting in person.

 

 

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner designed to protect your voting privacy, and will not be disclosed, except as necessary to meet applicable legal requirements and under other limited circumstances.

 

 

In the election of each of the directors, you may vote “FOR,” or “WITHHOLD” with respect to the nominee. In tabulating the voting results for the election of each of the directors, only “FOR” and “WITHHOLD” votes are counted.

 

For the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2010 and other items of business that may be properly presented at the annual meeting, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you elect to “ABSTAIN,” the abstention has the same effect as a vote “AGAINST.”

 

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you sign your proxy card or voting instruction card without giving specific instructions, your shares

will be voted in accordance with the recommendations of the Board (“FOR” the nominee to the Board and “FOR” ratification of our independent registered public accounting firm).

 

 

In the election of the directors, each director will be elected by a plurality of the votes cast for him. A plurality of votes cast means that the number of votes cast “FOR” the nominee’s election must exceed the number of votes cast “FOR” a competing nominee’s election. The election of our two director nominees is not being contested. All other matters voted upon at the meeting will be decided by a majority of the votes cast.

 

If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Generally, broker non-votes occur when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. Recent regulatory changes were made to eliminate the ability of your broker or bank to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares to ratify the selection of our independent registered public accounting firm. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is obtained. Abstentions have the same effect as votes against the matters being voted on at the meeting (other than in the election of directors, who are elected by a plurality of the votes cast).

 

 

Other than the two items of business described in this proxy statement, we are not aware of any other business to be acted upon at the annual meeting. If you grant a proxy pursuant to this proxy statement, the persons named as proxy holders, Garrett J. Cummings and Monica Treviso, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason the nominee is not available as a candidate for director, the persons named as proxy holders will vote for your proxy for such other candidate or candidates as may be nominated by the Board.

 

 

The inspectors of elections will be Elizabeth Lewis and Sheryl Costa.

 

 

GateHouse Media is making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. If you choose to access the proxy materials over the internet, you are responsible for internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees who will not receive any additional compensation for such solicitation activities. We also will reimburse brokerage houses and other custodians, nominees and fiduciaries for forwarding proxy and solicitation materials to stockholders.

 

 

We intend to announce preliminary voting results at the annual meeting and publish final results on a Current Report on Form 8-K which will be filed by us with the SEC within four business days of the annual meeting.

 

 

Most of our stockholders hold their shares through a broker or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

 

If your shares are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you together with a voting instruction card on behalf of your broker, trustee or nominee. As the beneficial owner, you have the right to direct your broker, trustee or nominee how to vote and you also are invited to attend the annual meeting. Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in directing the broker, trustee or nominee how to vote your shares. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a legal proxy from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting.

 

 

Please contact our transfer agent, American Stock Transfer & Trust Company at (800) 937-5449, with questions concerning stock certificates, dividend checks, transfer of ownership or other matters pertaining to your stock account.

 

 

You are entitled to attend the annual meeting only if you were a GateHouse Media stockholder as of the close of business on March 28, 2011 or you hold a valid proxy for the annual meeting. You should be prepared to present photo identification for admittance. If you are not a stockholder of record but hold shares through a broker, trustee or nominee (i.e., in street name), you must provide proof of beneficial ownership on the record date, such as your most recent account statement prior to March 28, 2011, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the annual meeting.

 

The meeting will begin promptly at 9:00 a.m. Check-in will begin at 8:30 a.m., and you should allow ample time for the check-in procedures.

 

 

Holders of a majority of shares of our common stock entitled to vote must be present in person or represented by proxy in order to conduct business and vote on matters raised at the meeting. Both abstentions and broker non-votes described previously in Question 15 are counted for the purposes of determining the presence of a quorum.

 

 

You may submit proposals for consideration at future stockholder meetings. For a stockholder proposal to be considered for inclusion in our proxy statement for next year’s annual meeting, our Corporate Secretary must receive the written proposal at our principal executive offices no later than December 13, 2011. Such proposals also

must comply with Rule 14a-8 promulgated by the SEC regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

 

GateHouse Media, Inc.
Attn: Corporate Secretary
350 WillowBrook Office Park
Fairport, New York 14450

 

For a stockholder proposal that is not intended to be included in our proxy statement under Rule 14a-8, the stockholder must provide the information required by our Amended and Restated Bylaws and give timely notice to the Corporate Secretary in accordance with our Amended and Restated Bylaws, which, in general, require that the notice be received by the Corporate Secretary:

 

 

If the date of the stockholder meeting is moved to a date more than 25 days before or after the anniversary of our annual meeting for the prior year, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever occurs first.

 

 

You may propose director candidates for consideration by the Board. Any such recommendations should include the nominee’s name and qualifications for Board membership and should be directed to the Corporate Secretary at the address of our principal executive offices set forth in response to Question 24 above.

 

In addition, our Amended and Restated Bylaws permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, a stockholder must deliver the information required by our Amended and Restated Bylaws and a statement by the nominee consenting to being named as a nominee and consenting to serve as a director if elected.

 

 

To nominate an individual for election at next year’s annual stockholder meeting, the stockholder must give timely notice to the Corporate Secretary in accordance with our Amended and Restated Bylaws, which, in general, require that the notice be received by the Corporate Secretary between the close of business on January 27, 2012 and the close of business on February 26, 2012, unless the annual meeting is moved to a date more than 25 days before or after the anniversary of the prior year’s annual meeting, in which case the deadline will be as described in Question 24.

 

 

You may contact our Corporate Secretary at our principal executive offices, set forth in response to Question 24 above, for a copy of the relevant Amended and Restated Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. Our Amended and Restated Bylaws also are available on our website at www.gatehousemedia.com.

 

 

If you: (a) have any questions about the annual meeting; (b) have any questions how to vote or revoke your proxy; and/or (c) need additional copies of this proxy statement or voting materials, you should contact Mark Maring by at (585) 598-6874 or by email at investorrelations@gatehousemedia.com.

