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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

GCI Liberty, Inc.
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
    (2)   Aggregate number of securities to which transaction applies:
        
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
    (4)   Proposed maximum aggregate value of transaction:
        
    (5)   Total fee paid:
        

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
    (2)   Form, Schedule or Registration Statement No.:
        
    (3)   Filing Party:
        
    (4)   Date Filed:
        

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LOGO

GCI LIBERTY, INC.

12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

May 21, 2018

Dear Stockholder:

You are cordially invited to attend the 2018 annual meeting of stockholders of GCI Liberty, Inc. (GCI Liberty) to be held at 8:00 a.m., local time, on June 25, 2018, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5900.

At the annual meeting, you will be asked to consider and vote on the proposals described in the accompanying notice of annual meeting and proxy statement, as well as on such other business as may properly come before the meeting.

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the annual meeting, please read the enclosed proxy materials and then promptly vote via the Internet or telephone or by completing, signing and returning by mail the enclosed proxy card. Doing so will not prevent you from later revoking your proxy or changing your vote at the meeting.

Thank you for your cooperation and continued support and interest in GCI Liberty.

    Very truly yours,

 

 


GRAPHIC

 

 

Gregory B. Maffei
President and Chief Executive Officer

The proxy materials relating to the annual meeting will first be made available on or about May 24, 2018.


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GCI LIBERTY, INC.
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

         

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be Held on June 25, 2018

NOTICE IS HEREBY GIVEN of the annual meeting of stockholders of GCI Liberty, Inc. (GCI Liberty) to be held at 8:00 a.m., local time, on June 25, 2018, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5900, to consider and vote on the following proposals:

1. A proposal (which we refer to as the election of directors proposal) to elect John C. Malone, Gregory B. Maffei, Ronald A. Duncan, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton to serve as members of our board in the classes indicated under "Proposal 1—The Election of Directors Proposal," until their respective successors are elected and qualified, for the applicable term prescribed in our restated certificate of incorporation, or their earlier resignation or removal;


2.


A proposal (which we refer to as the auditors ratification proposal) to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018; and


3.


A proposal to adopt the GCI Liberty, Inc. 2018 Omnibus Incentive Plan (which we refer to as the incentive plan proposal).

You may also be asked to consider and vote on such other business as may properly come before the annual meeting.

Holders of record of our Series A common stock, par value $0.01 per share, Series B common stock, par value $0.01 per share, and Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, in each case, outstanding as of 5:00 p.m., New York City time, on May 14, 2018, the record date for the annual meeting, will be entitled to notice of the annual meeting and to vote at the annual meeting or any adjournment or postponement thereof. These holders will vote together as a single class on each proposal. A list of stockholders entitled to vote at the annual meeting will be available at our offices at 12300 Liberty Boulevard, Englewood, Colorado 80112 for review by our stockholders for any purpose germane to the annual meeting for at least ten days prior to the annual meeting.

We describe the proposals in more detail in the accompanying proxy statement. We encourage you to read the proxy statement in its entirety before voting.

Our board of directors has unanimously approved each of the election of directors proposal, the auditors ratification proposal and the incentive plan proposal and recommends that you vote "FOR" the election of each director nominee and "FOR" each of the auditors ratification proposal and the incentive plan proposal.

Votes may be cast in person at the annual meeting or by proxy prior to the meeting by telephone, via the Internet, or by mail.

Important Notice Regarding the Availability of Proxy Materials For the Annual Meeting of Stockholders to be Held on June 25, 2018: our Notice of Annual Meeting of Stockholders, Proxy Statement, and 2017 Annual Report to Stockholders are available at www.envisionreports.com/GCIL.


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YOUR VOTE IS IMPORTANT. Voting promptly, regardless of the number of shares you own, will aid us in reducing the expense of any further proxy solicitation in connection with the annual meeting.

    By order of the board of directors,

 

 

GRAPHIC

Katherine C. Jewell
Assistant Vice President and Secretary

Englewood, Colorado
May 21, 2018

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE PROMPTLY VIA TELEPHONE OR ELECTRONICALLY VIA THE INTERNET. ALTERNATIVELY, PLEASE COMPLETE, SIGN AND RETURN BY MAIL THE ENCLOSED PAPER PROXY CARD.


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TABLE OF CONTENTS

PROXY STATEMENT SUMMARY    

THE ANNUAL MEETING

 

2

Electronic Delivery

  2

Time, Place and Date

  2

Purpose

  2

Quorum

  2

Who May Vote

  2

Votes Required

  3

Votes You Have

  3

Recommendation of Our Board of Directors

  3

Shares Outstanding

  3

Number of Holders

  3

Voting Procedures for Record Holders

  3

Voting Procedures for Shares Held in Street Name

  4

Revoking a Proxy

  4

Solicitation of Proxies

  4

Other Matters to Be Voted on at the Annual Meeting

  4

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

5

Security Ownership of Certain Beneficial Owners

  5

Security Ownership of Management

  6

Changes in Control

  9

PROPOSALS OF OUR BOARD

 

10

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

 

10

Board of Directors

  10

Vote and Recommendation

  14

PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

 

15

Change in Independent Auditors

  15

Audit Fees and All Other Fees

  16

Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor

  16

Vote and Recommendation

  16

PROPOSAL 3—INCENTIVE PLAN PROPOSAL

 

17

Key Features of the 2018 Incentive Plan

  17

GCI Liberty, Inc. 2018 Omnibus Incentive Plan

  17

U.S. Federal Income Tax Consequences of Awards Granted under the 2018 Incentive Plan

  21

New Plan Benefits

  23

Vote and Recommendation

  23

MANAGEMENT AND GOVERNANCE MATTERS

 

24

Executive Officers

  24

Section 16(a) Beneficial Ownership Reporting Compliance

  25

Code of Ethics

  25

Director Independence

  25

Board Composition

  26

Board Leadership Structure

  26

Board Role in Risk Oversight

  26

Committees of the Board of Directors

  26

Board Meetings

  30

Director Attendance at Annual Meetings

  31

Stockholder Communication with Directors

  31

Executive Sessions

  31

EXECUTIVE COMPENSATION

 

32

Compensation Discussion and Analysis

  32

Summary Compensation Table

  41

Grants of Plan-Based Awards

  43

Outstanding Equity Awards at Fiscal Year-End

  44

Option Exercises and Stock Vested

  45

Potential Payments Upon Termination or Change-in-Control

  45

DIRECTOR COMPENSATION

 

46

EQUITY COMPENSATION PLAN INFORMATION

 

47

Securities Authorized for Issuance under Equity Compensation Plans

  47

Equity Compensation Plan Information

  47

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

47

STOCKHOLDER PROPOSALS

 

52

ADDITIONAL INFORMATION

 

52

ANNEX A: GCI Liberty, Inc. 2018 Omnibus Incentive Plan

 

A-1

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PROXY STATEMENT SUMMARY

2018 ANNUAL MEETING OF STOCKHOLDERS


 


WHEN


ITEMS OF BUSINESS


 
 

8:00 a.m., local time, on June 25, 2018

WHERE

The Corporate Offices of GCI Liberty 12300 Liberty Boulevard
Englewood, Colorado 80112

1.

Election of directors proposal—To elect John C. Malone, Gregory B. Maffei, Ronald A. Duncan, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton to serve as members of our board in the classes indicated under "Proposal 1—The Election of Directors Proposal," until their respective successors are elected and qualified, for the applicable term prescribed in our restated certificate of incorporation, or their earlier resignation or removal.

 
 

RECORD DATE

5:00 p.m., New York City time, on May 14, 2018

2.

Auditors ratification proposal—To ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018.

 
   

3.

Incentive plan proposal—To adopt the GCI Liberty, Inc. 2018 Omnibus Incentive Plan.

Such other business as may properly come before the annual meeting.


   

WHO MAY VOTE

Holders of shares of GLIBA, GLIBB and GLIBP

 

 


PROXY VOTING

Stockholders of record on the record date are entitled to vote by proxy in the following ways:



 

 


GRAPHIC


GRAPHIC


GRAPHIC


 
  By calling 1 (800) 652-8683 (toll free) in the United States or Canada Online at www.envisionreports.com/GCIL By returning a properly completed, signed and dated proxy card  

ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS

    Proposal   Voting
Recommendation

 
Page Reference
(for more detail)

 

 

 

Election of directors proposal

 


  

 

FOR EACH
NOMINEE

 

10

 

 
 

 

 

Auditors ratification proposal

 


 

FOR

 

15

 

 

 

 

Incentive plan proposal

 


 

FOR

 

17

 

 
 

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GCI LIBERTY, INC.
a Delaware Corporation

12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

We are furnishing this proxy statement in connection with the board of directors' solicitation of proxies for use at our 2018 Annual Meeting of Stockholders to be held at 8:00 a.m., local time, on June 25, 2018, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, or at any adjournment or postponement of the annual meeting. At the annual meeting, we will ask you to consider and vote on the proposals described in the accompanying Notice of Annual Meeting of Stockholders. The proposals are described in more detail in this proxy statement. We are soliciting proxies from holders of our Series A common stock, par value $0.01 per share (GLIBA), Series B common stock, par value $0.01 per share (GLIBB), and Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (GLIBP). We refer to GLIBA and GLIBB together with shares of our Series C common stock, par value $0.01 per share (none of which were issued or outstanding as of the record date) as our common stock. We refer to our common stock together with GLIBP as our capital stock.

On March 9, 2018, pursuant to the Agreement and Plan of Reorganization, dated as of April 4, 2017, by and among Qurate Retail, Inc., a Delaware corporation formerly known as Liberty Interactive Corporation (Qurate Retail), Liberty Interactive LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Qurate Retail (Liberty LLC), and GCI Liberty, Inc., an Alaska corporation (Old GCI Liberty), as amended (the GCI Reorganization Agreement), Qurate Retail acquired a controlling equity interest in Old GCI Liberty in exchange for certain assets and liabilities of Qurate Retail's Ventures Group (Ventures Group), which controlling equity interest Qurate Retail subsequently split-off to holders of its Series A and Series B Liberty Ventures common stock (the split-off) in full redemption thereof (such transactions together with the other transactions contemplated by the GCI Reorganization Agreement, the Transactions).

Following the Transactions, our company and Qurate Retail operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other.

On March 22, 2018, Old GCI Liberty entered into an Agreement and Plan of Merger (as amended, the Reincorporation Merger Agreement) with GCI Liberty, which was then named "GCI Merger Sub, Inc." and was a direct, wholly owned subsidiary of Old GCI Liberty, providing for the merger of Old GCI Liberty with and into GCI Liberty (the Reincorporation Merger), with GCI Liberty continuing as the surviving corporation in the Reincorporation Merger and existing under the laws of the State of Delaware. Old GCI Liberty entered into the Reincorporation Merger Agreement for the limited purposes of changing Old GCI Liberty's state of incorporation from Alaska to Delaware and adopting a new certificate of incorporation and bylaws to account for certain differences in Delaware law as compared to Alaska law. On May 7, 2018, the shareholders of Old GCI Liberty approved the Reincorporation Merger Agreement at a special meeting, and the Reincorporation Merger was completed on May 10, 2018. Upon completion of the Reincorporation Merger, our company's name was changed from "GCI Merger Sub, Inc." to "GCI Liberty, Inc." and we continue to conduct the businesses and operations of Old GCI Liberty as they were previously conducted.

References to, and descriptions of, our company with respect to periods prior to May 10, 2018 relate to Old GCI Liberty, and references to, and descriptions of, our company with respect to periods after May 10, 2018 relate to GCI Liberty. Old GCI Liberty was named General Communication, Inc. prior to February 20, 2018.

GCI LIBERTY, INC. 2018 PROXY STATEMENT   |  1


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THE ANNUAL MEETING

ELECTRONIC DELIVERY

Registered stockholders may elect to receive future notices and proxy materials by e-mail. To sign up for electronic delivery, go to www.computershare.com/investor. Stockholders who hold shares through a bank, brokerage firm or other nominee may sign up for electronic delivery when voting by Internet at www.proxyvote.com, by following the prompts. Also, stockholders who hold shares through a bank, brokerage firm or other nominee may sign up for electronic delivery by contacting their nominee. Once you sign up, you will not receive a printed copy of the notices and proxy materials, unless you request them. If you are a registered stockholder, you may suspend electronic delivery of the notices and proxy materials at any time by contacting our transfer agent, Computershare, at (866) 367-6355 (outside the United States (781) 575-2879). Stockholders who hold shares through a bank, brokerage firm or other nominee should contact their nominee to suspend electronic delivery.

TIME, PLACE AND DATE

The annual meeting of stockholders is to be held at 8:00 a.m., local time, on June 25, 2018, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5900.

PURPOSE

At the annual meeting, you will be asked to consider and vote on each of the following:

You may also be asked to consider and vote on such other business as may properly come before the annual meeting, although we are not aware at this time of any other business that might come before the annual meeting.

QUORUM

In order to conduct the business of the annual meeting, a quorum must be present. This means that the holders of at least a majority of the aggregate voting power represented by the shares of our capital stock outstanding on the record date and entitled to vote at the annual meeting must be represented at the annual meeting either in person or by proxy. For purposes of determining a quorum, your shares will be included as represented at the meeting even if you indicate on your proxy that you abstain from voting. If a broker, who is a record holder of shares, indicates on a form of proxy that the broker does not have discretionary authority to vote those shares on a particular proposal or proposals, or if those shares are voted in circumstances in which proxy authority is defective or has been withheld, those shares (broker non-votes) will nevertheless be treated as present for purposes of determining the presence of a quorum. See "—Voting Procedures for Shares Held in Street Name—Effect of Broker Non-Votes" below.

WHO MAY VOTE

Holders of shares of GLIBA, GLIBB and GLIBP, as recorded in our stock register as of 5:00 p.m., New York City time, on May 14, 2018 (such date and time, the record date for the annual meeting), will be entitled to notice of the annual meeting and to vote at the annual meeting or any adjournment or postponement thereof.

