def14a
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)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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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
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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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 27,
2010 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 or by mailing a proxy or voting
instruction card in the provided pre-addressed envelope. Voting
by phone 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 support and interest in GateHouse Media, Inc.
Sincerely,
Michael E. Reed
Chief Executive Officer
2010
ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF
ANNUAL MEETING AND PROXY STATEMENT
TABLE OF
CONTENTS
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GATEHOUSE
MEDIA, INC.
350 WillowBrook Office Park
Fairport, New York 14450
(585) 598-0030
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Time and Date |
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9:00 a.m. on May 27, 2010 |
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Place |
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Board Room at GateHouse Media, Inc., located at 350 WillowBrook
Office Park, Fairport, New York 14450. |
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Items of Business |
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(a) To elect one Class I director.
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(b) To consider and act upon a proposal to ratify the
appointment of Ernst & Young LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2010.
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(c) To consider and act upon such other business as may
properly come before the meeting.
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Adjournments and Postponements |
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Any action on the items of business described above may be
considered at the annual meeting at the time and date specified
above or at any time and date to which the annual meeting may be
properly adjourned or postponed. |
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Record Date |
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You are entitled to vote only if you were a GateHouse Media,
Inc. stockholder as of the close of business on March 29,
2010. |
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Meeting Admission |
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You are entitled to attend the annual meeting only if you were a
GateHouse Media, Inc. stockholder as of the close of business on
March 29, 2010 or hold a valid proxy for the annual
meeting. You should be prepared to present photo identification
for admittance. In addition, if you are a stockholder of record
or hold your shares through the GateHouse Media, Inc. Omnibus
Stock Incentive Plan, your ownership as of the record date will
be verified prior to being admitted to the meeting. 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 as of the record date, such as
your most recent account statement prior to March 29, 2010,
a copy of the voting instruction card provided by your broker,
trustee or nominee, or similar evidence of ownership. If you do
not provide photo identification and comply with the other
procedures outlined above, you will not be admitted to the
annual meeting. The annual 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. |
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Voting |
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Your vote is very important. Whether or not you plan to
attend the annual meeting, we encourage you to read this proxy
statement and submit your proxy or voting instructions as soon
as possible as outlined on the voting instruction card or as
instructed in the Notice of Internet Availability of Proxy
Materials. |
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You may submit your proxy or voting instruction card for the
annual meeting by completing, signing, dating and returning your
proxy or voting instruction card in the preaddressed envelope
provided, or, in most cases, by using the telephone. For
specific instructions on how to vote your shares, please refer
to the section entitled Questions and Answers
Voting Information beginning on page 3 of this proxy
statement and the instructions on the proxy or voting
instruction card or as instructed in the Notice of Internet
Availability of Proxy Materials. |
By order of the Board of Directors,
Polly Grunfeld Sack, Senior Vice President, Secretary and
General Counsel
This notice of annual meeting and proxy statement and form of
proxy are being distributed on or about April 12, 2010.
QUESTIONS
AND ANSWERS
Proxy
Materials
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1.
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Why am I
receiving these materials?
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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 Medias
annual meeting of stockholders, which will take place on
May 27, 2010. 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.
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2.
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Why am I
being asked to review materials on-line?
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Under rules recently adopted by the U.S. Securities and
Exchange Commission (the SEC), we are now
furnishing proxy materials to some of 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
on or about April 12, 2010.
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3.
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What
information is contained in the proxy statement?
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The information in the proxy statement relates to the proposals
to be voted on at the annual meeting, the voting process,
GateHouse Medias Board and Board committee, the
compensation of directors and executive officers for fiscal
2009, and other required information.
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4.
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How may I
obtain GateHouse Medias
Form 10-K
and other financial information?
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A copy of our 2009 Annual Report, which includes our 2009
Form 10-K,
is enclosed.
Stockholders may request another free copy of our 2009 Annual
Report, which includes our 2009
Form 10-K,
from:
GateHouse Media, Inc.
Attn: Investor Relations
350 WillowBrook Office Park
Fairport, New York 14450
(585) 598-0030
Alternatively, you can access our 2009 Annual Report, which
includes our 2009
Form 10-K,
on our website under the Investors tab at:
www.gatehousemedia.com
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5.
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How may I
request an electronic copy of the proxy materials, if I am
currently receiving a paper copy?
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If you wish to receive an electronic copy of our proxy materials
in the future, please contact your broker if you are not a
stockholder of record. If you are a stockholder of record or
hold your shares through the GateHouse Media, Inc. Omnibus Stock
Incentive Plan (along with any agreements issued in connection
therewith, collectively, the Incentive Plan)
contact our transfer agent (See Question 22).
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6.
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What
should I do if I receive more than one set of voting
materials?
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You may receive more than one 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 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
2
one 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.
Voting
Information
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7.
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What
items of business will be voted on at the annual
meeting?
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The items of business scheduled to be voted on at the annual
meeting are:
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The election of one Class I director; and
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To consider and act upon a proposal to ratify the appointment of
Ernst & Young LLP (EY) as our
independent registered public accounting firm for the for the
fiscal year ending December 31, 2010.
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We also will consider any other business that is properly
presented at the annual meeting.
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8.
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How does
the Board recommend that I vote?
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Our Board recommends that you vote your shares FOR
the nominee to the Board, and FOR the ratification
of EY as our independent registered public accounting firm for
the 2010 fiscal year.
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9.
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What
shares can I vote?
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Each share of GateHouse Media common stock issued and
outstanding as of the close of business on March 29, 2010,
the Record Date, 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 58,098,231 shares
of common stock issued and outstanding.
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10.
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How can I
vote my shares in person at the annual meeting?
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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.
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11.
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How can I
vote my shares without attending the annual meeting?
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By Telephone after your receipt of hard
copies of the proxy materials (either directly or as outlined in
the Notice of Internet Availability of Proxy Materials).
Stockholders of record of our common stock who live in the
United States or Canada may submit proxies by following the
Vote by Telephone instructions on the proxy cards.
Most stockholders who hold shares beneficially in street name
and live in the United States or Canada may vote by phone by
calling the number specified on the voting instruction cards
provided by their brokers, trustees or nominees. Please check
the voting instruction card for telephone voting availability.
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By Mail after your receipt of hard copies of
the proxy materials (either directly or as outlined in the
Notice of Internet Availability of Proxy Materials).
Stockholders of record of our common stock may submit proxies by
completing, signing and dating their proxy cards and mailing
them in the accompanying pre-addressed envelope. Stockholders
who hold shares beneficially in street name may vote by mail by
completing, signing and dating the voting instruction cards
provided and mailing them in the accompanying pre-addressed
envelopes.
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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 a set of proxy materials has
been sent directly to you by American Stock Transfer &
Trust Company. Please carefully consider the information
contained in the proxy statement and, whether or not you plan to
attend the meeting, vote by one of the
3
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 the 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.
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12.
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What is
the deadline for voting my shares?
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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.
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13.
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May I
change my vote?
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If you are the stockholder of record, you may revoke your proxy
by granting a new proxy bearing a later date (which
automatically revokes the earlier proxy), by providing a written
notice of revocation to our Corporate Secretary at the address
noted below in response to Question 25 prior to the annual
meeting, or 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.
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14.
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Is my
vote confidential?
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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.
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15.
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How are
votes counted?
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In the election of the director, you may vote FOR,
AGAINST or ABSTAIN with respect to the
nominee. If you elect to ABSTAIN in the election of
the director, the abstention will not impact the election of the
director. In tabulating the voting results for the election of
the director, only FOR and AGAINST 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).
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16.
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What is
the voting requirement to approve each of the
proposals?
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In the election of the director, the 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
nominees election must exceed the number of votes cast
AGAINST such nominees election. If the nominee
receives more FOR votes than AGAINST
votes, the nominee will be elected. All other matters voted upon
at the meeting will be decided by a majority of the votes cast.
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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. 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 matter
except in the election of the director, as described above.
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17.
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What
happens if additional matters are presented at the annual
meeting?
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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.
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18.
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Who will
serve as inspector of elections?
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The inspectors of elections will be Elizabeth Lewis and Sheryl
Costa.
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19.
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Who will
bear the cost of soliciting votes for the annual
meeting?
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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.
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20.
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Where can
I find the voting results of the annual meeting?
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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.
Stock
Ownership Information
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21.
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What is
the difference between holding shares as a stockholder of record
and as a beneficial owner?
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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.
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22.
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What if I
have questions for GateHouse Medias transfer
agent?
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Please contact our transfer agent, at the phone number listed
below, with questions concerning stock certificates, dividend
checks, transfer of ownership or other matters pertaining to
your stock account.
American
Stock Transfer & Trust Company:
(800) 937-5449
Annual
Meeting Information
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23.
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How can I
attend the annual meeting?
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You are entitled to attend the annual meeting only if you were a
GateHouse Media stockholder as of the close of business on
March 29, 2010 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 29, 2010, 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.
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24.
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How many
shares must be present or represented to conduct business at the
annual meeting?
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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 16 are counted for the purposes of determining the
presence of a quorum.
Stockholder
Proposals, Director Nominations and Related Bylaw
Provisions
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25.
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What is
the deadline to propose actions for consideration at next
years annual meeting of stockholders?
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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 years annual
meeting, our Corporate Secretary must receive the written
proposal at our principal executive offices no later than
December 13, 2010. 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 our
Corporate Secretary in accordance with our Amended and Restated
Bylaws, which, in general, require that the notice be received
by our Corporate Secretary:
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Not earlier than the close of business on January 27,
2011; and
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Not later than the close of business on February 26, 2011.
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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 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.
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26.
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How may I
recommend or nominate individuals to serve as
directors?
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You may propose director candidates for consideration by the
Board. Any such recommendations should include the
nominees name and qualifications for Board membership and
should be directed to our Corporate Secretary at the address of
our principal executive offices set forth in response to
Question 25 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.
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27.
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What is
the deadline to nominate individuals to serve as
directors?
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To nominate an individual for election at next years
annual stockholder meeting, a stockholder must give timely
notice to our Corporate Secretary in accordance with our Amended
and Restated Bylaws, which, in general, require that the notice
be received by our Corporate Secretary between the close of
business on January 27, 2011 and the close of business on
February 26, 2011, unless the annual meeting is moved to a
date more than 25 days before or after the anniversary of
the prior years annual meeting, in which case the deadline
will be as described in Question 25.
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28.
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How may I
obtain a copy of GateHouse Medias Amended and Restated
Bylaw provisions regarding stockholder proposals and director
nominations?
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You may contact our Corporate Secretary at our principal
executive offices, set forth in response to Question 25 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.
Further
Questions
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29.
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Who can
help answer my questions?
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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 at:
(585) 598-6874
/ investorrelations@gatehousemedia.com
CORPORATE
GOVERNANCE PRINCIPLES AND BOARD MATTERS
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 amended and restated on May 7, 2009 (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.
Board and
Board Committee Independence
Our Corporate Governance Guidelines require that a majority of
our Board consist of 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
7
the independence standards of the New York Stock Exchange. As of
the date of this proxy statement, our Board has determined that
three out of our five current directors (Messrs. Friedman,
Osborne and Sheehan) are independent, including the one director
nominee 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.
Board
Structure and Committee Composition
As of the date of this proxy statement, our Board has five
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 (including the nominee for election as a
Class I director at this years annual meeting,
Mr. Friedman) joined our Board on October 24, 2006 in
connection with the commencement of our initial public offering
and the initial listing of our common stock on the New York
Stock Exchange (we were delisted from the New York Stock
Exchange effective October 24, 2008). During fiscal year
2009, our Board held five 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 2009,
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.
