Atlanta, Georgia

April 19, 2012

GRAY TELEVISION, INC.

4370 Peachtree Road, N.E.

Atlanta, Georgia 30319

PROXY STATEMENT

For Annual Meeting of Shareholders

to be Held on May 30, 2012

This proxy statement is being furnished by the Board of Directors (the “Board”) of Gray Television, Inc., a Georgia corporation (which we refer to as “Gray,” the “Company,” “we,” “us” or “our”), to the holders of our common stock, no par value per share, and our Class A common stock, no par value per share, in connection with the solicitation of proxies by the Board for use at the 2012 Annual Meeting of Shareholders (the “2012 Annual Meeting”) to be held at The Peachtree Insurance Center, The Executive Board Room, 5^th Floor, 4370 Peachtree Road, N.E., Atlanta, Georgia 30319, on Wednesday, May 30, 2012, at 9:30 a.m., local time, and at any adjournments or postponements thereof. For directions to the location where the 2012 Annual Meeting will be held, you may contact our corporate offices at (404) 266-8333. Distribution of this proxy statement and a proxy card to shareholders is scheduled to begin on or about April 19, 2012.

A proxy delivered pursuant to this solicitation is revocable at the option of the person giving the same at any time before it is exercised. A proxy may be revoked, prior to its exercise, by signing and delivering a later dated proxy card, by submitting a later dated vote by Internet or by telephone, by delivering written notice of the revocation of the proxy to our Vice President Law and Development prior to the 2012 Annual Meeting, or by attending and voting at the 2012 Annual Meeting. Attendance at the 2012 Annual Meeting, in and of itself, will not constitute revocation of a proxy. Unless previously revoked, the shares represented by proxy will be voted in accordance with the shareholder’s directions if the proxy is duly submitted prior to the 2012 Annual Meeting.

If you return a signed proxy card that does not indicate your voting preferences, the persons named as proxies on the proxy card will vote your shares FOR the election of each of the director nominees recommended by the Board, FOR the amendments to the Gray Television, Inc. 2007 Long Term Incentive Plan and FOR the ratification of the Company’s independent registered public accountant, and in accordance with the discretion of the named proxies on other matters properly brought before the 2012 Annual Meeting.

The expenses associated with this proxy statement and soliciting the proxies sought hereby will be borne by us. In addition to the use of the mail, proxies may be solicited by our officers, directors and regular employees, who will not receive additional compensation therefor, in person or by telephone or other means of communication. We also will request brokerage firms, banks, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of shares of the common stock and the Class A common stock as of the record date for the 2012 Annual Meeting and will provide reimbursement for the cost of forwarding the proxy materials in accordance with customary practice. Your cooperation in promptly submitting your vote will help to avoid additional expense.

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VOTING REQUIREMENTS

Record Date and Voting Rights

Our Board has fixed the close of business on March 22, 2012 as the record date for determining holders of the common stock and the Class A common stock entitled to notice of, and to vote at, the 2012 Annual Meeting. Only holders of record of our common stock and/or our Class A common stock on that date will be entitled to notice of, and to vote at, the 2012 Annual Meeting. Shareholders of record may vote by:

Instructions for voting are included on the proxy card.

Important Notice Regarding the Availability of Proxy Materials for the 2012 Annual Meeting

The following information can be found athttp://www.proxyvote.com:

As of the record date, March 22, 2012, 51,405,846 shares of our common stock and 5,753,020 shares of our Class A common stock were outstanding. Each share of our common stock is entitled to one vote and each share of our Class A common stock is entitled to ten votes. The total number of possible votes for each director nominee, and for each other matter to be acted upon, is 108,936,046.

A quorum is necessary to hold a valid 2012 Annual Meeting. A number of votes greater than a majority of possible votes, or 54,468,024 votes (including abstentions and broker non-votes), represented in person or by proxy will constitute a quorum. Abstentions and broker non-votes (which occur with respect to an item when a broker submits a proxy but is not permitted to or otherwise declines to vote on that item without instructions from the beneficial owner of the shares and no such instruction is given) will be counted as present for purposes of determining a quorum. Votes cast by proxy or in person at the 2012 Annual Meeting will be tabulated by the inspector of elections appointed for the meeting, who also will determine whether a quorum is present for the transaction of business.

Required Vote

With respect to Proposal 1 regarding the election of the director nominees, a majority of the votes is not required; instead, the director nominees will be elected by a plurality of the votes cast in person or by proxy at the 2012 Annual Meeting, which means that the ten nominees receiving the most votes will be elected. Under New York Stock Exchange (“NYSE”) rules, if your broker holds your shares in its name, your broker is not permitted to vote your shares with respect to the election of directors if your broker does not receive voting instructions from you. Votes withheld from any nominee will have no effect on the outcome of the election of directors. Abstentions and broker non-votes will not be counted as “votes cast” and, therefore, will have no effect on the outcome of the election of directors.

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With respect to Proposal 2, the approval of amendments to our 2007 Long Term Incentive Plan to provide that nonemployee directors of Gray shall be eligible to participate in such plan and add a “no repricing” provision to the plan, as well as for shareholders to reapprove the material terms for performance-based awards under the plan, requires the affirmative vote of a majority of votes cast in person or by proxy at the 2012 Annual Meeting. Under NYSE rules, however, the total votes cast must represent over 50% in interest of all securities entitled to vote on this proposal. Because abstentions and broker non-votes are not counted as votes cast on this proposal, they will have the practical effect of a vote against this proposal unless more than 50% of our outstanding shares are voted with respect to this proposal.

With respect to Proposal 3, ratification of the appointment of McGladrey & Pullen, LLP as Gray’s independent registered public accounting firm for 2012 requires the affirmative vote of a majority of the votes cast in person or by proxy at the 2012 Annual Meeting. Under NYSE rules, if your broker holds your shares in its name, your broker is permitted to vote your shares with respect to the ratification of the appointment of McGladrey & Pullen, LLP as Gray’s independent registered public accounting firm for 2012 even if your broker does not receive voting instructions from you. Abstentions and broker non-votes will not be counted as “votes cast” and, therefore, will have no effect on the outcome of this proposal.

With respect to any other matter that may properly come before the 2012 Annual Meeting for shareholder consideration, a matter generally will be approved by the affirmative vote of a majority of the votes cast in person or by proxy at the 2012 Annual Meeting unless the question is one upon which a different vote is required by express provision of the laws of Georgia, federal law, Gray’s Articles of Incorporation or Gray’s Bylaws, or, to the extent permitted by the laws of Georgia, the Board has expressly provided that some other vote shall be required, in which case such express provisions shall govern.

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PROPOSAL 1

ELECTION OF DIRECTORS

Nominees

At the 2012 Annual Meeting, ten directors are to be elected to hold office until our next annual meeting of shareholders and until their successors have been duly elected and qualified. The Board has been reduced to ten members due to the retirement of Zell B. Miller on December 7, 2011. Each nominee is currently serving as a director, with the exception of Robin R. Howell, whose nomination to the Board was recommended by the Management Personnel Committee. In case any nominee listed in the table below should be unavailable for any reason, which our management has no reason to anticipate, your proxy will be voted for any substitute nominee or nominees who may be selected by the Management Personnel Committee prior to or at the 2012 Annual Meeting. In such circumstances, if no substitute is selected by the Management Personnel Committee prior to or at the 2012 Annual Meeting, the Board may determine to reduce the membership of the Board to the number of nominees available for election.

Our Board of Directors unanimously recommends that you vote “FOR” the election of those director nominees specified in this proxy statement.

Set forth below is information concerning each of the nominees as of April 19, 2012.

Hilton H. Howell, Jr., has been our Chief Executive Officer since August 20, 2008 and has also served as our Vice-Chairman since September 2002. Before that, he had been our Executive Vice President since September 2000. He has served as one of our directors since 1993. He is a member of the Executive Committee of our Board. He has served as a director and Chairman of the Board of Gray Television Group, Inc. and WVLT-TV, Inc. which are our subsidiaries, and as President, Chairman of the Board and a director of Gray Television Licensee, LLC, another of our subsidiaries, since 2008. He has served as President and Chief Executive Officer of Atlantic American Corporation, an insurance holding company, since 1995, and as Chairman of that company since February 24, 2009. He has been Executive Vice President of Delta Life Insurance Company and Delta Fire and Casualty Insurance Company, life and casualty insurance companies, respectively, since 1991. Mr. Howell also serves as a director of

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Atlantic American Corporation and its subsidiaries American Southern Insurance Company, American Safety Insurance Company and Bankers Fidelity Life Insurance Company, as well as Delta Life Insurance Company and Delta Fire and Casualty Insurance Company. He is the son-in-law of Mr. J. Mack Robinson and Mrs. Harriett J. Robinson, both current members of our Board, and he is the husband of Mrs. Howell. In addition to his current role as Gray’s Chief Executive Officer, Mr. Howell brings to the Board experience from past leadership positions as an executive and his service on numerous boards. Mr. Howell also has practiced as an attorney in a variety of roles, and his experience in that discipline adds a legal perspective to the decisions facing the Board.