2   |   GCI LIBERTY, INC. 2018 PROXY STATEMENT


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THE ANNUAL MEETING

VOTES REQUIRED

Each director nominee who receives a plurality of the combined voting power of the outstanding shares of our capital stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors at the annual meeting, voting together as a single class, will be elected to the office.

Approval of each of the auditors ratification proposal and the incentive plan proposal requires the affirmative vote of a majority of the combined voting power of the outstanding shares of our capital stock that are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class.

VOTES YOU HAVE

At the annual meeting, holders of shares of GLIBA will have one vote per share, holders of shares of GLIBB will have ten votes per share, and holders of shares of GLIBP will have one-third of one vote per share, in each case, that our records show are owned as of the record date.


RECOMMENDATION OF OUR BOARD OF DIRECTORS

Our board of directors has unanimously approved each of the proposals and recommends that you vote "FOR" the election of each director nominee and "FOR" each of the auditors ratification proposal and the incentive plan proposal.

SHARES OUTSTANDING

As of the record date, an aggregate of approximately 104,554,000 shares of GLIBA, 4,449,000 shares of GLIBB and 7,251,000 shares of GLIBP were issued and outstanding and entitled to vote at the annual meeting.

NUMBER OF HOLDERS

There were, as of the record date, 1,917, 61 and 895 record holders of GLIBA, GLIBB and GLIBP, respectively (which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or other nominees, but include each such institution as one holder).

VOTING PROCEDURES FOR RECORD HOLDERS

Holders of record of GLIBA, GLIBB and GLIBP as of the record date may vote in person at the annual meeting, by telephone or through the Internet. Alternatively, they may give a proxy by completing, signing, dating and returning the proxy card by mail. Instructions for voting by using the telephone or the Internet are printed on the proxy voting instructions attached to the proxy card. In order to vote through the Internet, holders should have their proxy cards available so they can input the required information from the proxy card, and log onto the Internet website address shown on the proxy card. When holders log onto the Internet website address, they will receive instructions on how to vote their shares. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a personal identification number, which will be provided to each voting stockholder separately. Unless subsequently revoked, shares of our capital stock represented by a proxy submitted as described herein and received at or before the annual meeting will be voted in accordance with the instructions on the proxy.

YOUR VOTE IS IMPORTANT. It is recommended that you vote by proxy even if you plan to attend the annual meeting. You may change your vote at the annual meeting.

If you submit a properly executed proxy without indicating any voting instructions as to a proposal enumerated in the Notice of Annual Meeting of Stockholders, the shares represented by the proxy will be voted "FOR" the election of each director nominee and "FOR" each of the auditors ratification proposal and the incentive plan proposal.

GCI LIBERTY, INC. 2018 PROXY STATEMENT   |  3


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If you submit a proxy indicating that you abstain from voting as to a proposal, it will have no effect on the election of directors proposal and will have the same effect as a vote "AGAINST" each of the other proposals.

If you do not submit a proxy or you do not vote in person at the annual meeting, your shares will not be counted as present and entitled to vote for purposes of determining a quorum, and your failure to vote will have no effect on determining whether any of the proposals are approved (if a quorum is present).

VOTING PROCEDURES FOR SHARES HELD IN STREET NAME

General. If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee when voting your shares or to grant or revoke a proxy. The rules and regulations of the New York Stock Exchange and The Nasdaq Stock Market LLC (Nasdaq) prohibit brokers, banks and other nominees from voting shares on behalf of their clients with respect to numerous matters, including, in our case, all of the proposals described in this proxy statement other than the auditors ratification proposal. Accordingly, to ensure your shares held in street name are voted on these matters, we encourage you to provide promptly specific voting instructions to your broker, bank or other nominee.

Effect of Broker Non-Votes. Broker non-votes are counted as shares of our capital stock present and entitled to vote for purposes of determining a quorum but will have no effect on any of the proposals. You should follow the directions your broker, bank or other nominee provides to you regarding how to vote your shares of GLIBA, GLIBB or GLIBP or how to change your vote or revoke your proxy.

REVOKING A PROXY

If you submitted a proxy prior to the start of the annual meeting, you may change your vote by voting in person at the annual meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to GCI Liberty, Inc., Proxy Services, c/o Computershare Investor Services, P.O. Box 505008, Louisville, Kentucky 40233-9814. Any signed proxy revocation or later-dated proxy must be received before the start of the annual meeting. In addition, you may change your vote through the Internet or by telephone (if you originally voted by the corresponding method) not later than 2:00 a.m., New York City time, on June 25, 2018.

Your attendance at the annual meeting will not, by itself, revoke a prior vote or proxy from you.

If your shares are held in an account by a broker, bank or other nominee, you should contact your nominee to change your vote or revoke your proxy.

SOLICITATION OF PROXIES

We are soliciting proxies by means of our proxy statement and our annual report (together, the proxy materials) on behalf of our board of directors. In addition to this mailing, our employees may solicit proxies personally or by telephone. We pay the cost of soliciting these proxies. We also reimburse brokers and other nominees for their expenses in sending paper proxy materials to you and getting your voting instructions.

If you have any further questions about voting or attending the annual meeting, please contact GCI Liberty Investor Relations at (833) 618-8602.

OTHER MATTERS TO BE VOTED ON AT THE ANNUAL MEETING

Our board of directors is not currently aware of any business to be acted on at the annual meeting other than that which is described in the Notice of Annual Meeting of Stockholders and this proxy statement. If, however, other matters are properly brought to a vote at the annual meeting, the persons designated as proxies will have discretion to vote or to act on these matters according to their best judgment. In the event there is a proposal to adjourn or postpone the annual meeting, the persons designated as proxies will have discretion to vote on that proposal.

4   |   GCI LIBERTY, INC. 2018 PROXY STATEMENT


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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information concerning shares of our capital stock beneficially owned by each person or entity known by us to own more than five percent of the outstanding shares of each series of our capital stock. All of such information is based on publicly available filings, unless otherwise known to us from other sources.

Unless otherwise indicated, the security ownership information is given as of March 31, 2018 and, in the case of percentage ownership information, is based upon (1) 104,549,667 shares of GLIBA, (2) 4,455,208 shares of GLIBB and (3) 7,251,398 shares of GLIBP, in each case, outstanding on that date, assuming the conversion on a one-for-one basis of shares of Old GCI Liberty capital stock for shares of our capital stock pursuant to the Reincorporation Merger. The percentage voting power is presented in the table below on an aggregate basis for all shares of our capital stock. References in this section to GLIBA, GLIBB and GLIBP with respect to dates prior to the completion of the Reincorporation Merger on May 10, 2018 refer to Old GCI Liberty's Class A common stock, Class B common stock and Series A Cumulative Redeemable Preferred Stock, respectively. Fractional shares of Old GCI Liberty were rounded to the nearest share.

Name and Address of Beneficial Owner
  Title of
Series or
Class

  Amount and
Nature of
Beneficial
Ownership

  Percent of
Series
(%)

  Voting
Power
(%)

 

John C. Malone

  GLIBA     607,021 (1)   *     26.9  

c/o GCI Liberty, Inc.

  GLIBB     4,021,175 (1)   90.3        

12300 Liberty Boulevard

  GLIBP     10 (1)   *        

Englewood, CO 80112

                       

Gregory B. Maffei

  GLIBA   1,807,099 (1) 1.7   5.5  

c/o GCI Liberty, Inc.

  GLIBB   689,396 (1) 14.1      

12300 Liberty Boulevard

  GLIBP          

Englewood, CO 80112

                 
       

Ronald A. Duncan

  GLIBA     1,499,734 (1)   1.4     1.1  

c/o GCI Liberty, Inc.

  GLIBB                

12300 Liberty Boulevard

  GLIBP     476,107 (1)   6.6        

Englewood, CO 80112

                       

John W. Stanton and Theresa E. Gillespie

  GLIBA   1,689,009 (2) 1.6   1.2  

155 108th Avenue, N.E., Suite 400

  GLIBB        

Bellevue, WA 98004

  GLIBP   536,193 (3) 7.4    
       

The Vanguard Group

  GLIBA     7,739,903 (4)   7.4     5.2  

100 Vanguard Blvd.

  GLIBB                

Malvern, PA 19355

  GLIBP     408,485 (4)   5.6        

Black Rock, Inc.

  GLIBA   5,877,605 (5) 5.6   4.0  

40 East 52nd Street

  GLIBB        

New York, NY 10022

  GLIBP   762,153 (5) 10.5    

Dimensional Fund Advisors LP

  GLIBA     2,214,734 (6)   2.1     1.6  

Palisades West, Building One

  GLIBB     5,186 (6)   *        

6300 Bee Cave Road

  GLIBP     414,060 (6)   5.7        

Austin, TX 78746

                       

GCI LIBERTY, INC. 2018 PROXY STATEMENT   |  5


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Name and Address of Beneficial Owner
  Title of
Series or
Class

  Amount and
Nature of
Beneficial
Ownership

  Percent of
Series
(%)

  Voting
Power
(%)

 

T. Rowe Price Associates, Inc.

  GLIBA   7,298,786 (7) 7.0   4.8  

100 E. Pratt Street

  GLIBB        

Baltimore, MD 21202

  GLIBP   4,058 (7) *    

FPR Partners LLC

  GLIBA     8,108,508 (8)   7.8     5.4  

199 Fremont Street, Suite 2500

  GLIBB                

San Francisco, CA 94105

  GLIBP                
*
Less than one percent

(1)
Information with respect to shares of GCI Liberty capital stock beneficially owned by Mr. Malone, who is the Chairman of the Board and a director of GCI Liberty, Mr. Maffei, who is the President and Chief Executive Officer and a director of GCI Liberty, and Mr. Duncan, who is a director of GCI Liberty, is also set forth in "—Security Ownership of Management" below.

(2)
Based on Amendment No. 8 to the Report on Schedule 13D, filed March 12, 2018, by John W. Stanton and Theresa E. Gillespie (Stanton and Gillespie), which states that, with respect to GLIBA, Stanton and Gillespie have shared voting and shared dispositive power over 1,689,009 shares.

(3)
Based on the Report on Schedule 13D, filed March 12, 2018, by Stanton and Gillespie, which states that, with respect to GLIBP, Stanton and Gillespie have shared voting power over 536,193 shares and shared dispositive power over 536,193 shares.

(4)
Based on Form 13F, filed February 14, 2018, by The Vanguard Group (Vanguard), which states that, (i) with respect to Qurate Retail's Series A Liberty Ventures common stock, par value $0.01 per share (LVNTA), Vanguard has sole investment discretion over 6,406,801 shares, shared investment discretion over 46,374 shares, sole voting power over 42,197 shares and shared voting power over 10,297 shares, and (ii) with respect to Old GCI Liberty's Class A common stock, no par value, which traded on Nasdaq prior to February 22, 2018 (GNCMA), Vanguard has sole investment discretion over 1,991,800 shares, shared investment discretion over 50,625 shares, sole voting power over 50,725 shares and shared voting power over 2,100 shares. As a result of the Transactions (and based on the 13F), Vanguard has, (i) with respect to GLIBA, sole investment discretion over 7,661,635 shares, shared investment discretion over 78,268 shares, sole voting power over 74,154 shares and shared voting power over 11,620 shares, and (ii) with respect to GLIBP, sole investment discretion over 398,360 shares, shared investment discretion over 10,125 shares, sole voting power over 10,145 shares and shared voting power over 420 shares.

(5)
Based on Form 13F, filed February 9, 2018, by Black Rock, Inc. (Black Rock), which states that, (i) with respect to LVNTA, Black Rock has sole investment discretion over 3,476,822 shares and sole voting power over 3,176,752 shares and (ii) with respect to GNCMA, Black Rock has sole investment discretion over 3,810,767 shares and sole voting power over 3,752,553 shares. As a result of the Transactions (and based on the 13F), Black Rock has, (i) with respect to GLIBA, sole investment discretion over 5,877,605 shares and sole voting power over 5,540,860 shares, and (ii) with respect to GLIBP, sole investment discretion over 762,153 shares and sole voting power over 750,511 shares.

(6)
Based on Form 13F, filed February 12, 2018, by Dimensional Fund Advisors LP (Dimensional), which states that, (i) with respect to LVNTA, Dimensional has shared investment discretion over 910,444 shares and sole voting power over 852,839 shares, (ii) with respect to Qurate Retail's Series B Liberty Ventures common stock, par value $0.01 per share, Dimensional has sole investment discretion and sole voting power over 5,186 shares, and (iii) with respect to GNCMA, Dimensional has sole investment discretion over 2,070,302 shares and sole voting power over 1,974,747 shares. As a result of the Transactions, Dimensional has, (i) with respect to GLIBA, sole investment discretion over 1,304,290 shares, shared investment discretion over 910,444 shares and sole voting power over 2,096,930 shares, (ii) with respect to GLIBB, sole investment discretion and sole voting power over 5,186 shares and (iii) with respect to GLIBP, sole investment discretion over 414,060 shares and sole voting power over 394,949 shares.

(7)
Based on Form 13F, filed February 14, 2018, by T. Rowe Price Associates, Inc. (T. Rowe), which states, (i) with respect to LVNTA, T. Rowe has sole investment discretion over 7,286,003 shares and sole voting power over 1,501,862 shares and (ii) with respect to GNCMA, has sole investment discretion over 20,290 shares and sole voting power over 9,570 shares. As a result of the Transactions (and based on the 13F), T. Rowe has, (i) with respect to GLIBA, sole investment discretion over 7,298,786 shares and sole voting power over 1,507,891 shares, and (ii) with respect to GLIBP, sole investment discretion over 4,058 shares and sole voting power over 1,914 shares.