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Name of Director
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Audit Committee
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Wesley R. Edens Chairman of the Board
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Michael E. Reed
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Richard L. Friedman
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Burl Osborne
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Member
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Kevin M. Sheehan
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Chair
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Board
Leadership Structure
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 any way that it deems best at any given
point in time.
The
Boards Role in Risk Oversight
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
8
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
adopted in October 2006 and 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). 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 auditors 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 five times during
fiscal year 2009, in addition to acting by written consent
without a meeting. 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; (d) reviewing
the Compensation Discussion and Analysis for inclusion in our
proxy statement; and (e) producing a report on executive
officer compensation as required by the SEC to be included in
our annual 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 Audit
Committee; (c) oversee the evaluation of our management;
and (d) develop, review and recommend corporate governance
guidelines.
9
Compensation
Committee Interlocks and Insider Participation
Since December 19, 2008, the date that the Compensation
Committee was discharged, the Board, with the exception of
Michael Reed, has assumed those functions formerly carried out
by the Compensation Committee. No member of the Board performing
the functions formerly carried out by the Compensation Committee
was an officer or employee of ours during 2008, or at any time
prior. With the exception of the Chairman of the Board,
Mr. Edens, no member of the Board performing the functions
formerly carried out by the Compensation Committee had any
relationship with us during 2009 pursuant to which disclosure
would be required under applicable SEC rules pertaining to the
disclosure of transactions with related persons (as defined
below). None of our executive officers currently serves or has
ever served as a member of the board of directors, the
compensation committee, or any similar body, of any entity one
of whose executive officers served on our Board or the
Compensation Committee.
Director
Nominees
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 candidates 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
26. How may I recommend or nominate individuals to serve as
directors? on page 7 of this proxy statement.
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 Boards oversight of
the business and affairs of our company; and (b) the
nominees reputation for honesty and ethical conduct in his
or her personal and professional activities. Additional factors
which the Board may consider include a candidates 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
candidates 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 our stockholders.
10
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. 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
Communications
with Directors
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.
Policy on
Transactions with Related Persons
The Board recognizes the fact that transactions with related
persons present a heightened risk of conflicts of interests
and/or
improper valuation (or the perception thereof). Any transaction
with our company or affiliates of ours in which a director,
executive officer or beneficial holder of more than 5% of the
outstanding shares of common stock, or any immediate family
member of the foregoing (each, a related
person) has a direct or indirect material interest,
and where the amount involved exceeds $120,000, must be
specifically disclosed by us in our public filings. See the
discussion on page 18 of this proxy statement under the
heading Related Person Transactions.
Our Code of Business Conduct and Ethics, applicable to
employees, officers and directors, discourages transactions
where there is or could be an appearance of a conflict of
interest. In addition, this Code requires specific approval by a
designated member of management of transactions involving us and
one of our employees, officers or directors. Our Amended and
Restated Certificate of Incorporation also provides regulation,
definition and guidance on related business activities,
corporate opportunities and agreements with significant
stockholders.
DIRECTOR
COMPENSATION
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 incurred in attending Board
meetings.
Messrs. Friedman, Osborne and Sheehan, were each granted a
number of restricted shares of common stock in October 2006
having a value of $300,000 based on the fair market value of our
shares on the date of grant. As of the
11
date of this proxy statement all of these restricted shares of
common stock are fully vested, having vested in three equal
tranches on the last day of each of fiscal years 2007, 2008 and
2009. The independent directors holding these shares of
restricted common stock (whether or not such shares were vested)
were entitled to any dividends that became payable on such
shares during the restricted period.
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 our common stock having a fair market
value of $15,000 as of the date of grant; however,
Messrs. Friedman, Osborne and Sheehan, all of whom were
granted the restricted shares of common stock described above,
will not be eligible to receive these automatic annual grants.
As such, no directors received unrestricted share grants for the
fiscal year ending December 31, 2009.
2009 DIRECTOR
COMPENSATION TABLE
The following table provides information about the compensation
earned by our independent directors during 2009.
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Fees Earned or
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Paid in Cash(1)(2)
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Name
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($)
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Stock Awards ($)
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Total ($)
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Richard L. Friedman
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30,000
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30,000
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Burl Osborne
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30,000
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30,000
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Kevin M. Sheehan
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35,000
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35,000
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(1) |
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Amounts in this column reflect the annual cash retainer of
$30,000 earned for 2009. |
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(2) |
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Mr. Sheehans cash fee includes an additional $5,000
retainer he earned as chair of the Audit Committee. |
PROPOSAL ONE:
ELECTION OF DIRECTOR
There is one nominee for election to our Board at this
years 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. At each
annual meeting of stockholders, one class of directors is
elected for a three-year term to succeed the directors of the
same class whose terms are then expiring. As a result, only a
portion of the Board is 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 three
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.
The nominee has indicated to us that he will be available to
serve as director. The Board has approved the nominee. In the
event that the nominee should become unavailable, the proxy
holders, Garrett J. Cummings and Monica Treviso, will vote for
such other nominee as designated by the Board.
12
The Board
recommends a vote FOR the following Class I
nominee:
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Richard L. Friedman
Director since October 2006
Age 69
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Mr. Friedman is the President and Chief Executive Officer of
Carpenter & Company, Inc. of Cambridge, MA, a real estate
ownership, development and management firm which operates
nationally. Mr. Friedman founded Carpenter & Company, Inc.
in 1968. Mr. Friedman has had substantial involvement with
numerous businesses, civic and charitable entities including
serving as a director (or member) of: The Steppingstone
Foundation, Mt. Auburn Foundation, PNC Bank New England, Johnny
Rockets, Inc., The Bridge Fund, and The Dartmouth College Real
Estate Advisory Committee. Mr. Friedman received a B.A from
Dartmouth College. Mr. Friedman was appointed by President
William J. Clinton as Chairman of the National Capital Planning
Commission and continues to work with its Interagency Security
Task Force.
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Key Attributes, Experience and Skills:
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Mr. Friedman has significant leadership and financial
experience, including expertise in commercial finance and
economic development, as well as extensive experience on
corporate and charitable foundation boards.
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The
following Class II directors are serving on the Board for a
term that ends at the 2011 Annual Meeting:
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Burl Osborne
Director since October 2006
Age 72
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Mr. Osborne formerly held several positions in the Belo
Corporation: President, Publishing Division from 1995 to 2001;
director from 1987 to 2002; and Publisher of The Dallas Morning
News Co., from 1986 to 2001 with which he became associated in
1980. In connection with The Associated Press, Mr. Osborne
served as Chairman of the Board from 2002 to 2007 and director
from 1993-2007 and as a member of the Executive Committee. Mr.
Osborne also has served as director and Past Chairman of
Southern Newspaper Publishers Association, and a director of
Newspaper Association of America. Currently, he serves as:
director of the Committee to Protect Journalists; director of
J.C. Penney Company, Inc. since April 1, 2003; and Chief
Executive Officer of Freedom Communications, Inc. since July 1,
2009. Mr. Osborne earned a Bachelor of Arts degree from
Marshall University in Huntington, West Virginia and a Master of
Business Administration degree from Long Island University. He
also participated in the Advanced Management Program at the
Harvard Business School.
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Key Attributes, Experience and Skills:
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Mr. Osborne has significant knowledge of our company and the
newspaper, publishing and multimedia industries through
management experience and board service. Mr. Osbornes
experience includes significant senior executive leadership
positions, including merger and acquisitions operations.
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Michael E. Reed
Director since October 2006
Age 44
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Mr. Reed became GateHouse Medias Chief Executive Officer
in February 2006. He was formerly the President and Chief
Executive Officer of Community Newspaper Holdings, Inc.
(CNHI) and had served in that capacity since
1999. Mr. Reed served as CNHIs Chief Financial Officer
from 1997 to 1999. Prior to that, he worked for Park
Communications, Inc., a multimedia company, located in Ithaca,
New York. Mr. Reed currently serves on the Board of Directors
for the Associated Press and he is also the Chairman of the
Audit Committee for the Associated Press. He also serves on the
Board of Directors for the Newspaper Association of America.
Mr. Reed also serves on the board of directors for the
Minneapolis Star Tribune. Mr. Reed formerly was a member of the
Board of Visitors of the University of Alabamas College of
Communication and Information Sciences and was a member of the
Grady College Journalism Schools Board of Advisors.
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Key Attributes, Experience and Skills:
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Mr. Reed has a deep understanding of our companys
operations, strategy and people, as well as our industry,
serving as our Chief Executive Officer for over four years. He
has also served in senior executive capacities with other
companies in the newspaper and publishing industries. Mr. Reed
has extensive corporate board experience.
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The
following Class III directors are serving on the Board for
a term that ends at the 2012 Annual Meeting:
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Wesley R. Edens
Chairman of the Board since
June 2005
Age 48
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Mr. Edens is founding principal and Co-Chairman of the Board of
Directors of Fortress Investment Group LLC
(Fortress). Previously, Mr. Edens served as
Chief Executive Officer of Fortress from inception to August
2009. He has been a principal and the Chairman of the Management
Committee of Fortress, which he co-founded in May 1998. Mr.
Edens has primary investment oversight of Fortress private
equity and publicly traded alternative businesses. He began his
career at Lehman Brothers, where he ran the mortgage trading
area as a partner and managing director. He then joined
BlackRock Financial Management to form his first private equity
fund, BlackRock Asset Investors. He spent a year in UBS as
managing director in the principal finance group, and then left
when he and two principals founded Fortress. Mr. Edens serves as
a director of each Aircastle Limited, Brookdale Living
Communities Inc., Brookdale Senior Living Inc., Eurocastle
Investment Limited, Fortress Investment Trust II, Fortress
Registered Investment Trust, Mapeley Limited, Newcastle
Investment Corp., RailAmerica Inc., Seacastle Inc., FRIT PINN
LLC and GAGFAH S.A. Mr. Edens previously served as a director of
each of Crown Castle Investment Corp., Fortress Brookdale
Investment Fund LLC, Fortress Pinnacle Investment Fund and RIC
Coinvestment Fund LP. Mr. Edens received a B.S. in Finance from
Oregon State University.
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Key Attributes, Experience and Skills:
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Mr. Edens has extensive experience in the venture capital,
private equity and investment advisory fields. Mr. Edens brings
to our board his expertise in leading organizations, dealing
with capital markets, finance transactions and acquisition
matters, as well as fundamental financial statement analysis,
including balance sheets, income statements and cash flow
statements.
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Kevin Sheehan
Director since October 2006
Age 56
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Mr. Sheehan currently serves as President and Chief Executive
Officer of Norwegian Cruise Line, which he joined in November
2007. Previously, Mr. Sheehan provided consulting services to
Cerebrus Capital Management LP (2006-2007) and provided
consulting services to Clayton Dubilier & Rice from 2005
until 2006. Prior thereto, Mr. Sheehan was Chairman and Chief
Executive Officer of Cendant Corporations Vehicle Services
Division (included responsibility for Avis Rent A Car, Budget
Rent A Car, Budget Truck, PHH Fleet Management and Wright
Express) from January 2003 until May 2005. From March 2001 until
May 2003, Mr. Sheehan served as Chief Financial Officer of
Cendant Corporation. From August 1999 to February 2001, Mr.
Sheehan was President-Corporate and Business Affairs and Chief
Financial Officer of Avis Group Holdings, Inc. and a director of
that company from June 1999 until February 2001. From September
2005 to December 2007, Mr. Sheehan was on the faculty of Adelphi
University, serving as a Distinguished Visiting
Professor Accounting, Finance and Economics. Mr.
