SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

 

(Amendment No. 1)

 

ý ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2004

 

or

 

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to           

 

Commission File No. 0-15279

 

GENERAL COMMUNICATION, INC.

(Exact name of registrant as specified in its charter)

 

ALASKA		92-0072737
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2550 Denali Street Suite 1000 Anchorage, Alaska		99503
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code: (907) 868-5600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

 

Class A common stock		Class B common stock
(Title of class)		(Title of class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes  ý  No  o.

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes  ý  No  o

 

The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the average bid and asked prices of such stock as of the close of trading on as of the last business day of the registrant’s most recently completed second fiscal quarter of June 30, 2004 was approximately $324,817,000.

 

The number of shares outstanding of the registrant’s common stock as of February 28, 2005, was:

 

Class A common stock – 51,559,580 shares; and,

Class B common stock – 3,861,722 shares.

 

 

Explanatory Note

 

General Communication, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2004, which was originally filed on March 15, 2005 (the “Original Filing”).

 

The purpose of this Amendment is to provide the information required by Part III of Form 10-K.  This Amendment amends and restates in their entirety only the cover page, Part III, the Exhibit Index, and Exhibit 31.  This Amendment does not affect any other parts of or exhibits to the Original Filing, and those unaffected parts or exhibits are not included in this Amendment.

 

Except as expressly stated herein, this Amendment continues to speak as of the date of the Original Filing and the Company has not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Filing.  Accordingly, this Amendment should be read in conjunction with the Company’s other filings, if any, made with the Securities and Exchange Commission subsequent to the filing of the Original Filing, including any amendments to those filings, if any.

 

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Part III

 

Item 10.                                                   Directors and Executive Officers of the Registrant.

 

Identification

 

As of December 31, 2004, our board currently consisted of eight director positions, divided into three classes of directors serving staggered three-year terms.  However, one of our directors (Mr. Reinstadtler) has, for personal reasons unrelated to us, chosen not to be nominated for reelection at our 2005 annual meeting.  The board intends to reduce its size to seven directors, effective with his departure.  A director on our board is elected at an annual meeting of shareholders and serves until the earlier of his or her resignation or removal, or his or her successor is elected and qualified.

 

Our executive officers generally are appointed at our board’s first meeting after each annual meeting of shareholders and serve at the discretion of the board.

 

The following table sets forth certain information about our directors and executive officers as of December 31, 2004.

 

Name		Age		Position
Donne F. Fisher(1),(2),(3),(4),(5)		66		Chairman, Director
Ronald A. Duncan(2),(4)		52		President, Chief Executive Officer, and Director
John M. Lowber(1)		55		Senior Vice President, Chief Financial Officer, Secretary, and Treasurer
G. Wilson Hughes		59		Executive Vice President and General Manager
William C. Behnke		47		Senior Vice President - Strategic Initiatives
Gina R. Borland		40		Vice President - General Manager, Local Services
Marsha E. Burns		52		Vice President - General Manager, Network Solutions
Martin E. Cary		40		Vice President - General Manager, Managed Broadband Services
Richard P. Dowling		61		Senior Vice President - Corporate Development
Paul E. Landes		46		Vice President - Marketing and Sales, Chief Marketing Officer
Terry J. Nidiffer		44		Vice President - General Manager, Internet Services
William R. Snell		55		Vice President - General Manager, Cable and Entertainment Services
Dana L. Tindall		43		Senior Vice President - Legal, Regulatory and Governmental Affairs
Richard D. Westlund		61		Vice President - General Manager, Long Distance and Wholesale Services
Stephen M. Brett(2),(3),(5)		64		Director
Jerry A. Edgerton(2)		62		Director and Nominee
William P. Glasgow(1),(2),(3),(4),(5)		46		Director
Stephen R. Mooney(2),(3),(4),(5),(6)		45		Director
Stephen A. Reinstadtler(1),(2),(3),(5),(6)		38		Director
James M. Schneider(2),(3),(5),(6)		52		Director

 

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(1)                                  Member of Finance Committee.

 

(2)                                  The present classification of our board is as follows: (1) Class I - Messrs. Edgerton and Reinstadtler, whose present terms expire at the time of our annual meeting; (2) Class II - Messrs. Brett, Duncan and Mooney whose present terms expire at the time of the 2006 annual meeting; and (3) Class III - Messrs. Fisher, Glasgow, and Schneider, whose present terms expire at the time of the 2007 annual meeting.

 

(3)                                  Member of the Compensation Committee.

 

(4)                                  Member of the Executive Committee.

 

(5)                                  Member of the Nominating and Corporate Governance Committee.

 

(6)                                  Member of the Audit Committee.

 

Donne F. Fisher.  Mr. Fisher has served as Chairman of our board since June 2002 and has served as a director on our board since 1980.  Mr. Fisher had been a consultant to Tele-Communications, Inc. (“TCI”) since January 1996, and a director of TCI from 1980 to March 1999 when TCI merged into AT&T Corp.  From 1982 until 1996, he held various executive officer positions with TCI and its subsidiaries.  Mr. Fisher had served on the board of directors of most of TCI’s subsidiaries through the years.  He currently serves on the boards of directors of, and on the compensation committees and the audit committees of, both Liberty Media Corp. and Liberty Media International, Inc.  Since 1999 he has managed his personal assets.  His present term as a director on our board expires in 2007.

 

Ronald A. Duncan.  Mr. Duncan is a co-founder of the Company and has served as a director on our board since 1979.  Mr. Duncan has served as our President and Chief Executive Officer since January 1, 1989.  From 1979 through December 1988 he was our Executive Vice President.  His present term as a director on our board expires in 2006.

 

John M. Lowber.  Mr. Lowber has served as our Chief Financial Officer since January 1987, as our Secretary and Treasurer since July 1988 and as our Senior Vice President since December 1989.  He was our Vice President – Administration from 1985 to December 1989.  Prior to joining the Company, Mr. Lowber was a senior manager and certified public accountant at Peat Marwick Mitchell and Co. (presently named KPMG LLP).

 

G. Wilson Hughes.  Mr. Hughes has served as our Executive Vice President and General Manager since June 1991.  He previously held engineering or management positions with Northern Air Cargo, Enserch, Ebasco, Frank Moolin and Associates and Alascom, Inc.  Mr. Hughes has served as Chairman of the Anchorage Economic Development Corporation and the Alaska Industrial Development and Export Authority.

 

William C. Behnke.  Mr. Behnke has served as our Senior Vice President – Strategic Initiatives since January 2001 and, prior to that, had served as our Senior Vice President – Marketing and Sales from January 1994.  He was one of our Vice Presidents and was President of GCI Network Systems, Inc., one of our former subsidiaries, from February 1992 to January 1994.  From June 1989 to February 1992, Mr. Behnke was one of our Vice Presidents and General Manager of GCI Network Systems, Inc.  From August 1984 to June 1989, he was Senior Vice President for TransAlaska Data Systems, Inc.