(8)
Based on Form 13F, filed February 14, 2018, by FPR Partners, LLC (FPR), which states that FPR has sole investment discretion and sole voting power over 8,108,508 LVNTA shares. As a result of the Transactions, FPR has sole investment discretion and sole voting power over 8,108,508 GLIBA shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information with respect to the ownership by each of GCI Liberty's current directors and executive officers, the Named Executive Officers (as defined herein) and by all of GCI Liberty's

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

current directors and executive officers as a group of shares of GLIBA, GLIBB, and GLIBP. The security ownership information with respect to the shares of our capital stock is given as of March 9, 2018 for the Named Executive Officers and as of March 31, 2018 for GCI Liberty's current directors and executive officers, and, in the case of percentage ownership information, is based upon (1) 104,549,667 shares of GLIBA, (2) 4,455,208 shares of GLIBB and (3) 7,251,398 shares of GLIBP, in each case, outstanding on that date, assuming the conversion on a one-for-one basis of shares of Old GCI Liberty capital stock for shares of our capital stock pursuant to the Reincorporation Merger. The percentage voting power is presented in the table below on an aggregate basis for all shares of our capital stock. References in this section to GLIBA, GLIBB and GLIBP with respect to dates prior to the consummation of the Reincorporation Merger on May 10, 2018 refer to Old GCI Liberty's Class A common stock, Class B common stock and Series A Cumulative Redeemable Preferred Stock, respectively. Fractional shares of Old GCI Liberty are rounded to the nearest share.

Shares of restricted stock that have been granted pursuant to GCI Liberty's incentive plans are included in the outstanding share numbers, for purposes of the table below. Shares of capital stock issuable upon exercise or conversion of options, warrants and convertible securities that were exercisable or convertible on or within 60 days after March 31, 2018 are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of that person and for the aggregate percentage owned by the directors and executive officers as a group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other individual person. For purposes of the following presentation, beneficial ownership of shares of GLIBB, though convertible on a one-for-one basis into shares of GLIBA, are reported as beneficial ownership of GLIBB only, and not as beneficial ownership of GLIBA. So far as is known, the persons indicated below have sole voting and dispositive power with respect to the shares indicated as owned by them, except as otherwise stated in the notes to the table.

The number of shares indicated as owned by the persons in the table includes interests in shares held by the Liberty Media 401(k) Savings Plan as of March 31, 2018. The shares held by the trustee of the Liberty Media 401(k) Savings Plan for the benefit of these persons are voted as directed by such persons.

Name
Title of
Series or
Class

Amount and Nature of
Beneficial Ownership
(in thousands)

Percent of
Series
(%)

Voting
Power
(%)

 
John C. Malone GLIBA 607 (1)(2) * 26.9  

Chairman of the Board and

GLIBB 4,021 (1)(3) 90.3    

Director

GLIBP ** *    

Gregory B. Maffei

GLIBA 1,807 (4)(5)(6)                 1.7 5.5  

President, Chief Executive

GLIBB 689 (5) 14.1  

Officer and Director

GLIBP  

Ronald A. Duncan

GLIBA 1,500 (7) 1.4 1.1  

Director, President and

GLIBB    

Chief Executive Officer,

GLIBP 476 (7) 6.6    

GCI Holdings, LLC

         
Gregg L. Engles GLIBA  

Director

GLIBB  
GLIBP  
Donne F. Fisher GLIBA 57 * *  

Director

GLIBB ** *    
  GLIBP 8 *    

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Name
Title of
Series or
Class

Amount and Nature of
Beneficial Ownership
(in thousands)

Percent of
Series
(%)

Voting
Power
(%)

 
Richard R. Green GLIBA ** (8) * *  

Director

GLIBB  
GLIBP  
Sue Ann Hamilton GLIBA ** * *  

Director

GLIBB    
  GLIBP    
Richard N. Baer GLIBA 18 (5) * *  

Chief Legal Officer

GLIBB  
GLIBP  
Mark D. Carleton GLIBA 50 (5) * *  

Chief Financial Officer

GLIBB    

GLIBP    
Albert E. Rosenthaler GLIBA 95 (4)(5) * *  

Chief Corporate Development

GLIBB  

Officer

GLIBP  
Peter J. Pounds GLIBA 118 * *  

Former Senior Vice President,

GLIBB    

Chief Financial Officer and

GLIBP 37 *    

Secretary of Old GCI Liberty

         
Martin E. Cary GLIBA 97 * *  

Former Senior Vice President and

GLIBB  

General Manager—Business of

GLIBP 31 *  

Old GCI Liberty

         
Gregory E. Chapados GLIBA 333 (9) * *  

Former President and Chief

GLIBB    

Operating Officer of Old GCI

GLIBP 106 (9) *    

Liberty

         
Tina M. Pidgeon GLIBA 106 * *  

Former Senior Vice President,

GLIBB  

Chief Compliance Officer,

GLIBP 34 *  

General Counsel and

         

Governmental Affairs of

         

Old GCI Liberty

         
All directors and executive officers GLIBA 4.134 (1)(2)(4)(5)(6)(7)(8)(9) 3.9 32.8  
(as a group (10 persons)) GLIBB 4,711 (1)(3)(5) 96.2    
  GLIBP 484 (7)(9) 6.7    
*
Less than one percent

**
Less than 1,000 shares

(1)
Includes 79,243 GLIBA shares and 123,847 GLIBB shares held by Mrs. Malone, as to which shares Mr. Malone has disclaimed beneficial ownership.

(2)
Includes (i) 410,146 GLIBA shares pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility extended by Fidelity and (ii) 117,600 GLIBA shares pledged to Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in connection with margin loan facilities extended by Merrill Lynch.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(3)
Includes 66,683 GLIBB shares held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malone's adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held by the trusts and has disclaimed beneficial ownership of the shares held by the trusts.

(4)
Includes shares held in the Liberty Media 401(k) Savings Plan as follows:
   
  GLIBA
   
 

Gregory B. Maffei

    870    
 

Albert E. Rosenthaler

  1,845    
 

Total

    2,715    
(5)
Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options exercisable within 60 days after March 31, 2018.
   
  GLIBA
  GLIBB
   
 

Richard N. Baer

    2,659        
 

Mark D. Carleton

  30,418      
 

Gregory B. Maffei

    873,998     443,001    
 

Albert E. Rosenthaler

  44,111      
 

Total

    951,186     443,001    
(6)
Includes 574,210 GLIBA shares held by a grantor retained annuity trust.

(7)
Includes the following: (a) 1,833 shares of GLIBA and 582 shares of GLIBP allocated to Mr. Duncan under the Employee Stock Purchase Plan adopted by Old GCI Liberty in January 1987 (the GCI 401(k) Plan), formerly known as the Stock Purchase Plan; (b) 1,419,021 shares of GLIBA and 450,484 shares of GLIBP to which Mr. Duncan has a direct pecuniary interest (and for which 1,310,755 shares of GLIBA and 416,111 shares of GLIBP are pledged as security); (c) 12,600 shares of GLIBA and 4,000 shares of GLIBP held by Missy, LLC, which is 25% owned by Mr. Duncan, 25% owned by Dani Bowman, Mr. Duncan's wife, and 50% owned by a trust of which Mr. Duncan's daughter is the 50% beneficiary and for which Mr. Duncan is the General Manager and has voting and dispositive power; (d) 9,450 shares of GLIBA and 3,000 shares of GLIBP owned by the Neoma Lowndes Trust which Ms. Miller is a 50% beneficiary and for which Mr. Duncan is the trustee with sole voting and dispositive power and (e) 56,830 shares of GLIBA and 18,041 shares of GLIBP held by Dani Bowman, of which Mr. Duncan disclaims beneficial ownership. Does not include 40,195 shares of GLIBA and 12,760 shares of GLIBP held by Amanda Miller, with respect to which Mr. Duncan disclaims beneficial ownership (Ms. Miller is Mr. Duncan's daughter).

(8)
Includes 354 shares of GLIBA held by Dr. Green's spouse.

(9)
Includes 8,009 GLIBA shares and 2,543 GLIBP shares held under the GCI 401(k) Plan.

CHANGES IN CONTROL

We know of no arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of our company.

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PROPOSALS OF OUR BOARD

The following proposals will be presented at the annual meeting by our board of directors.

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

BOARD OF DIRECTORS

Our board of directors currently consists of seven directors. Our directors, whose terms will expire at the 2018 annual meeting, are John C. Malone, Gregory B. Maffei, Ronald A. Duncan, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton. These directors are nominated for election to our board to serve as directors in the classes and for the terms described below, and we have been informed that each of these directors is willing to serve as a director of our company. If any nominee should decline election or should become unable to serve as a director of our company for any reason before election at the annual meeting, votes will be cast by the persons appointed as proxies for a substitute nominee, if any, designated by the board of directors.

The director nominees are being nominated for election to our board of directors to serve in the following classes, effective upon their respective election to our board of directors:

Class I
John C. Malone
Richard R. Green
  Class II
Ronald A. Duncan
Donne F. Fisher
  Class III
Gregory B. Maffei
Sue Ann Hamilton
Gregg L. Engles

The term of office of the Class I directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in 2019. The term of office of the Class II directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in 2020. The term of office of the Class III directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in 2021. Commencing with the election of directors at the 2019 annual meeting of our stockholders, at each annual meeting of our stockholders, the successors of that class of directors whose term expires at that meeting will be elected to hold office for a term expiring at the annual meeting of our stockholders held in the third year following the year of their election. The directors of each class will hold office until the expiration of the term of such class and their respective successors are elected and qualified or until such director's earlier death, resignation or removal.

The following lists the nominees for election as directors at the annual meeting and includes as to each person how long such person has been a director of our company, such person's professional background, other public company directorships and other factors considered in the determination that such person possesses the requisite qualifications and skills to serve as a member of our board of directors. The number of shares of our capital stock beneficially owned by each director is set forth in this proxy statement under the caption "Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management."

Nominees for Election as Class I Directors

John C. Malone

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PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

Richard R. Green

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Nominees for Election as Class II Directors

Ronald A. Duncan

Donne F. Fisher

Nominees for Election as Class III Directors

Gregory B. Maffei

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PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

Sue Ann Hamilton

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Gregg L. Engles

VOTE AND RECOMMENDATION

A plurality of the combined voting power of the outstanding shares of our capital stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors at the annual meeting, voting together as a single class, is required to elect each of John C. Malone, Gregory B. Maffei, Ronald A. Duncan, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton as a member of our board of directors.

   
GRAPHIC
  Our board of directors unanimously recommends a vote "FOR" the election of each nominee to our board of directors.    

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PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

We are asking our stockholders to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2018.

Even if the selection of KPMG LLP is ratified, the audit committee of our board of directors in its discretion may direct the appointment of a different independent accounting firm at any time during the year if our audit committee determines that such a change would be advisable. In the event our stockholders fail to ratify the selection of KPMG LLP, our audit committee will consider it as a direction to select other auditors for the year ending December 31, 2018.

A representative of KPMG LLP is expected to be available to answer appropriate questions at the annual meeting and will have the opportunity to make a statement if he or she so desires.

CHANGE IN INDEPENDENT AUDITORS

Grant Thornton LLP (GT) was Old GCI Liberty's independent registered public accounting firm for the fiscal year ended December 31, 2017. On March 9, 2018, GT was replaced as our independent registered public accounting firm by KPMG LLP. The replacement of GT and approval of the appointment of KPMG LLP as our independent registered public accounting firm was approved by the audit committee of our board of directors on March 9, 2018 in connection with the closing of the Transactions and on May 11, 2018 following the completion of the Reincorporation Merger. For accounting purposes, the Transactions are treated as a reverse acquisition and, as such, the historical financial statements of the accounting acquirer, which will be audited by KPMG LLP for the fiscal years ended December 31, 2015, 2016 and 2017, have become our historical financial statements.

GT's audit report on Old GCI Liberty's financial statements for the fiscal years ended December 31, 2016 and 2017, did not contain an adverse opinion or disclaimer of opinion, nor was it qualified as to audit scope or accounting principles. During the fiscal years ended December 31, 2016 and 2017, (a) there were no "disagreements" (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between us and GT on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to GT's satisfaction, would have caused GT to make reference in connection with GT's opinion to the subject matter of the disagreement; and (b) there were no "reportable events" as the term is described in Item 304(a)(1)(v) of Regulation S-K.

We provided GT with a copy of the disclosures made in a Current Report on Form 8-K filed with the SEC on March 14, 2018 and requested that GT furnish us with a letter addressed to the Securities and Exchange Commission (SEC) stating whether they agree with the above statements. The letter is filed as Exhibit 16.1 to that Current Report on Form 8-K.

During the two most recent fiscal years and the interim periods preceding the engagement, and through the date of this proxy statement, neither we nor anyone on our behalf has previously consulted with KPMG LLP regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that KPMG LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph 304(a)(1)(v) of Regulation S-K).

A representative of GT is expected to be available to answer appropriate questions at the annual meeting and will have the opportunity to make a statement if he or she so desires.

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AUDIT FEES AND ALL OTHER FEES

The following table presents fees for professional audit services rendered by GT for the audit of Old GCI Liberty's consolidated financial statements for 2017 and 2016 and fees billed for other services rendered by GT.

 
  2017
  2016
 

Audit fees(1)

  $ 1,435,101     1,406,817  

Audit related fees(2)

  134,750   28,875  

Audit and audit related fees

    1,569,851     1,435,692  

Tax fees(3)

  124,693   148,397  

Total fees

  $ 1,694,544     1,584,089  

             
(1)
Consists of fees for Old GCI Liberty's annual financial statement audit, quarterly financial statement reviews, reviews of other filings by the company with the SEC, audit of Old GCI Liberty's internal control over financial reporting and for services that are normally provided by an auditor in connection with statutory and regulatory filings or engagements.

(2)
Consists of fees for Form S-4 filings and the audit of the GCI 401(k) Plan and review of the related annual report on Form 11-K filed with the SEC.