William E. Mayher, III is a member and Chairman of the Executive Committee, the Audit Committee, the Management Personnel Committee and the 2007 Long Term Incentive Plan Committee of Gray’s Board, and has served as Chairman of Gray’s Board since August 1993. Dr. Mayher was a neurosurgeon in Albany, Georgia from 1970 to 1998. Dr. Mayher is a former Chairman of the Medical College of Georgia Foundation Board and served as Chairman of Blue Cross Blue Shield of Georgia and as a member of the Board of Directors of the American Association of Neurological Surgeons. He also serves as Chairman of the Albany Regional Airport Commission. He is currently serving as Senior Warden of St. Paul’s Episcopal Church. Dr. Mayher is a member of the Georgia Aviation Hall of Fame Board, and he is also a Senior FAA Aviation Medical Examiner. Dr. Mayher has been an active member of our Board for over 20 years, and his tenure provides stability and a familiarity with our operations. As evidence of the breadth of his knowledge, he currently serves on all of the Board’s committees as a source of continued and reliable leadership.

Robert S. Prather, Jr., has served as our President and Chief Operating Officer since September 2002. He has served as one of our directors since 1993. He is a member of the Executive Committee of our Board. He has served as President and a director of our subsidiaries Gray Television Group, Inc. and WVLT-TV, Inc., since 2002. He has been a director of Southern Community Newspapers (formerly known as Triple Crown Media, Inc.) (“SCN”) since 1994, and served as Chairman of SCN from December 2005 until November 2007. He served as President and Chief Executive Officer of SCN from May 2005 to December 30, 2005, and has served in that position since November 2007. SCN filed for protection under Chapter 11 of the U.S. bankruptcy code on September 14, 2009. SCN emerged from bankruptcy effective December 8, 2009. He also serves as a member of the Board of Directors for GAMCO Investors, Inc., Gaylord Entertainment Company and Draper Holdings Business Trust. He served as an advisory director of Swiss Army Brands, Inc. until 2011. He served on the Board of Trustees of the Georgia World Congress Center Authority until 2010, serving as its Chairman for three years ended December 31, 2010. Mr. Prather’s background as both our current Chief Operating Officer and having served as a former chief executive officer lends a unique perspective to the Board. He possesses a wealth of knowledge about our industry and his tenure on the Board provides consistent leadership.

Richard L. Bogeris a member of the Audit Committee of Gray’s Board. Mr. Boger has been President and Chief Executive Officer of Lex-Tek International, Inc., a financial services consulting company, since February 2002. He has also served since July 2003, as business manager for Owen Holdings, LLLP, a Georgia Limited Liability Limited Partnership; since July 2004, as General Partner of Shawnee Meadow Holdings, LLLP, a Georgia Limited Liability Limited Partnership; and since March 2006, as business manager for Heathland Holdings, LLLP, a Georgia Limited Liability Limited Partnership, each of which is an investment holding company. He also serves as a member of the Board of Trustees of Corner Cap Group of Funds, a series mutual fund. Mr. Boger brings to the Board extensive managerial and entrepreneurial experience from his current position as the Chief Executive Officer of a specialized financial services consulting company, his having founded and sold two commercial insurance services companies, and his present service as a partner and business manager in three investment companies. His perspective from serving in several industries outside our own, including on

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the boards of a mutual fund and several nonprofit organizations, provides the Board with an informed resource for a wide range of disciplines and adds a diverse voice to its deliberations.

Ray M. Deaver is Chairman of the Management Personnel Committee and a member of the 2007 Long Term Incentive Plan Committee of Gray’s Board. Prior to his appointment to Gray’s Board, Mr. Deaver served as Gray’s Regional Vice President-Texas from October 1999 until his retirement in 2001. He was the President and General Manager of KWTX Broadcasting Company and President of Brazos Broadcasting Company from November 1997 until their acquisition by Gray in October 1999. Mr. Deaver’s years of experience in the broadcasting field and his role as the former General Manager for two of our affiliates provide the Board with a wealth of industry-specific operational knowledge. In that capacity and as our former Regional Vice President in Texas, Mr. Deaver’s diverse background lends a unique, localized perspective to the Board.

T.L. (Gene) Elder is a member of the Audit Committee of Gray’s Board. He is a CPA and has over 40 years of experience as in the Accounting and Finance fields, with over 25 years as a Chief Financial Officer. In 1994, Mr. Elder became a partner of Tatum, LLC, a national firm of career chief financial officers which was acquired by Spherion Staffing Services in March 2010, and served as a Senior Partner of that firm from 2004 until his retirement from that position in May 2009. Mr. Elder, through his background as a former Chief Financial Officer, provides the Board and the Audit Committee with significant financial and accounting expertise.

Robin R. Howell has served as Vice President and Director of both Delta Life Insurance Company and Delta Fire & Casualty Company since 1992. She is a former Chairman of the Board for Farmer’s and Merchant’s Bank and a member of the Board of Directors for Premier Bancshares. She received a BA in Economics from the University of Virginia and a Masters of Business Administration from the University of Texas at Austin, and has had a number of management and oversight roles in various businesses in which her family has maintained ownership interests since that time. Mrs. Howell is the daughter of Mr. and Mrs. Robinson and the wife of Mr. Howell. Mrs. Howell is active in the community, serving on the Board of Directors and Executive Committee of the High Museum of Art, the Board of Directors of the Forward Arts Foundation, and as a member of the Junior League of Atlanta. Mrs. Howell’s involvement at the executive and board level in various businesses and numerous civic, social and academic associations provides valuable insight to the Company and elevates the Company’s profile in the community.

Howell W. Newton is Chairman of the Audit Committee of Gray’s Board. Since 1978, Mr. Newton has been President and Treasurer of Trio Manufacturing Co., a real estate and investment company. Mr. Newton’s many years of executive service with a financial services company provides the Board with considerable financial expertise. His tenure on our Board provides consistent leadership, and his familiarity with Gray’s operations serves as an ongoing resource for issues facing a large, public company.

Hugh E. Norton is Chairman of the 2007 Long Term Incentive Plan Committee and is a member of the Management Personnel Committee of Gray’s Board. Mr. Norton has been President of Norco Holdings, Inc., an insurance agency, since 1973 and also is a real estate developer in Destin, Florida. Prior to that, he was Regional Manager of Security Insurance Group where he served for 15 years. Mr. Norton brings to the Board a wealth of business experience based on his many years of service as an executive, as well as a unique perspective based on the regulatory and local government issues he faces as a developer. As the director with the longest tenure on our Board, he also serves as an ongoing source for industry-specific knowledge.

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Harriett J. Robinson has been a director of Atlantic American Corporation since 1989. Mrs. Robinson has also been a director of Delta Life Insurance Company and Delta Fire and Casualty Insurance Company since 1967. Mrs. Robinson is the wife of Mr. J. Mack Robinson and the mother-in-law of Mr. Hilton H. Howell, Jr., both current members of Gray’s Board, and the mother of Mrs. Howell. Mrs. Robinson’s active service on our Board and on the boards of several other companies for a number of years provides capable leadership and a familiarity with the operational issues facing organizations in today’s business climate. She lends a diverse voice to the Board’s deliberations, and her civic involvement and philanthropic activities provide a critical link to the community, particularly to women in business.

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PROPOSAL 2

APPROVAL OF AMENDMENTS TO THE GRAY TELEVISION, INC.

2007 LONG TERM INCENTIVE PLAN

We are asking our shareholders to approve amendment No. 1 (“Amendment No. 1”) to the Gray Television, Inc. 2007 Long Term Incentive Plan (the “2007 Incentive Plan”) and, as part of that approval, to reapprove the material terms for performance-based awards under the 2007 Incentive Plan. The version of the 2007 Incentive Plan that was in effect prior to Amendment No. 1 was adopted by our board of directors on March 14, 2007 and approved by our shareholders on May 2, 2007.

On April 2, 2012, the board of directors approved Amendment No. 1, which generally makes the following changes to such plan: (1) provides that nonemployee directors of Gray and every subsidiary of Gray shall be eligible to participate in the 2007 Incentive Plan as participants and (2) adds a “no repricing” provision.