 

Richard P. Dowling.  Mr. Dowling has served as our Senior Vice President – Corporate Development since December 1990.  He was our Senior Vice President –Operations and Engineering from December 1989 to December 1990.  From 1981 to December 1989, Mr. Dowling served as our Vice President – Operations and Engineering.

 

Dana L. Tindall.  Ms. Tindall has served as our Senior Vice President – Legal, Regulatory, and Governmental Affairs since January 1994.  She was our Vice President – Regulatory Affairs from January 1991 to January 1994.  From October 1989 through December 1990, Ms. Tindall was our Director of

 

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Regulatory Affairs, and she served as our Manager of Regulatory Affairs from 1985 to October 1989.  In addition, Ms. Tindall was an adjunct professor of telecommunications economics at Alaska Pacific University from September through December 1995.

 

Gina R. Borland.  Ms. Borland has served as our Vice President-General Manager, Local Services since January 2001.  Prior to that, she was a member of our Corporate Development Department serving in various capacities generally involving business development from September 1996 through December 2000.  She has been employed by us since 1988 serving in various capacities.

 

Marsha E. Burns.  Ms. Burns has served as our Vice President – General Manager, Network Solutions since 1998.  From 1997 to 1998 she served as our Vice President – Enterprise Services.  Prior to joining us, Ms. Burns held several management positions with IBM.

 

Martin E. Cary.  Mr. Cary has served as our Vice President – General Manager, Managed Broadband Services since September 2004.  Prior to that Mr. Cary was our Vice President – Broadband Services from June 1999 to September 2004 and Vice President – Rural Services from December 1997 to June 1999.  Prior to joining us, Mr. Cary was a senior partner of Astrolabe Systems, Inc., a consulting company acquired by us in December 1997.

 

Paul E. Landes.  Mr. Landes has served as our Vice President – Marketing and Sales, Chief Marketing Officer since 2002.  Prior to that, he was our Vice President – Marketing from 1999 to 2002.  Prior to joining us, he was part of the management team at Carr Gottstein Foods, an Alaska based retail food and merchandise company, from 1992 to 1999.  Previous to that work, he was a part of the management team at Pay n Save Drug Store, a retail merchandise company, from 1987 to 1992.

 

Terry J. Nidiffer.  Mr. Nidiffer has served as our Vice President – General Manager, Internet Services since February 2000.  Prior to that he was our Director, Internet Network Services, from July 1999 to January 2000.

 

William R. Snell.  Mr. Snell has served as our Vice President – General Manager, Cable and Entertainment Services since November 1996.  Prior to that, he was Executive Director for the Alaska Industrial Development and Export Authority from July 1992 until November 1996.  Mr. Snell has served as a trustee (including acting as the chair) of the Alaska State Pension Investment Board from July 1999 until September 2003.

 

Richard D. Westlund.  Mr. Westlund has served as our Vice President – General Manager, Long Distance and Wholesale Services since January 2001.  Prior to that he was our Vice President – General Manager, Wholesale and Carrier Services from January 1999 through December 2000.  Prior to that, Mr. Westlund was our Vice President – Director, Carrier Relations and Marketing from April 1988 to December 1998.

 

Stephen M. Brett.  Mr. Brett has served as a director on our board since January 2001.  He has been of counsel to Sherman and Howard, a law firm, since January 2001.  He served as Senior Executive Vice President for AT&T Broadband from March 1999 to April 2000.  Prior to that Mr. Brett served as Executive Vice President, General Counsel and Secretary to TCI from 1991 to March 1999.  His present term as a director on our board expires in 2006.

 

Jerry A. Edgerton.  Nominee, Mr. Edgerton was appointed to the board in June 2004 to fill a new position when the board was expanded from seven to eight directors.  He has been Senior Vice President – Government Markets for MCI Communications Corporation since November 1996.

 

William P. Glasgow.  Mr. Glasgow has served as a director on our board since 1996.  From 1999 to December 2004, he was President/CEO of Security Broadband Corp.  From 2000 to the present Mr. Glasgow has been President of Diamond Ventures, L.L.C., a Texas limited liability company and sole general partner of Prime II Management, L.P., and Prime II Investments, L.P., both of which are Delaware limited partnerships.  Since 1996, he has been President of Prime II Management, Inc., a Delaware corporation, which was formerly the sole general partner of Prime II Management, L.P.  From 1989 to 1996, he held positions of Vice President – Finance and Senior Vice President – Finance with Prime II Management, Inc.  Mr. Glasgow is presently a managing director of the general partner of Prime VIII, L.P.

 

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He is also managing director of Prime New Ventures.  He joined Prime Cable Corp. (an affiliate of Prime II Management, Inc.) in 1983 and served in various capacities until that corporation was liquidated in 1987.  He currently serves on the boards of directors of Prime Cellular Corp., Prime II Management Group, Inc., Prime Comm, Inc., SKA Management, Inc., Infrasafe, Inc. and Security Broadband Corp., none of which are publicly held.  His present term as a director on our board expires in 2007.

 

Stephen R. Mooney.  Mr. Mooney has served as a director on our board since January 1999.  Since 2002, Mr. Mooney has served as Vice President of Treasury Services at MCI, Inc. (“MCI”).  From 1999 to 2002, he was Vice President of WorldCom Ventures Fund, Inc.  Prior to that, he held various corporate development positions with MCI Communications Corporation and MCImetro, Inc.  His present term as a director on our board expires in 2006.

 

Stephen A. Reinstadtler.  Mr. Reinstadtler has served as a director on our board since December 2002.  Since November 2004, he has been a principal in SR Capital Advisors, LLC, an investment advisory firm.  From January 2002 to November 2004, he had been Managing Director of TD Capital, an affiliate of Toronto-Dominion Bank Financial Group.  He has held various positions with TD Capital since July 1995.  Prior to joining TD Capital, he was a member of Toronto-Dominion Bank’s media, telecommunications and technology group from April 1994 to June 1995 where he was responsible for executing highly leveraged debt transactions for leading media and communications companies.  He has 10 years of private equity and investment banking experience.  Mr. Reinstadtler’s present term as a director on our board expires in 2005, and he has chosen not to be a nominee for reelection to the board.

 

James M. Schneider.  Mr. Schneider has served as a director on our board since July 1994.  He has been Senior Vice President and Chief Financial Officer for Dell, Inc. since March 2000.  Prior to that, he was Senior Vice President – Finance for Dell Computer Corporation from September 1998 to March 2000.  Prior to that, from September 1996 to September 1998 he was Vice President – Finance for that corporation.  From September 1993 to September 1996, he was Senior Vice President for MCI Communications Corporation in Washington, D.C.  Mr. Schneider was with the accounting firm of Price Waterhouse from 1973 to September 1993 and was a partner in that firm from October 1983 to September 1993.  He presently serves on the board of directors of, and is a member of the audit committee of, GAP, Inc.  His present term as a director on our board expires in 2007.