(3)
Consists of fees for review of Old GCI Liberty's state and federal income tax returns and consultation on various tax advice and tax planning matters.

Our audit committee has considered whether the provision of services by KPMG LLP to our company other than auditing is compatible with KPMG LLP maintaining its independence and believes that the provision of such other services is compatible with KPMG LLP maintaining its independence.

POLICY ON PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT AUDITOR

All services provided by our independent auditor during 2017 were approved in accordance with the terms of Old GCI Liberty's pre-approval policy that was in place during 2017, which provided as follows:

VOTE AND RECOMMENDATION

The affirmative vote of a majority of the combined voting power of the outstanding shares of our capital stock that are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class, is required to approve the auditors ratification proposal.

   
GRAPHIC
  Our board of directors unanimously recommends a vote
"FOR" the auditors ratification proposal.
   

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PROPOSAL 3—INCENTIVE PLAN PROPOSAL

The following is a description of the material provisions of the GCI Liberty, Inc. 2018 Omnibus Incentive Plan (the 2018 incentive plan). The summary that follows is not intended to be complete, and we refer you to the copy of the 2018 incentive plan set forth as Annex A to this proxy statement for a complete statement of its terms and provisions.

KEY FEATURES OF THE 2018 INCENTIVE PLAN

GCI LIBERTY, INC. 2018 OMNIBUS INCENTIVE PLAN

Our board determined to adopt the 2018 incentive plan in connection with the Transactions. If the 2018 incentive plan is approved, it will be the only incentive plan under which awards will be made, and no additional awards will be made under the General Communication, Inc. Amended and Restated 1986 Stock Option Plan (Stock Option Plan). In addition, only the eight million shares reserved under the 2018 incentive plan (as described below) will be available for grant. The 2018 incentive plan is structured as an omnibus plan under which awards may be made to our company's officers, employees, independent contractors and nonemployee directors and employees of Liberty Media or Qurate Retail providing services to us. A summary of certain terms of the 2018 incentive plan is set forth below.

The 2018 incentive plan is administered by the compensation committee of our board of directors, other than awards granted to nonemployee directors which may be administered by our full board of directors or the compensation committee. The 2018 incentive plan is designed to provide additional remuneration to eligible officers and employees of our company, our nonemployee directors and independent contractors and employees of Liberty Media or Qurate Retail providing services to us and to encourage their investment in our capital stock, thereby increasing their proprietary interest in our business. The 2018 incentive plan is also intended to (1) attract persons of exceptional ability to become our officers and employees, and (2) induce directors, independent contractors and employees of Liberty Media or Qurate Retail providing services to us to provide services to us. Such persons will be eligible to participate in and may be granted awards under the 2018 incentive plan. The number of individuals who will receive awards under the 2018 incentive plan will vary from year to year and will depend on various factors, such as the number of promotions and our hiring needs during the year and exceptional or extraordinary performance. Although we cannot predict the number of future award recipients, we estimate that there will be approximately four nonemployee directors of our company and 500 employees of our company (including employees of GCI Holdings and its subsidiaries) who will be eligible to receive awards under the 2018 incentive plan. We do not currently anticipate granting any awards under the 2018 incentive plan to independent contractors of our company. For the avoidance of doubt, employees and

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nonemployee directors of any of our affiliates may not participate in the 2018 incentive plan based solely upon their status at any such affiliate.

Under the 2018 incentive plan, the compensation committee may grant non-qualified stock options, SARs, restricted shares, RSUs, cash awards, performance awards or any combination of the foregoing (as used in this description of the 2018 incentive plan, collectively, awards). The maximum number of shares of our common stock with respect to which awards may be granted under the 2018 incentive plan is 8 million shares, subject to anti-dilution and other adjustment provisions of the 2018 incentive plan. With limited exceptions, no employee or independent contractor will be granted in any calendar year awards under the 2018 incentive plan covering more than 1.5 million shares of our common stock, subject to anti-dilution and other adjustment provisions of the 2018 incentive plan. In addition, no employee or independent contractor may receive payment for cash awards during any calendar year aggregating in excess of $10 million. No nonemployee director may be granted during any calendar year awards having a value (as determined on the grant date of such award) that would be in excess of $3 million.

Shares of our common stock issuable pursuant to awards made under the 2018 incentive plan will be made available from either authorized but unissued shares of our common stock or shares of our common stock that we have issued but reacquired, including shares purchased in the open market. Shares of our common stock that are subject to (i) any award granted under the 2018 incentive plan that expires, terminates or is cancelled or annulled for any reason without having been exercised, (ii) any award of any SARs granted under the 2018 incentive plan the terms of which provide for settlement in cash, and (iii) any award of restricted shares or RSUs granted under the 2018 incentive plan that shall be forfeited prior to becoming vested, will once again be available for issuance under the 2018 incentive plan. Shares of our common stock that are (i) not issued or delivered as a result of the net settlement of an outstanding option or SAR, (ii) used to pay the purchase price or withholding taxes relating to an outstanding award, or (iii) repurchased in the open market with the proceeds of an option purchase price will not again be made available for issuance under the 2018 incentive plan.

Subject to the provisions of the 2018 incentive plan, the compensation committee is authorized to establish, amend and rescind such rules and regulations as it deems necessary or advisable for the proper administration of the 2018 incentive plan and to take such other action in connection with or in relation to the 2018 incentive plan as it deems necessary or advisable.

Unless otherwise determined by the compensation committee and expressly provided for in an agreement, awards are not transferrable except as permitted by will or the laws of descent and distribution or pursuant to a domestic relations order.

Stock Options. Non-qualified stock options awarded under the 2018 incentive plan will entitle the holder to purchase a specified number of shares of a series of our common stock at a specified exercise price subject to the terms and conditions of the applicable option grant. The exercise price of an option awarded under the 2018 incentive plan may be no less than the fair market value of the shares of the applicable series of our common stock as of the day the option is granted. The term of an option may not exceed ten years; however, if the term of an option expires when trading in our common stock is prohibited by law or our company's policy, the option will expire on the 30th day after the expiration of such prohibition. The compensation committee will determine, and each individual award agreement will provide, (1) the series and number of shares of our common stock subject to the option, (2) the per share exercise price, (3) whether that price is payable in cash, by check, by promissory note, in whole shares of any series of our common stock, by the withholding of shares of our common stock issuable upon exercise of the option, by cashless exercise, or any combination of the foregoing, (4) other terms and conditions of exercise, (5) restrictions on transfer of the option and (6) other provisions not inconsistent with the 2018 incentive plan. Dividend equivalents will not be paid with respect to any stock options.

Stock Appreciation Rights. A SAR awarded under the 2018 incentive plan entitles the recipient to receive a payment in stock or cash equal to the excess of the fair market value (on the day the SAR is exercised) of a share of the applicable series of our common stock with respect to which the SAR was granted over the base price specified in the grant. A SAR may be granted to an option holder with respect to all or a portion of the shares of our common stock subject to a related stock option (a tandem SAR) or granted separately to an eligible person (a free standing SAR). Tandem SARs are exercisable only at the time and to the extent that the related stock option is exercisable. Upon the exercise or termination of the related stock option, the related

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tandem SAR will be automatically cancelled to the extent of the number of shares of our common stock with respect to which the related stock option was so exercised or terminated. The base price of a tandem SAR is equal to the exercise price of the related stock option. Free standing SARs are exercisable at the time and upon the terms and conditions provided in the relevant award agreement. The term of a free standing SAR may not exceed ten years; however, if the term of a free standing SAR expires when trading in our common stock is prohibited by law or our company's policy, the free standing SAR will expire on the 30th day after the expiration of such prohibition. The base price of a free standing SAR may be no less than the fair market value of a share of the applicable series of our common stock as of the day the SAR is granted. Dividend equivalents will not be paid with respect to any SARs.

Restricted Shares and RSUs. Restricted shares are shares of our common stock that become vested and may be transferred upon completion of the restriction period. The compensation committee will determine, and each individual award agreement will provide, (1) the price, if any, to be paid by the recipient of the restricted shares, (2) whether dividends or distributions paid with respect to restricted shares will be retained by us during the restriction period (retained distributions), (3) whether the holder of the restricted shares may be paid a cash amount any time after the shares become vested, (4) the vesting date or vesting dates (or basis of determining the same) for the award and (5) other terms and conditions of the award. The holder of an award of restricted shares, as the registered owner of such shares, may vote the shares.

A RSU is a unit evidencing the right to receive, in specified circumstances, one share of the specified series of our common stock, or, in the discretion of the company, its cash equivalent, subject to a restriction period or forfeiture conditions. The compensation committee will be authorized to award RSUs based upon the fair market value of shares of any series of our common stock under the 2018 incentive plan. The compensation committee will determine, and each individual award agreement will provide, the terms, conditions, restrictions, vesting requirements and payment rules for awards of RSUs, including whether the holder will be entitled to dividend equivalent payments with respect to the RSUs. RSUs will be issued at the beginning of the restriction period and holders will not be entitled to shares of our common stock covered by RSU awards until such shares are issued to the holder at the end of the restriction period.

Upon the applicable vesting date, all or the applicable portion of restricted shares or RSUs will vest, any retained distributions or unpaid dividend equivalents with respect to the restricted shares or RSUs will vest to the extent that the awards related thereto have vested, and any cash amount to be received by the holder with respect to the restricted shares or RSUs will become payable, all in accordance with the terms of the individual award agreement. The compensation committee may permit a holder to elect to defer delivery of any restricted shares or RSUs that become vested and any related cash payments, retained distributions or dividend equivalents, provided that such deferral elections are made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the Code).

Cash Awards. The compensation committee will also be authorized to provide for the grant of cash awards under the 2018 incentive plan. A cash award is a bonus paid in cash that may be based upon the attainment of one or more performance goals over a performance period established by the compensation committee. The terms, conditions and limitations applicable to any cash awards will be determined by the compensation committee.

Performance Awards. At the discretion of the compensation committee, any of the above-described awards may be designated as a performance award. All cash awards shall be designated as performance awards. Performance awards are contingent upon performance measures applicable to a particular period, as established by the compensation committee and set forth in individual agreements, based upon any one or more of the following business criteria:

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Performance measures may apply to the award recipient, to one or more business units, divisions or subsidiaries of our company or an applicable sector of our company, or to our company as a whole. Goals may also be based on performance relative to a peer group of companies. A performance measure need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). If the compensation committee determines that the performance award may be granted and administered in a manner that preserves the deductibility of the compensation resulting from such award in accordance with Section 162(m) of the Code and the compensation committee determines, in its discretion, that the award should be designed accordingly, then the compensation committee will follow procedures necessary to allow such award to achieve this result. For more information on Section 162(m) of the Code and the repeal of the qualified performance-based compensation exception, see "U.S. Federal Income Tax Consequences of Awards Granted under the 2018 Incentive PlanCertain Tax Code Limitations on Deductibility" below.

Awards Generally. Awards under the 2018 incentive plan may be granted either individually, in tandem or in combination with each other. Where applicable, the securities underlying, or relating to, awards granted under the 2018 incentive plan may be shares of our common stock as provided in the relevant grant. The closing price of GLIBA shares was $43.56, as of May 16, 2018. The closing price of GLIBB shares was $43.50 on May 7, 2018, the last day on which a sale occurred. Under certain conditions, including the occurrence of certain approved transactions, a board change or a control purchase (all as defined in the 2018 incentive plan), options and SARs will become immediately exercisable, and the restrictions on restricted shares and RSUs will lapse, unless individual agreements state otherwise or the compensation committee determines in connection with an approved transaction that the vesting and exercisability of awards will not accelerate because action has been taken to provide for a substantially equivalent substitute award. At the time an award is granted, the compensation committee will determine, and the relevant agreement will provide for, any vesting or early termination, upon a holder's termination of employment or service with our company, of any unvested options, SARs, RSUs or restricted shares and the period during which any vested options and SARs must be

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exercised. Unless otherwise provided in the relevant agreement, (1) no option or SAR may be exercised after its scheduled expiration date (however, if the term of an option or SAR expires when trading in our common stock is prohibited by law or our company's insider trading policy, then the term of such option or SAR shall expire on the 30th day after the expiration of such prohibition), (2) if the holder's service terminates by reason of death or disability (as defined in the 2018 incentive plan), his or her options or SARs shall remain exercisable for a period of at least one year following such termination (but not later than the scheduled expiration date) and (3) any termination of the holder's service for "cause" (as defined in the 2018 incentive plan) will result in the immediate termination of all options and SARs and the forfeiture of all rights to any restricted shares, RSUs, retained distributions, unpaid dividend equivalents and related cash amounts held by such terminated holder. If a holder's service terminates due to death or disability, options and SARs will become immediately exercisable, and the restrictions on restricted shares and RSUs will lapse and become fully vested, unless individual agreements state otherwise.

Adjustments. The number and kind of shares of our common stock that may be awarded or otherwise made subject to awards under the 2018 incentive plan, the number and kind of shares of our common stock covered by outstanding awards and the purchase or exercise price and any relevant appreciation base with respect to any of the foregoing will be subject to appropriate adjustment as the compensation committee deems equitable, in its sole discretion, in the event (1) we subdivide the outstanding shares of any series of our common stock into a greater number of shares of such series of common stock, (2) we combine the outstanding shares of any series of our common stock into a smaller number of shares of such series of common stock or (3) there is a stock dividend, extraordinary cash dividend, reclassification, recapitalization, reorganization, stock redemption, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase any series of our common stock, or any other similar corporate event (including mergers or consolidations, other than approved transactions (as defined in the 2018 incentive plan) for which other provisions are made pursuant to the 2018 incentive plan). In addition, in the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the compensation committee has the discretion to (i) provide, prior to the transaction, for the acceleration of vesting and exercisability, or lapse of restrictions, with respect to the awards, or in the case of a cash merger, termination of unexercised awards, or (ii) cancel such awards and deliver cash to holders based on the fair market value of such awards as determined by the compensation committee, in a manner that is in compliance with the requirements of Section 409A of the Code. If the purchase price of options or the base price of SARs, as applicable, is greater than the fair market value of such options or SARs, the options or SARs may be canceled for no consideration.