If the shareholders approve the Amendment No. 1, the 2007 Incentive Plan will allow awards under the 2007 Incentive Plan to be granted to nonemployee directors of Gray and every subsidiary of Gray and will prohibit repricing of stock options and stock appreciation rights.

Approval of Amendment No. 1 will also constitute reapproval by our shareholders of the material terms for performance-based awards under the 2007 Incentive Plan, which is necessary to provide the flexibility for us to make certain awards under the 2007 Incentive Plan that will be tax-deductible by us as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

Section 162(m) of the Code limits the deductibility for federal income tax purposes of compensation in excess of $1 million per year for the chief executive officer and certain other officers, unless such compensation qualifies as performance-based compensation under the Code. Various requirements must be satisfied in order for awards to qualify as performance-based compensation. One requirement is that the material terms relating to such awards must be approved by the shareholders of the public company every five years.

By reapproving the material terms for performance-based awards under the 2007 Incentive Plan, certain awards that could be made under the 2007 Incentive Plan would qualify as performance-based compensation, assuming other conditions are met.

Description of the 2007 Incentive Plan

A summary of the material terms of the 2007 Incentive Plan, as it is proposed to be amended, appears below. This summary is qualified in its entirety by reference to the full text of the 2007 Incentive Plan, as proposed to be amended, which is attached as Appendix A to this proxy statement.

Purpose. The 2007 Incentive Plan is designed to encourage certain employees (including officers and directors who are also employees) and nonemployee directors of Gray or Gray’s subsidiaries to acquire Gray common stock or Class A common stock or to receive monetary payments based on the value of such stock or upon achieving certain goals on a mutually advantageous basis, thereby strengthening the employees’ and nonemployee directors’ desire to remain with Gray, while simultaneously providing an incentive to work for Gray’s success.

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Administration. The 2007 Incentive Plan will be administered by a committee or subcommittee of Gray’s board of directors that consists of no fewer than two members, each of whom is an outside director and a “non-employee” director (the “2007 Plan Committee”). The determinations of the 2007 Plan Committee will be made in accordance with their judgment as to the best interest of Gray and its shareholders and in accordance with the purpose of the 2007 Incentive Plan. Determinations, interpretations or other actions made or taken by the 2007 Plan Committee pursuant to the provisions of the 2007 Incentive Plan will be final and binding and conclusive for all purposes and upon all persons whomsoever. The 2007 Plan Committee may delegate administrative duties to one or more officers or employees of Gray or subsidiaries of Gray to the extent that such delegation would not jeopardize the performance-based exception under Section 162(m) of the Code or otherwise violate applicable law or rules of the Securities Exchange Act of 1934.

Participants. Employees (approximately 2,100 as of March 31, 2012) and nonemployee directors (eight as of March 31, 2012) of Gray or any designated subsidiary who have a major impact on the success and future growth and profitability of Gray, as determined by the 2007 Plan Committee in its sole discretion, are eligible to participate in the 2007 Incentive Plan. A designation as a participant in one year will not require the 2007 Plan Committee to designate such person to receive (1) an award in any other year, (2) the same type of award as granted to the participant in any other year or as granted to any other participant in any year, or (3) the same amount of award as granted to the participant in any other year or as granted to any other participant in any year.

Shares Reserved Under the Plan. The 2007 Incentive Plan allows Gray to issue an aggregate of 6,000,000 shares of Gray common stock or Class A common stock with not more than 1,000,000 out of that 6,000,000 being Class A common stock. The 6,000,000 maximum includes approximately 2,469,000 shares of stock that were unused shares under the 2002 Long Term Incentive Plan. No new awards are eligible to be made under the 2002 Long Term Incentive Plan. Stock underlying awards under the 2002 Long Term Incentive Plan that expire, are cancelled or are forfeited after May 2, 2007 will not be added back to the 6,000,000 maximum. As of April 2, 2012, an aggregate of 4,461,007 shares were available for future grants under the 2007 Incentive Plan, of which 1,000,000 of such shares may be shares of Class A common stock.

The following awards will be counted against the 6,000,000 maximum: (1) stock underlying outstanding options or performance awards while such options and performance awards are outstanding, (2) the full number of stock appreciation rights (“SARs”) granted that are to be settled in common stock, regardless of the number of shares actually issued upon settlement of such SAR, and (3) restricted stock issued pursuant to the 2007 Incentive Plan while such restricted stock is outstanding even while subject to restrictions. When the exercise price of an option is paid by delivery of shares of Gray common stock or Class A common stock, the number of shares available for issuance under the 2007 Incentive Plan shall continue to be reduced by the gross (rather than the net) number of shares issued pursuant to such exercise. Shares underlying expired, canceled or forfeited awards (except restricted stock) may be added back to the 6,000,000 maximum.

Unless and until the 2007 Plan Committee determines that an award to a covered employee shall not be designed to comply with the performance-based exception under Section 162(m) of the Code, the maximum aggregate number of shares of Gray common stock or Class A common stock that may be awarded to any individual in any one fiscal year pursuant to stock options will be 500,000 shares, the maximum aggregate number of shares of Gray common stock or Class A common stock that may be awarded to any individual in any one fiscal year pursuant to SARs will be 500,000 shares, and the maximum aggregate payout to any individual in any one year as to performance awards will be the greater of $1,000,000 or 500,000 shares. Shares related to a cancelled award or an award that is amended

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in a way that is treated as a cancellation will count against the maximum limitations for the applicable fiscal year.

Grant of Awards.After the 2007 Plan Committee grants an award to a participant, Gray will notify the participant of such grant and will deliver or mail an award agreement to the participant. The participant must execute and return the award agreement within 30 days after it is mailed or delivered by Gray. If the participant fails to execute and return the award agreement within the 30 day period, his or her award will terminate automatically. However, if the participant dies within the 30 day period, the award agreement will be effective notwithstanding the fact that it has not been signed prior to death.

Types of Awards. The 2007 Incentive Plan provides for the granting of incentive stock options, nonqualified stock options, restricted stock awards, SARs and performance awards (collectively, the “awards”). Except as specifically limited in the 2007 Incentive Plan, the 2007 Plan Committee has complete discretion in determining the type and number of awards to be granted and the terms and conditions of such awards (such terms and conditions need not be uniform as between different participants). The types of awards are described in greater detail below.

Incentive Stock Options. Incentive stock options granted under the 2007 Incentive Plan, which are intended to comply with Section 422 of the Code, may be exercised as provided in the individual award agreements, but in no event later than 10 years from the date of grant. The purchase price per share of Gray common stock or Class A common stock purchasable under any incentive stock option (which may not be less than 100% of the fair market value of the shares on the date the option is granted) will be determined by the 2007 Plan Committee. The purchase price may be paid by check or, in the discretion of the 2007 Plan Committee, by the delivery of shares then owned by the participant. The aggregate fair market value of the stock for which an incentive stock option is exercisable for the first time during any calendar year (under all option plans of Gray and its subsidiary corporations) shall not exceed $100,000 per participant. Only key employees may be granted incentive stock options under the 2007 Incentive Plan.

Upon a termination of employment for any reason (other than death or disability), an incentive stock option will terminate not later than 3 months after such termination (or 3 months after death, if the optionee dies within 3 months after such termination).

Upon a termination of employment as a result of death or disability, an incentive stock option will be exercisable for 12 months after such termination (or the longer of the remainder of the 12-month period or 3 months after death, if the optionee dies within 12 months after a termination as a result of disability).

In no event shall any incentive stock option be exercised more than 10 years after its date of grant.

Nonqualified Stock Options. Nonqualified stock options granted under the 2007 Incentive Plan may be exercised as provided in the individual award agreements, but in no event later than 10 years from the date of grant. The purchase price per share of Gray common stock or Class A common stock purchasable under any nonqualified stock option (which may not be less than 100% of the fair market value of the shares on the date the option is granted) will be determined by the 2007 Plan Committee. The purchase price may be paid by check or, in the discretion of the 2007 Plan Committee, by the delivery of shares then owned by the participant. The 2007 Plan Committee will have the right to determine at the time an option is granted whether shares issued upon exercise of a nonqualified stock option will be subject to restrictions, and if so, the nature of the restrictions.

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Unless determined otherwise in the award agreement, upon a termination of employment or service for any reason (other than death, disability or retirement), an option will terminate 3 months after such termination.

Unless determined otherwise in the award agreement, upon a termination of employment or service as a result of death, disability or retirement, an option will terminate 12 months after such termination (or 3 months after death, if the optionee dies within 12 months after termination as a result of retirement or disability).

In no event shall any option be exercised more than 10 years after its date of grant.