 

Arrangements and Understandings

 

Director Independence.  Messrs. Edgerton and Mooney, members of our board, are officers of MCI.  As of December 31, 2004, MCI was a holder of in excess of 5% of the Company’s outstanding shares of Class B common stock.  Mr. Reinstadtler, a member of our board, had been an officer of an affiliate of Toronto Dominion Investments, Inc. (“Toronto Dominion”) for a significant portion of 2004.  As of December 31, 2004, Toronto Dominion was a holder of 100% of the Company’s outstanding shares of Series B preferred stock.  As of that date, all of that Series B preferred stock was immediately convertible into shares of Class A common stock, constituting 1.5% of the outstanding shares of that stock after that conversion.  Mr. Fisher, our Chairman of the Board, while in that capacity an officer under our Bylaws and responsible for the conduct of our board meetings and shareholder meetings when present, is considered by our board to have no greater influence on our affairs or authority to act on behalf of us than any other non-executive director on our board.

 

Our board believes each of its members is an independent director, as the term is defined by the Nasdaq Stock Market corporate governance listing standards to which we are subject (“Independent Director”), with the exception of Mr. Duncan who is an officer and employee of the Company.  That is, in the case of all other board members, our board believes each of them is an individual having a relationship to us which would not interfere with the exercise of independent judgment in carrying out the member’s responsibilities to us.

 

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Rights of Holders of Series B Preferred Stock in Nomination to, or Observer Status Regarding, the Board.  Under the terms of the issuance and sale of our Series B preferred stock, so long as any shares of that stock remain outstanding, we must cause our board to include one seat, the nominee for which is to be designated under terms of that sale.  As of December 31, 2004, those specific terms were not effective, although they could in the future become effective with the issuance of additional shares of our Series B preferred stock to another holder or should the present holder of the outstanding Series B preferred stock, Toronto Dominion, not be prohibited from participation in the designation of that board member by law or regulation, including the federal Bank Holding Company Act.

 

The Series B Agreement provides that, upon designation of an individual by the holders of our Series B preferred stock, our board must cause that individual to be nominated for approval by the holders of our common stock at each meeting of our shareholders at which directors are to be elected.  Our board is then expected, upon that nomination, to recommend approval of that designated individual.  In the event the holders of the our common stock shall fail to elect that designated individual, the holders of Series B preferred stock will have the right to appoint an observer to attend the meetings of our board.  Independent of that observer right, if at any time the designee to our board is not an employee of Toronto Dominion or its affiliates, then that investor would have an additional right to appoint an observer to attend all meetings of our board.  See below within this Part III, “Certain Relationships and Related Transactions:  Certain Transactions – Series B Agreement.”

 

Audit Committee Financial Expert

 

Our Audit Committee is composed of Messrs. Mooney, Reinstadtler and Schneider.  All three members are considered by our board to be Independent Directors.  In addition, Messrs. Mooney and Schneider are considered by our board to be audit committee financial experts (“Audit Committee Financial Experts”).

 

The Nasdaq Stock Market corporate governance listing standards require that at least one member of our Audit Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or comparable experience or background which results in the individual’s “financial sophistication.”  This financial sophistication may derive from the person being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.  Our board believes that Messrs. Mooney and Schneider, as Audit Committee Financial Experts, also meet the Nasdaq Stock Market requirements for financial sophistication.

 

Under rules of the Securities and Exchange Commission (“SEC”), an Audit Committee Financial Expert is defined as a person who has all of the following attributes:

 

•                                          Understanding of generally accepted accounting principles and financial statements.

 

•                                          Ability to assess the general application of such principles in connection with accounting for estimates, accruals and reserves.

 

•                                          Experience in preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements, or experience actively supervising one or more persons engaged in such activities.

 

•                                          Understanding of internal control over financial reporting.

 

•                                          Understanding of audit committee functions.

 

Legal Proceedings

 

As of December 31, 2004, our board was unaware of any legal proceedings which may have occurred during the past five years in which one or more of our directors, director nominees or executive officers were a party adverse to us, or any legal proceeding which would be material to an evaluation of the ability or integrity of one or more of our directors or executive officers.

 

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Section 16(a) Beneficial Ownership Reporting Compliance

 

During 2004, there were three failures to file with the SEC Forms 3 (Initial Statement of Beneficial Ownership of Securities) or 4 (Change in Beneficial Ownership Report) on a timely basis as required under Section 16(a) of the Exchange Act.  That is, Messrs. Edgerton and Cary failed to file respective Forms 3, each on a single transaction, and Ms. Tindall failed to file a Form 4 on a single transaction.

 

Code of Business Conduct and Ethics

 

Our Ethics Code, i.e., our Code of Business Conduct and Ethics, was adopted by our board in 2003.  It applies to all of our officers, directors and employees.  The Ethics Code takes as its basis a set of business principles adopted by our board several years ago.  It also builds upon the basic requirements for a code of ethics as required by federal securities law and rules adopted by the SEC.

 

Through the Ethics Code, we have reestablished our course of business conduct and ethics, infusing it with certain key values and characteristics and providing adherence to a clear code of ethical conduct.  The Ethics Code promotes honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships of our employees.  It also promotes full, fair, accurate, timely and understandable disclosure in our reports and documents filed with, or submitted to, the SEC and other public communications made by us.  The Ethics Code further promotes compliance with applicable governmental laws, rules and regulations, internal reporting of violations of the code to appropriate persons as identified in the code and accountability for adherence to the code.

 

A copy of the Ethics Code is displayed on our Internet website at www.gci.com (click on “About GCI,” then on “Corporate Governance” and then on “Code of Business Conduct and Ethics”).  Also, a copy of the Ethics Code may be obtained at no charge and upon written request to us at the following address:

 

ATTN: Secretary (Ethics Code)

General Communication, Inc.

2500 Denali Street, Suite 1000

Anchorage, Alaska  99503

 

Item 11.                                                   Executive Compensation.

 

Director Compensation

 

Through September 2004, director fees were set at $2,000 per director per quarter pro-rated based upon attendance at our board meetings during the quarter.  However, directors who serve on the Audit Committee each received an additional director fee of $2,000 per director per quarter pro-rated based upon attendance at committee meetings.  Directors affiliated with the Company through a business interest did not receive director fees.