Amendment and Termination. The 2018 incentive plan will terminate on the fifth anniversary of the plan's effective date (which is March 9, 2018) unless earlier terminated by the compensation committee. The compensation committee may suspend, discontinue, modify or amend the 2018 incentive plan at any time prior to its termination, except that outstanding awards may not be amended to reduce the purchase or base price of outstanding options or SARs. However, before an amendment may be made that would adversely affect a participant who has already been granted an award, the participant's consent must be obtained.

U.S. FEDERAL INCOME TAX CONSEQUENCES OF AWARDS GRANTED UNDER THE 2018 INCENTIVE PLAN

The following is a summary of the U.S. federal income tax consequences that generally will arise with respect to awards granted under the 2018 incentive plan and with respect to the sale of any shares of our common stock acquired under the 2018 incentive plan. This general summary does not purport to be complete, does not describe any state, local or non-U.S. tax consequences, and does not address issues related to the tax circumstances of any particular recipient of an award under the 2018 incentive plan.

Non-Qualified Stock Options; SARs. Holders will not recognize taxable income upon the grant of a non-qualified stock option or a SAR. Upon the exercise of a non-qualified stock option or a SAR, the holder will recognize ordinary income (subject to withholding, if applicable) in an amount equal to the excess of (1) the fair market value on the date of exercise of the shares received over (2) the exercise price or base price (if any) he or she paid for the shares. The holder will generally have a tax basis in any shares of our common stock

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received pursuant to the exercise of a SAR, or pursuant to the cash exercise of a non-qualified stock option, that equals the fair market value of such shares on the date of exercise. The disposition of the shares of our common stock acquired upon exercise of a non-qualified stock option will ordinarily result in capital gain or loss. We are entitled to a deduction in an amount equal to the income recognized by the holder upon the exercise of a non-qualified stock option or SAR.

Cash Awards; RSUs; Restricted Shares. A holder will recognize ordinary compensation income upon receipt of cash pursuant to a cash award or, if earlier, at the time such cash is otherwise made available for the holder to draw upon it, and we will have a corresponding deduction for federal income tax purposes, subject to certain limits on deductibility discussed below. A holder will not have taxable income upon the grant of a RSU but rather will generally recognize ordinary compensation income at the time the award is settled in an amount equal to the fair market value of the shares received, at which time we will have a corresponding deduction for federal income tax purposes, subject to certain limits on deductibility discussed below.

Generally, a holder will not recognize taxable income upon the grant of restricted shares, and we will not be entitled to any federal income tax deduction upon the grant of such award. The value of the restricted shares will generally be taxable to the holder as compensation income in the year or years in which the restrictions on the shares of common stock lapse. Such value will equal the fair market value of the shares on the date or dates the restrictions terminate. A holder, however, may elect pursuant to Section 83(b) of the Code to treat the fair market value of the shares subject to the restricted share award on the date of such grant as compensation income in the year of the grant of the restricted share award. The holder must make such an election pursuant to Section 83(b) of the Code within 30 days after the date of grant. If such an election is made and the holder later forfeits the restricted shares to us, the holder will not be allowed to deduct, at a later date, the amount such holder had earlier included as compensation income. In any case, we will receive a deduction for federal income tax purposes corresponding in amount to the amount of compensation included in the holder's income in the year in which that amount is so included, subject to certain limits on deductibility discussed below.

A holder who is an employee will be subject to withholding for federal, and generally for state and local, income taxes at the time the holder recognizes income under the rules described above with respect to the cash or the shares of our common stock received pursuant to awards. Dividends that are received by a holder prior to the time that the restricted shares are taxed to the holder under the rules described in the preceding paragraph are taxed as additional compensation, not as dividend income. The tax basis of a holder in the shares of our common stock received will equal the amount recognized by the holder as compensation income under the rules described in the preceding paragraph, and the holder's holding period in such shares will commence on the date income is so recognized.

Certain Tax Code Limitations on Deductibility. In order for us to deduct the amounts described above, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. The ability to obtain a deduction for awards under the 2018 incentive plan could also be limited by Section 280G of the Code, which provides that certain excess parachute payments made in connection with a change in control of an employer are not deductible. The ability to obtain a deduction for amounts paid under the 2018 incentive plan could also be affected by Section 162(m) of the Code, which limits the deductibility, for U.S. federal income tax purposes, of compensation paid to certain employees to $1 million during any taxable year. Following the enactment of the Tax Cuts and Jobs Act of 2017, beginning with the 2018 calendar year, the executives potentially affected by the limitations of Section 162(m) of the Code has been expanded and there is no longer any exception for qualified performance-based compensation. The transition rules in effect for binding contracts in effect on November 2, 2017 provides that performance-based awards will maintain their exemption from the $1 million annual deduction limitation for so long as such contracts are not materially modified, even though the compensation deduction for such awards would not occur until after 2017. However, portions of the compensation we pay to the named executive officers may not be deductible due to the application of Section 162(m) of the Code. Our compensation committee believes that the lost deduction on compensation payable in excess of the $1 million limitation for the named executive officers is not material relative to the benefit of being able to attract and retain talented management.

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Code Section 409A. Section 409A of the Code generally provides that any deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (1) the timing of payment, (2) the advance election of deferrals, and (3) restrictions on the acceleration of payment. Failure to comply with Section 409A of the Code may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% penalty on the participant on such deferred amounts included in the participant's income. We intend to structure awards under the 2018 incentive plan in a manner that is designed to be exempt from or comply with Section 409A of the Code.

NEW PLAN BENEFITS

Due to the nature of the 2018 incentive plan and the discretionary authority afforded the compensation committee in connection with the administration thereof, we cannot determine or predict the value, number or type of awards to be granted pursuant to the 2018 incentive plan.

Prior to the date of this proxy statement, we have granted awards of stock options under the 2018 incentive plan to purchase 4,848 shares of GLIBA to Donne F. Fisher, a nonemployee director, and 1,555 RSUs to each of Gregg L. Engles, Richard R. Green and Sue Ann Hamilton, each of whom is a nonemployee director, with respect to shares of GLIBA, which results in 7,990,487 shares of our common stock being available for future grants. The exercise price of the stock options granted to Donne F. Fisher under the 2018 incentive plan is $42.99 per share, and these options have a term of seven years.

VOTE AND RECOMMENDATION

The affirmative vote of a majority of the combined voting power of the outstanding shares of our capital stock that are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class, is required to approve the 2018 incentive plan proposal.

   
GRAPHIC
  Our board of directors unanimously recommends a vote "FOR" the approval of the GCI Liberty, Inc. 2018 Omnibus Incentive Plan.    

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EXECUTIVE OFFICERS

The following lists the executive officers of our company (other than Gregory B. Maffei, our President and Chief Executive Officer, and John C. Malone, our Chairman of the Board, who also serve as directors of our company and who are listed under "Proposal 1The Election of Directors Proposal"), their ages and a description of their business experience, including positions held with our company. All positions referenced in the table below with our company include, where applicable, positions with our predecessors.

Name   Positions

Richard N. Baer
Age: 61

 

Mr. Baer has served as Chief Legal Officer of our company since March 2018, Qurate Retail, Liberty Media, Liberty TripAdvisor and Liberty Broadband since January 2016 and Liberty Expedia since March 2016. He previously served as Senior Vice President and General Counsel of Qurate Retail and Liberty Media from January 2013 to December 2015, Liberty TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015. Previously, Mr. Baer served as Executive Vice President and Chief Legal Officer of UnitedHealth Group Incorporated from May 2011 to December 2012. He served as Executive Vice President and General Counsel of Qwest Communications International Inc. from December 2002 to April 2011 and Chief Administrative Officer from August 2008 to April 2011.

Albert E. Rosenthaler
Age: 58

 

Mr. Rosenthaler has served as Chief Corporate Development Officer of our company since March 2018, and Qurate Retail, Liberty Media, Liberty TripAdvisor, Liberty Broadband and Liberty Expedia since October 2016. He previously served as Chief Tax Officer of, Qurate Retail, Liberty Media, Liberty TripAdvisor and Liberty Broadband from January 2016 to September 2016 and Liberty Expedia from March 2016 to September 2016. He previously served as a Senior Vice President of Qurate Retail (including its predecessor) from April 2002 to December 2015, Liberty Media (including its predecessor) from May 2007 to December 2015, Liberty TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015.

Mark D. Carleton
Age: 57

 

Mr. Carleton has served as Chief Financial Officer of our company since March 2018. He previously served as Treasurer of our company from March 2018 to May 2018. He has also served as Chief Financial Officer of Qurate Retail, Liberty Media and Liberty Broadband since October 2016. He previously served as Chief Development Officer of Qurate Retail, Liberty Media, Liberty Broadband and Liberty TripAdvisor from January 2016 to September 2016, as a Senior Vice President of Qurate Retail from November 2014 to December 2015, Liberty Media from January 2013 to December 2015 and Liberty Broadband from October 2014 to December 2015, and as a Senior Vice President of predecessors of Liberty Media from December 2003 to January 2013. Prior to that time, Mr. Carleton served as a partner at KPMG LLP.

Our executive officers will serve in such capacities until their respective successors have been duly elected and have been qualified, or until their earlier death, resignation, disqualification or removal from office. There is no family relationship between any of our executive officers or directors, by blood, marriage or adoption.

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During the past ten years, none of our directors and executive officers has had any involvement in such legal proceedings as would be material to an evaluation of his or her ability or integrity.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten-percent stockholders are required by SEC regulation to furnish us with copies of all Section 16 forms they file.

Based solely on a review of the copies of the Forms 3, 4 and 5 and amendments to those forms furnished to us during our most recent fiscal year and written representations made to us by our executive officers and directors, we believe that, during the year ended December 31, 2017, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten-percent beneficial owners were met, except that Mr. Martin E. Cary inadvertently filed one late Form 4 to report a sale that occurred on January 3, 2017. Mr. Gregory F. Chapados inadvertently filed one late Form 4 to report a sale that occurred on January 9, 2017. Additionally, Ms. Tina M. Pidgeon informed us that her financial adviser engaged in transactions for her account, pursuant to an investment strategy she approved for the purposes of protecting against a decline in the value of her shares of Old GCI Liberty's common stock, which should have been reported on Forms 4. On April 25, 2017, May 22, 2017, July 10, 2017, July 24, 2017, and November 24, 2017, Ms. Pidgeon made Form 4 filings reporting all such transactions.

CODE OF ETHICS

We have adopted a code of business conduct and ethics that applies to all of our employees, directors and officers, which constitutes our "code of ethics" within the meaning of Section 406 of the Sarbanes-Oxley Act. Our code of business conduct and ethics is available on our website at www.gciliberty.com.

DIRECTOR INDEPENDENCE

It is our policy that a majority of the members of our board of directors be independent of our management. For a director to be deemed independent, our board of directors must affirmatively determine that the director has no direct or indirect material relationship with us. To assist our board of directors in determining which of our directors qualify as independent for purposes of Nasdaq rules as well as applicable rules and regulations adopted by the SEC, the nominating and corporate governance committee of our board of directors follows Nasdaq's corporate governance rules on the criteria for director independence.

Our board of directors has determined that each of Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton qualifies as an independent director of our company.

On March 9, 2018, in connection with the Transactions, all of the members of Old GCI Liberty's board of directors as of immediately prior to the completion of the Transactions (the Legacy Board), other than Ronald A. Duncan, resigned from the board of Old GCI Liberty and new individuals were appointed to the board. The Legacy Board believed that each of its members satisfied the definition of an "Independent Director," with the exception of Mr. Duncan. The term "Independent Director" as used by the Legacy Board meant an individual, other than one of Old GCI Liberty's executive officers or employees, and other than any other individual having a relationship which in the opinion of the board would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Accordingly, the Legacy Board believed, in the case of all board members other than Mr. Duncan, that each of them was an individual having a relationship which did not interfere with the exercise of independent judgment in carrying out the member's director responsibilities to Old GCI Liberty. In addition, the Legacy Board believed that the members of the Legacy Board audit committee were each an independent director as the term is defined in the Nasdaq corporate listing standards and were independent as defined by Rule 10A-3(b)(1) under the Exchange Act.

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BOARD COMPOSITION

As described above under "Proposal 1The Election of Directors Proposal," our board is comprised of directors with a broad range of backgrounds and skill sets, including in media and telecommunications, venture capital and technology. Our board is also chronologically diverse with our members' ages spanning three to four decades. For more information on our policies with respect to board candidates, see "Committees of the Board of DirectorsNominating and Corporate Governance Committee" below.

BOARD LEADERSHIP STRUCTURE

Our board has separated the positions of Chairman of the Board and Chief Executive Officer (principal executive officer). John C. Malone, one of our largest stockholders, holds the position of Chairman of the Board, leads our board and board meetings and provides strategic guidance to our Chief Executive Officer. Gregory B. Maffei, our President, holds the position of Chief Executive Officer, leads our management team and is responsible for driving the performance of our company. We believe this division of responsibility effectively assists our board in fulfilling its duties.

BOARD ROLE IN RISK OVERSIGHT

The board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant board committees. Our audit committee oversees management of financial risks and risks relating to potential conflicts of interest. Our compensation committee oversees the management of risks relating to our compensation arrangements with senior officers. Our nominating and corporate governance committee oversees risks associated with the independence of the board. These committees then provide reports periodically to the full board. The oversight responsibility of the board and its committees is enabled by management reporting processes that are designed to provide visibility to the board about the identification, assessment and management of critical risks. These areas of focus include strategic, operational, financial and reporting, succession and compensation, legal and compliance, and other risks. Our management reporting processes include regular reports from our Chief Executive Officer, which are prepared with input from our senior management team, and also include input from our Internal Audit group.