Stock Appreciation Rights. A SAR is the right to receive a payment from Gray equal to the excess of the fair market value of a share of Gray common stock or Class A common stock at the date of exercise over the base price (or the exercise price of an option, if the SAR is granted in conjunction with an option). At the discretion of the 2007 Plan Committee, SARs may be granted (1) in lieu of exercise of an option or (2) independent of an option. If the option qualifies as an incentive stock option pursuant to Section 422 of the Code, the related SAR must comply with the applicable provisions of the Code. The base or grant price of each SAR will equal the fair market value of Gray common stock or Class A common stock on the date of grant of the SAR. Payment for SARs may be made in cash or Gray common stock or Class A common stock, or in a combination thereof, at the discretion of the 2007 Plan Committee. In addition, at the time of grant, the 2007 Plan Committee may, in its sole discretion, establish any other conditions on exercise of a SAR. The following will apply upon the exercise of a SAR:

Restricted Stock. Restricted stock consists of Gray common stock or Class A common stock issued or transferred under the 2007 Incentive Plan (other than upon exercise of options or as performance awards) at any purchase price less than the fair market value thereof on the date of issuance or transfer, or as a bonus. The purchase price (if any) will be determined by the 2007 Plan Committee. Participants are entitled to all dividends paid with respect to restricted stock during the period of restriction and will not be required to return any such dividends to Gray in the event of the forfeiture of the restricted stock. Participants will be entitled to vote the restricted stock during the period of restriction. In addition, the restricted stock may be subject to (1) restrictions on the sale or other disposition thereof, (2) rights of Gray to reacquire such stock at the purchase price, if any, originally paid upon termination of employment or service within specified periods, (3) employee or nonemployee director representations that the employee or nonemployee director intends to acquire such stock for investment and not for resale and (4) other restrictions, conditions and terms as the 2007 Plan Committee deems appropriate.

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Performance Awards. Performance awards consist of Gray common stock or Class A common stock, stock units or cash-based units or a combination thereof, to be issued without payment therefor, if the performance goals established by the 2007 Plan Committee are achieved during the applicable performance period. The goals established by the 2007 Plan Committee may be based upon Company-wide performance or upon operating unit performance or a combination thereof and may include return on average total capital employed, earnings per share, return on shareholders’ equity, market share, growth in Broadcast Cash Flow, growth in Broadcast Cash Flow Less Cash Corporate Expenses, growth in EBITDA, growth in total revenue and/or specified components of total revenue, reduction in or the limitation in the growth of specified operating expenses, attainment of and/or maintenance of specified operating margins, attainment of and/or maintenance of specified weighted average costs of debt, attainment of and/or maintenance of specified weighted costs of capital, operating income (loss), income (loss) from continuing operations, pretax income from continuing operations and, for a performance award that the 2007 Plan Committee determines shall not be designed to comply with the performance-based exception under Section 162(m) of the Code, such other goals as may be established by the 2007 Plan Committee. Actual payment of the performance award earned shall be in a single sum and in cash or in Gray common stock or Class A common stock or in a combination of both, as determined by the 2007 Plan Committee in its sole discretion. If Gray common stock or Class A common stock is used, the participant will not have the right to vote such stock and receive dividends thereon until the goals are achieved and the actual shares are issued. If the performance award is paid in cash instead of Gray common stock or Class A common stock, the number of shares reserved for issuance under the 2007 Incentive Plan and the number of shares which may be granted in the form of performance awards will be reduced as if shares had been issued. The 2007 Plan Committee will certify in writing that any performance goals and any other material terms of a performance award have been achieved prior to the actual payment of the performance award. All performance awards will be paid in full no later than the fifteenth day of the third month following the end of the first calendar year in which the applicable performance period ends or such awards are no longer subject to a substantial risk of forfeiture.

Adjustments, Amendments and Termination of the 2007 Incentive Plan. In the event of any change in corporate capitalization, certain corporate transactions, other distribution of stock or property, or any reorganization or liquidation, such adjustment shall be made in the number and class of Gray common stock or Class A common stock which may be delivered, in the number and class of and/or price of shares subject to outstanding awards granted under the 2007 Incentive Plan, and in the award limits as may be determined to be appropriate and equitable by the 2007 Plan Committee, in its sole discretion, to prevent dilution or enlargement of rights, provided, however, that the number of shares of Gray common stock or Class A common stock subject to any award must always be a whole number. The 2007 Plan Committee may not make any adjustments that would cause an award (1) that is exempt from Section 409A of the Code to become subject to Section 409A of the Code or (2) that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A of the Code. The awards are intended to comply with the exemptions or deferred compensation requirements of Section 409A of the Code.

The board of directors has the right to amend or terminate the 2007 Incentive Plan at any time; provided, however, that except as specifically provided in the adjustment and change in control provisions of the 2007 Incentive Plan or otherwise required by law, no amendment or termination shall reduce the amount of any existing award or change the terms and conditions of an existing award without the participant’s consent. In addition, with the exception of the adjustments described above, no amendment or other similar actions shall: (1) increase the total number of shares that may be issued under the 2007 Incentive Plan or increase the amount or type of awards that may be granted under the 2007 Incentive Plan; (2) change the minimum purchase price (if any) of shares of Gray common stock or Class A common stock which may be made subject to awards under the 2007 Incentive Plan; or (3) modify the eligibility requirements, unless first duly approved by the shareholders of Gray.

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Furthermore, except in connection with a corporate transaction or event described in the adjustment provision of the 2007 Incentive Plan, shareholder approval is required to amend the terms of outstanding awards to reduce the base price, or cancel outstanding options or SARs in exchange for cash, other awards or options or SARs with a base price that is less than the base price of the original options or SARs as applicable.

Change in Control. The 2007 Incentive Plan provides that in the event of a change of control of Gray, the 2007 Plan Committee may make such adjustments with respect to awards and take such other action as it deems advisable such as the substitution of new awards, the adjustment, termination or removal of restrictions on outstanding awards, the acceleration of awards, or the termination of outstanding awards in exchange for the cash value determined in good faith by the 2007 Plan Committee of the vested and/or unvested portion of the award. Any adjustment may provide, in the 2007 Plan Committee’s discretion, for the elimination, without payment, of any fractional shares that might otherwise become subject to an award, but may not otherwise diminish the then value of the award. The adjustment and manner of application of the foregoing will be determined by the 2007 Plan Committee in its sole discretion and to the extent permitted under Section 409A of the Code.

A “change in control” is deemed to have occurred if (1) any person (other than Gray or a permitted holder) is or becomes the beneficial owner of 45% percent or more of the combined voting power of Gray’s then outstanding securities; (2) during any period of two consecutive years individuals who at the beginning of such period constitute the board cease for any reason to constitute at least a majority thereof, unless the election or nomination of such new directors is approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period but excluding any individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the board of directors; (3) there is consummated any consolidation or merger of Gray in which Gray is not the continuing or surviving corporation or pursuant to which shares of Gray common stock or Class A common stock are converted into cash, securities or other property, other than a merger of Gray in which holders of Gray’s common stock or Class A common stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger; (4) there is consummated any consolidation or merger of Gray in which Gray is the continuing or surviving corporation in which the holders of Gray’s common stock or Class A common stock immediately prior to the merger do not own 51% percent or more of the combined voting power of the surviving corporation immediately after the merger; (5) there is consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all of Gray’s assets; or (6) the shareholders of Gray approve any plan or proposal for the liquidation or dissolution of Gray.

Non-Transferability of Awards. No award may be transferred by the recipient, except by will or by the laws of descent and distribution and each award shall be exercisable, during the participant’s lifetime, only by the participant.

Withholding.Gray has the power and the right to deduct or withhold, or require a participant to remit to Gray, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the 2007 Incentive Plan. With respect to withholding required upon the exercise of options or SARs, upon the lapse of restrictions on restricted stock, or upon any other taxable event arising as a result of awards granted under the 2007 Incentive Plan, participants may make an irrevocable election, subject to the approval of the 2007 Plan Committee, to satisfy the withholding requirement, in whole or in part, by having Gray withhold shares having a fair market value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction.

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Award Grant Period. No award shall be granted more than 10 years after May 2, 2007.

Certain Federal Income Tax Consequences. The following discussion is designed to provide a summary of the material Federal income tax consequences with respect to awards granted under the 2007 Incentive Plan as of the date of this proxy statement. Any entitlement to a tax deduction on the part of Gray is subject to the applicable Federal tax rules, including, those relating to the $1 million limitation on deductible compensation under Section 162(m) of the Code and possible excise taxes on executives or loss of Gray’s deductions under Section 280G of the Code if the vesting of awards is accelerated on or in connection with a change in control of Gray.