Sheehan was on the Board of Avis Europe PLC from 2003 to 2005,
the Adelphi University School of Business Advisory Board from
2005 to present and the Board of the Long Island Philharmonic
from 1999 to 2006. Mr. Sheehan is currently on the Board of
West of England and Msgr. McClancy Memorial High School.
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Key Attributes, Experience and Skills:
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Mr. Sheehan has significant experience in a senior management
capacity for large corporations. Specifically, his experience as
the Chief Financial Officer of several large corporations
provide him with important experience and skills, as well as an
understanding of the complexities of our current economic
environment. Mr. Sheehan also brings significant financial
expertise to our Board.
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PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
EY served as our independent registered public accounting
firm for the fiscal year ending December 31, 2009. The
Audit Committee has selected EY as our independent registered
public accounting firm for the fiscal year ending
December 31, 2010. 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,
2010 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.
15
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, 2009 and December 31, 2008.
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2009
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2008
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Audit Fees
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$
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1,055,517
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$
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1,759,012
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Audit-Related Fees
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0
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53,025
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Tax Fees
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0
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0
|
|
All Other Fees
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
$
|
1,055,517
|
|
|
$
|
1,812,037
|
|
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;
(ii) managements assessment of the effectiveness of
internal control over financial reporting; and (iii) the
effectiveness of internal control over financial reporting;
(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 year ending December 31, 2009, no fees were
incurred for these services. For the fiscal year ending
December 31, 2008, fees of $53,025 were incurred for due
diligence assistance with acquisitions.
(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, 2009 and
December 31, 2008, 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,
2009 and December 31, 2008, 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, 2010 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,
2010.
16
COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information regarding ownership
of our common stock as of March 29, 2010 (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 the SEC and information provided to us, except where
otherwise noted.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares Beneficially
|
|
|
Percent of
|
|
Name and Address of Beneficial Owner
|
|
Owned(1)
|
|
|
Class
|
|
|
Named Executive Officers and Directors(2)
|
|
|
|
|
|
|
|
|
Michael E. Reed
|
|
|
407,087
|
|
|
|
*
|
|
Melinda A. Janik(3)
|
|
|
100,000
|
|
|
|
*
|
|
Mark Maring(4)
|
|
|
100,372
|
|
|
|
*
|
|
Kirk Davis(5)
|
|
|
72,667
|
|
|
|
*
|
|
Polly G. Sack
|
|
|
44,314
|
|
|
|
*
|
|
Wesley R. Edens(6)
|
|
|
22,975,800
|
|
|
|
39.5
|
%
|
Richard L. Friedman
|
|
|
46,667
|
|
|
|
*
|
|
Burl Osborne
|
|
|
28,667
|
|
|
|
*
|
|
Kevin M. Sheehan
|
|
|
53,667
|
|
|
|
*
|
|
All Executive Officers and Directors as a group
(9 persons)
|
|
|
23,829,241
|
|
|
|
41.0
|
%
|
5% Stockholders
|
|
|
|
|
|
|
|
|
Fortress Investment Holdings LLC (6)(7)
|
|
|
22,975,800
|
|
|
|
39.5
|
%
|
|
|
|
* |
|
Less than one percent. |
|
(1) |
|
Consists of shares held, including shares of restricted stock
subject to vesting. |
|
(2) |
|
The address of each officer or director listed in the table
above is:
c/o GateHouse
Media, Inc., 350 WillowBrook Office Park, Fairport, New York
14450. |
|
(3) |
|
Melinda A. Janik was appointed as our Chief Financial Officer
effective February 2, 2009. |
|
(4) |
|
Mark Maring served as our Interim Chief Financial Officer from
August 19, 2008 to February 2, 2009. |
|
(5) |
|
Kirk Davis became our President and Chief Operating Officer in
January 2009. |
|
(6) |
|
Includes: 22,975,800 shares held by certain affiliates of
Fortress Investment Group LLC (FIG). FIF III
Liberty Holdings LLC (FIF Liberty Holdings)
directly owns 22,050,000 of such shares. The members of FIF
Liberty Holdings are Fortress Investment Fund III LP,
Fortress Investment Fund III (Fund B) LP,
Fortress Investment Fund III (Fund C) LP,
Fortress Investment Fund III (Fund D) L.P.,
Fortress Investment Fund III (Fund E) L.P.,
Fortress Investment Fund III (Coinvestment
Fund A) LP, Fortress Investment Fund III
(Coinvestment Fund B) LP, Fortress Investment Fund III
(Coinvestment Fund C) LP and Fortress Investment
Fund III (Coinvestment Fund D) L.P.
(collectively, the Fund III Funds).
Fortress Fund III GP LLC is the general partner of each of
the Fund III Funds and its sole member is Fortress
Investment Fund GP (Holdings) LLC. The sole member of
Fortress Investment Fund GP (Holdings) LLC is Fortress
Operating Entity I LP (FOE I). 505,100 and
170,700 shares are directly owned by Fortress Partners
Securities LLC (FPS) and Fortress Partners
Offshore Securities LLC (FPOS) respectively.
Fortress Partners Fund LP (FPF) is the
sole member of FPS and Fortress Partners Advisors LLC
(FPA) is the investment advisor of FPF.
Fortress Partners Master Fund LP (FPM)
is the sole managing member of FPOS. Fortress Partners Offshore
Master GP LLC is the general partner of FPM which has FOE I as
its sole managing member. |
|
|
|
225,000 shares and 25,000 shares are directly owned by
Drawbridge DSO Securities LLC (Drawbridge
DSO) and Drawbridge OSO Securities LLC
(Drawbridge OSO), respectively. Drawbridge
Special Opportunities Fund LP (DBSO LP)
is the sole member of Drawbridge DSO and Drawbridge Special |
17
|
|
|
|
|
Opportunities Fund Ltd. (DBSO Ltd) is
the sole member of Drawbridge OSO. Drawbridge Special
Opportunities Advisors LLC (DSOA) is the
investment advisor for each of DBSO LP and DBSO Ltd. |
|
|
|
FIG LLC is the sole member of each of FPA and DSOA. FIG LLC is
wholly owned by FOE I. FIG Corp is the general partner FOE I.
FIG Corp is wholly owned by FIG. |
|
|
|
Mr. Edens may be deemed to beneficially own the shares
listed as beneficially owned by FIG. Mr. Edens disclaims
beneficial ownership of all such shares except to the extent of
his pecuniary interest therein and the inclusion of the shares
herein shall not be deemed an admission of beneficial ownership
of the reported shares for purposes of this Section 16 or
otherwise. Similarly, each of the affiliates of FIG listed above
disclaims beneficial ownership of all reported shares except to
the extent of its pecuniary interest therein and the inclusion
of the shares in this report shall not be deemed an admission of
beneficial ownership of the reported shares for purposes of
Section 16 otherwise. |
|
(7) |
|
The address of Fortress Investment Holdings LLC is 1345 Avenue
of the Americas, 46th Floor, New York, New York 10105. |
RELATED
PERSON TRANSACTIONS
Transaction
with Former Executive
On April 9, 2009, the Company sold certain of its assets
relating to the business of operating and publishing Charles
City Press, The Extra, The Northeast Iowa Shopper
and New Hampton Tribune to an affiliate of Gene A.
Hall for a purchase price of $1.925 million, subject to
customary adjustments (Acquired Business).
The parties also entered into a transitional services agreement
to provide such affiliate with certain services with respect to
the acquired business for up to six months after the sale. On
October 9, 2009 a parcel of real estate related to the
Acquired Business was sold to Mr. Halls affiliate for
a purchase price of $75,000. Mr. Hall was an Executive Vice
President of the Company up to the date of the sale.
Fortress
As of March 29, 2010, Fortress Investment Group LLC and
certain of its affiliates, including certain funds managed by it
or its affiliates (collectively, Fortress),
beneficially owned 39.5% of GateHouse Medias outstanding
common stock.
In addition, GateHouse Medias Chairman, Wesley Edens, is
the Chairman of the Management Committee of Fortress. GateHouse
Media does not pay Mr. Edens a salary or any other form of
compensation.
Indebtedness
As described more fully beginning on page 20, affiliates of
Fortress Investment Group LLC own $126.0 million of the
2007 Credit Facility as of December 31, 2009. These amounts
were purchased on arms length terms in secondary market
transactions. In addition, also as described more fully
beginning on page 23, affiliates of Fortress Investment
Group LLC own $4.0 million of the 2008 Bridge Facility as
of December 31, 2009. These amounts were purchased directly
from Barclays.
Fortress
Preferred Stock Agreement with Subsidiary
On August 21, 2008, an affiliate of Fortress, FIF III
Liberty Holdings LLC (FIF III), 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 our 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.
FIF III may 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.
18
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 its Board 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.
19
2006
Credit Facility
On June 6, 2006, GateHouse Media Operating, Inc.
(Operating), an indirect wholly-owned
subsidiary of GateHouse Media, GateHouse Media Holdco, Inc.
(Holdco), an indirect wholly-owned subsidiary
of GateHouse Media, and certain of their subsidiaries entered
into a first lien credit agreement, as amended on June 21,
2006 and October 11, 2006, with a syndicate of financial
institutions with Wachovia Bank, National Association as
administrative agent. The first lien credit facility provided
for a $570.0 million term loan facility and a revolving
credit facility with a $40.0 million aggregate loan
commitment amount available, including a $15.0 million
sub-facility
for letters of credit and a $10.0 million swingline
facility.
In October 2006, GateHouse Media used a portion of the net
proceeds from its initial public offering to pay down
$12.0 million of the first lien credit facility, and to
repay in full the outstanding balance of $21.3 million
under the $40.0 million revolving credit facility.
An aggregate of $87.0 million of the first lien term loans
and $37.0 million of the second lien term loans under the
2006 Credit Facility were purchased in the secondary market in
arms-length transactions by the following affiliates of
Fortress: (a) DBSO Corporates Ltd., Fortress Credit
Investments I Ltd. and Fortress Credit Investments II Ltd.,
which are subsidiaries of Drawbridge Special Opportunities
Fund LP and Drawbridge Special Opportunities
Fund Ltd., and (b) Newcastle CDO VIII 1, Limited,
which is a subsidiary of Newcastle Investment Corp. DBSO
Corporates Ltd. received a portion of the net proceeds of the
initial public offering as a result of the repayment in full of
the second lien term loan facility and the partial repayment of
the first lien term loan facility included in the 2006 Credit
Facility.
The 2006 Credit Facility was amended and restated on
February 27, 2007. This amended and restated credit
facility is referred to as the 2007 Credit
Facility.
2007
Credit Facility
Holdco, Operating and certain of their subsidiaries are parties
to an Amended and Restated Credit Agreement, dated as of
February 27, 2007, with a syndicate of financial
institutions with Wachovia Bank, National Association as
administrative agent.
The 2007 Credit Facility provides for a:
(a) $670.0 million term loan facility that matures on
August 28, 2014, (b) delayed draw term loan facility
of up to $250.0 million that matures on August 28,
2014, and (c) revolving credit facility with a
$40.0 million aggregate loan commitment amount available,
including a $15.0 million
sub-facility
for letters of credit and a $10.0 million swingline
facility, that matures on February 28, 2014. The borrowers
used the proceeds of the 2007 Credit Facility to refinance
existing indebtedness and for working capital and other general
corporate purposes, including, without limitation, financing
acquisitions permitted under the 2007 Credit Facility. The 2007
Credit Facility is secured by a first priority security interest
in (x) all present and future capital stock or other
membership, equity, ownership or profits interest of Operating
and all of its direct and indirect domestic restricted
subsidiaries, (y) 65% of the voting stock (and 100% of the
nonvoting stock) of all present and future first-tier foreign
subsidiaries and (z) substantially all of the tangible and
intangible assets of Holdco, Operating and their present and
future direct and indirect domestic restricted subsidiaries. In
addition, the loans and other obligations of the borrowers under
the 2007 Credit Facility are guaranteed, subject to specified
limitations, by Holdco, Operating and their present and future
direct and indirect domestic restricted subsidiaries.