COMMITTEES OF THE BOARD OF DIRECTORS

Executive Committee

Our board of directors has established an executive committee, whose members are John C. Malone and Gregory B. Maffei. Except as specifically prohibited by the General Corporation Law of the State of Delaware, the executive committee may exercise all the powers and authority of our board of directors in the management of our business and affairs, including the power and authority to authorize the issuance of shares of our capital stock.

Compensation Committee

Our board of directors has established a compensation committee, whose chairperson is Sue Ann Hamilton and whose other members are Gregg L. Engles and Richard R. Green. Stephen M. Brett, Bridget L. Baker, Jerry A. Edgerton, Stephen R. Mooney and James M. Schneider had also served as members of the compensation committee during their tenure on the Legacy Board. See "—Director Independence" above.

The compensation committee reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and our other executive officers. The compensation committee also reviews and approves the compensation of our Chief Executive Officer, Chief Legal Officer, Chief Financial Officer and Chief Corporate Development Officer, and oversees the compensation of the chief executive officers of our non-public operating subsidiaries. For a description of Old GCI Liberty's past processes and policies for consideration and determination of executive compensation, including the role of the Chief Executive Officer and outside consultants in determining or recommending amounts and/or forms of compensation, see "Executive Compensation—Compensation Discussion and Analysis."

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Our board of directors has adopted a written charter for the compensation committee, which is available on our website at www.gciliberty.com.

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee during 2017 is or has been an officer or employee of our company, or has engaged in any related party transaction in which our company was a participant.

Nominating and Corporate Governance Committee

Our board of directors has established a nominating and corporate governance committee, whose chairman is Richard R. Green and whose other members are Gregg L. Engles and Sue Ann Hamilton. See "—Director Independence" above. All of the members of the Legacy Board other than Ronald A. Duncan had also served as members of the nominating & corporate governance committee during their tenure on the Legacy Board. See "—Director Independence" above.

The nominating and corporate governance committee identifies individuals qualified to become board members consistent with criteria established or approved by our board of directors from time to time, identifies director nominees for upcoming annual meetings, develops corporate governance guidelines applicable to our company and oversees the evaluation of our board and management.

Prior to the completion of the Reincorporation Merger, the procedures by which our shareholders could recommend candidates for director to our board of directors were governed by the restated articles of incorporation and bylaws of Old GCI Liberty and Alaska law, and we amended these procedures to comply with the General Corporation Law of Delaware, our restated certificate of incorporation and bylaws upon completion of the Reincorporation Merger.

The nominating and corporate governance committee will consider candidates for director recommended by any stockholder provided that such recommendations are properly submitted. Eligible stockholders wishing to recommend a candidate for nomination as a director should send the recommendation in writing to the Corporate Secretary, GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. Stockholder recommendations must be made in accordance with our bylaws, as discussed under "Stockholder Proposals" below, and contain the following information:

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*
Indicates a change in our procedures to recommend candidates for director as discussed above.

In connection with its evaluation, the nominating and corporate governance committee may request additional information from the proposing stockholder and the candidate. The nominating and corporate governance committee has sole discretion to decide which individuals to recommend for nomination as directors.

To be nominated to serve as a director, a nominee need not meet any specific minimum criteria. However, the nominating and corporate governance committee believes that nominees for director should possess the highest personal and professional ethics, integrity, values and judgment and should be committed to the long-term interests of our stockholders. When evaluating a potential director nominee, including one recommended by a stockholder, the nominating and corporate governance committee will take into account a number of factors, including, but not limited to, the following:

The nominating and corporate governance committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The nominating and corporate governance committee does not have a formal policy with respect to diversity; however, our board and the nominating and corporate governance committee believe that it is important that our board members represent diverse viewpoints.

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When seeking candidates for director, the nominating and corporate governance committee may solicit suggestions from incumbent directors, management, stockholders and others. After conducting an initial evaluation of a prospective nominee, the nominating and corporate governance committee will interview that candidate if it believes the candidate might be suitable to be a director. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to our board of directors, it may recommend to the full board that candidate's nomination and election.

In connection with the completion of the Transactions and pursuant to the GCI Reorganization Agreement, Ronald A. Duncan continued on our board. The remainder of our board was recommended by Qurate Retail pursuant to the GCI Reorganization Agreement and each of John C. Malone, Gregory B. Maffei, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton was appointed to our board, effective March 9, 2018, following a vote of the Legacy Board and will stand for election this year.

Prior to nominating an incumbent director for re-election at an annual meeting of stockholders, the nominating and corporate governance committee will consider the director's past attendance at, and participation in, meetings of the board of directors and its committees and the director's formal and informal contributions to the various activities conducted by the board and the board committees of which such individual is a member.

The members of our nominating and corporate governance committee have determined that John C. Malone, Gregory B. Maffei, Ronald A. Duncan, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton, who are nominated for election at the annual meeting, continue to be qualified to serve as directors of our company and such nominations were approved by the entire board of directors.

Our board of directors has adopted a written charter for the nominating and corporate governance committee. Our board of directors has also adopted corporate governance guidelines, which were developed by the nominating and corporate governance committee. The charter and the corporate governance guidelines are available on our website at www.gciliberty.com.

Audit Committee

Our board of directors has established an audit committee, whose chairman is Gregg L. Engles and whose other members are Richard R. Green and Sue Ann Hamilton. Scott M. Fisher, William P. Glasgow and Stephen R. Mooney had also served as members of the audit committee during their tenure on the Legacy Board. See "—Director Independence" above.

Our board of directors has determined that Mr. Engles is an "audit committee financial expert" under applicable SEC rules and regulations. The audit committee reviews and monitors the corporate financial reporting and the internal and external audits of our company. The committee's functions include, among other things:

Our board of directors has adopted a written charter for the audit committee, which is available on our website at www.gciliberty.com.

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Audit Committee Information

Each member of the audit committee is an independent director as determined by our board of directors, based on the listing standards of Nasdaq. Each member of the audit committee also satisfies the SEC's independence requirements for members of audit committees. Our board of directors has determined that Mr. Engles is an "audit committee financial expert" under applicable SEC rules and regulations.

The audit committee reviews our financial reporting process on behalf of our board of directors. Management has primary responsibility for establishing and maintaining adequate internal controls, for preparing financial statements and for the public reporting process. Our independent auditor, KPMG LLP, is responsible for expressing opinions on the conformity of our audited consolidated financial statements with U.S. generally accepted accounting principles. Our independent auditor also expressed its opinion as to the effectiveness of our internal control over financial reporting.

The Legacy Board's audit committee reviewed and discussed with management and GT Old GCI Liberty's most recent audited consolidated financial statements, as well as management's assessment of the effectiveness of Old GCI Liberty's internal control over financial reporting and GT's evaluation of the effectiveness of Old GCI Liberty's internal control over financial reporting. The Legacy Board's audit committee also discussed with GT the matters required to be discussed by the Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees, including that firm's judgment about the quality of Old GCI Liberty's accounting principles, as applied in its financial reporting.

GT provided the Legacy Board's audit committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding GT's communications with the audit committee concerning independence, and the audit committee discussed with GT that firm's independence from the company and its subsidiaries.

Based on the reviews, discussions and other considerations referred to above, the Legacy Board's audit committee recommended to Old GCI Liberty's board of directors that the audited financial statements be included in the company's Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K), which was filed on February 28, 2018 with the SEC.


 

 

The Members of the Audit Committee for the periods indicated
Stephen R. Mooney (2012 - March 2018)
Scott M. Fisher (2012 - March 2018)
William P. Glasgow (2012 - March 2018)
Gregg L. Engles (March 2018 - Present)
Richard R. Green (March 2018 - Present)
Sue Ann Hamilton (March 2018 - Present)

As indicated in the preceding three paragraphs, the Legacy Board's audit committee was responsible for and took the actions described in the preceding three paragraphs. All of such actions took place prior to the completion of the Transactions. In connection with the Transactions, all of the members of the Legacy Board, other than Ronald A. Duncan, resigned from the board of Old GCI Liberty (including the members of the audit committee), and new individuals were appointed to the board (including the audit committee). The disclosure in the preceding three paragraphs is being provided in response to the requirements of Item 407(d)(3) of Regulation S-K.

Other

Our board of directors, by resolution, may from time to time establish other committees of our board of directors, consisting of one or more of our directors. Any committee so established will have the powers delegated to it by resolution of our board of directors, subject to applicable law.

BOARD MEETINGS

During 2017, there were eight meetings of the full Legacy Board, no meeting of the Legacy Board's executive committee, two meetings of the Legacy Board's compensation committee, one meeting of the Legacy Board's

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MANAGEMENT AND GOVERNANCE MATTERS

nominating, corporate governance committee and four meetings of the Legacy Board's audit committee. All of the Legacy Board's members with the exception of Mr. Zinterhofer attended at least 75% of his or her board and committee meetings in 2017.

DIRECTOR ATTENDANCE AT ANNUAL MEETINGS

Our board of directors encourages all members of the board to attend each annual meeting of our stockholders. All of the ten directors then serving on the Legacy Board attended Old GCI Liberty's 2017 annual meeting of stockholders.

STOCKHOLDER COMMUNICATION WITH DIRECTORS

Our stockholders may send communications to our board of directors or to individual directors by mail addressed to our board of directors or to an individual director c/o GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. All such communications from stockholders will be forwarded to our directors on a timely basis.

EXECUTIVE SESSIONS

In 2017, the independent directors of our company, then serving, met at four executive sessions without management participation.

Any interested party who has a concern regarding any matter that it wishes to have addressed by our independent directors, as a group, at an upcoming executive session may send its concern in writing addressed to independent directors of GCI Liberty, c/o GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. The current independent directors of our company are Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton.

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EXECUTIVE COMPENSATION

This section sets forth information relating to, and an analysis and discussion of, compensation paid by Old GCI Liberty to the following persons (who we collectively refer to as the Named Executive Officers):

The Named Executive Officers were executive officers of Old GCI Liberty during the year ended, and as of, December 31, 2017 as well as prior to the completion of the Transactions. On March 9, 2018, in connection with the completion of the Transactions, (i) substantially all of the members of the Legacy Board (including the members of its compensation committee (the Legacy CC)) resigned from the board of Old GCI Liberty and were replaced by the current members of our board and (ii) each individual who was an executive officer of Old GCI Liberty, including the Named Executive Officers, immediately prior to the completion of the Transactions was replaced by Messrs. Maffei, Carleton, Baer and Rosenthaler, who now serve as our executive officers. The descriptions in this section with respect to the Named Executive Officers and the Legacy CC refer to such former executive officers and members of the compensation committee of Old GCI Liberty prior to the completion of the Transactions. Further, references to Old GCI Liberty refer to Old GCI Liberty prior to the completion of the Transactions (including under its prior name, General Communication, Inc.). We expect that our compensation program for the year ending December 31, 2018 will differ significantly from the 2017 compensation program of Old GCI Liberty, which is described in this section. See "—Compensation Discussion and Analysis—Changes for 2018—Services Agreement."

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Overview

Compensation of the Named Executive Officers and directors during 2017 was subject to processes and procedures carried out through the Legacy CC (the Compensation Program). This compensation discussion and analysis (Compensation Discussion and Analysis) addresses the material elements of the Compensation Program as applied to the Named Executive Officers.

Principles of the Compensation Program

The Compensation Program was based upon the following principles (Compensation Principles):

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EXECUTIVE COMPENSATION

Process

Overview

The Legacy CC reviewed and approved the base salary, incentive and other compensation of Old GCI Liberty's former Chief Executive Officer and senior executive officers, including the Named Executive Officers. The analyses and recommendations of Old GCI Liberty's Chief Executive Officer on these matters could be considered by the Legacy CC in its deliberations and approvals.

Other elements of executive compensation and benefits as described in this section were also reviewed by the Legacy CC on a regular basis.

Implementation

Discussions on executive compensation and benefits made by the Legacy CC were guided by the Compensation Principles. The elements of compensation as described later in this section were believed by the Legacy CC to be integral and necessary parts of the Compensation Program.

The Legacy CC concluded that each individual segment of each element of executive compensation was generally consistent with one or more of the Compensation Principles. The Legacy CC further concluded the amount of compensation provided by the segment was reasonable, primarily based upon a comparison of the compensation amounts and segments Old GCI Liberty provided when compared to those offered by other similar companies in its industry and market.

Old GCI Liberty's process for determining executive compensation and benefits did not involve a precise and identifiable formula or link between each element and the Compensation Principles. However, it took into consideration market practice and information provided by its management. Furthermore, it was based upon the relationship of compensation as would be paid and financial performance of Old GCI Liberty. It was also the result of discussion among the Legacy CC members and management. Ultimately it was based upon the judgment of the Legacy CC.

Each year the Legacy CC reviewed elements of compensation for each of Old GCI Liberty's senior executive officers including, for 2017, the Named Executive Officers. The Legacy CC believed it had created a framework for an effective Compensation Program. The Legacy CC modified the Compensation Program at its discretion to continue its effectiveness for motivating the senior executive officers and aligning their interests with the long-term interests of Old GCI Liberty's shareholders. Old GCI Liberty did not compare its compensation to a peer group since 2010.

Elements of 2017 Executive Compensation

Overview

For 2017, the elements of compensation in the Compensation Program were as follows:

As of December 31, 2017, there were no compensatory plans or arrangements providing for payments to any of the Named Executive Officers in conjunction with any termination of employment or other working relationship of such an officer with Old GCI Liberty (including without limitation, resignation, severance, retirement or constructive termination of employment of the officer). Furthermore, as of that date, there were no such plans or arrangements providing for payments to any of the Named Executive Officers in conjunction with a change of control of Old GCI Liberty or a change in such an officer's responsibilities to Old GCI Liberty.