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the exercise of such right and subsequently disposes of such Gray common stock, any gain or loss realized upon the sale will be either long-term or short-term capital gain or loss, depending on the holder’s holding period for the Gray common stock that has been sold.

Additional Information Regarding Plan Benefits

Reference is made to the sections captioned “Executive Compensation—Compensation Discussion and Analysis—Compensation Decisions Made in 2011—Long-Term Incentive Grants,” “Outstanding Equity Awards at December 31, 2011” and “Option Exercises and Stock Vested in 2011” for detailed information on stock incentive awards and exercises of such awards by certain executive officers under the 2007 Incentive Plan. Our named executive officers, other than Mr. Beizer, have received options to purchase common stock under the 2007 Incentive Plan as follows: Mr. Howell (173,062 shares), Mr. Prather (584,822 shares) and Mr. Ryan (132,398 shares). Prior to his retirement, Mr. Beizer did not receive any options to purchase common stock under the 2007 Incentive Plan. All current executive officers as a group have been granted options under the 2007 Incentive Plan to purchase 954,568 shares of common stock. In addition, options to purchase an aggregate of 793,200 shares have been granted to all employees of the Company as a group, excluding current executive officers, under the 2007 Incentive Plan.

Market Price of the Common Stock

As of April 2, 2012 the closing price of the Gray Class A common stock as reported by the New York Stock Exchange was $1.65 per share, and the closing price of the Gray common stock as reported by the New York Stock Exchange was $1.99 per share.

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Plan Benefits

No grants have been made under the 2007 Incentive Plan that are subject to shareholder approval at the 2012 Annual Meeting. The Management Personnel Committee, which has functioned as the 2007 Plan Committee, currently expects that, if Amendment No. 1 is approved by Gray’s shareholders at the 2012 Annual Meeting, it will make grants of shares of restricted stock to each of Gray’s nonemployee directors, or director nominees, valued at $40,000. The following table shows the restricted stock that Gray expects will be granted to its current nonemployee directors, and director nominee, at the 2012 Annual Meeting. Other than these expected grants, it is not possible to determine specific amounts and types of awards that may be awarded in the future under the 2007 Incentive Plan because the grant and actual pay-out of awards under such plan is discretionary.

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Equity Compensation Plan Information

The following table gives information about the common stock and Class A common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2011.

Equity Compensation Plan Information

The Board of Directors recommends a vote FOR the amendments to the Gray Television, Inc. 2007 Long Term Incentive Plan.

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PROPOSAL 3

RATIFICATION OF COMPANY’S INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM FOR 2012

Gray’s independent registered public accounting firm is appointed annually by the Audit Committee. The Audit Committee examines a number of factors when selecting a firm, including the qualifications, staffing considerations, and the independence and quality controls of the firms considered. The Audit Committee has appointed McGladrey & Pullen, LLP as Gray’s independent registered public accounting firm for 2012. McGladrey & Pullen, LLP has served as Gray’s independent registered public accounting firm since 2006 and is considered by management to be well-qualified.

Shareholder ratification of the selection of McGladrey & Pullen, LLP as our independent registered public accounting firm is not required but is being presented to our shareholders as a matter of good corporate practice. Notwithstanding shareholder ratification of the appointment of the independent registered public accounting firm, the Audit Committee, in its discretion, may direct the appointment of a new independent registered public accounting firm if the Audit Committee believes that such a change would be in the best interests of the Company and its shareholders. Should the shareholders not ratify the selection of McGladrey & Pullen, LLP as Gray’s independent registered public accounting firm for 2012 under this proposal, it is contemplated that the appointment of McGladrey & Pullen, LLP for the 2012 fiscal year will nevertheless be permitted to stand unless the Audit Committee, on reconsideration, finds other compelling reasons for making a change.

Representatives of McGladrey & Pullen, LLP are expected to be present at the 2012 Annual Meeting and, if present, will be given the opportunity to make a statement, if they desire, and to respond to appropriate questions.

The Board of Directors recommends a vote FOR the ratification of McGladrey & Pullen, LLP as the Company’s independent registered public accounting firm for 2012.

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CORPORATE GOVERNANCE

We are in compliance with the NYSE corporate governance rules. We have adopted a Code of Ethics that applies to all of our directors, executive officers and employees. If any waiver of this Code of Ethics is granted, the waiver will be disclosed in an SEC filing on Form 8-K. Our Code of Ethics and the written charters of our Audit Committee and our Management Personnel Committee, which acts as our Nominating and Corporate Governance Committee and Compensation Committee under separate charters, as well as our Corporate Governance Principles, are available under the heading Governance Documents in the Corporate Governance section of our website atwww.gray.tv. All such information is also available in print to any shareholder upon request by telephone at (404) 266-8333.

After considering all applicable regulatory requirements and assessing the materiality of each director’s relationship with us, our Board has affirmatively determined that all of our directors are independent in accordance with Sections 303A.02(a) and (b) of the NYSE listing standards and the standards set forth in the IRC and the Exchange Act, except for: (1) Mr. Robinson, due to his family relationship with Mrs. Robinson and Mr. Howell; (2) Mr. Prather, due to his status as an executive officer; (3) Mr. Howell, due to his status as an executive officer; and (4) Mrs. Robinson, due to her family relationships with Mr. Robinson and Mr. Howell. In addition, the Board has determined that Mrs. Howell is not independent due to her family relationship with Mrs. Robinson and Mr. Howell. Consequently, our Board has determined that six of our ten current directors, and six of our ten director nominees, are independent in accordance with the listing standards of the NYSE and the standards set forth in the IRC and the Exchange Act. In addition, the Board had previously determined that, prior to his retirement from the Board, Senator Miller was independent.

Gray encourages interested parties to communicate with its Board. Any interested party who wishes to communicate with the Board or with any particular director, including any independent director, may send a letter to our Vice President Law and Development, Gray Television, Inc., 4370 Peachtree Road, N.E., Atlanta, Georgia 30319, which communications will be forwarded to the Board by the Vice President Law and Development. Any communication should indicate that you are an interested party and clearly specify that such communication is intended to be made to the entire Board or to one or more particular directors.

The Board has adopted a policy that all directors on the Board are expected to attend annual meetings of the shareholders. All then-current members of our Board attended the 2011 Annual Meeting of Shareholders in person.

In accordance with Section 303A.03 of the NYSE listing standards, the independent non-management directors met in executive session four times during 2011. Dr. Mayher, as the Chairman of the Board, presides over the executive sessions. Consistent with our belief that our leadership structure should reflect the best interests of the Company and our shareholders, we have not adopted a policy at this time stating whether or not the positions of Chief Executive Officer and Chairman of the Board should be held by separate individuals. Rather, we believe that the Board should remain free to determine the leadership structure from time to time based upon the availability of qualified and competent candidates. Currently, Mr. Howell serves in the role of Chief Executive Officer, while Dr. Mayher, who is an independent director, serves as Chairman of the Board. We believe the resulting structure is appropriate for Gray at this time because it allows us to make the best use of the capabilities of these individuals in their respective roles while indicating to our shareholders that we also value the perspective of independent leadership on our Board. With respect to potential transactions with related parties required to be disclosed pursuant to Item 404(a) of Regulation S-K, the Audit Committee charter provides that the Audit Committee must review and approve such transactions in advance after full disclosure of the nature

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and extent of the related party’s interest in any such transaction. The Company did not engage in any such related party transactions in 2011.

Management of the Company is responsible for the Company’s day-to-day risk management, and the Board serves in a risk management oversight role. The Audit Committee assists the Board in fulfilling this oversight function. The Audit Committee and management of the Company periodically review various risks facing the Company and the internal controls and procedures in place to manage such risks. In addition, the Audit Committee and the Board consider risk-related matters on an on-going basis in connection with deliberations regarding specific transactions and issues.

BOARD COMMITTEES AND MEMBERSHIP

The Board held four meetings during 2011. During 2011, each of the directors attended all of the meetings of the Board and meetings of all committees of the Board on which such directors served.

Our Board has an Executive Committee. The Executive Committee is authorized between meetings of the Board, to manage and direct our affairs, except as otherwise provided by law or as otherwise directed by the Board. All actions by the Executive Committee are subject to revision and alteration by the Board, provided that no rights of third parties shall be affected by any such revision or alteration. The Executive Committee did not meet during 2011. The members of the Executive Committee are Messrs. Howell, Mayher (as Chairman) and Prather.

