(1) Description of Plan
The following description of the GCI 401(k) Plan ("Plan") provides general information only. Participants should refer to the Plan document for a more complete description of the Plan's provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Benefits are not guaranteed by the Pension Benefit Guaranty Corporation.
General
The Plan is a defined contribution plan sponsored by GCI Communication Corp. ("GCICC "and "Plan Sponsor"), a wholly owned subsidiary of Liberty Broadband Corporation (“Liberty Broadband”). The previous plan sponsor was GCI Liberty, Inc. (“GCI Liberty”) until December 15, 2020 when GCI Liberty transferred sponsorship of the Plan to GCICC. The Plan covers employees of GCICC and the following affiliated companies, United Utilities, Inc. (“UUI”), Unicom, Inc. ("Unicom") and Denali Media Holdings, Corp. ("DMH") (collectively, the "Company"). GCI Liberty ended the operations of DMH during the third quarter of 2020 and amended the Plan to remove DMH as a participating employer. Employees of participating employers are eligible to make employee deferral contributions immediately after their date of hire, and are eligible to share in Company matching contributions, if any, on the first entry date after completing one year of service, as defined in the Plan document. The entry dates are the first day of each quarter during the year. GCICC and affiliated companies are parties-in-interest to the Plan.
On December 18, 2020, Liberty Broadband completed its previously announced acquisition of GCI Liberty (the “Combination”). Prior to the Combination, GCI Liberty consisted of (i) a wholly owned subsidiary, GCI Holdings, (ii) an equity method investment in Liberty Broadband, (iii) an investment in Charter and (iv) other assets and liabilities.
As a result of the Combination, each holder of a share of Series A common stock and Series B common stock of GCI Liberty, including those shares held by Plan participants, received 0.58 of a share of Series C common stock and Series B common stock, respectively, of Liberty Broadband. Additionally, each holder of a share of Series A Cumulative Redeemable Preferred Stock of GCI Liberty (“GCI Liberty Preferred Stock”) received one share of newly issued Liberty Broadband Series A Cumulative Redeemable Preferred Stock (“Liberty Broadband Preferred Stock”), which has substantially identical terms to GCI Liberty’s former Series A Cumulative Redeemable Preferred Stock, including a mandatory redemption date of March 9, 2039. Cash was paid in lieu of issuing fractional shares of Liberty Broadband stock in the Combination. No other changes were made to the Plan as a result of the Combination.
The Plan was restated on July 14, 2021. There were no significant changes made to the Plan.
Contributions
The Plan provides for a qualified cash or deferred arrangement as defined in Section 401(k) of the Internal Revenue Code of 1986 ("Code"). A participant may elect the following methods to make employee contributions:
1. Salary Reduction Contributions, which will not be included in the participant's current earnings for federal income tax purposes but rather are taxable upon distribution, or
2. Roth 401(k) Contributions, which will be included in the participant's current earnings for federal income tax purposes and are not taxable upon distribution.
Eligible employees of the Company may elect, if certain requirements are met, to reduce their eligible compensation in any amount up to 50% of such compensation subject to a maximum of $19,500 in each of 2021 and 2020. Contributions may be made as salary reduction or Roth 401(k) contributions or a combination of both.
Compensation considered for all Plan purposes is subject to a compensation ceiling of $290,000 and $285,000 in 2021 and 2020, respectively. Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions of no more than $6,500 per year for each of the years ended December 31, 2021 and 2020. Participant catch-up contributions are not eligible for Company matching contributions.
The Plan allows up to 100% matching of employee contributions. Company matching contributions made to the Plan may be invested in any Plan offered investment choice at any time by the participant. The Plan currently offers various mutual