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However, in the event of a change in control, the options and restricted stock of the Named Executive Officers could vest. See "—Potential Payments upon Termination or Change-in-Control."

Old GCI Liberty had no requirements with respect to security ownership by its officers or directors, and it had no policies regarding hedging the economic risk of ownership of its equity. Executive officers were invited to provide their input with respect to their compensation to the Legacy CC primarily through Old GCI Liberty's former Chief Executive Officer.

A Named Executive Officer participating in the Compensation Program in 2017 could, under terms of the corresponding Incentive Compensation Plan agreement with Old GCI Liberty and pursuant to Old GCI Liberty's deferred compensation plan, elect to defer a significant portion of that compensation. In this instance, the Named Executive Officer became Old GCI Liberty's unsecured creditor. See "—Nonqualified Deferred Compensation."

Base Salary

Effective January 1, 2017, based upon the process previously described in this section, the base salaries reported in the Summary Compensation Table (see "—Summary Compensation Table") were approved by the Legacy CC.

Mr. Duncan's base salary reflects cash compensation of $925,000 per year. Mr. Duncan's duties remained unchanged during 2017.

Mr. Pounds' base salary reflects cash compensation of $400,000 per year. Mr. Pounds' duties remained unchanged during 2017.

Mr. Cary's base salary reflects cash compensation of $200,000 per year. Mr. Cary's base salary increased in 2017 from $160,000 to $200,000 to compensate him for additional responsibilities acquired when he was promoted in 2016. His duties remained unchanged during 2017.

Mr. Chapados' base salary reflects cash compensation of $450,000 per year. During 2017, Mr. Chapados was appointed as President of Old GCI Liberty.

Ms. Pidgeon's base salary reflects cash compensation of $325,000 per year. Ms. Pidgeon's duties remained unchanged during 2017.

Incentive Compensation Plan

A portion of the Company's compensation to each Named Executive Officer in 2017 related to, and was contingent upon, the officer's performance and Old GCI Liberty's financial performance and resources.

Old GCI Liberty's board approved an Incentive Compensation Plan for the Named Executive Officers (Messrs. Duncan, Pounds, Chapados, and Cary and Ms. Pidgeon) to create a framework that aligned the interests of the executive officers with the long-term interests of Old GCI Liberty's shareholders.

The Legacy CC first determined the targeted annual incentive compensation for each of them. Incentive compensation was paid out in the form of 50% cash and 50% restricted stock grants that would vest 100% at the end of three years, unless otherwise determined by the Legacy CC based on the individual circumstances of each of the Named Executive Officers. Therefore, the incentive compensation was designed to encourage the focus of these executives on long-term performance. Discretionary annual cash bonuses were intended to reward short-term performance and to make senior executive compensation packages competitive with comparable executive positions in other companies.

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EXECUTIVE COMPENSATION

Incentive Compensation. The following table provides a summary of the 2017 incentive compensation targets for the Named Executive Officers:

Name
  Adjusted
EBITDA
($)

  Discretionary
($)

  Total 2017
Incentive
Compensation
Plan Target
($)

 

Ronald A. Duncan(1)

    402,580     1,610,321     2,012,901  

Peter J. Pounds(2)

  102,375   352,625   455,000  

Martin E. Cary

    97,500     552,500     650,000  

Gregory F. Chapados(2)

  270,619   932,131   1,202,750  

Tina M. Pidgeon

    90,000     510,000     600,000  
(1)
Mr. Duncan's incentive compensation target was $150,495 lower than what was disclosed in Old GCI Liberty's 2017 Proxy Statement filed with the SEC on May 16, 2017 due to lower actual Adjusted EBITDA from the estimate used in the Proxy Statement. As disclosed in the 2017 Proxy Statement, Mr. Duncan's final incentive compensation target was calculated by multiplying the sum of his base salary, director cash compensation, estimated value of the stock grant for service as a director, and incentive compensation (Total Compensation) by the percentage increase in Adjusted EBITDA from Adjusted EBITDA in 2013 and adding that to his target incentive compensation.

(2)
Incentive Compensation was paid out in the form of 50% cash and 50% restricted stock grants that would vest at the end of two years. The number of shares issued to Mr. Pounds and Mr. Chapados was determined by dividing the 50% of Incentive Compensation for shares by the price of Old GCI Liberty's Class A shares on December 31, 2012, which was $9.59. This arrangement was in place for Mr. Pounds and Mr. Chapados through 2017.

The following is a description of what each of these incentive compensation targets are and how they were measured.

Adjusted EBITDA. The Adjusted EBITDA goal was intended to focus the Named Executive Officers on increasing Adjusted EBITDA. Adjusted EBITDA for purposes of this goal was defined as earnings plus imputed interest on financed devices and the cash received in excess of revenue recognized for long-term roaming arrangements before net interest expense, income taxes, depreciation and amortization expense, loss on extinguishment of debt, share-based compensation expense, accretion expense, loss attributable to non-controlling interest resulting from Old GCI Liberty transactions relating to a new markets tax credit program with US Bancorp, gains and impairment losses on equity and cost method investments, and other non-cash adjustments. The goal would be achieved by Old GCI Liberty recording Adjusted EBITDA that was equal to the Adjusted EBITDA target.

The target for this metric was $321.4 million in 2017 for the Named Executive Officers who would earn their Target Incentive Compensation for this goal if the metric was achieved. In the case of the Named Executive Officers, the incentive compensation earned would be increased or decreased from the Target Incentive Compensation by 5% for each $1 million that the actual Adjusted EBITDA was above or below the Adjusted EBITDA metric.

Discretionary. The Legacy Board took various factors into account when deciding on the payout of the discretionary portion of the plan applying to the Named Executive Officers. These factors included, but were not limited to, leadership, crisis management, succession planning, strategic planning, risk management, special projects, and financial reporting.

The following table summarizes the 2017 incentive compensation achieved by the Named Executive Officers, each of whom participated in this plan. The 2017 incentive compensation was paid 50% in cash and 50% in the form of restricted stock grants that would vest at the end of three years after the grant date with the

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exception of Mr. Duncan who was paid 75% in cash and 25% in the form of restricted stock grants; the majority of the cash portion was paid in 2017:

Goals
  Ronald A.
Duncan

  Peter J.
Pounds

  Martin E.
Cary

  Gregory F.
Chapados

  Tina M.
Pidgeon

 

Adjusted EBITDA Goal—Target Incentive Compensation

  $ 402,580   $ 102,375   $ 97,500   $ 270,619   $ 90,000  

Adjusted EBITDA Goal Achievement(1)

  16.8 % 16.8 % 16.8 % 16.8 % 16.8 %

2017 Adjusted EBITDA Incentive Compensation Earned

  $ 67,533   $ 17,173   $ 16,356   $ 45,396   $ 15,098  

Discretionary

  $ 1,610,321   $ 352,625   $ 552,500   $ 932,131   $ 510,000  

Discretionary Achievement(2)

    77.1 %   120.1 %   89.0 %   93.6 %   93.6 %

2017 Discretionary Incentive Compensation Earned

  $ 1,241,463   $ 423,393   $ 491,998   $ 872,599   $ 477,302  

2017 Incentive Compensation Earned

  $ 1,308,996   $ 440,566   $ 508,354   $ 917,995   $ 492,400  
(1)
The Adjusted EBITDA for this 2017 goal was $321.4 million for Old GCI Liberty. The Named Executive Officers would earn their Target Incentive Compensation for this goal if Old GCI Liberty had Adjusted EBITDA equal to the metric. The Target Incentive Compensation would be increased or decreased by 5% for each $1 million that the actual Adjusted EBITDA is above or below the metric. For 2017, the actual Adjusted EBITDA for purposes of this goal was $304.8 million resulting in actual Adjusted EBITDA that was $16.6 million below the metric, therefore, the earned Incentive Compensation for the Adjusted EBITDA goal was decreased by 83%.

(2)
The Legacy CC considered the following factors regarding the Discretionary Achievement of the Named Executive Officers. With regard to Mr. Duncan, the Legacy CC took into account his efforts to secure certain revenue streams, his support of company procurement efforts, and his leadership for efforts to reinforce the Company's culture. With regard to Mr. Pounds, the Legacy CC considered his leadership in regards to leading an initiative to achieve savings through a procurement initiative, team development and succession planning, and his support for other corporate initiatives. With regard to Mr. Cary, the Legacy CC considered, among other things, his efforts to secure certain revenue streams, his support of Old GCI Liberty's procurement initiative, and his leadership of key initiatives within Old GCI Liberty's business. With regard to Mr. Chapados, the Legacy CC considered, among other things, his leadership of key company initiatives including reinforcing Old GCI Liberty's culture, risk management, his support of Old GCI Liberty's procurement initiative, and team development. With regard to Ms. Pidgeon, the Legacy CC considered her leadership in revenue assurance efforts, corporate risk management, supporting Old GCI Liberty's initiatives, and team development.

Stock Option Plan

Awards, if granted to the Named Executive Officers, were granted pursuant to terms of the Stock Option Plan. Awards, if granted, were granted contemporaneously with the approval of the Legacy CC, typically early in the year in question or late in the previous year as described above. See "—Elements of Compensation—Incentive Compensation Plan."

Old GCI Liberty adopted the Stock Option Plan in 1986. It was subsequently amended from time to time. Under the Stock Option Plan, Old GCI Liberty was authorized to grant awards and options to purchase shares of GNCMA to selected officers, directors and other employees of, and consultants or advisors to, Old GCI Liberty and its subsidiaries. Old GCI Liberty did not issue any stock options after 2010. The selection of grantees for awards under the plan was made by the Legacy CC.

The number of shares of GNCMA allocated to the Stock Option Plan was 15.7 million shares. The number of shares for which options or awards could be granted was subject to adjustment upon the occurrence of stock dividends, stock splits, mergers, consolidations and certain other changes in corporate structure or capitalization. As of December 31, 2017, 1.2 million shares had been granted subject to vesting, 6.9 million share grants had vested, 8.7 million shares had been issued upon the exercise of options under the plan, 2.3 million shares had been repurchased by the plan and 1.2 million shares remained available for additional grants under the plan.

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EXECUTIVE COMPENSATION

Restricted stock awards granted under the Stock Option Plan could be subject to vesting conditions based upon service or performance criteria as the Legacy CC could specify. These specifications could include attainment of one or more performance targets. Shares acquired pursuant to such an award could not be transferred by the participant until vested. Unless otherwise provided by the Legacy CC, a participant would forfeit any shares of restricted stock where the restrictions had not lapsed prior to the participant's termination of service with Old GCI Liberty. Participants holding restricted stock would have the right to vote the shares and to receive dividends paid, if any. However, those dividends or other distributions paid in shares would be subject to the same restrictions as the original award.

The Legacy CC selected each grantee and the time of grant of an option or award and determined the terms of each grant, including the number of shares covered by each grant and the exercise price. In selecting a participant, as well as in determining these other terms and conditions of each grant, the Legacy CC took into consideration such factors as it deemed, in its sole discretion, relevant in connection with accomplishing the purpose of the plan.

Under the Stock Option Plan, Old GCI Liberty's authority to modify or amend the plan was subject to prior approval of its shareholders only in cases of increasing the number of shares of its stock allocated to, and available and reserved for, issuance under the plan, changing the class of persons eligible to receive incentive stock options or where shareholder approval was required under applicable law, regulation or rule.

Subject to these limitations, Old GCI Liberty could terminate or amend the Stock Option Plan at any time. However, no termination or amendment could affect any outstanding option or award unless expressly provided by the Legacy CC. In any event, no termination or amendment of the plan could adversely affect an outstanding option or award without the consent of the participant unless necessary to comply with applicable law, regulation or rule.

With limited exception, no maximum or minimum existed with regard to the amount, either in dollars or in numbers, of options that could be exercised in any year, either by a single optionee or by all optionees under the Stock Option Plan. At the 2002 annual meeting, Old GCI Liberty's shareholders approved an amendment to the plan placing a limitation on accumulated grants of options of not more than 500,000 shares of GNCMA per optionee per year.

With these exceptions, there were no fixed limitations on the number or amount of securities being offered, other than the practical limitations imposed by the number of employees eligible to participate in the plan and the total number of shares of stock authorized and available for granting under the plan. Shares covered by options which terminated or expired for any reason prior to their exercise were available for grant of new options pursuant to the plan.

Perquisites

Old GCI Liberty provided certain perquisites to the Named Executive Officers. The Legacy CC believed these perquisites were reasonable and appropriate and consistent with Old GCI Liberty's awareness of perquisites offered by similar publicly traded companies. The perquisites assisted in attracting and retaining the Named Executive Officers and, in the case of certain perquisites, promoted health, safety and efficiency of the Named Executive Officers. These perquisites were as follows:

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Retirement and Welfare Benefits

GCI 401(k) Plan. In January 1987, Old GCI Liberty adopted the GCI 401(k) Plan qualified under Section 401 of the Internal Revenue Code of 1986. The GCI 401(k) Plan provided for acquisition of Old GCI Liberty's Class A common stock (and later, Class A-1 common stock) at market value as well as various mutual funds. Old GCI Liberty could match a percentage of the employees' contributions up to certain limits. Named Executive Officers could, along with its employees generally, participate in the GCI 401(k) Plan in which Old GCI Liberty could provide matching contributions in accordance with the terms of the plan.

As of December 31, 2017, there remained 4.1 million shares of Old GCI Liberty's former Class A and 0.5 million shares of Old GCI Liberty's former Class B common stock allocated to the GCI 401(k) Plan and available for issuance by Old GCI Liberty or otherwise acquisition by the plan for the benefit of participants in the plan.

Deferred Compensation Arrangements. Old GCI Liberty offers to our executive officers deferred compensation arrangements specifically fashioned to the needs of the officer and us (Deferred Compensation Arrangements). During 2017, none of our Named Executive Officers participated in Deferred Compensation Arrangements.