 

GateHouse Media is committed to maintaining high standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders well and maintaining our integrity in the marketplace. To that end, we have adopted a Code of Business Conduct and Ethics for our directors, officers and employees, including a separate Code of Ethics for our Chief Executive Officer and senior financial officers. In addition, we have adopted the Corporate Governance Guidelines of GateHouse Media, Inc., as most recently amended and restated on April 4, 2011 (our “Corporate Governance Guidelines”), which, in conjunction with our Amended and Restated Articles of Incorporation, Amended and Restated Bylaws and Audit Committee charter, form the framework for our corporate governance. All of our corporate governance materials, including the Audit Committee charter, are available on our website at www.gatehousemedia.com.

 

These materials also are available in print to any stockholder upon request. The Board regularly reviews corporate governance developments and makes modifications as warranted.

 

After the resignation of Richard L. Friedman from our Board on March 7, 2011, we currently have an equal number of independent and non-independent directors. For a director to be considered independent, the Board must determine that the director does not have any material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). The Board has established guidelines to assist it in determining director independence, which conform to the independence standards of the New York Stock Exchange. As of the date of this proxy statement, our Board has determined that two out of our four current directors (Messrs. Osborne and Sheehan) are independent, including one of the director nominees standing for election at our annual meeting.

 

According to our Corporate Governance Guidelines, all members of the Audit Committee must be independent directors. Members of the Audit Committee also must satisfy a separate SEC independence requirement, which provides that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than their compensation for service as directors.

 

Executive Sessions

 

The independent directors meet at least once each year in regularly scheduled executive sessions. Additional executive sessions may be scheduled by independent directors. The chairperson of the Audit Committee presides over these sessions.

 

As of the date of this proxy statement, our Board has four directors and a standing Audit Committee. On December 19, 2008, the Board discharged its Nominating and Corporate Governance Committee and its Compensation Committee. The committee membership and function of the Audit Committee is described below. The Audit Committee operates under a written charter adopted by the Board.

 

Except for Mr. Edens, our Chairman of the Board, all of our current directors joined our Board on October 24, 2006. During fiscal year 2010, our Board held six meetings. Each director attended at least 75% of the Board meetings and committee meetings on which he served (except for Wesley R. Edens). During fiscal year 2010, our Board also took corporate action by written consents without a meeting. Each director is expected to attend, absent unusual circumstances, all annual and special meetings of stockholders. Such attendance may be in person or by conference call.

 

 

We currently split the roles of Chairman of the Board and Chief Executive Officer. The Board believes that separating these two positions allows each person to focus on their individual responsibilities and enhances the accountability of our Chief Executive Officer to the Board. Under this structure, our Chief Executive Officer can focus his attention on the day-to-day operations and performance of our company and on implementing our longer-term strategic direction. At the same time, our Chairman of the Board can focus his attention on longer term strategic issues, setting the agenda for and on providing insight and guidance to our Chief Executive Officer. We currently believe that the separation of the roles of Chairman of the Board and Chief Executive Officer is appropriate, however, our Corporate Governance Guidelines do not require the separation of the offices of the Chairman of the Board and the Chief Executive Officer. The Board is free to choose its Chairman of the Board in anyway that it deems best at any given point in time.

 

The Board is responsible for enterprise risk management, including risks associated with our corporate governance, such as board organization, membership, structure and leadership succession planning, as well as the management of risks arising from our executive compensation policies and programs. While the Board retains responsibility for the general oversight of risks, it has delegated financial oversight to our Audit Committee, which focuses on financial risk, including those that could arise from our accounting and financial reporting processes and our consolidated financial statement audits.

 

The Board and the Audit Committee work together to provide enterprise-wide oversight of our management and handling of risk. These responsibilities are satisfied through periodic reports from the Audit Committee chairman regarding the risk considerations within its area of expertise, as well as through periodic reports to the Board, or the Audit Committee, from our management team on areas of material risk to the Company, including operational, financial, legal, regulatory and strategic risks. The Board, or the Audit Committee with respect to risks within its scope, reviews these reports to enable it to understand our risk identification, risk management and risk mitigation strategies. The Audit Committee chairman will report to the Board at subsequent Board meetings regarding particular risks within the scope of the Audit Committee, enabling the Board and the Audit Committee to coordinate the risk oversight role.

 

Audit Committee

 

The Audit Committee was established under a written charter which became effective as of the time we were first listed on the New York Stock Exchange (we were delisted from the New York Stock Exchange effective October 24, 2008), and which was last amended and restated on December 18, 2008. Our Audit Committee oversees a broad range of issues surrounding our accounting and financial reporting processes and audits of our financial statements. In particular, our Audit Committee: (a) assists the Board in monitoring the integrity of our financial statements, our compliance with legal and regulatory requirements, our independent auditor’s qualifications and independence and the performance of our internal audit function and independent auditors; (b) assumes direct responsibility for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of performing any audit, review or attest services and for dealing directly with any such accounting firm; (c) provides a forum for consideration of matters relating to any audit issues; and (d) prepares the audit committee report that the SEC rules require be included in our annual proxy statement. The Audit Committee met four times during fiscal year 2010, in addition to acting by written consent without a meeting. The Audit Committee Charter requires such committee to be comprised of at least two members as determined from time to time by the Board. As of the date of this proxy statement, the members of our Audit Committee are Messrs. Sheehan and Osborne. Mr. Sheehan is our Audit Committee chair and our Audit Committee financial expert under applicable SEC rules. Each member of our Audit Committee is “independent” as defined under the Exchange Act and New York Stock Exchange rules.

Compensation Committee

 

On December 19, 2008 the Board discharged its standing Compensation Committee. The Board is of the view that it has the requisite skill and judgment to perform this function without a formal committee. Currently, the entire Board, except for Mr. Reed, performs those functions that were customarily performed by the Compensation Committee, which include: (a) reviewing policy relating to the compensation and benefits of our officers and employees; (b) reviewing and approving the corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other senior officers; (c) evaluating performance of such officers in light of those goals and objectives and determining compensation of these officers based on such evaluations; and (d) reviewing the executive compensation disclosure in our proxy statement.