As of December 31, 2009, (a) $670.0 million was
outstanding under the term loan facility,
(b) $250.0 million was outstanding under the delayed
draw term loan facility and (c) no amounts were outstanding
under the revolving credit facility. Borrowings under the 2007
Credit Facility bear interest, at the borrowers option,
equal to the LIBOR Rate for a LIBOR Rate Loan (as defined in the
2007 Credit Facility), or the Alternate Base Rate for an
Alternate Base Rate Loan (as defined in the 2007 Credit
Facility), plus an applicable margin. The applicable margin for
LIBOR Rate term loans and Alternate Base Rate term loans, as
amended by the First Amendment (as defined below), is 2.00% and
1.00%, respectively. The applicable margin for revolving loans
is adjusted quarterly based upon Holdcos Total Leverage
Ratio (as defined in the 2007 Credit Facility) (i.e., the
ratio of Holdcos Consolidated Indebtedness (as defined in
the 2007 Credit Facility) on the last day of the preceding
quarter to Consolidated EBITDA (as defined in the 2007 Credit
Facility) for the four fiscal quarters ending on the date of
determination).
20
The applicable margin ranges from 1.50% to 2.00%, in the case of
LIBOR Rate Loans and, 0.50% to 1.00% in the case of Alternate
Base Rate Loans. Under the revolving credit facility, GateHouse
Media will also pay a quarterly commitment fee on the unused
portion of the revolving credit facility ranging from 0.25% to
0.5% based on the same ratio of Consolidated Indebtedness to
Consolidated EBITDA and a quarterly fee equal to the applicable
margin for LIBOR Rate Loans on the aggregate amount of
outstanding letters of credit. In addition, GateHouse Media will
be required to pay a ticking fee at the rate of 0.50% of the
aggregate unfunded amount available to be borrowed under the
delayed draw term facility.
No principal payments are due on the term loan facilities or the
revolving credit facility until the applicable maturity date.
The borrowers are required to prepay borrowings under the term
loan facilities in an amount equal to 50.0% of Holdcos
Excess Cash Flow (as defined in the 2007 Credit Facility) earned
during the previous fiscal year, except that no prepayments are
required if the Total Leverage Ratio (as defined in the 2007
Credit Facility) is less than or equal to 6.0 to 1.0 at the end
of such fiscal year. In addition, the borrowers are required to
prepay borrowings under the term loan facilities with asset
disposition proceeds in excess of specified amounts to the
extent necessary to cause Holdcos Total Leverage Ratio to
be less than or equal to 6.25 to 1.00, and with cash insurance
proceeds and condemnation or expropriation awards, in excess of
specified amounts, subject, in each case, to reinvestment
rights. The borrowers are required to prepay borrowings under
the term loan facilities with the net proceeds of equity
issuances by GateHouse Media in an amount equal to the lesser of
(a) the amount by which 50.0% of the net cash proceeds
exceeds the amount (if any) required to repay any credit
facilities of GateHouse Media or (b) the amount of proceeds
required to reduce Holdcos Total Leverage Ratio to 6.0 to
1.0. The borrowers are also required to prepay borrowings under
the term loan facilities with 100% of the proceeds of debt
issuances (with specified exceptions) except that no prepayment
is required if Holdcos Total Leverage Ratio is less than
6.0 to 1.0. If the term loan facilities have been paid in full,
mandatory prepayments are applied to the repayment of borrowings
under the swingline facility and revolving credit facilities and
the cash collateralization of letters of credit.
The 2007 Credit Facility contains a financial covenant that
requires Holdco to maintain a Total Leverage Ratio of less than
or equal to 6.5 to 1.0 at any time an extension of credit is
outstanding under the revolving credit facility. The 2007 Credit
Facility contains affirmative and negative covenants applicable
to Holdco, Operating and their restricted subsidiaries
customarily found in loan agreements for similar transactions,
including restrictions on their ability to incur indebtedness
(which GateHouse Media is generally permitted to incur so long
as it satisfies an incurrence test that requires it to maintain
a pro forma Total Leverage Ratio of less than 6.5 to 1.0),
create liens on assets; engage in certain lines of business;
engage in mergers or consolidations, dispose of assets, make
investments or acquisitions; engage in transactions with
affiliates, enter into sale leaseback transactions, enter into
negative pledges or pay dividends or make other restricted
payments (except that Holdco is permitted to (a) make
restricted payments (including quarterly dividends) so long as,
after giving effect to any such restricted payment, Holdco and
its subsidiaries have a Fixed Charge Coverage Ratio (as defined
in the 2007 Credit Facility) equal to or greater than 1.0 to 1.0
and would be able to incur an additional $1.00 of debt under the
incurrence test referred to above and (b) make restricted
payments of proceeds of asset dispositions to GateHouse Media to
the extent such proceeds are not required to prepay loans under
the 2007 Credit Facility
and/or cash
collateralize letter of credit obligations and such proceeds are
used to prepay borrowings under acquisition credit facilities of
GateHouse Media). The 2007 Credit Facility also permits the
borrowers, in certain limited circumstances, to designate
subsidiaries as unrestricted subsidiaries which are
not subject to the covenant restrictions in the 2007 Credit
Facility. The 2007 Credit Facility contains customary events of
default, including defaults based on a failure to pay principal,
reimbursement obligations, interest, fees or other obligations,
subject to specified grace periods; a material inaccuracy of
representations and warranties; breach of covenants; failure to
pay other indebtedness and cross-accelerations; a Change of
Control (as defined in the 2007 Credit Facility); events of
bankruptcy and insolvency; material judgments; failure to meet
certain requirements with respect to ERISA; and impairment of
collateral. There were no extensions of credit outstanding under
the revolving credit portion of the facility at
December 31, 2009 and, therefore, we are not required to be
in compliance with the Total Leverage Ratio covenant.
Subject to the satisfaction of certain conditions and the
willingness of lenders to extend additional credit, the 2007
Credit Facility provides that the borrowers may increase the
amounts available under the revolving facility
and/or the
term loan facilities.
As of December 31, 2009, affiliates of Fortress own
$126.0 million of the loans under the 2007 Credit Facility.
21
First
Amendment to 2007 Credit Facility
On May 7, 2007, GateHouse Media entered into the First
Amendment to amend the 2007 Credit Facility (the First
Amendment). The First Amendment provided an
incremental term loan facility under the 2007 Credit Facility in
the amount of $275.0 million. As amended by the First
Amendment, the 2007 Credit Facility includes $1.195 billion
of term loan facilities and $40.0 million of a revolving
credit facility. The incremental term loan facility amortizes at
the same rate and matures on the same date as the existing term
loan facilities under the 2007 Credit Facility. Interest on the
incremental term loan facility accrues at a rate per annum equal
to, at the option of the borrower, (a) adjusted LIBOR plus
a margin equal to (i) 2.00%, if the corporate family
ratings and corporate credit ratings of Operating by
Moodys Investors Service Inc. and Standard &
Poors Rating Services, are at least B1, and B+,
respectively, in each case with stable outlook or
(ii) 2.25%, otherwise, as was the case as of
December 31, 2009, or (b) the greater of the prime
rate set by Wachovia Bank, National Association, or the federal
funds effective rate plus 0.50%, plus a margin 1.00% lower than
that applicable to adjusted LIBOR-based loans. Any voluntary or
mandatory repayment of the First Amendment term loans made with
the proceeds of a new term loan entered into for the primary
purpose of benefiting from a margin that is less than the margin
applicable as a result of the First Amendment will be subject to
a 1.00% prepayment premium. The First Amendment term loans are
subject to a most favored nation interest provision
that grants the First Amendment term loans an interest rate
margin that is 0.25% less than the highest margin of any future
term loan borrowings under the 2007 Credit Facility.
As previously noted, the First Amendment also modified the
interest rates applicable to the term loans under the 2007
Credit Facility. Term loans thereunder accrue interest at a rate
per annum equal to, at the option of the Borrower,
(a) adjusted LIBOR plus a margin equal to 2.00% or
(b) the greater of the prime rate set by Wachovia Bank,
National Association, or the federal funds effective rate plus
0.50%, plus a margin equal to 1.00%. The terms of the previously
outstanding borrowings were also modified to include a 1.00%
prepayment premium corresponding to the prepayment premium
applicable to the First Amendment term loans and a corresponding
most favored nation interest provision.
Second
Amendment to 2007 Credit Facility
On February 3, 2009, GateHouse Media entered into a Second
Amendment to the 2007 Credit Facility (the Second
Amendment). The Second Amendment amends our Amended
and Restated Credit Agreement, dated as of February 27,
2007, as amended by the First Amendment to Amended and Restated
Credit Agreement, dated as of May 7, 2007 (together, the
Credit Agreement), by and among Holdco,
GateHouse Media Operating, Inc. (the
Subsidiary), GateHouse Media
Massachusetts I, Inc., GateHouse Media Massachusetts II,
Inc., ENHE Acquisition, LLC, each of those domestic subsidiaries
of Holdco identified as a Guarantor on the
signature pages of the Credit Agreement, and Wachovia Bank,
National Association, as administrative agent for the lenders.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Credit Agreement.
The Second Amendment, among other things, permits the Subsidiary
to repurchase term loans outstanding under the Credit Agreement
at prices below par through one or more Modified Dutch Auctions
(as defined in the Second Amendment) through December 31,
2011, provided that: (a) no Default or Event of Default
under the Credit Agreement has occurred and is continuing or
would result from such repurchases, (b) the sum of
Unrestricted Cash and Accessible Borrowing Availability (as
defined in the Second Amendment) under the Credit Agreement is
greater than or equal to $20.0 million; and (c) no
Extension of Credit (as defined in the Second Amendment) is
outstanding under the revolving credit facility before or after
giving effect to such repurchases. The Second Amendment further
provides that such repurchases may result in the prepayment of
term loans on a non-pro rata basis. No debt repurchases are
required to be made pursuant to the Second Amendment and we
cannot provide any assurances that any such debt repurchases
will be made or, if made, the prices at which such repurchases
will be made.
The Second Amendment also reduces the aggregate principal
amounts available under the Credit Agreement, as follows:
(a) for revolving loans, from $40.0 million to
$20.0 million; (b) for the letter of credit
subfacility, from $15.0 million to $5.0 million; and
(c) for the swingline loan subfacility, from
$10.0 million to $5.0 million.
22
In addition, the Second Amendment provides that Holdco may not
incur additional term debt under the Credit Agreement unless the
Senior Secured Incurrence Test is less than 4.00 to 1 and the
current Incurrence Test is satisfied, as such terms are defined
in the Second Amendment.
As of December 31, 2009, a total of $1.195 billion was
outstanding under the 2007 Credit Facility. On March 5,
2010 we made a principal payment of $2.5 million on the
2007 Credit Facility. As of March 31, 2010, a total of
$1.193 billion was outstanding under the 2007 Credit
Facility.
For fiscal 2009, GateHouse Media paid $36.6 million in
interest under the 2007 Credit Facility.