 

At its December 2004 board meeting, the board adopted a new director compensation plan (“Director Compensation Plan”).  The Director Compensation Plan is a plan to acknowledge and compensate, from time to time, directors on our board for ongoing dedicated service.  The plan compensation consists of stipends in the form of cash and Company Class A common stock.  The cash compensation consists of $24,000 per year (prorated for days served and paid quarterly) plus $2,000 for each meeting attended either in person or telephonically.  The cash compensation portion of the Director Compensation Plan commenced effective with the September 2004 board meeting.

 

The stock compensation portion of the Director Compensation Plan consists of a grant of 3,330 shares to a director for each year of service, or a portion of a year of service.  The initial grants under the plan were made on a contingent basis, effective December 22, 2004, and vested on December 31, 2004.  Subsequent grants will be made annually under the plan on June 1 of each year, commencing with June 1, 2005.  When the shares vest, they are subject to taxation based on the then fair market value of the vested shares.  Accordingly, at the time of vesting, the Company will make a supplemental payment equal to 40% of the value of the vested shares of each director in order to facilitate the payment by the director of the taxes that may result from the vesting of the shares.  The Nasdaq Stock Market rules require prior shareholder approval of the stock compensation portion of the plan, and the board intends to seek that approval at the 2005 shareholder meeting.  In the

 

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meantime, grants of stock made under the plan are contingent upon shareholder approval of that portion of the plan.

 

Under the Director Compensation Plan, compensation will be paid only to those directors who are able to receive the benefit individually, whether or not they are our employees.

 

During 2004, the directors on our board received no other direct compensation for serving on the board and its committees.  However, they were reimbursed for travel and out-of-pocket expenses incurred in connection with attendance at meetings of the board and its committees.

 

Executive Compensation

 

Summary Compensation.  The following table sets forth certain information concerning the cash and non-cash compensation earned during fiscal years 2002, 2003 and 2004 by our chief executive officer and by each of our four other most highly compensated executive officers whose individual combined salary and bonus each exceeded $100,000 during 2004 (collectively, “Named Executive Officers”).

 

SUMMARY COMPENSATION TABLE

 

		Annual Compensation								Long-Term Compensation Awards
Name and Principal Position		Year		Salary ($)		Bonus ($)		Other Annual Compensation ($)		Restricted Stock Awards ($)		Securities Underlying Options/SARs(#)		All Other Compensation ($)(1),(2)
Ronald A. Duncan		2004		345,000		131,250		-0-		36,763		250,000		51,267
President and Chief Executive		2003		295,000		105,000		-0-		-0-		-0-		21,338
Officer		2002		295,000		99,750		-0-		-0-		450,000		21,338
G. Wilson Hughes		2004		175,000		67,724		-0-		-0-		-0-		192,402
Executive Vice President		2003		175,000		53,682		-0-		-0-		-0-		162,773
and General Manager		2002		173,959		75,177		-0-		-0-		200,000		155,957
John M. Lowber
Senior Vice President, Chief		2004		223,884		85,281		-0-		-0-		100,000		142,017
Financial Officer and		2003		222,050		53,682		-0-		-0-		-0-		129,257
Secretary/Treasurer		2002		220,090		75,177		-0-		-0-		200,000		116,245
Richard P. Dowling		2004		225,000		70,168	(3)	-0-		-0-		-0-		15,036
Senior Vice President–		2003		223,956		3,682		-0-		-0-		-0-		8,353
Corporate Development		2002		225,000		43,891		-0-		-0-		150,000		6,441
Richard D. Westlund
Vice President and		2004		135,000		181,785	(4)	-0-		-0-		-0-		73,514
General Manager Long		2003		135,000		388,894		-0-		-0-		-0-		68,641
Distance & Wholesale Services		2002		135,000		90,141		-0-		-0-		-0-		58,171

 

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(1)                                  The amounts reflected in this column include accruals under deferred compensation agreements between us and the named individuals as follows: Mr. Hughes, $132,932 in 2002, $137,474 in 2003 and $170,444 in 2004; Mr. Lowber, $84,274 in 2002, $95,912 in 2003 and $108,052 in 2004; Mr. Westlund, $43,637 in 2002, $44,148 in 2003 and $44,700 in 2004; and Mr. Dowling, $900 in 2002 and 2003 and $902 in 2004. Mr. Hughes received a partial distribution of his deferred compensation account during 2002, 2003 and 2004. The distribution to Mr. Hughes in 2002 included $132,932 which was credited to his account during 2002, plus an additional $10,961 which had been credited to his deferred account and reported in 2001. Does not include bonus agreement granted to Mr. Hughes in 2002. See, within this section, “-Hughes Bonus Agreement.” The distribution in 2003 included $60,720 of the $137,474 which was credited to Mr. Hughes account during 2003. The distribution in 2004 included $35,000 of the $170,444 which was credited to Mr. Hughes’ account during 2004.

 

(2)                                  The amounts reflected in this column also include matching contributions under the Stock Purchase Plan as follows: Mr. Duncan, $20,500, $20,000,and $20,000 in 2004, 2003, 2002, respectively; Mr. Hughes, $20,500, $20,000, $20,000 in 2004, 2003, and 2002, respectively; Mr. Lowber, $20,500, $20,000, and $18,625 in 2004, 2003, and 2002, respectively; Mr. Dowling, $12,538, $5,857, and $4,083, in 2004, 2003, and 2002, respectively; and Mr. Westlund, $20,500, $20,000, and $11,000 in 2004, 2003, and 2002, respectively. Amounts shown for Mr. Duncan include premiums of $138 under a term life insurance, policy paid in each of 2004, 2003, and 2002, respectively. Amounts shown for Mr. Westlund include premiums of $6,181, $3,293, and $2,334, under a life insurance policy paid in 2004, 2003, and 2002, respectively. Amounts shown for Mr. Hughes include premiums of $258, $258, and $1,825, under life insurance policies paid in each of 2004, 2003, and 2002, respectively. Amounts for Mr. Lowber include premiums of $258, $138, and $138, under life insurance policies paid in each of 2004, 2003, and 2002, respectively. Amounts shown for Mr. Dowling include premiums of $396, $396, and $258 under a life insurance policy paid in each of 2004, 2003, and 2002. Includes a waiver of accrued interest on a note owed to us by Mr. Lowber in the amounts of $12,007 on January 1, 2004, 2003, and 2002.

 

Includes $806 in 2004 for Mr. Westlund and $3,841 in 2003 for Mr. Hughes, respectively, for the personal use of our leased aircraft. Includes $29,328 in director compensation for Mr. Duncan and a longevity bonus valued at $101 both for 2004. Includes a longevity bonus valued at $127 for Mr. Westlund in 2004. Amounts in this column further include $1,200 of credit applied to services purchased from us by each of the Named Executive Officers for each year for their participation in our quality assurance program extended to employees, generally. Amounts in this column do not include the cash surrender value of a life insurance policy in the amount of $603,509 which was distributed to Mr. Lowber during 2002. The policy premiums were paid out of proceeds credited to Mr. Lowber’s deferred compensation account during the years 1992 through 1999 and had been included under the “All Other Compensation” column during those years.