 

Nominating and Corporate Governance Committee

 

On December 19, 2008 the Board discharged its standing Nominating and Corporate Governance Committee. The Board is of the view that it has the requisite skill and judgment to perform this function without a formal committee. Currently, the entire Board performs those functions that were customarily performed by the Nominating and Corporate Governance Committee. The primary function of the Board, when serving in this role, is to: (a) identify, review and recommend nominees for election as directors; (b) recommend directors to serve on the committees; (c) oversee the evaluation of our management; and (d) develop, review and recommend corporate governance guidelines.

 

Stockholder Recommendations

 

The Board will consider properly submitted stockholder recommendations of candidates for membership on the Board according to the procedures described below under “Identifying and Evaluating Candidates for Directors.” In evaluating such recommendations, the Board seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth below under “Director Qualifications.” Any stockholder recommendations proposed for consideration by the Board must be in writing, include the candidate’s name and qualifications for Board membership and should be addressed to:

 

GateHouse Media, Inc.
Attn: Corporate Secretary
350 WillowBrook Office Park
Fairport, New York 14450
Fax: (585) 248-9562

 

Stockholder Nominations

 

In addition, our Amended and Restated Bylaws permit stockholders to nominate directors for consideration at any annual stockholder meeting. For a description of the process for nominating directors at the annual meeting, see “Questions and Answers — Stockholder Proposals, Director Nominations and Related Bylaw Provisions — Question 25”.

 

Director Qualifications

 

Our Corporate Governance Guidelines contain Board membership criteria that apply to nominees recommended for a position on our Board. At a minimum, the Board shall consider: (a) whether each such nominee has demonstrated, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of the business and affairs of our company; and (b) the nominee’s reputation for honesty and ethical conduct in his or her personal and professional activities. Additional factors which the Board may consider include a candidate’s specific experiences and skills, relevant industry background and knowledge, time availability in light of other commitments, potential conflicts of interest, material relationships with our company and independence from our management and our company. The Board also may seek director candidates with a diversity of backgrounds, experiences, gender and race. Each candidate should be committed to enhancing

stockholder value and should have sufficient time to carry out the required duties and to provide insight and practical wisdom based on experience. A candidate’s service on other boards of public companies should be limited to a number that permits the candidate to perform responsibly all director duties. Each director must represent the interest of all of our stockholders.

 

Identifying and Evaluating Candidates for Directors

 

The Board uses a variety of methods for identifying and evaluating nominees for director. The Board regularly assesses its appropriate size and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Board may consider several potential candidates. Candidates may come to the attention of the Board through its current members, professional search firms, stockholders or other persons.

 

Identified candidates are evaluated at regular or special meetings of the Board and may be considered at any point during the year. As described above, the Board considers properly submitted stockholder recommendations for candidates for the Board to be included in our proxy statement and evaluates such candidates using the same criteria as other candidates. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials should be addressed to:

 

GateHouse Media, Inc.
Attn: Corporate Secretary
350 WillowBrook Office Park
Fairport, New York 14450
Fax: (585) 248-9562

 

The Board has adopted a process by which stockholders and other interested parties may communicate with the independent directors of the Board or the chairperson of the Audit Committee by regular mail. You may send communications by regular mail to the attention of the Chairperson, Audit Committee; or to the independent directors as a group to the Independent Directors, each c/o Corporate Secretary, GateHouse Media, Inc., 350 WillowBrook Office Park, Fairport, New York 14450.

 

Our management will review all communications received to determine whether the communication requires immediate action. Management will pass on all communications received, or a summary of such communications, to the appropriate director or directors.

 

Each independent director is entitled to receive an annual retainer of $30,000, payable in two equal semi-annual installments. In addition, an annual fee of $5,000 is paid, in two equal semi-annual installments, to the chair of the Audit Committee. Fees to independent directors may be paid by issuance of our common stock, based on the value of our common stock at the date of issuance, rather than in cash, unless the issuance would prevent such director from being determined to be independent. Such stock must be granted pursuant to a stockholder-approved plan. All members of our Board are reimbursed for reasonable expenses and expenses incurred in attending Board meetings.

 

Except as otherwise provided by the plan administrator of the Incentive Plan, on the first business day after our annual meeting of stockholders and each such annual meeting thereafter during the term of the Incentive Plan, each of the independent directors who is serving following such annual meeting will automatically be granted under the Incentive Plan a number of unrestricted shares of GateHouse Media common stock having a fair market value of $15,000 as of the date of grant; however, Messrs. Osborne and Sheehan will not be eligible to receive these automatic annual grants.

2010 Director Compensation Table

 

The following table provides information about the compensation earned by our independent directors during 2010.

 

 

 

 

There are two nominees for election to our Board at this year’s annual meeting. In accordance with the terms of our Amended and Restated Certificate of Incorporation, the Board is divided into three classes of directors (designated Class I, Class II and Class III) of the same or nearly the same number to the extent practicable. After the resignation of Mr. Friedman on March 7, 2011, we currently have two Class II directors, two Class III directors and no Class I directors. At each annual meeting of stockholders, one class of directors will be elected for a three-year term to succeed the directors of the same class whose terms are then expiring. As a result, a portion of the Board will be elected each year.

 

Our Amended and Restated Certificate of Incorporation authorizes a Board consisting of at least three, but no more than seven, members, with the exact number of directors to be fixed from time to time by a resolution of the majority of the Board (or by a duly adopted amendment to the Certificate of Incorporation). Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the Board into classes with staggered three-year terms may delay or prevent a change of management or a change in control.

 

If you sign your proxy or voting instruction card but do not give instruction with respect to voting for the director, your shares will be voted for the person recommended by the Board. If you wish to give specific instructions with respect to voting for director, you may do so by indicating your instructions on your proxy or voting instruction card.