2008
Bridge Facility
On February 15, 2008, GateHouse Media Intermediate Holdco,
Inc., a wholly-owned subsidiary of GateHouse Media
(Holdco II), and GateHouse Media
(collectively, the Bridge Borrower) entered
into the 2008 Bridge Facility with Barclays Capital, as
syndication agent, sole arranger and book runner
(Barclays).
The 2008 Bridge Facility originally provided for a
$20.6 million term loan facility subject to extensions
through August 15, 2009. The Bridge Facility is secured by
a first priority security interest in all present and future
capital stock of Holdco owned by Holdco II and all proceeds
thereof.
Borrowings under the 2008 Bridge Facility bear interest at a
floating rate equal to the LIBOR Rate (as defined in the 2008
Bridge Facility), plus an applicable margin. During the first
three months of the facility, until May 15, 2008, the
applicable margin was 8.00%. After May 15, 2008 and until
February 12, 2009 (the date of the Second Waiver and
Amendment to 2008 Bridge Facility) the applicable margin was
10.00%. After February 12, 2009 and until the maturity
date, the applicable margin is 12.00%.
The Bridge Borrower is required to prepay borrowings under the
2008 Bridge Facility with (a) 100% of the net cash proceeds
from the issuance or incurrence of debt by Holdco II and
its restricted subsidiaries, (b) 100% of the net cash
proceeds from any issuances of equity by Holdco II or any
of its restricted subsidiaries and (c) 100% of the net cash
proceeds of asset sales and dispositions by Holdco II and
its subsidiaries, except, in the case of each of clause (a),
(b) and (c), to the extent such required prepayment would
contravene any provision of, or cause a violation of or default
under, the 2007 Credit Facility, in which case such mandatory
prepayment shall not be required. The Bridge Borrower may
voluntarily prepay the 2008 Bridge Facility at any time.
In connection with the 2008 Bridge Facility, Holdco II
entered into a Pledge Agreement in favor of Barclays, pursuant
to which Holdco II pledges certain assets for the benefit
of the secured parties as collateral security for the payment
and performance of its obligations under the 2008 Bridge
Facility. The pledged assets include, among other things
(a) all present and future capital stock or other
membership, equity, ownership or profits interest of the Bridge
Borrower in all of its direct domestic restricted subsidiaries
and (b) 65% of the voting stock (and 100% of the nonvoting
stock) of all of the present and future first-tier foreign
subsidiaries.
First
Waiver to 2008 Bridge Facility
On October 17, 2008, Holdco II entered into the First
Waiver to the 2008 Bridge Facility. The First Waiver waived
compliance by Holdco II with the Total Leverage Ratio (as
defined in the 2008 Bridge Facility) covenant for the quarter
ended September 30, 2008. The Total Leverage Ratio was
required to be no greater than 7.25 to 1.00.
Second
Waiver and Amendment to 2008 Bridge Facility
On February 12, 2009, Holdco II entered into the
Second Waiver and Amendment to the 2008 Bridge Facility. The
Second Waiver and Amendment waived compliance by Holdco II
with the Total Leverage Ratio for the quarter ended
December 31, 2008. As mentioned above, the Second Waiver
and Amendment also set the applicable margin
23
for the 2008 Bridge Facility at 12.00% and established an
amortization schedule for the outstanding balance due under the
Bridge Facility as follows:
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Installment
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Principal Amount
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May 31, 2009
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$1,500,000
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June 30, 2009
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$1,500,000
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July 31, 2009
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$1,500,000
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August 31, 2009
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$1,500,000
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September 30, 2009
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$5,000,000
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October 31, 2009
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$2,000,000
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November 30, 2009
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$2,000,000
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Term Loan Maturity Date
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Remaining outstanding amounts
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Furthermore, under the Second Waiver and Amendment to the 2008
Bridge Facility the covenant requiring compliance with the Total
Leverage Ratio was eliminated. The Bridge Borrower also agreed
to prepay the 2008 Bridge Facility in any month, and only to the
extent that, the month end cash balance exceeds the Projected
Cash Balance by $2.0 million, starting in May of 2009, and
agreed to make certain prepayments in the event of any voluntary
repurchase or prepayment of term loans under the 2007 Credit
Facility.
Third
Waiver to the 2008 Bridge Facility
On June 1, 2009, Holdco II entered into the Third
Waiver to the 2008 Bridge Facility. The Third Waiver waived
compliance by Holdco II with the obligation to pay the
monthly payment due on May 31, 2009 in the principal amount
of $1.5 million until June 12, 2009.
Third
Amendment to 2008 Bridge Facility
On June 12, 2009, Holdco II entered into the Third
Amendment to the 2008 Bridge Facility. The Third Amendment
established a revised amortization schedule for the outstanding
balance due under the 2008 Bridge Facility which runs through
February 12, 2011. Bi-monthly payments of $1.5 million
under the revised amortization schedule began in June 2009 with
any remaining amounts due February 12, 2011.
As a result of the prepayment of a portion of the 2008 Bridge
Facility the final payment has been accelerated to December
2010. The Bridge Borrowers agreement to prepay the 2008
Bridge Facility in any month was amended to provide that the
Bridge Borrower prepay the 2008 Bridge Facility in any month,
and only to the extent that, the month end cash balance exceeds
the revised Projected Cash Balance by $4.0 million,
starting in June of 2009. The Bridge Borrower also agreed to
additional informational document delivery requirements. In
addition, the applicable grace period for any
failure to make a principal payment was extended to 30 days.
As of December 31, 2009, a total of $8.0 million was
outstanding under the 2008 Bridge Facility.
EXECUTIVE
OFFICERS
Michael E. Reed, age 44, became our Chief Executive
Officer in February 2006 and became a director in October 2006.
He was formerly the President and Chief Executive Officer of
Community Newspaper Holdings, Inc. (CNHI) and
had served in that capacity since 1999. Mr. Reed served as
CNHIs Chief Financial Officer from 1997 to 1999. Prior to
that, he worked for Park Communications, Inc., a multimedia
company, located in Ithaca, New York. Mr. Reed currently
serves on the board of directors for the Associated Press and he
is also the Chairman of the Audit Committee for the Associated
Press. He also serves on the board of directors for the
Newspaper Association of America. Mr. Reed also serves on
the board of directors for the Minneapolis Star Tribune.
Mr. Reed formerly was a member of the Board of Visitors of
the University of Alabamas College of Communication and
Information Sciences and is a member of the Grady College
Journalism Schools Board of Advisors.
Melinda A. Janik, age 53, 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
24
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 Price Waterhouse, LLP. Ms. Janik is a
Certified Public Account and holds an MBA in finance and
accounting and a bachelors degree in chemistry from the
State University of New York at Buffalo.
Mark Maring, age 43, 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 Constellations 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 masters 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.
Kirk Davis, age 48, 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,
also known as the South of Boston Media Group, from 2004 to
2006. Prior to that, Mr. Davis served as Vice President of
Publishing for Turley Publications 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
(TAB Newspapers), 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 50, 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
IMGs 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 masters degree in civil
engineering from Stanford University, in addition to a law
degree from Stanford University Law School.
COMPENSATION
DISCUSSION AND ANALYSIS
The Board is responsible for establishing, implementing and
monitoring our executive compensation philosophy and objectives.
The Board believes that the most effective executive
compensation program is one that is designed to reward the
achievement of annual, long-term and strategic goals and aligns
the interests of our executives with those of our stockholders,
with the ultimate objective of improving long-term stockholder
value.
The following Compensation Discussion and Analysis describes the
material elements of compensation for those executive officers
identified in the Summary Compensation Table (Named
Executive Officers), as well as the role and
involvement of various parties in executive compensation
analysis and decisions, and provides a discussion of the process
and rationale for the Boards decisions to compensate our
Named Executive Officers with
25
specific types and amounts of compensation. We have not
established an extensive or complicated executive compensation
program. Instead, we believe that we have a fairly simple
executive compensation program that is intended to provide
appropriate compensation for our Named Executive Officers, as
determined by the Board. As this Compensation Discussion and
Analysis explains in greater detail, our executive compensation
program currently has three key elements: (a) base salary;
(b) an annual incentive in the form of an annual bonus; and
(c) periodic long-term equity incentives, such as
restricted share grants.
Executive
Summary of Compensation Actions
This section highlights the key decisions made by the Board with
respect to our executive compensation program in 2009 and early
2010. Based on the global economic conditions, the performance
of GateHouse Media stock and other factors:
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2009 base salaries for our Named Executive Officers were frozen
at 2008 levels;
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Other than a time-vested restricted stock award granted to
Ms. Janik in connection with her joining our executive
management team, no awards of equity compensation were granted
during 2009 or to date in 2010 for 2009 performance; and
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On March 4, 2010, the Board elected to pay discretionary
annual bonuses to our Named Executive Officers as an incentive
to remain in our employment.
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Objectives
of Our Compensation Program
The primary objective of our executive compensation program is
to attract and retain executives with the requisite skills and
experience to help us achieve our business mission and develop,
expand and execute business opportunities to improve long-term
stockholder value. The impact of the continuing global recession
on the print and online advertising industries continues to
create a challenging operating environment and to drive
significant and rapid change. However, this economic environment
has not changed the primary objectives of our executive
compensation program of attracting and retaining talented
executives. In fact, the weaknesses in the economy generally,
and the financial markets specifically, has intensified the
demand for exceptional leadership. We believe that a capable,
experienced and highly motivated executive management team is
critical to our success and to the creation of long-term
stockholder value. In assessing the ability of our executive
compensation program to meet these objectives, the Board
evaluates both company and individual performance as well as
market compensation. Through this evaluation, the Board works to
help ensure that we maintain our ability to attract and retain
superior employees in key positions and that compensation
provided to key employees remains competitive relative to the
compensation paid to similarly situated executives of peer
companies.
Key
Elements of Our Executive Compensation Program
We seek to achieve the objectives for our executive compensation
program through three key compensation elements:
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a base salary;
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an annual incentive in the form of an annual bonus paid at the
Boards discretion, based on its evaluation of short-term
company and individual performance; and
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periodic long-term equity incentives, such as restricted share
grants, to align the interests of our Named Executive Officers
with those of our stockholders.
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Compensation
Setting Process
Role
of the Board and Executive Officers
The Board is primarily responsible for overseeing compensation
for our executive officers, including Named Executive Officers.
Since December 19, 2008, the Board, with the exception of
our Chief Executive Officer, has
26
assumed the functions previously carried out by the Compensation
Committee. The Board, with the exception of our Chief Executive
Officer, annually approves the compensation for our Named
Executive Officers.
Compensation
Consultants
Neither we nor the Board has had, or currently has, any
contractual arrangement with any executive compensation
consultant who has a role in determining or recommending the
amount or form of compensation paid to our executive officers,
including our Named Executive Officers, or our directors. The
Board did not engage a compensation consultant to assist with
setting 2009 executive compensation. We have not adopted a
policy regarding compensation consultant independence. We will
consider the implementation of such a policy if and when we
consider retaining a compensation consultant to assist us with
our executive compensation programs.
Benchmarking
Data
The Board believes that each element of the compensation program
should establish compensation levels taking into account current
market practices. As such, the members of the Board may
familiarize themselves with compensation trends and competitive
conditions through the review of non-customized market surveys,
data and other information about relevant market compensation
practices. However, market compensation levels and practices are
only one of the factors used by the Board in making executive
compensation decisions. The Board does not target a specific
percentile within this market data and instead uses the
comparative data solely as a validation after having determined
the types and amount of compensation based on its own
evaluation. Other factors considered in the Boards
evaluation may include the individual Named Executive
Officers level of responsibility, the individual Named
Executive Officers performance, historical company
practices, long-term market trends, internal pay equity, and
expectations regarding the individuals future
contributions, our own performance, budget considerations, and
succession planning and retention strategies.