Our Board has an Audit Committee, the purpose of which is to review and evaluate the results and scope of the audit and other services provided by our independent registered public accounting firm, as well as our accounting policies and system of internal accounting controls, and to review and approve any transactions between us and any related parties. The Audit Committee is governed by a written Audit Committee Charter, which was approved and adopted in its current form by the Board in June 2009 and can be found on our website atwww.gray.tv in theCorporate Governance section under the headingGovernance Documents. The Audit Committee held five meetings during 2011. The members of the Audit Committee are Messrs. Boger, Elder, Mayher and Newton (as Chairman). The Board has affirmatively determined that T.L. (Gene) Elder is an “audit committee financial expert” as that term is defined under applicable SEC rules. Our identification of Mr. Elder as an audit committee financial expert does not impose on him any duties, obligations or liability that are greater than the duties, obligations and liabilities imposed on the other members of the Audit Committee. The Board has determined that all members of the Audit Committee are independent in accordance with NYSE and SEC rules governing audit committee member independence. The Audit Committee maintains a risk assessment process designed to identify risks facing Gray that the Audit Committee considers to be the most significant. In executing this process, the Audit Committee receives reports from management and other advisors and strives to generate serious and thoughtful strategies to mitigate those risks. Management periodically meets with the Audit Committee and reviews such risks and the relevant strategies. The report of the Audit Committee is set forth in this proxy statement under the headingReport of Audit Committee.

Our Board has a Management Personnel Committee that functions as both the Compensation Committee and the Nomination and Corporate Governance Committee. The Management Personnel Committee has adopted separate written charters to govern its activities as the Compensation Committee and the Nominating and Corporate Governance Committee, respectively, current copies of which are available on our website atwww.gray.tv in theCorporate Governance section under the headingGovernance Documents. In its capacity as the Compensation Committee, the Management Personnel Committee makes recommendations with respect to executive salaries, bonuses and long-term compensation. The Management Personnel Committee held four meetings in 2011, during which

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meetings it performed the functions of both the Compensation Committee and the Nominating and Corporate Governance Committees. Its current members are Messrs. Deaver (as Chairman), Mayher, and Norton. Mr. Miller also served on the committee until his retirement in December 2011. The Board has affirmatively determined that all current members of the Management Personnel Committee are independent, and Senator Miller was independent, in accordance with NYSE, SEC and IRC rules governing independence. The report of the Management Personnel Committee is set forth in this proxy statement under the headingReport of Management Personnel Committee.

In addition to acting as our Compensation Committee, the Management Personnel Committee also acts as our Nominating and Corporate Governance Committee. In this capacity, the Management Personnel Committee assists the Board in fulfilling its responsibilities to shareholders by identifying and screening individuals qualified to become our directors, recommending candidates to the Board for all directorships, evaluating the set of corporate governance principles and guidelines applicable to us that the Board has adopted, and overseeing the evaluation of the Board and management. In recommending candidates to the Board for nomination as directors, the Management Personnel Committee strives to identify individuals who bring a unique perspective to Gray’s leadership and contribute to the overall diversity of our Board. Although the Management Personnel Committee has not adopted a specific written diversity policy for nominations, we believe that a diversity of experience, gender, race, ethnicity and age contributes to effective governance for the benefit of our shareholders. In practice, the Management Personnel Committee considers such characteristics together with the other qualities displayed by our candidates, such as judgment, skill, integrity and experience. The Management Personnel Committee does not assign a particular weight to these individual factors. Rather, the Management Personnel Committee looks for a mix of factors that, when considered along with the experience and credentials of the other candidates and existing directors, will provide shareholders with a diverse and experienced Board. Historically, we have not used a recruiting firm to assist with this process.

The Management Personnel Committee will consider recommendations for director nominees submitted by shareholders. The Management Personnel Committee’s evaluation of candidates recommended by our shareholders does not differ materially from its evaluation of candidates recommended from other sources. Shareholders wishing to recommend director candidates for consideration by the Management Personnel Committee may do so by writing to our Vice President Law and Development, giving the candidate’s name, biographical data, qualifications and all other information that is required to be disclosed under the applicable rules and regulations of the SEC. The foregoing information should be forwarded to the Nominating and Corporate Governance Committee, c/o Vice President Law and Development, Gray Television, Inc., 4370 Peachtree Road, N.E., Atlanta, Georgia 30319.

Our Board has a 2007 Long Term Incentive Plan Committee, the purpose of which is to make recommendations concerning grants of equity awards under the 2007 Long Term Incentive Plan and the Directors’ Restricted Stock Plan. The 2007 Long Term Incentive Plan Committee did not hold any meetings in 2011, and its members are Messrs. Deaver, Mayher, and Norton (as Chairman), all of which are “non-employee directors” under applicable SEC rules.

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Summary of Committee Memberships.

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BENEFICIAL SHARE OWNERSHIP

The following table sets forth certain information regarding the beneficial ownership of our Class A common stock and our common stock as of March 22, 2012 by (i) any person who is known to us to be the beneficial owner of more than five percent of our Class A common stock or our common stock, (ii) each director and director nominee, (iii) each executive officer named in the summary compensation table below and (iv) all directors and current executive officers as a group. For purposes of this table, a person is deemed to be a beneficial owner of a security if he or she has or shares the power to vote or to direct the voting of such security, or the power to dispose or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same securities. A person is also deemed to be a beneficial owner of any securities that such person has the right to acquire beneficial ownership of within 60 days. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. The information as to beneficial ownership has been furnished by the respective persons listed in the following table. The percentages of each class are based on 5,753,020 shares of Class A common stock and 51,405,846 shares of common stock outstanding as of March 22, 2012. Shares underlying outstanding stock options exercisable within 60 days of such date are deemed to be outstanding for purposes of calculating the percentage owned by such holder.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Management Personnel Committee

The Management Personnel Committee of the Board serves as our Compensation Committee, administers our executive compensation program and has the overall responsibility for approving and evaluating director and officer compensation plans, policies and programs. The Management Personnel Committee, in its capacity as the Compensation Committee, approves the compensation of each of our executive officers and all television station General Managers and establishes the compensation of our Board. The Management Personnel Committee consists of three members of our Board, Messrs. Deaver, Mayher, and Norton. The Board has affirmatively determined that all members of the Management Personnel Committee are independent in accordance with NYSE, SEC and IRC rules governing independence.

The Management Personnel Committee engaged Grant Thornton LLP, an internationally recognized public accounting and consulting firm, to advise the committee, and at times management, with respect to Gray’s compensation programs for 2011.

Named Executive Officers

The discussion of executive compensation includes information about our NEOs who are listed in the following table:

Overview of Previous Year Performance and Compensation

In 2011, working with its independent compensation consultant, the Management Personnel Committee continued to implement improvements to our executive compensation for alignment with current market best practices, including:

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In fiscal year 2011, Gray had strong performance in an improving economic environment. In addition, compensation decisions regarding Gray’s NEOs for 2011 and going forward in 2012 reflect the Management Personnel Committee’s consideration of the results of last year’s non-binding advisory vote on executive compensation.

For 2011 and 2010, Gray paid cash compensation to its NEOs of $3,345,679 and $4,273,750, respectively. The decrease in cash compensation for each executive in 2011 relative to 2010 was primarily the result of the 2010 payment of performance-based bonuses for Messrs. Howell, Prather and Ryan in specific recognition of their successful efforts in completing a series of refinancing transactions in that year, partially offset by increases in base salaries for Messrs. Howell and Ryan and, for certain of the NEOs, increases in nonequity incentive compensation in 2011. The following tables set forth the cash compensation paid to NEOs in 2011 and 2010, respectively:

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Elements of Compensation Program

The compensation program for our executive officers is designed to provide the Management Personnel Committee with the flexibility to offer a combination of cash (fixed and incentive-based) and equity-based compensation opportunity, as appropriate, in order align the executive officers’ interests with those of our shareholders. Consistent with 2010, the executive compensation program for 2011 primarily consisted of the following elements:

Each year, our executive officers are eligible for a base salary increase, an annual incentive award and a long-term incentive award based on the Management Personnel Committee’s evaluation of market data, Company and NEO performance, and achievement of goals.

The goals of our executive compensation program are to retain, motivate and reward our executive officers. We believe that the most effective executive compensation program is one that is conservative, yet competitive, and which aligns long-term compensation to the creation of shareholder value.

In 2011, the Management Personnel Committee based compensation decisions on a defined target market position of market median, or 50^th percentile, with opportunity for total compensation between the 50^th and 75^th percentiles as warranted based on Gray’s performance determined through achievement of approved performance goals.