 

Both of our nominees have indicated to us that they will be available to serve as directors. The Board has approved the nominees. In the event that any nominee should become unavailable, the proxy holders, Garrett J. Cummings and Monica Treviso, will vote for such other nominee or nominees as designated by the Board.

 

The Board recommends a vote “FOR” each of the following Class II nominees:

 

 

The following Class III directors are serving on the Board for a term that ends at the 2012 Annual Meeting:

 

 

 

Upon the resignation of Richard L. Friedman on March 7, 2011, we no longer have any Class I directors.

 

Ernst & Young LLP (“EY”), served as our independent registered public accounting firm for the fiscal year ending December 31, 2010. The Audit Committee has selected EY as our independent registered public accounting firm for the fiscal year ending December 31, 2011. This selection will be presented to stockholders for ratification at the annual meeting. The Audit Committee will consider the outcome of this vote in its future deliberations regarding the selection of our independent registered public accounting firm.

 

The Board recommends a vote in favor of the proposal to ratify the selection of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2011 and the persons named as proxy holders (unless otherwise instructed) will vote such proxies “FOR” this proposal.

 

We have been advised that an EY representative will be present at the annual meeting and that such representative will be available to respond to appropriate questions. Such representative will also be given an opportunity to make a statement if he or she should so desire.

Fees Paid to EY

 

The following table sets forth the fees, which include out-of-pocket expenses, for services provided by EY during the fiscal years ending December 31, 2010 and December 31, 2009.

 

 

The following is a description of the nature of the services comprising the fees disclosed in the table above for each of the four categories of services.

 

(a) Audit Fees.  These are fees for professional services rendered by EY for: (1) the audit of (i) our annual consolidated financial statements for the fiscal years ending December 31, 2010 and December 31, 2009; and (ii) the effectiveness of internal control over financial reporting for the fiscal year ending December 31, 2009; (2) the review of financial statements included in our Quarterly Reports on Form 10-Q; and (3) services that are typically rendered in connection with statutory and regulatory filings or engagements.

 

(b) Audit-Related Fees.  These are fees for assurance and related services rendered by EY that are reasonably related to the performance of the audit or the review of our financial statements that are not included as audit fees. These services consist of consultation on financial accounting and reporting and due diligence assistance with acquisitions. For the fiscal years ending December 31, 2010 and December 31, 2009, no fees were incurred for these services.

 

(c) Tax Fees.  These are fees for professional services rendered by EY with respect to tax compliance, tax advice and tax planning. These services consist of the review of certain tax returns and consulting on tax planning matters. For the fiscal years ending December 31, 2010 and December 31, 2009, no fees were incurred for these services.

 

(d) All Other Fees. These are fees for professional services rendered by EY that are reasonably related to the performance of the audit or the review of our financial statements that are not included as audit fees, audit-related fees or tax fees. For the fiscal years ending December 31, 2010 and December 31, 2009, no fees were incurred for these services.

 

Audit Committee Pre-approval Policy

 

The Audit Committee is responsible for pre-approving all audit services and permitted non-audit services (including the fees and retention terms) to be performed for us by the independent registered public accounting firm prior to their engagement for such services. Accordingly, all audit and audit-related services for which EY was engaged were pre-approved by the Audit Committee.

 

For each engagement, management provides the Audit Committee with information about the services and fees sufficiently detailed to allow the Audit Committee to make an informed judgment about the nature and scope of the services and the potential for the services to impair the independence of the auditor. After the end of the audit year, management provides the Audit Committee with a summary of the actual fees incurred for the completed audit year.

 

Vote Required and Recommendation

 

Ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2011 requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy and entitled to be voted at the meeting.

The Board unanimously recommends that you vote “FOR” Proposal 2 relating to the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2011.

 

Management has the primary responsibility for the integrity of the Company’s financial information and the financial reporting process, including the system of internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for conducting independent audits of the Company’s financial statements and management’s assessment of the effectiveness of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) and expressing an opinion on the financial statements and management’s assessment based upon those audits. The Audit Committee is responsible for overseeing the conduct of these activities.

 

As part of its oversight responsibility, the Audit Committee has:

 

 

Based upon the reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2010 for filing with the SEC.

 

By: The Audit Committee

 

Kevin M. Sheehan, Chairman

Burl Osborne

 

The following table sets forth information regarding ownership of our common stock as of March 28, 2011 (except as noted otherwise) by: (a) each of our directors and named executive officers, (b) each person or group known to us holding more than 5% of our common stock, and (c) all of our directors and executive officers as a group. Except as otherwise indicated, each owner has sole voting and investment powers with respect to the securities listed. The information provided in the table is based on our records, information filed with SEC and information provided to us, except where otherwise noted.

 

 

 

 

 

 

Fortress

 

As of March 28, 2011, Fortress Investment Group LLC and certain of its affiliates, including certain funds managed by it or its affiliates, beneficially owned 39.6% of our outstanding common stock.

 

In addition, our Chairman, Wesley Edens, is the Chairman of the Management Committee of Fortress. We do not pay Mr. Edens a salary or any other form of compensation.

 

Fortress Indebtedness

 

As described more fully in our Annual Report on Form 10-K in Item 7 under the heading “Indebtedness — 2007 Credit Facility” and in our Current Report on Form 8-K filed on April 7, 2011, affiliates of Fortress Investment Group LLC owned $126.0 million of the approximately $1.2 billion outstanding under the 2007 Credit Facility as of December 31, 2010. These amounts were purchased on arms’ length terms in secondary market transactions. During 2010, we made interest payments totaling $28.6 million to affiliates of Fortress Investment Group LLC.