 

(3)                                  Includes $70,000 of a $350,000 retention bonus paid in 2004 that vests ratably over a five—year period beginning January 1, 2004. Any unvested amounts are refundable in the event Mr. Dowling terminates his employment before the end of the retention period.

 

(4)                                  Includes $42,400 of a $407,886 retention bonus paid in 2004 that vests on March 31, 2005 with the remaining portion vesting in the amount of $85,000, $127,400 and $153,086 on March 31, 2006, 2007 and 2008, respectively. Any unvested amounts are refundable in the event Mr. Westlund terminates his employment before the end of the retention period.

 

Option/SAR Grants

 

The following table sets forth information on the individual grants of stock options (whether or not in tandem with stock appreciation rights (“SARs”)), and freestanding SARs made during 2004 to its Named Executive Officers.  We did not issue any tandem SARs or freestanding SARs during that period.

 

10

 

OPTION/SAR GRANTS IN LAST FISCAL YEAR

 

		Individual Grants
		Number of Securities Underlying Option/SARs Granted(1)		% of Total Optional SARs Granted to Employees in Fiscal		Exercise or Base Price(2)		Expiration		Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
Name		(#)		Year (%)		($/Share)		Date		5% ($)(3)		10%($)(3)
Ronald A. Duncan		250,000		32.6		8.40		06/24/14		1,255,523		3,243,109
G. Wilson Hughes		—		—		—		—		—		—
John M. Lowber		100,000		13.1		8.40		06/24/14		502,209		1,297,244
Richard P. Dowling		—		—		—		—		—		—
Richard D. Westlund		—		—		—		—		—		—

 

(1)                                  Options in Class A common stock.

 

(2)                                  The exercise price of the options was equal to the market price of the Class A common stock at the time of grant.

 

(3)                                  The potential realizable dollar value of a grant is calculated as the product of (a) the difference between (i) the product of the per-share market price at the time of grant and the sum of 1 plus the adjusted stock price appreciation rate (the assumed rate of appreciation compounded annually over the term of the option or SAR) and (ii) the per-share exercise price of the option or SAR and (b) the number of securities underlying the grant at fiscal year end.

 

Option Exercise and Fiscal Year-End Values

 

The following table sets forth information concerning each exercise of stock options during 2004 by each of the Named Executive Officers and the fiscal year-end value of unexercised options held by each of them.

 

AGGREGATED OPTION/SAR EXERCISES

IN LAST FISCAL YEAR AND FISCAL YEAR END

OPTION/SAR VALUES

 

		Shares Acquired on Exercise		Value		Number of Securities Underlying Unexercised Options/SARs at Fiscal Year-End (#)				Value of Unexercised In-the-Money Options/SARs at Fiscal Year-End ($)(1)
Name		(#)		Realized($)		Exercisable		Unexercisable		Exercisable		Unexercisable
Ronald A. Duncan		-0-		-0-		300,000		350,000		1,267,000		1,096,500
G. Wilson Hughes		-0-		-0-		150,000		250,000		681,000		985,000
John M. Lowber		105,425		635,988		320,000		330,000		1,364,800		1,196,200
Richard P. Dowling		-0-		-0-		225,425		130,000		996,061		522,700
Richard D. Westlund		57,366		273,245		33,333		66,667		134,665		269,335

 

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(1)                                  Represents the difference between the fair market value of the securities underlying the options/SAR and the exercise price of the options/SAR based upon the last trading price on December 31, 2004.

 

Non-Qualified, Unfunded Deferred Compensation Plan

 

In February 1995, we established a non-qualified, unfunded, deferred compensation plan to provide a means by which certain of our employees may elect to defer receipt of designated percentages or amounts of their compensation and to provide a means for certain other deferrals of compensation.  Employees eligible to participate in the plan are determined by our board.  We may, at our discretion, contribute matching deferrals in amounts as we select.

 

Participants immediately vest in all elective deferrals and all income and gain attributable to that participation.  Matching contributions and all income and gain attributable to them vest on a case-by-case basis as determined by us.  Participants may elect to be paid in either a single lump-sum payment or annual installments over a period not to exceed ten years.  Vested balances are payable upon termination of employment, unforeseen emergencies, death or total disability of the participant, or change of control of us or our insolvency.  Participants become our general unsecured creditors with respect to deferred compensation benefits of the plan.

 

During 2004, other than Messrs. Dowling and Westlund, none of the Named Executive Officers had participated in this plan.

 

Long-Term Incentive Plan Awards

 

We had no long-term incentive plan in operation during 2004.

 

Performance Based EBITDA Incentive Compensation Plan

 

In 2002, we adopted a Performance Based EBITDA (earnings before interest, taxes, depreciation, and amortization) Incentive Compensation Plan (“Incentive Compensation Plan”) to encourage increasing EBITDA, i.e., earnings before income taxes, depreciation and amortization (as defined in the plan), of our Alaska operations to a specified target by the end of 2006.  Participants are granted units which are valued in terms of a share of our Class A common stock.  If the target EBITDA is achieved on or before the end of 2006, the awards vest.  In this instance, each participant will be entitled to receive, for each unit, the market value of a share of our Class A common stock on the date that such payment is made.

 

Under the Incentive Compensation Plan, 40% of the payment will be made in cash.  The remaining 60% may, at our option, be paid either in cash or in our restricted Class A common stock.  However, if stock is to be issued in payment to participants, we are required to obtain shareholder approval of the Incentive Compensation Plan prior to any such payment.  Participants must be employed by us on the date of payment in order to receive any compensation pursuant to the plan.  The EBITDA target will be adjusted for any material

 

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acquisitions within the Alaska market.  The award may be paid out earlier if we are sold prior to the earlier of the end of 2006 or achievement of the EBITDA target.

 

Specified individuals of three groups of employees are eligible to participate in the plan.  They are our chief executive officer, our general managers and our senior officers.  Any payments to the general manager group pursuant to the plan are included in EBITDA for purposes of determining whether the EBITDA target for the senior officer group has been met.  One-half of the vested amount is valued and paid on the last day of the first quarter of the year following vesting, with the balance paid one year later.

 

The provisions of the Incentive Compensation Plan pertaining to the chief executive officer are the same as for the other two groups, except any payments to the general manager and senior officer groups under the plan are included in EBITDA for purposes of determining whether the EBITDA target for the chief executive officer has been met.  One-half of the total amount earned will be valued and paid on the last day of the first quarter of the year following achievement of the target EBITDA goal.  The remaining one-half will be paid as deferred compensation.  This amount will vest one-half on each of the first and second anniversaries of the initial award.  However, in the case of our chief executive officer, the individual must be employed by us on such dates for vesting to be effective.  We charged $837,000 to expense during 2004 under the Incentive Compensation Plan.