Additionally, the Management Personnel Committee applied a formal policy approved in 2010 for establishing compensation and incentive opportunity levels for each element of compensation, revising the annual, nonequity incentive structure to reflect achievement of quantitative goals only. Individual performance goals were not established or used in determining cash bonuses or nonequity incentive plan compensation that might be awarded under the 2011 Annual Incentive Plan. The Management Personnel Committee strives to achieve an appropriate mix between the different forms of compensation in order to (1) motivate the executive officers to deliver superior performance in the short-term by providing competitive base salaries, annual incentive payments and cash bonuses for specific achievements, (2) align the interests of the executive officers with the long-term interests of our shareholders through the grant of equity-based compensation and (3) provide an overall compensation package that promotes executive retention and is aligned with the defined target market position.

Base salaries for our executives are established or adjusted based on the size/complexity of the Company, the scope of each individual executive’s role, the knowledge and experience of such executive, and the competitiveness of the executive’s total compensation as compared to peer group and other market data.

The process for determining annual incentive compensation is based on how well, and to what extent, the Company performs against financial goals that are determined by the Management Personnel Committee.

The decision to grant long-term incentives is generally discretionary in nature (as opposed to the formulaic approach to annual incentive compensation opportunities used by the Management Personnel Committee) and is based each year on a retrospective qualitative evaluation of the following factors, which are evaluated by the Management Personnel Committee:

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Annual Incentive Performance Targets for 2011

The Management Personnel Committee established performance goals for 2011 based 100% on financial performance. Three financial performance measures comprise the financial performance measures historically used by Gray for purposes of valuing the Company’s business and approximating key financial performance covenants in certain financing agreements: (i) revenue (less agency commissions), (ii) broadcast cash flow, and (iii) net operating profit (“NOP”).

Gray’s NOP financial performance measure, by way of reference to Gray’s audited financial statements set forth in the Company’s Form 10-K, includes net income (loss), plus interest expense, plus income tax expense (benefit), plus loss on early extinguishment of debt, plus depreciation, plus amortization of intangible assets, less net gain on disposals of assets, and less net miscellaneous income.

Gray’s “broadcast cash flow” financial performance measure is defined as NOP (discussed above) plus amortization of non-cash stock based compensation, plus amortization of program broadcast rights, plus common stock contributed to 401(k) plan, less network compensation revenue, plus network compensation per network affiliation agreements, less network expense per network affiliation agreements, less payments on program broadcast obligations, and plus corporate and administrative expenses (excluding amortization of non-cash stock based compensation).

For each of the financial performance measures, the following goals were established for 2011:

The target performance goals were aligned with the Company’s internal business plan and annual budget as approved by the Management Personnel Committee. Threshold goals were established at 95% of target so that a level of performance near target was required to be achieved before any incentive payment was awarded, with a significant reduction to the incentive earned for results below target. Maximum awards were established at achievement of 110% of target, as the Management Personnel Committee believed this represented an appropriate amount of stretch in the goals. The Management Personnel Committee reviews the threshold, target and maximum criteria at the start of each fiscal year to ensure that an appropriate degree of difficulty is incorporated into the goals.

In 2012, the Management Personnel Committee expects to maintain the current structure for the determination of annual incentive awards such that 100% of the annual incentive award opportunity will be based on Gray’s financial performance, utilizing the same performance metrics of revenue (less agency commissions), NOP and broadcast cash flow.

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Response to Say-On-Pay Vote

Although the advisory shareholder vote on executive compensation is non-binding, the Management Personnel Committee has considered, and will continue to consider, the outcome of this vote each year such a vote is taken when making compensation decisions for our CEO and other NEOs. At our annual meeting of shareholders held on June 1, 2011, over 98% of the shares present or represented by proxy at the meeting voted for the approval of the compensation of the CEO and other NEOs. The Compensation Committee believes that this shareholder vote strongly endorses the compensation philosophy of the Company. After considering the result of the 2011 advisory vote on our executive compensation, the Management Personnel Committee did not believe it was necessary to undertake any material changes in the Company’s executive compensation programs. In addition, the shareholders approved a triennial frequency for submitting our executive compensation program to an advisory shareholder vote in the future.

Compensation Decisions Made in 2011

Base Salary

The base salary element of our executive compensation program provides each NEO with a fixed amount of annual cash compensation. Salaries for the NEOs are generally subject to annual review and adjustment by the Management Personnel Committee.

The Management Personnel Committee approved our NEOs’ base salaries for 2011 on March 17, 2011. The Management Personnel Committee determined to hold base salaries constant with the exception of Messrs. Howell and Ryan. Mr. Ryan’s base salary was increased to better align his pay with market data. Mr. Howell’s base salary was increased, to (i) better align his base pay with that of other executives with similar job descriptions and responsibilities as assessed through the compensation study, (ii) recognize his contributions and performance, and (iii) reflect the Management Personnel Committee’s awareness of an increase in the percentage of time Mr. Howell is now devoting to the role.

The base salaries paid to each of our NEOs were as follows for 2011 and 2010:

Mr. Howell’s 2010 and 2011 base salary took into consideration the fact that he worked less than full-time as our Chief Executive Officer. The Management Personnel Committee will continue to monitor Mr. Howell’s base salary in the future, and make adjustments commensurate with his role as our Chief Executive Officer as he assumes greater responsibility in that role and as the amount of time spent in the role increases.

Mr. Prather’s base salary is reflective of (i) the critical role he plays in managing Gray’s performance, (ii) his assigned responsibilities beyond the typical role of a Chief Operating Officer and

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(iii) the significant institutional knowledge, history and relationships he maintains and leverages on behalf of the Company and its business goals.

Annual Incentive Compensation

The Management Personnel Committee meets during the first quarter of each year, once adequate financial and other performance data from the prior fiscal year becomes available for review, and determines if any annual incentive compensation will be awarded to the executive officers and the amount of the incentive compensation.

The 2011 opportunity levels (expressed as a percentage of base salary) approved by the Management Personnel Committee for the NEOs in 2011 were as follows:

The annual incentive opportunity levels were established to provide each NEO with a market-competitive incentive opportunity linked to achievement of pre-determined financial goals. Actual performance levels between threshold and target, or between target and maximum, are used to determine incentive awards. Actual awards are determined formulaically by linear interpolation of those actual results as they relate to the established financial performance goals and the percentage by which such goals were achieved or exceeded.

Nonequity annual incentive compensation payments for 2011 were calculated based on actual results for 2011 and paid subsequent to the end of the year. Annual incentive plan targets vs. Gray’s actual results for 2011 were as follows:

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The following annual incentive compensation payments were made for 2011 performance:

Long-Term Incentive Grants

In order to align the interests of our executive officers and other key management personnel responsible for our growth with the interests of our shareholders, we established the 2007 Long Term Incentive Plan, which provides for equity-based awards. If stock options are awarded, it is our practice to grant options with an exercise price equal to the closing price of our Class A common stock and/or our common stock on the date of grant.

Long-term incentive grant guidelines are used by the Management Personnel Committee to determine and understand market competitive parameters for making long term incentive award decisions. Unlike the formulaic annual incentive award opportunities, which are tied to the Company’s actual performance compared to goals, the decision to grant long-term incentive awards generally remains within the discretion of the Management Personnel Committee.

The long-term incentive grant guidelines (expressed as a percentage of base salary) considered by the Management Personnel Committee for the purpose of consideration of long-term incentive awards in 2011 remained unchanged from those approved by the Management Personnel Committee in 2010, and were as follows:

The decision of whether or not to make long-term incentive grants in any year is based on a retrospective and qualitative assessment of factors, as discussed above under the headingElements of Compensation Program. The Management Personnel Committee did not award any long-term incentive grants to the NEOs in 2011. Based upon 2011 performance, in 2012, the Management Personnel Committee approved grants of long-term incentive awards to certain NEOs effective April 2, 2012. Important to the Management Personnel Committee’s decision to award these long-term incentive grants,

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were the Company’s and the individual’s performance in 2011, the fact that long-term incentive equity grants had not been made in recent years, total shareholder return as compared to the Company’s peer group, and competitiveness of each NEO’s total compensation. The Management Personnel Committee approved awards equal to the 2011 “target” opportunity guidelines for Messrs. Howell and Ryan, and equal to the “threshold” opportunity guideline for Mr. Prather, given the competitiveness of Mr. Prather’s current total compensation. No award was considered for Mr. Beizer due to his retirement.

This resulted in the following value-based awards being granted by the Management Personnel Committee:

After considering the mix of awards provided by peer group companies to similarly situated executives, and the Company’s executive compensation philosophy, the Management Personnel Committee approved an award mix intended to provide a balance between retention and performance improvement, with 50% of the value to be delivered through restricted stock grants with three-year ratable vesting, and 50% of the value to be delivered through stock option grants with four-year ratable vesting and a ten-year contractual term. The number of restricted shares granted was determined by dividing one-half of the grant value by the fair market value of our common stock on the grant date of the award, rounded up to the nearest whole number of shares. The number of options granted was determined by dividing one-half of the grant value by the fair value of a stock option as determined using the Black-Scholes Merton valuation method, rounded up to the nearest whole number of options.