 

Fortress Preferred Stock Agreement with Subsidiary

 

On August 21, 2008, FIF III Liberty Holdings LLC (“FIF III”), an affiliate of Fortress Investment Group LLC, purchased an aggregate of $11.5 million in 10% cumulative preferred stock of GateHouse Media Macomb Holdings, Inc. (“Macomb”), an operating subsidiary of ours. Macomb, which is an “Unrestricted Subsidiary” under the terms of the 2007 Credit Facility, used the proceeds from such sale of preferred stock to make an $11.5 million cash investment in Holdco non-voting 10% cumulative preferred stock. Under the Preferred Stock Agreement, FIF III had the right to require us to purchase its Macomb preferred stock during the five-year period following the full repayment by us of the 2008 Bridge Facility for an amount equal to the original purchase price plus accrued but unpaid dividends.

 

On December 7, 2010, FIF III, as the holder of the Macomb preferred stock, exercised its right to require us to purchase its Macomb preferred stock. We paid the purchase price of $14.1 million on December 8, 2010, which represented the sum of original purchase price paid by FIF III for the Macomb preferred stock and accrued but unpaid dividends thereon.

 

Fortress Investor Rights Agreement

 

On October 24, 2006, we entered into an Investor Rights Agreement with FIF III. The Investor Rights Agreement provides FIF III with certain rights with respect to the nomination of directors to our Board as well as registration rights for securities FIF III owns. The Investor Rights Agreement requires us to take all necessary or desirable action within our control to elect to our Board of Directors so long as FIF III and its permitted transferees beneficially own: (a) more than 50% of the voting power, four directors nominated by FIG Advisors LLC, an affiliate of Fortress (“FIG Advisors”), or such other party designated by Fortress; (b) between 25% and 50% of the voting power, three directors nominated by FIG Advisors; (c) between 10% and 25% of the voting power, two directors nominated by FIG Advisors; and (d) between 5% and 10% of the voting power, one director nominated by FIG Advisors. In the event that any designee of FIG Advisors shall for any reason cease to serve as a member of the

Board during his term of office, FIG Advisors will be entitled to nominate an individual to fill the resulting vacancy on the Board.

 

Pursuant to the Investor Rights Agreement, we granted Fortress, for so long as it beneficially owns at least 5% of its issued and outstanding common stock, “demand” registration rights. Fortress is entitled to an aggregate of four demand registrations. We are not required to maintain the effectiveness of the registration statement for more than 60 days. We are also not required to effect any demand registration within six months of a “firm commitment” underwritten offering to which the requestor held “piggyback” rights and which included at least 50% of the securities requested by the requestor to be included.

 

We are not obligated to grant a request for a demand registration within four months of any other demand registration and may refuse a request for demand registration if, in its reasonable judgment, it is not feasible to proceed with the registration because of the unavailability of audited financial statements.

 

For as long as Fortress beneficially owns an amount of at least equal to 1% of our issued and outstanding common stock, Fortress also has “piggyback” registration rights that allow Fortress to include the shares of common stock that Fortress owns in any public offering of equity securities initiated by us (other than those public offerings pursuant to registration statements on Forms S-4 or S-8) or by any of our other stockholders that may have registration rights in the future. The “piggyback” registration rights of Fortress are subject to proportional cutbacks based on the manner of the offering and the identity of the party initiating such offering.

 

We also granted Fortress, for as long as Fortress beneficially owns at least 5% or more of our common stock, the right to request shelf registrations on Form S-3, providing for an offering to be made on a continuous basis, subject to a time limit on our efforts to keep the shelf registration statement continuously effective and our right to suspend the use of a shelf registration prospectus for a reasonable period of time (not exceeding 60 days in succession or 90 days in the aggregate in any 12-month period) if we determine that certain disclosures required by the shelf registration statement would be detrimental to us or our stockholders.

 

We have agreed to indemnify Fortress against any losses or damages resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to which Fortress sells shares of our common stock, unless such liability arose from Fortress’ misstatement or omission, and Fortress has agreed to indemnify us against all losses caused by its misstatements or omissions. We have agreed to pay all expenses incident to registration and Fortress will pay its respective portions of all underwriting discounts, commissions and transfer taxes relating to the sale of its shares under such a registration statement.

 

Other Investment Activities of Fortress

 

Fortress and its affiliates engage in a broad spectrum of activities, including investment advisory activities, and have extensive investment activities that are independent from and may from time to time conflict with ours. Fortress and certain of its affiliates have in the past, and in the future may sponsor, advise or act as investment manager to, investment funds, portfolio companies of private equity investment funds and other persons or entities that have investment objectives that may overlap with ours and that may, therefore, compete with us for investment opportunities.

 

Cracked Rock Media

 

Kirk Davis, our President and Chief Operating Officer, is the owner of Cracked Rock Media, an owner of local newspapers in Central Massachusetts. Mr. Davis has no day-to-day operational involvement with Cracked Rock Media. Cracked Rock Media’s activities may from time to time conflict with ours.

 

Michael E. Reed, age 44, became our Chief Executive Officer in February 2006 and became a director in October 2006. Mr. Reed’s business experience and background is set forth under Proposal One: Election of Directors on page 14 of this proxy statement.

Melinda A. Janik, age 54, became our Senior Vice President and Chief Financial Officer in February 2009. She formerly served as an officer and Vice President and Controller of Paychex, Inc., a provider of payroll, human resource and benefit outsourcing services, from 2005 to 2009. Prior to joining Paychex, Inc., Ms. Janik served as Senior Vice President and Chief Financial Officer for Glimcher Realty Trust, a national mall Real Estate Investment Trust based in Columbus, Ohio, from 2002 to 2004. Ms. Janik was formerly Vice President and Treasurer of NCR Corporation, a global provider of financial and retail self service solutions and data warehousing, from 1997 to 2002. Prior to that, she worked for the accounting firm PricewaterhouseCoopers LLP. Ms. Janik is a Certified Public Account and holds an MBA in finance and accounting and a bachelor’s degree in chemistry from the State University of New York at Buffalo.