Executive
Compensation Program
Our practices with respect to each of the three key compensation
elements identified above, as well as other elements of
compensation, are set forth below.
Base
Salary
Each Named Executive Officer is paid a base salary providing him
or her with a guaranteed income stream which does not vary with
our performance. Each Named Executive Officers base salary
is based on his or her job responsibilities, leadership and
experience and value to, and length of service with, our
company. The salaries of our Named Executive Officers named in
the Summary Compensation Table are determined by the Board. Such
salaries may be reflected either in an employment agreement
(described below in the section entitled Employment
Agreements) or an offer letter. Decisions regarding
adjustments to base salaries are made at the discretion of the
Board, and are influenced by, among other factors determined by
the Board in its sole discretion, each Named Executive
Officers current base salary and the base salaries paid to
other executives performing substantially similar functions at
similar companies with a market capitalization similar to ours.
For 2009, in light of the current economic environment and
considering other factors, the Board elected to freeze the base
salaries of our Named Executive Officers at their 2008 levels.
27
Annual
Bonus Incentives for Named Executive Officers
Each of our Named Executive Officers is entitled to a
discretionary annual bonus that is based upon the achievement of
certain performance goals of the Company and individual, as
agreed to by each Named Executive Officer and the Board. The
annual bonus incentives are used to ensure that a portion of our
Named Executive Officers compensation is at risk, and that
each Named Executive Officer has the opportunity to receive a
variable amount of compensation based on Boards evaluation
of our and the individuals performance. 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 (a Restricted Stock
Bonus) vests over a specified period.
While the amount, if any, of an annual bonus is determined by
the Board in its sole discretion, the Board has established an
evaluation process used to assist in its decision-making process
relating to the amount, if any, of the annual bonus for our
Named Executive Officers. The evaluation process involves the
following four steps:
(a) Setting Company-wide annual performance
goals. Early in each fiscal year, the Board and
senior management establish annual performance measures for us.
For a particular fiscal year, those performance measures may
include one or any combination of the following: (i) net
income or operating income (before or after taxes, interest,
capital expenses, depreciation, amortization or nonrecurring or
unusual items); (ii) return on assets, return on capital,
return on equity, return on economic capital, return on other
measures of capital, return on sales or other financial
criteria; (iii) revenue or net sales; (iv) gross
profit or operating gross profit; (v) share price or total
shareholder return; (vi) earnings per share;
(vii) budget and expense management; or
(viii) customer or product measures. In determining the
extent to which the performance measures are met for a given
period, the Board exercises its judgment whether to reflect or
exclude the impact of changes in accounting principles and
extraordinary, unusual or infrequently occurring events.
(b) Setting individual performance
measures. As it sets our company-wide performance
measures, the Board also establishes individual performance
measures for each Named Executive Officer. These measures are
used by the Board to evaluate individual performance beyond
purely financial measures, and may include one or any
combination of the following: (i) exceptional performance
of each individuals functional responsibilities;
(ii) leadership; (iii) creativity;
(iv) innovation; (v) collaboration;
(vi) development and implementation of growth initiatives;
and (vii) other activities that are critical to driving
long-term value for stockholders.
(c) Setting a target bonus. The Board
establishes a target bonus amount for certain Named Executive
Officers. The target bonus takes into account all of the Company
and individual factors that the Board deems relevant, however,
no one factor by itself is determinative of the target bonus
amount. For 2009, Mr. Reeds target bonus was
$200,000, Ms. Janiks target bonus was $137,500 and
Mr. Marings target bonus was $140,000. Neither
Mr. Davis nor Ms. Sack had a target bonus amount for
2009.
(d) Measuring performance. After the end
of the fiscal year, the Board reviews our actual performance
against each of the performance goals established at the outset
of the year. The Board also makes an assessment of performance
against the individual goals set at the outset of the year as
well as each Named Executive Officers performance in
relation to any extraordinary events or transactions. The Board
does not apply a rigid set of rules for determining the relative
importance of these factors. The Board may emphasize or weight
particular factors differently for each Named Executive Officer
and differently for each fiscal year.
Periodic
Long-Term Equity Incentive Compensation
The periodic long-term equity incentive program provides a
periodic award (typically annual) of equity compensation under
our Incentive Plan. The objective of the program is to directly
align compensation for our Named Executive Officers over a
multi-year period with the interests of our stockholders by
motivating and rewarding creation and preservation of long-term
stockholder value. The level of long-term incentive compensation
is determined based on an evaluation of competitive factors in
conjunction with total compensation provided to our Named
Executive Officers and the goals of the compensation program
described above.
During 2009, following the Boards evaluation of our
performance, and after consideration of any other appropriate
factors determined by the Board in its sole discretion, the
Board determined not to grant our Named
28
Executive Officers any awards of long-term equity compensation,
other then the time-vested restricted stock award granted to
Ms. Janik in connection with her joining our executive
management team.
Mr. Reed and Ms. Sack each previously entered into a
management stockholder agreement (the Management
Stockholder Agreements) pursuant to which they were
awarded restricted share grants. Under the Management
Stockholder Agreements, the restricted share grants are subject
to a five-year vesting schedule, with one-third of the shares
vesting on each of the third, fourth and fifth anniversaries
from the grant date. In addition, Mr. Reed also purchased
additional restricted shares of our common stock which are also
subject to the Management Stockholder Agreements.
Following the adoption of the Incentive Plan in October 2006,
additional restricted share grants were awarded to certain of
our Named Executive Officers under the Incentive Plan in each of
2006, 2007 and 2008. The majority of the restricted share grants
granted under the Incentive Plan vest in one-third increments on
each of the first, second and third anniversaries of the grant
date. During 2009, only Ms. Janik received a restricted
share grant. Such grant of 100,000 shares of restricted
stock was made on February 6, 2009 in connection with her
joining our executive management team. Ms. Janiks
restricted share grant vests in equal parts on the first, second
and third anniversaries of the date of grant.
During the applicable vesting period, our Named Executive
Officers holding restricted share grants have all the rights of
a stockholder, including, without limitation, the right to vote
and the right to receive all dividends or other distributions
(at the same rate and on the same terms as all other
stockholders). Due to our mid-2008 decision to suspend the
payment of quarterly dividends to stockholders, our Named
Executive Officers did not receive any dividends on any of their
unvested restricted share grants during 2009.
Benefits
and Perquisites
The Board supports providing benefits and perquisites to our
Named Executive Officers that are substantially the same as
those offered to our other executive officers, including
vacation, sick time, participation in our medical, dental and
insurance programs, all in accordance with the terms of such
plans and program in effect from time to time.
Policy
With Respect to the $1 Million Deduction Limit
Section 162(m) of the Code generally disallows a tax
deduction to public corporations for compensation greater than
$1 million paid for any fiscal year to the
corporations Chief Executive Officer and the three other
most highly compensated executive officers as of the end of any
fiscal year, other than the Chief Financial Officer. However,
certain forms of performance-based compensation are excluded
from the $1 million deduction limit if certain requirements
are met. The Board designs certain components of Named Executive
Officer compensation, including awards granted under the
Incentive Plan, to permit full deductibility. The Board
believes, however, that our stockholder interests are best
served by not restricting its discretion and flexibility in
crafting compensation programs, even though such programs may
result in certain non-deductible compensation expenses.
Accordingly, we have granted and may continue to grant awards
such as time-based restricted share grants
and/or enter
into compensation arrangements under which payments are not
deductible under Section 162(m) in the event that the Board
determines that such non-deductible arrangements are otherwise
in the best interests of our stockholders.
COMPENSATION
COMMITTEE REPORT
Since December 19, 2008, the date that the Compensation
Committee was discharged, the Board, with the exception of
Michael Reed, has assumed those functions formerly carried out
by the Compensation Committee. These functions include,
evaluating and establishing compensation for our executive
officers and overseeing other management incentive, benefit and
perquisite programs. Management has the primary responsibility
for our financial statements and reporting process, including
the disclosure of executive compensation. With this in mind, the
Board has reviewed and discussed with management the
Compensation Discussion and Analysis found on pages 25-29 of
this proxy statement. The Board is satisfied that the
Compensation Discussion and Analysis fairly
29
represents the philosophy, intent and actions of the Board with
regard to executive compensation, and on that basis, the Board
recommended that the Compensation Discussion and Analysis be
included in this proxy statement.
By: the Board of Directors
Wesley R. Edens
Richard L. Friedman
Burl Osborne
Kevin Sheehan
COMPENSATION
OF EXECUTIVE OFFICERS
2009
Summary Compensation Table
The following table provides information concerning total
compensation earned or paid to the Chief Executive Officer, the
Chief Financial Officer (including the Interim Chief Financial
Officer) and the three other most highly-compensated executive
officers of the Company who served in such capacities for the
fiscal year ending December 31, 2009. These six officers
are referred to as the Named Executive Officers in this proxy
statement.
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Change in
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Pension
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Value and
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Nonqualified
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Deferred
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Stock
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Compensation
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All Other
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Salary
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Bonus(1)
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Awards(2)
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Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)(6)
|
|
|
($)
|
|
|
Michael E. Reed
|
|
|
2009
|
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,000,000
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
|
500,000
|
|
|
|
50,000
|
|
|
$
|
243,744
|
|
|
|
|
|
|
|
|
|
|
|
793,744
|
|
|
|
|
2007
|
|
|
|
500,000
|
|
|
|
350,000
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
950,000
|
|
Melinda A. Janik
|
|
|
2009
|
|
|
$
|
248,558
|
|
|
$
|
150,000
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
$
|
408,558
|
|
Senior Vice President and Chief Financial Officer(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Maring
|
|
|
2009
|
|
|
$
|
200,000
|
|
|
$
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
275,000
|
|
Vice President of Investor
|
|
|
2008
|
|
|
|
161,000
|
|
|
|
70,000
|
|
|
$
|
450,005
|
|
|
|
|
|
|
|
|
|
|
|
681,005
|
|
Relations and Strategic Development(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kirk Davis(5)
|
|
|
2009
|
|
|
$
|
461,261
|
|
|
$
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
711,261
|
|
President and Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polly G. Sack
|
|
|
2009
|
|
|
$
|
260,000
|
|
|
$
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
385,000
|
|
Senior Vice President, Secretary
|
|
|
2008
|
|
|
|
260,000
|
|
|
|
75,000
|
|
|
|
121,880
|
|
|
|
|
|
|
|
|
|
|
|
456,880
|
|
and General Counsel
|
|
|
2007
|
|
|
|
225,000
|
|
|
|
200,000
|
|
|
|
100,000
|
|
|
|
|
|
|
$
|
81,006
|
|
|
|
606,006
|
|
|
|
|
(1) |
|
The amounts in this column reflect the bonus amount earned in
the respective year without regard to the year those amounts
were actually paid. |
|
(2) |
|
The dollar value of restricted stock awards included in the
Stock Awards column are the aggregate grant date
fair value of stock awards granted during a year calculated in
accordance with FASB ASC Topic 718. For a discussion of
valuation assumptions, see Note 2(a) to our 2009
Consolidated Financial Statements included in our Annual Report
on
Form 10-K
for the fiscal year ending December 31, 2009. Information
regarding the shares of restricted stock granted to certain of
our Named Executive Officers during 2009 is set forth in the
Grants of Plan-Based Awards table. |
|
(3) |
|
Melinda A. Janik was appointed Chief Financial Officer effective
February 2, 2009. |
|
(4) |
|
Mark Maring served as Interim Chief Financial Officer from
August 19, 2008 to February 2, 2009. |
|
(5) |
|
Kirk Davis became our President and Chief Operating Officer in
January 2009. |
|
(6) |
|
In 2007, All Other Compensation for Ms. Sack included:
(i) relocation benefits of $51,961, (ii) $26,616 tax
gross-up and
(iii) GateHouse Media-paid life insurance premiums of
$2,429. |
30
2009
Grants of Plan-Based Awards
We have provided the following Grants of Plan-Based Awards table
to provide additional information about annual cash incentive
compensation, stock options and restricted share awards granted
to our Named Executive Officers during the fiscal year ending
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
Awards:
|
|
Grant
|
|
|
|
|
Number
|
|
Date Fair
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
Shares of
|
|
Stock and
|
|
|
Grant
|
|
Stock or
|
|
Option
|
Name
|
|
Date
|
|
Units (#)(1)
|
|
Awards(2)
|
|
Michael E. Reed
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
Melinda A. Janik
|
|
|
2/6/2009
|
|
|
|
100,000
|
|
|
$
|
10,000
|
|
Mark Maring
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
Kirk Davis
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
Polly G. Sack
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
|
|
(1) |
|
The amounts set forth in this column reflect the number of
restricted share grants granted under the Incentive Plan. This
grant has a three-year vesting schedule |
|
(2) |
|
The dollar value of the restricted shares disclosed in this
column are the aggregate grant date fair value of awards granted
during 2009 calculated in accordance with FASB ASC Topic 718.