Qualified Benefit Plans

The Management Personnel Committee has historically had a general policy of structuring performance-based compensation arrangements for its executive officers whose compensation might exceed the $1 million cap in a way that will satisfy Section 162(m)’s conditions for deductibility, to the extent feasible and after taking into account all relevant considerations. However, we also need flexibility to pursue our incentive and retention objectives, even if this means that a portion of executive compensation may not be deductible by us. Accordingly, the Management Personnel Committee may, from time to time, approve elements of compensation for certain officers that are not fully deductible, under appropriate circumstances.

Capital Accumulation Plan

We currently sponsor the Gray Television, Inc. Capital Accumulation Plan to encourage eligible employees to defer a part of their current income to provide for their retirement, death or disability under the provisions of Section 401(k) of the IRC. The plan covers all of our employees. Under the Capital Accumulation Plan, participants may elect to make pre-tax savings deferrals from their compensation each year, subject to annual limits on such deferrals imposed by the IRC. We may also, at our discretion, on an annual basis, make a matching contribution with respect to a participant’s elective deferrals and/or may make additional voluntary contributions. For the year ended December 31, 2011, we did not match employee contributions except for employees at one of our stations, in accordance with the terms of their union contract. Participants are immediately vested in their voluntary contributions plus the actual earnings thereon. Employer contributions and earnings thereon become 100% vested after the participant completes three years of service. The only form of benefit payment under the Capital Accumulation Plan is a single lump-sum payment equal to the vested balance in the participant’s account. The vested portion of a participant’s accrued benefit is payable upon such employee’s termination of employment, attainment

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of age 59 1/2, retirement, total and permanent disability, or death. Participants may also make in-service withdrawals from their pre-tax contributions under the plan for certain specified instances of hardship.

Pension Plan

Under the terms of the Pension Plan, in the event of the death of an executive officer before retirement, 50% of the accrued benefit will become payable to the surviving spouse at the time the deceased participant would have reached age 65. If the deceased participant had completed ten or more years of service, the survivor benefit may commence as early as the time the deceased participant would have reached age 55. If the deceased participant would have been eligible for early retirement at the time of death, survivor benefits may commence as soon as practicable. Any benefits that commence before the deceased participant would have reached age 65 will be reduced the same as early retirement benefits would have been reduced. In the event a disability occurs before retirement, the accrued benefit will become payable at age 65. No break in service will occur and benefits will continue to accrue during disability. In the event of voluntary termination, the vested accrued benefit will become payable at age 65. If the participant had completed ten or more years of service, the benefit may commence as early as age 55. If the participant had completed less than five years of credited service, the accrued benefit is not vested, and no future benefits would be payable from the Pension Plan.

Compensation Framework: Policies, Process and Risk Considerations.

Determining Competitive Practices

In 2010, Gray established a compensation peer group for purposes of determining competitive compensation for our executive officers. The Management Personnel Committee spent considerable time reviewing the peer group initially proposed by Grant Thornton LLP, and closely examined the included companies before finalizing the peer group. The peer group selection criteria included broadcasting companies (television, radio, and companies with a combination of television and radio operations). As a general guideline, companies were included with revenues of one-half of Gray’s revenue and up to two times Gray’s revenue, with median revenue of the peer group closely aligned with Gray’s revenue.

The compensation peer group originally consisted of seventeen (17) companies, including Belo Corp, Crown Media Holdings, Inc., Cox Radio Inc., Cumulus Media, Inc., Emmis Communications, Entercom Communications Corp, Entravision Communications, Fisher Communications, Inc., Lin TV Corp., Media General, Hearst-Argyle Television, Nexstar Broadcasting Group, Radio One Inc., Salem Communications Corp., Sinclair Broadcast GP, Spanish Broadcasting Sys Inc, and Westwood One Inc. The peer group has a median revenue closely aligned with Gray and better protects against potential volatility in data that may result from changes in peer group company status. Two of the companies, Cox Radio Inc., and Hearst-Argyle Television, are no longer public and were not included in the 2011 peer group benchmarking analysis.

The Management Personnel Committee uses the peer group for executive compensation comparisons, and ensured an appropriate benchmarking of executive roles to market data, including both proxy data (weighted at 75%) and published survey data (weighted at 25%) to determine the market value of Gray’s executive positions.

Process for Establishing Executive Total Compensation

In reviewing NEO compensation levels for 2011, the Management Personnel Committee reviewed a competitive market study prepared by Grant Thornton LLP. The study compared Gray’s practices regarding base salary, bonus, equity, cash incentives, perquisites and other compensation of its NEOs with market practices as reported in published survey data and for the approved peer group.

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Risk Considerations

Companies are expected to review their compensation policies and practices and incentive plans and programs to evaluate if such compensation policies and practices and incentive plans and programs are appropriately structured for the company and its business objectives and discourage executives from taking excessive risk. In designing the components of Gray’s compensation policies and practices and incentive plans and programs, we have attempted to mitigate the possibility that excessive short-term risks are being taken at the expense of long-term value. These mitigation strategies include: (1) the annual review and approval of the financial performance considerations by the Management Personnel Committee; (2) the use of multiple performance objectives, thus mitigating too heavy a focus on any one in particular; and (3) vesting of stock awards over time to motivate NEOs to focus on providing consistent results over the longer term. The Management Personnel Committee has reviewed Gray’s compensation policies and practices and incentive plans and programs, including all of its business units, to determine if they encourage individuals to take unreasonable risks; and has determined that any risks arising from these compensation programs are not reasonably likely to have a material adverse effect on the Company.

Role of the Compensation Consultant

In 2011, the Management Personnel Committee engaged Grant Thornton LLP, an internationally recognized public accounting and consulting firm, to advise the Management Personnel Committee with respect to Gray’s compensation programs for 2011. A Grant Thornton LLP representative reports directly to the Management Personnel Committee as its compensation advisor. The Management Personnel Committee annually reviews the role of its compensation advisor and believes that the advisor is fully independent for purposes of providing executive compensation recommendations. To ensure independence, the Management Personnel Committee directly hires and has the sole authority to terminate the compensation advisor and to determine the terms and conditions of their engagement. The compensation advisor reports directly to the Management Personnel Committee. Mr. Howell may participate in meetings in his role as CEO to provide information to the Management Personnel Committee and answer questions related to management and performance of Gray, but is not present when the Management Personnel Committee goes into executive session to make executive officer compensation decisions.

Annual Review of Consultant Independence

As a result of the steps taken by the Management Personnel Committee to monitor and manage the independence of its compensation consultant, the Management Personnel Committee believes that the advisor is able to provide candid, direct and objective advice to the Management Personnel Committee that is not influenced by management or any other services provided to Gray by Grant Thornton LLP. Furthermore, neither the compensation advisor nor any member of the advisory team participates in any of the other services provided to Gray by separate Grant Thornton LLP business units. Instead, with full knowledge of the Management Personnel Committee, the Audit Committee engages a distinct unit of Grant Thornton LLP to provide all other non-Management Personnel Committee consulting services to Gray, which is primarily related to internal audit services. Grant Thornton LLP provides the Management Personnel Committee with an annual update on its services and related fees. The Management Personnel Committee determines whether the separate services are performed objectively and free from the influence of management. The Management Personnel Committee recommended and approved the provision of these separate services to Gray.

Income Deduction Limitations

Section 162(m) of the IRC generally sets a limit of $1 million on the amount of compensation that we may deduct for federal income tax purposes in any given year with respect to the compensation of

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each of the executive officers. However, certain “performance-based” compensation that complies with the requirements of Section 162(m) is not included in the calculation of the $1 million cap. Historically, tax deductibility of officer compensation has not been a primary objective because of ongoing operating losses on a tax basis and the need for flexibility in pursuing our incentive and retention objectives. Our executive compensation program historically has not complied with all the requirements of Section 162(m), but the Management Personnel Committee will review such requirements and will consider ways to restructure the executive compensation program to satisfy our compensation goals and meet the 162(m) deductibility guidelines going forward. We reserve the right to design compensation plans that recognize a full range of performance and other criteria important to our success regardless of the federal tax deductibility of compensation paid under those plans.

Summary Compensation Table

The following table sets forth a summary of the compensation of our Chief Executive Officer, Chief Financial Officer, and the other named executive officers for 2011, 2010 and 2009, respectively.

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