 

Kirk Davis, age 49, became our President and Chief Operating Officer in January 2009. Mr. Davis has been with us since 2006, serving as the Chief Executive Officer of GateHouse Media New England. Prior to joining us, Mr. Davis served as the Chief Executive Officer of Enterprise NewsMedia, LLC, also known as the South of Boston Media Group, from 2004 to 2006, which we purchased on June 6, 2006. Prior to that, Mr. Davis served as Vice President of Publishing for Turley Publications, Inc., a publishing and printing company, from 2002 to 2004. In 2001, Mr. Davis formed Cracked Rock Media, Inc. and began acquiring newspapers in Central Massachusetts. Mr. Davis still owns Cracked Rock Media, but has no day-to-day operational involvement. Prior to that, Mr. Davis served as President of Community Newspaper Company (“CNC”) from 1998 to 2001. Mr. Davis also served as President of a newspaper group in the Boston area, which was part of CNC, from 1996 to 1998. Mr. Davis also served as a Publisher and managed newspaper companies in Pennsylvania, Massachusetts and California from 1990 to 1996. Mr. Davis also served as Vice President of Circulation and Marketing for Ingersoll Publications from 1985 to 1990. Mr. Davis attended Wright State University and Ohio University. He is past chairman of the board for the Suburban Newspapers of America (“SNA”) and as well as past chairman of the SNA Foundation. In 2007, Mr. Davis was elected to the Board of Directors of the Audit Bureau of Circulations.

 

Polly G. Sack, age 51, became our Vice President, Secretary and General Counsel in May 2006. Ms. Sack was named a Senior Vice President of ours in February 2009. She was formerly Senior Vice President and Director of Mergers and Acquisitions of IMG Worldwide, Inc. (“IMG”), a global sports, media and entertainment company, and had served in that capacity since 2001. Ms. Sack also served as IMG’s associate counsel and a vice president from 1992 to 2001. Prior to that, she worked in private practice for a major international law firm. Ms. Sack holds bachelor degrees in civil engineering and mathematics from the Massachusetts Institute of Technology and a master’s degree in civil engineering from Stanford University, in addition to a law degree from Stanford University Law School.

 

Mark Maring, age 44, became our Vice President of Investor Relations and Strategic Development in March 2008 and became our Treasurer in February 2009. Mr. Maring also served as our Interim Chief Financial Officer from August 2008 to February 2009. He was formerly a Vice President of Mendon Capital Advisors Corp, a registered investment advisor, from 2004 through 2008 where his responsibilities included risk management and hedging strategies. From 2000 to 2004 Mr. Maring was Vice President Investor Relations for Constellation Brands, Inc. (“Constellation”) an international producer and marketer of beverage alcohol brands. Mr. Maring also served as Constellation’s Director of Planning from 1997 to 2000. From 1992 to 1997, Mr. Maring worked with the accounting firm Arthur Andersen LLP. From 1987 to 1992 he worked for The Chase Manhattan Bank, N.A. in investment banking. Mr. Maring is a certified public accountant and holds a master’s degree in finance and accounting, from the Simon School of Business at the University of Rochester and a B.S. from St. John Fisher College.

 

The Board has responsibility for establishing, implementing and continually monitoring executive compensation. The Board’s focus is to establish compensation at levels necessary to attract, retain and motivate the best possible executive talent. Historically, the Board has developed our executive compensation programs based on input from our Chief Executive Officer, the officers’ current compensation, our financial condition, our operating results, and individual performance.

Throughout this section, the individual who served as the Company’s chief executive officer during 2010, as well as the two other individuals included in the 2010 Summary Compensation Table included below, are referred to as our “Named Executive Officers.” For the fiscal year ended December 31, 2010, the principal components of compensation for Named Executive Officers consisted of base salary and discretionary cash bonuses.

 

The table below summarizes the total compensation paid or earned by each of the Named Executive Officers for the fiscal years ended December 31, 2010 and 2009.

 

 

 

 

Michael E. Reed

 

Mr. Reed is employed as our Chief Executive Officer pursuant to an employment agreement effective as of January 30, 2006. Under this agreement, he has the duties and responsibilities customarily exercised by the person serving as chief executive officer of our size and nature.

 

Pursuant to his employment agreement, which has an initial three-year term that automatically renews subject to the same terms and conditions for additional one-year terms unless either we or Mr. Reed gives notice of non-renewal within ninety days prior to the end of the term, Mr. Reed receives an annual base salary of $500,000. Mr. Reed also is eligible for an annual, performance-based bonus. The agreement provides that Mr. Reed is eligible to receive an annual target bonus of $200,000 upon the achievement of certain performance goals agreed to by Mr. Reed and our Board. The bonus is payable in either our common stock or cash in the discretion of the Board, provided that no more than 50% of the bonus shall be payable in our common stock without Mr. Reed’s approval.

 

Melinda A. Janik

 

Ms. Janik was appointed to serve as our Senior Vice President and Chief Financial Officer effective February 2, 2009 pursuant to an offer letter dated December 24, 2008.

 

Pursuant to her offer letter, which has no guaranteed term of employment or renewal provision, Ms. Janik’s initial annual base salary was set at $275,000. Ms. Janik is eligible for an annual bonus based on achievement of annually agreed upon goals, with the target bonus being 50% of base pay, payable in such combination of cash and shares of our common stock as determined by the Board, in its sole discretion under the Incentive Plan (or any

similar or successor plan). On February 6, 2009, Ms. Janik also received an initial stock grant of 100,000 shares issued under the Incentive Plan. Such grant vests ratably on February 6, 2010, February 6, 2011 and February 6, 2012.

 

Kirk Davis

 

Mr. Davis is employed as our President and Chief Operating Officer pursuant to an employment agreement effective as of January 9, 2009. Under this agreement, he has the duties and responsibilities customarily exercised by the person serving as president and chief operating officer of a company of our size and nature.

 

Pursuant to his employment agreement, which has no guaranteed term of employment or renewal provision, Mr. Davis’ annual base salary shall be reviewed on an annual basis and adjusted in our sole discretion. Mr. Davis also is eligible for an annual bonus, based on the achievement, as determined by the Board in its sole discretion, of certain performance standards agreed to by Mr. Davis and our Board. Such bonus may be paid in such combination of cash and shares of our common stock as determined by the Board, in its sole discretion under the Incentive Plan (or any similar or successor plan).