 

During 2004, Messrs. Hughes and Westlund were the only Named Executive Officers who participated in the Incentive Compensation Plan.  For that year, units with respect to approximately 245,000 shares of our Class A common stock were to be granted pursuant to the Incentive Compensation Plan, of which were allocated 100,000 units to Mr. Hughes, 10,000 to Mr. Westlund and 50,000 units to Ms. Tindall.

 

Stock Purchase Plan

 

In December 1986, we adopted a qualified employee stock purchase plan which has been subsequently amended from time to time and is in its present form the Stock Purchase Plan.  The plan is qualified under Section 401 of the Internal Revenue Code.  All of our employees who have completed at least one year of service are eligible to participate in the plan.  Eligible employees may elect to reduce their taxable compensation in any even dollar amount up to 12% of such compensation for employees earning more than $90,000 per year and up to 50% of such compensation, both up to a maximum per employee of $14,000 for 2005.  Employees may contribute up to an additional 10% of their compensation with after-tax dollars.  Starting in 2002, participants over the age of fifty may make additional elective contributions to their accounts in the plan pursuant to a schedule set forth in the Internal Revenue Code.

 

Subject to certain limitations, we may make matching contributions of common stock for the benefit of employees.  Such a contribution will vest in increments over the first six years of employment.  Thereafter, they are fully vested when made.  No more than 10% of any one employee’s compensation will be matched in any year.  Except for additional elective contributions made by participants over age 50, the combination of salary reductions, after-tax contributions and our matching contributions for any employee cannot exceed the lesser of $42,000 or 25% of such employees’ compensation (determined after salary reduction) for any year.

 

Under the terms of the Stock Purchase Plan, participating eligible employees may direct their contributions to be invested in common stock of the Company, AT&T Corp., and Comcast Corporation, and shares of various identified mutual funds.

 

The Stock Purchase Plan, on our behalf, may each year pay to the plan’s trust fund an amount up to 100% of each participating eligible employee’s elective deferral and voluntary contributions to the plan as determined by our board.  This employer contribution on behalf of the

 

13

 

participating eligible employee is to equal a stated percentage of each employee’s contributions (both voluntary contributions and elective deferrals) during any payroll period.  However, no such employee’s elective deferral or voluntary contribution is to be matched in an amount exceeding 10% of that employee’s compensation during any payroll period the employee participates in the plan.  With limited exception, the amount of our contribution under the plan must not exceed either 10% of the aggregate compensation of all participating eligible employees under the plan in the year for which the contribution is being determined or the annual addition limitations of the Internal Revenue Code as provided in the plan.

 

The Stock Purchase Plan is administered through a plan administrator (currently Alfred J. Walker, one of our Vice Presidents and our Chief Accounting Officer), and the plan’s committee is appointed by our board.  The assets of the plan are invested from time to time by the trustee at the direction of the plan’s committee, except that participants have the right to direct the investment of their contributions to the Stock Purchase Plan.  The plan administrator and members of the plan’s committee are all our employees.  The plan’s committee has broad administrative discretion under the terms of the plan.

 

As of December 31, 2004, there remained 2,009,314 shares of Class A and 464,016 shares of Class B common stock allocated to the plan and available for issuance by us or otherwise acquisition by the plan for the benefit of participants in the plan.

 

Stock Option Plan

 

In December 1986, we adopted a stock option plan which has been amended from time to time and presently is our Amended and Restated 1986 Stock Option Plan (“Stock Option Plan”).

 

Under the Stock Option Plan, we are authorized to grant non-qualified options to purchase shares of Class A common stock to selected officers, directors and other employees of, and consultants or advisors to, the Company and its subsidiaries. The number of shares of Class A common stock allocated to the Stock Option Plan was last increased by 2.5 million shares to 13.2 million shares at our 2004 annual meeting.  The number of shares for which options may be granted is 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, 2004, there were 6,436,875 shares subject to outstanding options under the Stock Option Plan, 5,017,668 shares had been issued upon the exercise of options under the plan and 1,745,457 shares remained available for additional grants under the plan.

 

As of December 31, 2004 the Stock Option Plan was administered by the Compensation Committee composed of six members of our board.  The members of that committee are identified below.  See below within this section, “– Compensation Committee Report on Executive Compensation.”

 

The Compensation Committee selects optionees and determines the terms of each option, including the number of shares covered by each option, the exercise price and the option exercise period which, under the Stock Option Plan, may be up to ten years from the date of grant.  Options granted that have not become exercisable terminate upon the termination of the employment or directorship of the optionholder.  Exercisable options terminate from one month to one year after such termination, depending on the cause of such termination.  If an option expires or terminates, the shares subject to such option become available for additional grants under the Stock Option Plan.

 

14

 

Hughes Bonus Agreement

 

In consideration for agreeing to continue his employment until December 31, 2004, in December 2002 we granted Mr. Hughes the right to use certain of our real estate for two weeks each year from January 1, 2005 to December 31, 2034.  Mr. Hughes may elect at any time to receive a cash bonus in lieu of the foregoing equal to $275,000 plus interest accrued at the rate of 3% per annum for the period between January 1, 2002 and the date on which the option to elect such cash payment is exercised.  The bonus vested on December 31, 2004.  Should we intend to convey such real estate to a third party, Mr. Hughes would have the right to acquire certain property adjoining that real estate or, unless he should exercise the cash option previously described, be paid an amount equal to $275,000 plus accrued interest at the rate of 3% per annum for the period from January 1, 2002 to the date on which that option is exercised.  As of December 31, 2004, $299,750 were accrued pursuant to this agreement, of which $140,250 were accrued during 2004.

 

Report on Repricing of Options/SARs

 

During 2004, we did not adjust or amend the exercise price of stock options or SARs previously awarded to any of the Named Executive Officers, whether through amendment, cancellation or replacement grants, or any other means.

 

Employment Contracts and Termination of Employment and Change-in Control Arrangements

 

Except as disclosed in this Part III, as of December 31, 2004, there were no compensatory plans or arrangements, including payments to be received from us, with respect to the Named Executive Officers for that year.  This statement is limited to situations where such a plan or arrangement resulted in or may result from the resignation, retirement, or any other termination of a Named Executive Officer’s employment with us, or from a change of control of us or a change in that officer’s responsibilities following such a change in control, and where the amount involved, including all periodic payments or installments, exceeded $100,000.