Welfare Benefits. With the exception of the enhanced long-term and short-term disability benefits described previously, Old GCI Liberty provided to the Named Executive Officers the same health and welfare benefits provided generally to all other employees at the same general premium rates as charged to those employees. The cost of the health and welfare programs was subsidized by Old GCI Liberty for all eligible employees including the Named Executive Officers.

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EXECUTIVE COMPENSATION

Performance Rewarded

The Compensation Program was, in large part, designed to reward individual performance. What constituted performance varied from officer to officer, depending upon the nature of the officer's responsibilities. Consistent with the Compensation Program, Old GCI Liberty identified key business metrics and established defined targets related to those metrics for each Named Executive Officer. In the case of each Named Executive Officer, the targets were regularly reviewed by management, from time to time, and provided an immediate and clear picture of performance and enabled management to respond quickly to both potential problems as well as potential opportunities. The Compensation Program also was used to establish and track corresponding applicable targets for individual management employees.

In 2017, the Compensation Program was used in the development of each Named Executive Officer's individual performance goals and established incentive compensation targets. The Legacy CC evaluated the performance of each of the executive officers and the financial performance of Old GCI Liberty and awarded incentive compensation as described above. See "—Compensation Discussion and Analysis—Elements of Compensation—Incentive Compensation Plan."

The Legacy CC increased Mr. Pounds' total incentive compensation plan target for 2018 from $455,000 to $535,000. The increase to Mr. Pounds' Incentive Compensation was to replace compensation that was previously granted in the form of a retention restricted stock award.

Timing of Equity Awards

Overview.    Timing of equity awards under the Director Compensation Plan (as defined in "Director Compensation" below) and equity awards under the Compensation Program varied with the plan or portion of that program. However, Old GCI Liberty did not, and it had not in the past, timed its release of material nonpublic information for purposes of affecting the value of equity compensation. Timing issues and its grant policy are described further below.

Director Compensation Plan.    As a part of the Director Compensation Plan, Old GCI Liberty granted awards of its common stock to board members, including those persons who were also be serving as one or more of our executive officers. Mr. Duncan, a board member and Named Executive Officer, had been granted such awards in the past. These awards were made annually in June of each year in accordance with the terms of the Director Compensation Plan. The awards were made through the Stock Option Plan. See "—Compensation Discussion and Analysis—Elements of Compensation—Stock Option Plan."

Incentive Compensation Plan.    As a part of the Compensation Program, from time to time, Old GCI Liberty granted awards in its GNCMA shares to its executive officers, including the Named Executive Officers. In particular, awards were granted in conjunction with the agreements that Old GCI Liberty entered into with Named Executive Officers pursuant to the Incentive Compensation Plan. The grants of such awards were typically made early in the year at the time its board finalized the prior year incentive compensation plan payouts for each of the Named Executive Officers. All such awards were granted through the Stock Option Plan. See "—Compensation Discussion and Analysis—Elements of Compensation—Incentive Compensation Plan" and "—Elements of Compensation—Stock Option Plan."

Stock Option Plan.    As a part of the Compensation Program, from time to time, Old GCI Liberty granted stock awards in its GNCMA shares to its executive officers. In all cases, regardless of the identity of the grantee, the timing, amount and other terms of the grant of awards under our Stock Option Plan were determined in the sole discretion of the Legacy CC. See "—Compensation Discussion and Analysis—Elements of Compensation—Stock Option Plan."

Grant Policy.    Under the grant policy, all approved grants were granted effective the date they were approved by the Legacy CC and were priced at the market value at the close of trading on that date. The terms of the award were then communicated to the recipient within a reasonable time period.

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Deductibility of Executive Compensation

In determining the amount and form of compensation granted to executive officers, including the Named Executive Officers, Old GCI Liberty took into consideration both tax treatment and accounting treatment of the compensation. Tax and accounting treatment for various forms of compensation is subject to changes in, and changing interpretations of, applicable laws, regulations, rulings and other factors that were not within Old GCI Liberty's control. As a result, tax and accounting treatment is only one of several factors that Old GCI Liberty took into account in designing the previously described elements of compensation.

Nonqualified Deferred Compensation Plans

From time to time, Old GCI Liberty entered into deferred compensation arrangements with certain of its executive officers. These arrangements were negotiated with individual officers on a case-by-case basis. The Named Executive Officers did not participate in a deferred compensation arrangement with Old GCI Liberty during 2017.

Changes for 2018

In connection with the Transactions, each individual who was an executive officer of Old GCI Liberty, including the Named Executive Officers, immediately prior to the completion of the Transactions was replaced by Messrs. Maffei, Carleton, Baer and Rosenthaler, who now serve as our executive officers. Such persons continue to serve as our executive officers.

Services Agreement

Also in connection with the Transactions, we entered into the services agreement with Liberty Media in March 2018 (the Services Agreement), pursuant to which Liberty Media provides to our company certain administrative and management services, and we pay Liberty Media a monthly management fee, the amount of which is subject to semi-annual review (and at least an annual review by our compensation committee). As a result, employees, including our executive officers, who provide services to our company pursuant to the Services Agreement, are not separately compensated by our company other than with respect to equity awards with respect to our common stock.

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SUMMARY COMPENSATION TABLE

As of December 31, 2017, Old GCI Liberty did not have employment agreements with any of its Named Executive Officers. The following table summarizes total compensation paid or earned by each Named Executive Officer for fiscal years 2017, 2016 and 2015. The process followed by the Legacy CC in establishing total compensation for each Named Executive Officer as set forth in the table is described above. See "—Compensation Discussion and Analysis."

Name and Principal
Position

  Year
  Salary
($)

  Bonus
($)(1)

  Nonequity
Incentive
Plan
Compensation
($)

  Stock
Awards(2)
($)

  Option Awards(2)
($)

  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)

  All Other
Compensation
($)(3)

  Total
($)

 

Ronald A. Duncan(4)

    2017     925,000         981,747     1,188,789 (5)           127,840     3,223,376  

Former Chief Executive

    2016     925,000         833,632     1,118,454 (6)           83,000     2,960,086  

Officer of Old GCI Liberty

    2015     925,000         1,096,999     1,269,909 (7)           83,000     3,374,908  

Peter J. Pounds

  2017   400,000   35,384   184,899   468,134 (5)     25,000   1,113,417  

Former Senior Vice President,

  2016   400,000   5,280   206,982   1,845,581 (8)     18,279   2,476,122  

Chief Financial Officer and

  2015   400,000   6,417   235,888   365,456 (8)     20,437   1,028,198  

Secretary of Old GCI Liberty

                                     

Martin E. Cary

    2017     200,000         254,177     812,393 (5)               19,000     1,285,570  

Former Senior Vice President and General Manager—

    2016     160,000     115,858     711,699     1,754,254 (10)           60,190     2,802,001  

Business of Old GCI Liberty(9)

                                                       

Gregory F. Chapados

  2017   450,000     458,998   1,144,786 (5)     22,000   2,075,784  

Former President and Chief

  2016   450,000   7,313   511,768   1,020,883 (6)     22,279   2,012,243  

Operating Officer of Old GCI

  2015   450,000   8,363   530,748   757,863 (7)     24,437   1,771,411  

Liberty

                                     

Tina M. Pidgeon

    2017     325,000         369,300     154,755 (5)           22,000     871,055  

Former Senior Vice President,

    2016     325,000     17,550     409,415     158,682 (6)           21,279     931,926  

Chief Compliance Officer,

    2015     325,000     31,990     486,519     228,024 (11)           23,437     1,094,970  

General Counsel and

                                                       

Governmental Affairs of Old

                                                       

GCI Liberty

                                                       
(1)
The Bonus Compensation represents compensation paid pursuant to the Incentive Compensation Plan in excess of the target payment under the plan.

(2)
This column reflects the grant date fair values of awards of GNCMA, restricted stock awards or stock options granted in the fiscal year indicated which were computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718, Compensation—Stock Options (ASC Topic 718).

(3)
See, "Components of 'All Other Compensation"' table displayed below for more detail.

(4)
In 2015, Mr. Duncan received $183,650 in compensation for service on Old GCI Liberty's board in the form of $65,000 in director fees and a stock award valued at $118,650. In 2016, Mr. Duncan received $176,300 in compensation for service on Old GCI Liberty's board in the form of $65,000 in director fees and a stock award valued at $111,300. In 2017, Mr. Duncan received $347,300 in compensation for service on Old GCI Liberty's board in the form of $65,000 in director fees and a stock award valued at $282,300.

(5)
The Stock Awards granted during 2017 were for the Named Executive Officer's performance during 2016.

(6)
The Stock Awards granted during 2016 were for the Named Executive Officer's performance during 2015.

(7)
The Stock Awards granted during 2015 were for the Named Executive Officer's performance during 2014.

(8)
In 2016, Mr. Pounds received a stock award with a grant date fair value of $458,831 for his performance during 2015 and a stock award with a grant date fair value of $1,386,750 as a retention incentive. In 2015, Mr. Pounds received a stock award with a grant date fair value of $268,400 for his performance during 2014, a stock award with a grant date fair value of $48,528 for his performance related to the 2015 acquisition of certain interests in The Alaska Wireless Network, LLC and

GCI LIBERTY, INC. 2018 PROXY STATEMENT   |  41


Table of Contents

(9)
Compensation for Mr. Cary is only provided for 2017 and 2016 as he was not a Named Executive Officer in 2015.

(10)
In 2016, Mr. Cary received a stock award with a grant date fair value of $367,504 for his performance during 2015 and a stock award with a grant date fair value of $1,386,750 as a retention incentive.

(11)
In 2015, Ms. Pidgeon received a stock award with a grant date fair value of $179,496 for her performance during 2014 and a stock award with a grant date fair value of $48,528 for her performance related to the Wireless Acquisition.

The amounts reported under the "All Other Compensation" column are comprised of the following:

Name
  Year
  GCI 401(k)
Plan(1)($)

  Board
Fees
($)

  Success
Sharing(2)
($)

  Use of
Company
Leased
Aircraft(3)
($)

  Use of
Company
Retreat
Facilities(4)
($)

  Miscellaneous
($)

  Total
($)

 

Ronald A. Duncan

    2017     18,000     65,000             44,840         127,840  

    2016     18,000     65,000                     83,000  

    2015     18,000     65,000                     83,000  

Peter J. Pounds

  2017   18,000         7,000     25,000  

  2016   18,000     279         18,279  

  2015   18,000     2,437         20,437  

Martin E. Cary

    2017     18,000                     1,000 (5)   19,000  

    2016     18,000         279     41,911             60,190  

Gregory F. Chapados

  2017   18,000           4,000 (5) 22,000  

  2016   18,000     279       4,000 (5) 22,279  

  2015   18,000     2,437       4,000 (5) 24,437  

Tina M. Pidgeon

    2017     18,000                     4,000 (5)   22,000  

    2016     18,000         279             3,000 (5)   21,279  

    2015     18,000         2,437             3,000 (5)   23,437  
(1)
Amounts were contributions by Old GCI Liberty matching each employee's contribution. Matching contributions by Old GCI Liberty under the GCI 401(k) Plan were available to each of its full-time employees with over one year of service. During 2017, 2016 and 2015, the match was based upon the lesser of $18,000 or 10% of the employee's salary and the total of the employee's pre-tax and post-tax contributions to the plan. See "—Compensation Discussion and Analysis—Elements of Compensation—Retirement and Welfare Benefits—GCI 401(k) Plan."

(2)
See "—Compensation Discussion and Analysis—Elements of Compensation—Perquisites."

(3)
The value of use of Old GCI Liberty leased aircraft is shown at the variable cost to Old GCI Liberty.

(4)
The allocated cost of using Old GCI Liberty's remote fishing retreat for personal guests or family members.

(5)
Compensation for attending certain management meetings.

Pay Ratio Disclosure

In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the SEC adopted a rule requiring annual disclosure of the ratio of the median employee's annual total compensation to the total annual compensation of the principal executive officer (PEO). Old GCI Liberty's PEO as of December 31, 2017 was Ronald A. Duncan.

To determine the median employee, a listing was prepared of all active employees as of December 31, 2017 including the following:

42   |   GCI LIBERTY, INC. 2018 PROXY STATEMENT


Table of Contents

EXECUTIVE COMPENSATION

Old GCI Liberty used gross wages from W-2s to determine the median employee and for the wages used to calculate the ratio. W-2 wages include base salary, bonus payments, the value of realized equity awards, paid commissions, and taxable fringe benefits. Old GCI Liberty did not annualize wages and salaries for employees who were not employed for all of 2017.

For 2017, the total compensation for Old GCI Liberty's PEO was $3,223,376 and its median employee's pay was $68,563. As a result, the pay ratio of its CEO to the median employee for 2017 was 47.01 to 1.

GRANTS OF PLAN-BASED AWARDS

The following table displays specific information on grants of options, awards and non-equity incentive plan awards under our Compensation Program and, in addition, in the case of Mr. Duncan, our Director Compensation Plan, made to Named Executive Officers during 2017.

            Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
    Estimated Future Payouts
Under Equity Incentive Plan
Awards
    All
Other
Stock
Awards:
Number
of
Shares
    All
Other
Option
Awards:
Number
of
Securities
    Exercise
or Base
Price of
    Grant
Date Fair
Value of
Stock
and
 
Name
  Grant
Date

  Threshold
($)

  Target
($)

  Maximum
($)

  Threshold
(#)

  Target
(#)

  Maximum
(#)

  of Stock
or Units
(#)

  Underlying
Options
(#)

  Option
Awards
($/Sh)

  Option
Awards(1)
($)

 
Ronald A. Duncan     03/01/17                             42,860 (2)           906,489  
      06/01/17                             7,500 (3)           282,300  
Peter J. Pounds   03/01/17               22,134 (2)     468,134