 

General

 

Certain of our Named Executive Officers have restrictive covenants in their employment agreements and/or their management stockholder agreements for our benefit relating to non-competition during the term of employment and for the one year period following termination of their employment for any reason. Each of these agreements also contains restrictive covenants relating to non-solicitation of our employees, directors, agents, clients, customers, vendors, suppliers or consultants during the term of employment and for the one year period following termination of their employment for any reason.

 

We did not grant any annual cash incentive compensation, stock options or restricted share awards to our Named Executive Officers during the fiscal year ending December 31, 2010.

 

Each of our Named Executive Officers is entitled to a discretionary annual bonus as determined by the Board in its sole discretion. The bonus is payable in our common stock or cash or a combination thereof, as determined by the Board, in its sole discretion. Any bonus that is payable in common stock vests over a specified period. In determining the amount, if any, of a discretionary annual bonus to award to each of our Named Executive Officers, the Board considered: (i) the achievement of certain performance goals of the Company and the Named Executive Officer: (ii) the effects on our performance of the current financial downturn and the changing nature of our industry and our business; (iii) the leadership provided by the Named Executive Officer during these challenging times; and (iv) the need to retain our Named Executive Officers during these times.

 

For 2010, the Board considered the above factors and, on March 1, 2011, awarded the following discretionary cash bonuses to our Named Executive Officers: Mr. Reed — $750,000; Ms. Janik - $160,000; and Mr. Davis — $275,000.

 

In addition, we have provided the following Outstanding Equity Awards at Fiscal Year-End table to summarize the equity awards made to our Named Executive Officers which are outstanding as of December 31, 2010.

 

 

 

 

We maintain one defined benefit plan, the George W. Prescott Publishing Company Pension Plan (the “Prescott Pension Plan”). The Prescott Pension Plan benefits the employees of the George W. Prescott Publishing Company by providing funded, tax-qualified benefits up to the limits on compensation and benefits under the Internal Revenue Code. Benefits under the Prescott Pension Plan are funded by an irrevocable tax-exempt trust. An executive’s benefits under the Prescott Pension Plan are payable from the assets held by a tax-exempt trust, and are based on earnings up to a compensation limit under the Internal Revenue Code (which was $230,000 in 2008).

 

Effective December 31, 2008, the Prescott Pension Plan was amended to freeze benefit and participation. The only Named Executive Officer listed in the proxy statement who has benefits in the Prescott Pension Plan is Mr. Davis. The terms and conditions below relate solely to participants in the Prescott Pension Plan.

 

The “Normal Retirement Benefit” is expressed as an annual single life annuity payable from normal retirement age for the remainder of his life. The benefit under the Prescott Pension Plan is equal to an amount equal to the sum of (i) and (ii):

 

(i) an amount equal to the product of:

 

(a) 0.5% of Mr. Davis’ Average Compensation not in excess of the covered compensation base plus 1% of his Average Compensation in excess of the covered compensation base; and

 

(b) Mr. Davis’ years of Accrued Service (not in excess of 40).

(ii) an amount equal to the product of:

 

(a) 0.67% of Mr. Davis’ Average Compensation; and

 

(b) Mr. Davis’ years of Accrued Service in excess of 40.

 

“Average Compensation” means the average of Mr. Davis’ highest compensation paid during any five consecutive plan years of the ten plan years prior to December 31, 2008. “Compensation” means Mr. Davis’ total compensation in a plan year, excluding any bonuses, any overtime payments, and employer contributions under the Prescott Pension Plan or under any other employee benefit plan of an affiliated company. Pay in excess of the Internal Revenue Code Section 401(a)(17) limit, is not considered. “Accrued Service” is the total number of years prior to January 1, 2009 (June 1, 2009 for IBT Union employees), during which the executive has completed at least 1,000 Hours of Service.

 

If Mr. Davis retires after reaching the age of 60 and has completed five years of vesting service, he is entitled to the benefit amount. However, the benefit amount will be reduced 0.56% for each month his retirement precedes his reaching the age of 65.

 

In the event Mr. Davis dies prior to the commencement of benefit payments, his spouse will be eligible for a death benefit protection. This provides that if Mr. Davis and spouse were married for at least one year prior to his date of death, then the spouse of Mr. Davis shall receive a survivor annuity which is equal to 50% of the pension Mr. Davis would have received had he retired on his date of death or age 60, if later, with a joint and 50% survivor annuity option.

 

If Mr. Davis dies after payment of his benefit under the Prescott Pension Plan has commenced, the death benefit payable, if any, shall be determined in accordance with the form in which the benefit was being paid. The pension benefit under the Prescott Pension Plan is reduced if paid before normal retirement age. The pension benefit is defined as a single life annuity. Optional annuity forms which are approximately equal in value are also available.

 

Each of our Named Executive Officers is entitled to receive amounts earned during his or her term of employment regardless of the manner in which the Named Executive Officer’s employment is terminated. These amounts include accrued but unpaid base salary and accrued and unused vacation pay through the date of such termination (the “Accrued Benefits”). In addition, each of our Named Executive Officers may receive compensation under the terms of our Management Stockholder Agreements or the Incentive plan, as well as under the terms of their employment agreement or offer letter. Mr. Reed and Mr. Davis have entered into employment agreements with us, and we entered into an arrangement and understanding with respect to Ms. Janik’s appointment by way of an offer letter.

 

The Management Stockholder Agreement with Mr. Reed contains a call option exercisable at our discretion pursuant to which we may purchase the shares of non-forfeited common stock which are subject to the Management Stockholder Agreement upon termination of his employment for any reason (the “Call Option”). The amount we will pay him is determined as follows: (a) in the case of a termination for cause, the lower of the purchase price of $1,000 per share or the fair market value (as determined by the Board) or (b) in the case of a termination for any reason other than cause, the fair market value (as determined by the Board).