 

Compensation Committee Interlocks and Insider Participation

 

Our Compensation Committee was composed of six members of our board as identified below.  See within this section below, “– Compensation Committee Report on Executive Compensation.”  The relationships of them to us are described elsewhere in this Part III.  See within this Part III, “Directors and Executive Officers of the Registrant”; “Certain Relationships and Related Transactions:  Certain Transactions”; and “Security Ownership of Certain Beneficial Owners and Management.”

 

Compensation Committee Report on Executive Compensation

 

The duties of our Compensation Committee are as follows:

 

•                                          Prepare, on an annual basis for the review of and action by our board, a statement of policies, goals, and plans for executive officer and board member compensation, if any –

 

•                                          Statement is specifically to address expected performance and compensation of and the criteria on which compensation is based for the chief executive officer and such other of our executive officers as our board may designate for this purpose.

 

•                                          Monitor the effect of ongoing events on and the effectiveness of existing compensation policies, goals, and plans –

 

15

 

•                                          Events specifically include but are not limited to the status of the premise that all pay systems correlate with our compensation goals and policies.

 

•                                          Report from time to time, its findings to our board.

 

•                                          Monitor compensation-related publicity and public and private sector developments on executive compensation.

 

•                                          Familiarize itself with, and monitor the tax, accounting, corporate, and securities law ramifications of, our compensation policies, including but not limited to –

 

•                                          Comprehending a senior executive officer’s total compensation package.

 

•                                          Comprehending the package’s total cost to us and its total value to the recipient.

 

•                                          Paying close attention to salary, bonuses, individual insurance and health benefits, perquisites, historical loans made by us, special benefits to specific executive officers, individual pensions, and other retirement benefits.

 

•                                          Establish the overall cap on executive compensation and the measure of performance for executive officers, either by predetermined measurement or by a subjective evaluation.

 

•                                          Strive to make our compensation plans simple, fair, and structured so as to maximize shareholder value.

 

For 2004, the duties of our Compensation Committee in the area of executive compensation specifically included addressing the reasonableness of compensation paid to executive officers.  In doing so, the committee took into account how compensation compared to compensation paid by competing companies as well as our performance and available resources.

 

Our compensation policy as established by our Compensation Committee is that a portion of our annual compensation of our senior executive officers relates to and is contingent upon our performance.  In addition, executive officers participating in deferred compensation agreements established by us become, under those agreements, our unsecured creditors.

 

In February 2004, our Compensation Committee, using as a guide the Incentive Compensation Plan, established compensation levels for 2004 for all senior corporate officers, including Mr. Duncan and certain of the Named Executive Officers.  Also at that time, our Compensation Committee established annual incentive bonus agreements with Mr. Duncan and with each of several of its senior executive officers, including certain of the Named Executive Officers.

 

These agreements included the premise that our performance, or that of a division or subsidiary, as the case may be, for purposes of compensation would be measured by our Compensation Committee against goals established at that time and were reviewed and approved by our board.  The goals included our targets for revenues and cash flow standards of the relevant division or subsidiary of our business.  Targeted objectives were set and measured from time to time by our Compensation Committee.  Our other business achievements obtained through the efforts of an executive officer were also taken into consideration in the evaluation of performance.  Performances were evaluated and bonuses were issued as described elsewhere in this section.

 

16

 

During 2004, our Compensation Committee monitored and provided direction for the Stock Purchase Plan and Stock Option Plan.  In addition, our Compensation Committee reviewed compensation levels of members of management, evaluated the performance of management, and considered management succession and related matters.

 

Our Compensation Committee reviewed in detail all aspects of compensation for certain of the Named Executive Officers and our other senior executive officers.  In particular, our Compensation Committee concluded that the performance of our chief executive officer, Mr. Duncan, had met or surpassed the goals and objectives set as the basis for his compensation for 2004.  That is, the Compensation Committee believes the salary and benefits paid to Mr. Duncan during 2004 were commensurate with the Company’s financial performance.  The Compensation Committee expects that any bonus compensation recommended to be payable to Mr. Duncan in future years will also be based upon the Company’s growth and financial performance, and subject to approval by the Compensation Committee.

 

The practice of our Compensation Committee in future years will likely be to continue to review directly the compensation and performance of Mr. Duncan as our chief executive officer.  While our Compensation Committee may review recommendations by Mr. Duncan for the compensation of other senior executive officers, the committee in accordance with Nasdaq Stock Market corporate governance listing standards rules has responsibility for recommending compensation of such officers directly to our board for its determination.

 

Compensation Committee:

Stephen M. Brett, Chair

Donne F. Fisher

William P. Glasgow

Stephen R. Mooney

Stephen A. Reinstadtler

James M. Schneider

 

Performance Graph

 

The following graph includes a line graph comparing the yearly percentage change in our cumulative total shareholder return on our Class A common stock during the five-year period 2000 through 2004.  This return is measured by dividing (1) the sum of (a) the cumulative amount of dividends for the measurement period (assuming dividend reinvestment, if any) and (b) the difference between our share price at the end and the beginning of the measurement period, by (2) the share price at the beginning of that measurement period.  This line graph is compared in the following graph with two other line graphs during that five-year period, i.e., a market index and a peer index.

 

The market index is the Center for Research in Securities Price Index for the Nasdaq Stock Market for United States companies.  It presents cumulative total returns for a broad based equity market assuming reinvestment of dividends and is based upon companies whose equity securities are traded on the Nasdaq Stock Market.  The peer index is the Center for Research in Securities Price Index for Nasdaq Telecommunications Stock.  It presents cumulative total returns for the equity market in the telecommunications industry segment assuming reinvestment of dividends and is based upon companies whose equity securities are traded on the Nasdaq Stock Market.  The line graphs represent monthly index levels derived from compounding daily returns.

 

In constructing each of the line graphs in the following graph, the closing price at the beginning point of the five-year measurement period has been converted into a fixed investment, stated in dollars, in our Class A common stock (or in the stock represented by a given index, in the cases of the two comparison indexes), with cumulative returns for each subsequent fiscal year measured as a change from that investment.  Data for each succeeding fiscal year during the five-year measurement period are plotted with points showing the cumulative total return as of

 

17

 

that point.  The value of a shareholder’s investment as of each point plotted on a given line graph is the number of shares held at that point multiplied by the then prevailing share price.

 

Our Class B common stock is traded over-the-counter on a more limited basis.  Therefore, comparisons similar to those previously described for the Class A common stock are not directly available.  However, the performance of Class B common stock may be analogized to that of the Class A common stock in that the Class B common stock is readily convertible into Class A common stock by request to us.

 

Comparison of Five-Year Cumulative Return

Performance Graph for General Communication, Inc.