These numbers are calculated by multiplying the closing price of
GateHouse Media common stock on the date of grant by the number
of restricted shares awarded. |
Employment
Agreements
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 shall automatically renew 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. Reeds 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. Janiks 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.
31
Mark
Maring
Mr. Maring is currently employed as our Treasurer and Vice
President of Investor Relations and Strategic Development. From
August 19, 2008 to February 2, 2009, Mr. Maring
also served as our Interim Chief Financial Officer. Pursuant to
an offer letter effective as of February 6, 2008,
Mr. Maring was initially employed as our Vice President of
Investor Relations and Strategic Development, with the duties
and responsibilities customarily exercised by the person serving
as Vice President of Investor Relations and Strategic
Development of a company of our size and nature.
Pursuant to his offer letter, which has no guaranteed term of
employment or renewal provision, Mr. Marings initial
annual base salary is at the rate of $200,000 per year.
Mr. Maring also is eligible for an annual bonus based on
achievement of annually agreed upon targets, of up to 70% of
base pay. This bonus will be paid with a combination of cash and
restricted stock and is subject to approval by the Board.
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).
Polly
G. Sack
Ms. Sack is employed as our Senior Vice President,
Secretary and General Counsel pursuant to an employment
agreement effective as of May 17, 2006. Under this
agreement, she has the duties and responsibilities customarily
exercised by the person serving as chief legal officer of a
company of our size and nature.
Pursuant to her employment agreement, which has no guaranteed
term of employment or renewal provision, Ms. Sacks
annual base salary shall be reviewed on an annual basis and
adjusted in our sole discretion. Ms. Sack also is eligible
for an annual, performance-based bonus, without a target level,
based upon the achievement of certain performance goals agreed
to by Ms. Sack and our Board. Such bonus may be a
Restricted Stock Bonus as determined by our Board and without
restriction as to the relative proportions of common stock or
cash comprising such bonus. Ms. Sacks employment
agreement also provided for the reimbursement of her reasonable
relocation expenses.
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.
32
2009
Outstanding Equity Awards at Fiscal Year-End
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, 2009.
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
Market Value
|
|
|
|
|
of Shares
|
|
|
Number of
|
|
or Units of
|
|
|
Shares or Units
|
|
Stock that
|
|
|
of Stock that
|
|
have not
|
|
|
have not Vested
|
|
Vested(1)
|
Name
|
|
(#)
|
|
($)
|
|
Michael E. Reed
|
|
|
100,000
|
(2)(3)
|
|
$
|
20,000
|
|
|
|
|
100,000
|
(2)(4)
|
|
|
20,000
|
|
|
|
|
1,817
|
(5)
|
|
|
363
|
|
|
|
|
7,956
|
(6)
|
|
|
1,591
|
|
|
|
|
7,955
|
(7)
|
|
|
1,591
|
|
Melinda A. Janik
|
|
|
33,334
|
(8)
|
|
$
|
6,667
|
|
|
|
|
33,333
|
(9)
|
|
|
6,667
|
|
|
|
|
33,333
|
(10)
|
|
|
6,667
|
|
Mark Maring
|
|
|
25,424
|
(11)(12)
|
|
$
|
5,085
|
|
|
|
|
25,424
|
(11)(13)
|
|
|
5,085
|
|
|
|
|
25,424
|
(11)(14)
|
|
|
5,085
|
|
Kirk Davis
|
|
|
16,667
|
(15)
|
|
$
|
3,333
|
|
|
|
|
16,667
|
(16)
|
|
|
3,333
|
|
|
|
|
1,989
|
(6)
|
|
|
398
|
|
|
|
|
1,989
|
(7)
|
|
|
398
|
|
Polly G. Sack
|
|
|
5,000
|
(17)(18)
|
|
$
|
1,000
|
|
|
|
|
5,000
|
(17)(19)
|
|
|
1,000
|
|
|
|
|
1,817
|
(5)
|
|
|
363
|
|
|
|
|
3,978
|
(6)
|
|
|
796
|
|
|
|
|
3,978
|
(7)
|
|
|
796
|
|
|
|
|
(1) |
|
The amounts set forth in this column equal the number of shares
of restricted stock indicated multiplied by the closing price of
our common stock ($0.20) on December 31, 2009, the last
trading day of 2009. There can be no assurance that the amounts
shown in the table will ever be realized by the Named Executive
Officer. |
|
(2) |
|
Pursuant to his employment agreement, Mr. Reed received a
one-time grant of 300,000 shares of restricted common
stock. On March 1, 2009, one-third of the initial stock
grant vested; the remainder will vest ratably on March 1,
2010 and March 1, 2011 (the fourth and fifth anniversaries
of his employment agreements effective date). |
|
(3) |
|
Shares of restricted stock vest on March 1, 2010. |
|
(4) |
|
Shares of restricted stock vest on March 1, 2011. |
|
(5) |
|
Shares of restricted stock vest on January 2, 2010. |
|
(6) |
|
Shares of restricted stock vest on January 3, 2010. |
|
(7) |
|
Shares of restricted stock vest on January 3, 2011. |
|
(8) |
|
Shares of restricted stock vest on February 6, 2010. |
|
(9) |
|
Shares of restricted stock vest on February 6, 2011. |
|
(10) |
|
Shares of restricted stock vest on February 6, 2012. |
33
|
|
|
(11) |
|
Pursuant to his offer letter, Mr. Maring received an
initial stock grant of 76,272 shares.
Mr. Marings initial stock grant was issued under the
Incentive Plan. Such grant vests ratably on April 4, 2011,
April 4, 2012 and April 4, 2013. |
|
(12) |
|
Shares of restricted stock vest on April 4, 2011. |
|
(13) |
|
Shares of restricted stock vest on April 4, 2012. |
|
(14) |
|
Shares of restricted stock vest on April 4, 2013. |
|
(15) |
|
Shares of restricted stock vest on October 26, 2010. |
|
(16) |
|
Shares of restricted stock vest on October 26, 2011. |
|
(17) |
|
Pursuant to her employment agreement, Ms. Sack received an
Initial Stock Grant of 15,000 shares. On May 17, 2009,
one-third of the Initial Stock Grant vested, the remainder will
vest ratably on May 17, 2010 and May 17, 2011 (the
fourth and fifth anniversaries of her employment
agreements effective date). |
|
(18) |
|
Shares of restricted stock vest on May 17, 2010. |
|
(19) |
|
Shares of restricted stock vest on May 17, 2011. |
2009
Option Exercises and Stock Vested
We have provided the following Option Exercises and Stock Vested
table to provide additional information about the value realized
by our Named Executive Officers on option award exercises and
stock award vesting during the fiscal year ending
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
|
Shares
|
|
|
|
|
Acquired on
|
|
Value Realized
|
Name
|
|
Vesting(#)
|
|
on Vesting ($)
|
|
Michael E. Reed
|
|
|
109,774
|
|
|
$
|
9,391
|
|
Melinda A. Janik
|
|
|
|
|
|
|
|
|
Mark Maring
|
|
|
|
|
|
|
|
|
Kirk Davis
|
|
|
18,656
|
|
|
|
5,080
|
|
Polly G. Sack
|
|
|
15,426
|
|
|
|
2,571
|
|
2009
Pension Benefits
We do not offer retirement benefits to any of our Named
Executive Officers.
2009
Nonqualified Deferred Compensation
None of our Named Executive Officers were participants in or
made contributions to or withdrawals from any of our
nonqualified deferred compensation plans during the fiscal year
ending December 31, 2009.
Potential
Payments Upon Termination or Change of Control
The table beginning on page 36 of this proxy statement
estimates the amount of compensation payable to each of our
Named Executive Officers in the event of termination of such
executives employment upon voluntary termination,
termination for cause, death, disability, retirement,
involuntary not for cause termination, and termination following
a change of control. The amounts shown are estimates assuming
that such termination was effective as of December 31,
2009. A Named Executive Officer is entitled to receive amounts
earned during his or her term of employment regardless of the
manner in which the Named Executive Officers 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). These
amounts are not shown in the table. The termination provisions
in the employment agreements of certain of our Named Executive
Officers are substantially identical and are summarized below.
34
The Management Stockholder Agreements contain a call option
exercisable at our discretion pursuant to which we may purchase
certain of our Named Executive Officers nonforfeited common
stock, which are subject to the Management Stockholder
Agreements, upon termination of the Named Executive
Officers employment for any reason (the Call
Option). The amount we will pay a Named Executive
Officer is determined as follows: (a) in the case of a
termination for cause, the lower of the purchase price of $1,000
per share or the fair market value (as determined by the Board)
or (b) in the case of a termination for any reason other
than cause, the fair market value (as determined by the Board).
Additionally, under the Incentive Plan, if a Named Executive
Officers employment is terminated for any reason, we will
immediately repurchase any remaining unvested restricted shares
at a price equal to the par value ($.01) per share (the
Repurchase Obligation).
Payments
Made Upon Voluntary Termination and Termination for
Cause
Under the employment agreements, if certain of our Named
Executive Officers employment is voluntarily terminated or
terminated by us for cause, that Named Executive Officer would
not be entitled to any further compensation or benefits other
than Accrued Benefits. Mr. Reed and Ms. Sack would
forfeit all unvested shares subject to their respective initial
stock grants and any restricted stock bonuses and, in the case
of termination due to an act of dishonesty committed in
connection with our business, Mr. Reed and Ms. Sack
would forfeit all shares subject to their respective initial
stock grants 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, Disability or Retirement
Under the employment agreements, if certain of our Named
Executive Officers employment is terminated by reason of
death, that Named Executive Officer would not be entitled to
receive any further compensation or benefits other than the
Accrued Benefits and life insurance benefits. Certain Named
Executive Officers receive basic life insurance equal to one
times the executives salary and an additional voluntary
death benefit only if it is paid for by the Named Executive
Officer. If the Named Executive Officers employment is
terminated by reason of disability or retirement, the Named
Executive Officer shall not be entitled to receive any further
compensation or benefits other than the Accrued Benefits. If the
Named Executive Officer fails to perform his or her duties as a
result of disability or incapacity, the Named Executive Officer
shall continue to receive his or her base salary and all other
benefits and all other compensation unless and until his or her
employment is terminated.