 

Additionally, under the Incentive Plan, if a Named Executive Officer’s employment is terminated for any reason, we will immediately repurchase any remaining unvested restricted shares at a price equal to the par value ($.01) per share (the “Repurchase Obligation”).

 

Payments Made Upon Voluntary Termination and Termination for Cause

 

Under Mr. Reed’s and Mr. Davis’s respective employment agreements, if they voluntarily terminate their employment or are terminated by us for cause, they would not be entitled to any further compensation or benefits other than Accrued Benefits. They would also forfeit all unvested shares subject to their initial stock grant and any restricted stock bonuses and, in the case of termination due to an act of dishonesty committed in connection with our business, they would forfeit all shares subject to their initial stock grant and any restricted stock bonuses. Under the

Management Stockholder Agreements, we may exercise our Call Option. Under the Incentive Plan, we will purchase any remaining unvested restricted shares pursuant to our Repurchase Obligation.

 

Payments Made Upon Death or Disability

 

Under Mr. Reed’s and Mr. Davis’s respective employment agreements, if their employment is terminated by reason of death or disability, they would not be entitled to receive any further compensation or benefits other than the Accrued Benefits. If Mr. Reed or Mr. Davis fails to perform their duties as a result of disability or incapacity, they shall continue to receive their base salary and all other benefits and all other compensation unless and until their employment is terminated. If our Named Executive Officers’ employment is terminated by reason of death or disability, we may exercise our Repurchase Obligation under the Incentive Plan. In addition, under the Management Stockholder Agreements, we may exercise our Call Option.

 

Under the Incentive Plan, if the Named Executive Officer’s employment is terminated by reason of death or disability, the Named Executive Officer shall be entitled to the restricted shares that would have vested on the next vesting date following the date of such termination. In addition, we will purchase any remaining unvested restricted shares pursuant to our Repurchase Obligation.

 

Payments Made Upon Involuntary not for Cause Termination, or Change in Control with Termination

 

Under the employment agreements with Mr. Reed and Mr. Davis and the offer letter with Mr. Janik, if their employment is terminated by us other than for cause, they shall be entitled to:

 

(a) the Accrued Benefits;

 

(b) an amount equal to twelve months’ current base salary;

 

(c) the annual bonus including any declared bonus not yet paid;

 

(d) continuation of the Named Executive Officer’s health benefits at the same levels until the earlier of (i) the time it takes the Named Executive Officer to become eligible for benefits from a new employer or (ii) twelve months from the date of termination;

 

(e) the shares subject to the initial stock grant and any additional restricted stock bonuses that would have vested on the next anniversary date following the date of such termination, but in no event less than one-third (1/3) each of the shares subject to the initial stock grant and any additional restricted stock bonuses;

 

(f) if such termination occurs within twelve months of a change in control, 100% of the remaining unvested shares subject to the initial stock grant and any additional restricted stock bonuses will automatically vest; and

 

(g) under the Management Stockholder Agreements, we may exercise our Call Option.

 

Under the Incentive Plan, if the Named Executive Officer’s employment is terminated without cause, the Named Executive Officer shall be entitled to the restricted shares that would have vested on the next vesting date following the date of such termination. In addition, we will purchase any remaining unvested restricted shares pursuant to our Repurchase Obligation. If the termination occurs within twelve months of a change in control, 100% of the remaining unvested shares will automatically vest.

 

The employment agreements reference the definition of change in control in the Incentive Plan. The Incentive Plan defines a change in control as:

 

(a) any person acquiring 50.1% or more of our voting securities (other than securities acquired directly from us or our affiliates); or

 

(b) upon the consummation of a merger or consolidation of us or any subsidiary other than a merger or consolidation where at least a majority of the Board immediately following the merger or consolidation is at least a majority of the board of the surviving entity or its ultimate parent; or

 

(c) upon the approval by the stockholders of a complete liquidation or dissolution of our company of all or substantially all of our assets, other than (i) a sale or disposition by us of our assets to an entity of which at least

50.1% of the voting power is owned by our stockholders or (ii) a sale or disposition of all or substantially all of our assets immediately following which the Board members immediately prior thereto constitute at least a majority of the Board members of the entity who bought the assets or if the buyer is a subsidiary, the buyer’s ultimate parent.

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers, as well as each person or group holding more than 10% of our common stock, to file reports of ownership and changes in ownership of our equity securities with the SEC. During 2010, all of our directors, executive officers and persons or groups holding more than 10% of our common stock complied in a timely manner with the filing requirements of Section 16(a) of the Exchange Act. In making this statement, we relied solely on the written representations of our directors, executive officers and persons or groups holding more than 10% of our common stock and copies of the reports that they have filed with the SEC.

 

Expense and Method of Proxy Solicitation

 

The enclosed proxy is solicited by the Board and the entire cost of solicitation will be paid by GateHouse Media. In addition, GateHouse Media may reimburse banks, brokers and other nominees for costs reasonably incurred by them in forwarding proxy materials to beneficial owners of its common stock. GateHouse Media officers and other employees may also solicit the return of proxies. Proxies will be solicited by personal contact, mail, telephone and electronic means.

 

Householding Information

 

Some banks, brokers and other nominees are participating in the practice of “householding” proxy statements and annual reports. This means that beneficial holders of our common stock who share the same address or household may not receive separate copies of this proxy statement and our 2010 Annual Report or Notice of Internet Availability of Proxy Materials, as applicable. We will promptly deliver an additional copy of any of these documents to you if you write us at: GateHouse Media, Inc. 350 WillowBrook Office Park, Fairport, New York 14450, Attention: Investor Relations or contact Mark Maring at (585) 598-6874.

 

Annual Report on Form 10-K

 

We will provide to each stockholder who is solicited to vote at the 2010 Annual Meeting of Stockholders, upon the request of such person and without charge, a free copy of our 2010 Annual Report. Please write us at: 350 WillowBrook Office Park, Fairport, New York 14450, Attention: Investor Relations.