Under the Management Stockholder Agreements, if certain of our
Named Executive Officers 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 anniversary date following the date of such
termination, but in no event less than one-third (1/3) of the
restricted shares. In addition, we may exercise our Call Option.
Under the Incentive Plan, if the Named Executive Officers
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
and/or offer
letters of certain of our Named Executive Officers, 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;
35
(d) continuation of the Named Executive Officers
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 Officers
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 buyers ultimate parent.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael E.
|
|
|
Melinda A.
|
|
|
Mark
|
|
|
Kirk
|
|
|
Polly G.
|
|
Event
|
|
Reed
|
|
|
Janik
|
|
|
Maring
|
|
|
Davis
|
|
|
Sack
|
|
|
Voluntary Termination and Termination for Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Option(1)
|
|
$
|
5,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Repurchase Obligation(3)
|
|
|
177
|
|
|
|
1,000
|
|
|
|
763
|
|
|
|
373
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,177
|
|
|
$
|
1,000
|
|
|
$
|
763
|
|
|
$
|
373
|
|
|
$
|
198
|
|
Death
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated restricted stock
|
|
$
|
21,955
|
|
|
$
|
6,667
|
|
|
$
|
5,085
|
|
|
$
|
3,731
|
|
|
$
|
2,159
|
|
Call Option(1)(2)
|
|
|
5,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Repurchase Obligation(3)
|
|
|
80
|
|
|
|
667
|
|
|
|
508
|
|
|
|
187
|
|
|
|
90
|
|
Life insurance proceeds
|
|
|
500,000
|
|
|
|
275,000
|
|
|
|
200,000
|
|
|
|
461,261
|
|
|
|
260,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
527,035
|
|
|
$
|
282,334
|
|
|
$
|
205,593
|
|
|
$
|
465,179
|
|
|
$
|
262,249
|
|
Disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated restricted stock
|
|
$
|
21,955
|
|
|
$
|
6,667
|
|
|
$
|
5,085
|
|
|
$
|
3,731
|
|
|
$
|
2,159
|
|
Call Option(1)(2)
|
|
|
5,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Repurchase Obligation(3)
|
|
|
80
|
|
|
|
667
|
|
|
|
508
|
|
|
|
187
|
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
27,035
|
|
|
$
|
7,334
|
|
|
$
|
5,593
|
|
|
$
|
3,918
|
|
|
$
|
2,249
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael E.
|
|
|
Melinda A.
|
|
|
Mark
|
|
|
Kirk
|
|
|
Polly G.
|
|
Event
|
|
Reed
|
|
|
Janik
|
|
|
Maring
|
|
|
Davis
|
|
|
Sack
|
|
|
Retirement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call Option(1)
|
|
$
|
5,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Repurchase Obligation(3)
|
|
|
177
|
|
|
|
1,000
|
|
|
|
763
|
|
|
|
373
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,177
|
|
|
$
|
1,000
|
|
|
$
|
763
|
|
|
$
|
373
|
|
|
$
|
198
|
|
Involuntary not for Cause Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Bonus
|
|
$
|
200,000
|
|
|
$
|
137,500
|
|
|
$
|
140,000
|
|
|
$
|
250,000
|
|
|
$
|
125,000
|
|
Accelerated restricted Stock
|
|
|
21,955
|
|
|
|
6,667
|
|
|
|
5,085
|
|
|
|
3,731
|
|
|
$
|
2,159
|
|
Call Option(1)(2)
|
|
|
5,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Repurchase Obligation(3)
|
|
|
80
|
|
|
|
667
|
|
|
|
508
|
|
|
|
187
|
|
|
|
90
|
|
Cash severance payment
|
|
|
500,000
|
|
|
|
275,000
|
|
|
|
200,000
|
|
|
|
461,261
|
|
|
|
260,000
|
|
Continued health care benefits
|
|
|
7,689
|
|
|
|
3,243
|
|
|
|
7,689
|
|
|
|
7,689
|
|
|
|
7,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
734,724
|
|
|
$
|
423,077
|
|
|
$
|
353,282
|
|
|
$
|
722,868
|
|
|
$
|
394,430
|
|
Change in Control with Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Bonus
|
|
$
|
200,000
|
|
|
$
|
137,500
|
|
|
$
|
140,000
|
|
|
$
|
250,000
|
|
|
$
|
125,000
|
|
Accelerated restricted stock
|
|
|
43,546
|
|
|
|
20,000
|
|
|
|
15,254
|
|
|
|
7,462
|
|
|
|
3,955
|
|
Call Option(1)(2)
|
|
|
5,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cash severance payment
|
|
|
500,000
|
|
|
|
275,000
|
|
|
|
200,000
|
|
|
|
461,261
|
|
|
|
260,000
|
|
Continued health care benefits
|
|
|
7,689
|
|
|
|
3,243
|
|
|
|
7,689
|
|
|
|
7,689
|
|
|
|
7,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
756,235
|
|
|
$
|
435,743
|
|
|
$
|
362,943
|
|
|
$
|
726,412
|
|
|
$
|
396,136
|
|
|
|
|
(1) |
|
The amounts set forth in this row assume that we exercise our
Call Option as provided under all of the Management Stockholder
Agreements and pay the Named Executive Officer the fair market
value, based on the closing price of its common stock ($.20) on
December 31, 2009, the last trading day of 2009. |
|
(2) |
|
The amounts set forth in this row could also include the
accelerated restricted stock amount identified in the preceding
row, but are not included herein to avoid counting this
potential payment twice. |
|
(3) |
|
The amounts set forth in this row assume that we purchase any
remaining unvested restricted shares pursuant to our Repurchase
Obligation as provided under the Incentive Plan and pay the
Named Executive Officer the par value ($.01) per share. |
AUDIT
COMMITTEE REPORT
Management has the primary responsibility for the integrity of
the Companys financial information and the financial
reporting process, including the system of internal control over
financial reporting. The Companys independent registered
public accounting firm is responsible for conducting independent
audits of the Companys financial statements and
managements 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 managements 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:
|
|
|
|
|
reviewed and discussed the audited financial statements, the
adequacy of financial controls and the effectiveness of the
Companys internal control over financial reporting with
management and the Companys independent registered public
accounting firm;
|
|
|
|
discussed with the Companys independent registered public
accounting firm the matters required to be discussed by the
statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards, Vol. 1, AU section 380), as adopted
by the Public Company Accounting Oversight Board in
Rule 3200T;
|
37
|
|
|
|
|
received the written disclosures and the letter from the
Companys independent registered public accounting firm
required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent
accountants communications with the Audit Committee
concerning independence; and
|
|
|
|
discussed with it that firms independence.
|
Based upon the reviews and discussions, the Audit Committee
recommended to the Board that the audited financial statements
be included in the Companys Annual Report on
Form 10-K
for the fiscal year ending December 31, 2009 for filing
with the SEC.
By: the
Audit Committee
Kevin M.
Sheehan, Chairman
Burl Osborne
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2009, 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, with the exception of
Fortress, which filed two late reports disclosing one late
transaction in each such filing. 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.
OTHER
MATTERS
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 2009 Annual Report on
Form 10-K
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, another free copy of its 2009
Annual Report on
Form 10-K.
Please write us at: 350 WillowBrook Office Park, Fairport, New
York 14450, Attention: Investor Relations.
38
GATEHOUSE MEDIA, INC.
PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY THE BOARD FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints GARRETT CUMMINGS and MONICA TREVISO, or either of them, each with full power of substitution and revocation, as the proxy or proxies of the undersigned to represent the undersigned and vote all shares of common stock of GateHouse Media, Inc. that the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of GateHouse Media, Inc., to be held in the Board Room at GateHouse Media, Inc., located at 350 WillowBrook Office Park, Fairport, NY 14450 on Thursday, May 27, 2010 at 9:00 a.m., local time, including any adjournments and postponements thereof, upon the matters set forth on the reverse side and more fully described in the notice of meeting and proxy statement for said Annual Meeting, and in their discretion upon all other matters that may properly come before said Annual Meeting. This Proxy revokes any prior Proxy given by the undersigned.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
ANNUAL MEETING OF
STOCKHOLDERS OF
GATEHOUSE MEDIA, INC.
May 27, 2010
PROXY VOTING INSTRUCTIONS
TELEPHONE -
Call toll free 1-800-PROXIES (1-800-776-9437) in the United States or
1-718 921-8500 from foreign countries from any touch-tone telephone and
follow the instructions. Have your proxy card available when you call and use
the Company Number and Account Number shown on your proxy card.
Vote by phone until
11:59 PM EDT the day before the meeting.
MAIL - Sign,
date and mail your proxy card in the envelope provided as soon as possible.
IN PERSON -
You may vote your shares in person by attending the Annual Meeting.
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COMPANY NUMBER
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ACCOUNT NUMBER |
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NOTICE OF
INTERNET AVAILABILITY OF PROXY MATERIAL: The proxy statement, including the notice of meeting,
and annual report are available at http://investors.gatehousemedia.com/annuals.cfm
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Please detach along perforated line and
mail in the envelope provided. IF you are not voting via telephone. |
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g 10030000000000001000 2
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052710 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTOR AND FOR PROPOSAL 2.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx
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1. ELECTION OF THE DIRECTOR:
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FOR |
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AGAINST |
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ABSTAIN |
c FOR NOMINEE
c WITHHOLD AUTHORITY
FOR
NOMINEE
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NOMINEE: Richard L. Friedman |
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2. RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
3. With discretionary authority on such other matters as may properly come before the Annual Meeting. |
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c |
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c |
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c |
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THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES MADE.
WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEE FOR DIRECTOR AND FOR RATIFICATION OF
THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AS THE PROXY HOLDERS DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
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The Annual Meeting may be held as scheduled only if a majority of the shares outstanding are represented at the Annual Meeting by attendance or proxy. Accordingly, please complete this proxy, and return it promptly.
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Mark here if you plan to attend the Annual Meeting c |
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To change the address on your account, please check the
box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not
be submitted via this method. |
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c |
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Signature of Stockholder
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Date: |
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Signature of Stockholder |
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Date: |
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized
person. |
ANNUAL MEETING OF
STOCKHOLDERS OF
GATEHOUSE MEDIA, INC.
May 27, 2010
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The proxy statement, including the notice of meeting, and annual report
are available at http://investors.gatehousemedia.com/annuals.cfm
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
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Please detach along perforated line and mail in the envelope provided.
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g 10030000000000001000 2
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052710 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTOR AND FOR PROPOSAL 2.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx
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1. ELECTION OF THE DIRECTOR:
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FOR |
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AGAINST |
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ABSTAIN |
c FOR NOMINEE
c WITHHOLD AUTHORITY
FOR
NOMINEE
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NOMINEE: Richard L. Friedman |
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2. RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
3. With discretionary authority on such other matters as may properly come before the Annual Meeting. |
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THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES MADE.
WHEN NO CHOICE IS MADE, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEE FOR DIRECTOR AND FOR RATIFICATION OF
THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AS THE PROXY HOLDERS DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
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The Annual Meeting may be held as scheduled only if a majority of the shares outstanding are represented at the Annual Meeting by attendance or proxy. Accordingly, please complete this proxy, and return it promptly.
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Mark here if you plan to attend the Annual Meeting c |
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To change the address on your account, please check the
box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not
be submitted via this method. |
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Signature of Stockholder
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Date: |
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Signature of Stockholder |
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Date: |
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized
person. |