 

 

18

 

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH FOR GENERAL COMMUNICATION, INC., NASDAQ STOCK MARKET INDEX FOR

UNITED STATES COMPANIES, AND NASDAQ TELECOMMUNICATIONS STOCK(1)(2)(3)(4)

 

Measurement Period (Fiscal Year Covered)		Company ($)		Nasdaq Stock Market Index for U.S. Companies ($)		Nasdaq Telecommunications Stock ($)
FYE 12/31/99		100.0		100.0		100.0
FYE 12/31/00		160.0		60.8		42.6
FYE 12/31/01		195.0		47.8		28.3
FYE 12/31/02		153.4		33.1		13.0
FYE 12/31/03		198.9		49.4		21.7
FYE 12/31/04		252.3		53.8		23.1

 

Item 12.                                                   Security Ownership of Certain Beneficial Owners and Management.

 

Equity Compensation Plan Information

 

The Stock Option Plan was initially approved by our shareholders in 1986.  We do not have any current equity compensation plans approved by our shareholders other than the Stock Option Plan.

 

The following table sets forth information regarding the number of shares of our common stock that may be issued pursuant to our equity compensation plans or arrangements as of December 31, 2004.  The recipients of these grants are selected officers, directors and employees of, and consultants or advisors to, us in exchange for consideration in the form of goods or services (as described in Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation).

 

(1)                                  The lines represent monthly index levels derived from compounded daily returns that include all dividends.

 

(2)                                  The indexes are reweighted daily, using the market capitalization on the previous trading day.

 

(3)                                  If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

 

(4)                                  The index level for all series was set to $100.00 on December 31, 1999.

 

19

 

EQUITY COMPENSATION PLAN INFORMATION

AS OF DECEMBER 31, 2004

 

Plan Category		Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)(1)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (b)(1)		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c)(1)
Equity compensation plans approved by security holders(2)		6,436,875		6.81		1,745,457
Equity compensation plans not approved by security holders(3)		250,000		6.50		-0-
Total:(4)		6,686,875		6.79		1,745,457

 

(1)                                  Does not include contingently issuable shares granted to directors pursuant to the Director Compensation Plan in the total amount of 19,980 shares of Class A common stock.  See within this Part III, “Executive Compensation:  Director Compensation.”

 

(2)                                  Stock Option Plan.

 

(3)                                  Grant made in January 2001 separate from the Stock Option Plan of options to a company owned by Mr. Duncan to acquire 250,000 shares of our Class A common stock at $6.50 per share, exercisable up through March 10, 2010.  See below within this section, “- Ownership of Company: Principal Shareholders.”

 

(4)                                  Messrs. Dowling, Duncan, Hughes, and Westlund and one other of our employees have accumulated deferred compensation account balances that have been denominated in shares of our Class A common stock.  We have acquired shares of our Class A common stock in the open market or in private transactions over the years to fund the ultimate payment of the deferred amounts.  A total of 274,264 shares, of which all but 26,189 shares have vested, are owned in our name and are being held in treasury pending distribution.

 

Ownership of Company

 

Principal Shareholders.  The following table sets forth, as of December 31, 2004, certain information regarding the beneficial ownership of our Class A common stock, Class B common stock and Series B preferred stock by each of the following:

 

•                                          Each person known by us to own beneficially 5% or more of the outstanding shares of Class A common stock or Class B common stock, or Series B preferred stock.

 

•                                          Each of our directors.

 

•                                          Each of the Named Executive Officers.

 

•                                          All of our executive officers and directors as a group.

 

All information with respect to beneficial ownership has been furnished to us by the respective shareholders.

 

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Name and Address of Beneficial Owner(1)		Title of Class(2)		Amount and Nature of Beneficial Ownership(2) (#)		% of Class(2)		% of Total Shares Outstanding (Class A & B)(2)				% Combined Voting Power (Class A & B)(2)
								I		II		I		II
Stephen M. Brett		Class A		25,000	(3),(4)	*		*		*		*		*
		Class B		—		—
		Series B		—		—
Ronald A. Duncan		Class A		1,370,643	(4),(5)	2.6		3.3		3.2		6.6		6.5
		Class B		460,021	(5)	11.9
		Series B		—		—
Jerry A. Edgerton		Class A		—		—		—		—		—		—
		Class B		—		—
		Series B		—		—
Donne F. Fisher		Class A		62,135	(3),(4),(6)	*		*		*		2.4		2.4
		Class B		212,688	(6)	5.5
		Series B
William P. Glasgow		Class A		49,944	(4),(7)	*		*		*		*		*
		Class B		—		—
		Series B		—		—
G. Wilson Hughes		Class A		687,295	(8)	1.3		1.2		1.2		*		*
		Class B		2,765	(8)	*
		Series B		—		—
John M. Lowber		Class A		532,831	(9)	1.0		1.2		1.2		*		*
		Class B		6,287	(9)	*
		Series B		—		—
Stephen R. Mooney		Class A		—		—		—		—		—		—
		Class B		—		—
		Series B		—		—
Stephen A. Reinstadtler		Class A		—	(4)	—		—		—		—		—
		Class B		—		—
		Series B		—		—
James M. Schneider		Class A		55,000	(3),(4)	*		*		*		*		*
		Class B		—		—
		Series B		—		—
Dana L. Tindall		Class A		328,006	(10)	*		*		*		*		*
		Class B		3,835	(10)	*
		Series B		—		—
Richard D. Westlund		Class A		138,630	(11)	*		*		*		*		*
		Class B		3,618	(11)	—
		Series B		—		—
Barclays Global Investors, NA		Class A		2,909,142		5.6		5.2		5.2		3.2		3.2
45 Fremont Street		Class B		—		—
San Francisco, CA 94105		Series B		—		—
GCI Qualified Employee		Class A		5,090,863		9.8		9.3		9.2		6.8		6.7
Stock Purchase Plan		Class B		99,766		2.6
2550 Denali St., Ste. 1000 Anchorage, AK 99503		Series B		—		—
Estate of Kim Magness		Class A		131,996		*		1.0		1.0		5.0		4.9
c/o Raymond L. Sutton, Jr.		Class B		435,324		11.3
303 East 17th Ave., Ste. 1100 Denver, CO 80203 1264		Series B		—		—

 

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Name and Address of Beneficial Owner(1)		Title of Class(2)		Amount and Nature of Beneficial Ownership(2) (#)		% of Class(2)		% of Total Shares Outstanding (Class A & B)(2)				% Combined Voting Power (Class A & B)(2)
								I		II		I		II
Gary Magness		Class A		137,996		*		1.0		1.0		5.0		4.9
c/o Raymond L. Sutton, Jr.		Class B		433,924		11.2
303 East 17th Ave., Ste. 1100 Denver, CO 80203 1264		Series B		—		—
MCI		Class A		50,000	(12)	*		2.4		2.4		14.2		14.1
2201 Loudoun County Parkway		Class B		1,275,791		33.0
Ashburn, VA 20147		Series B		—		—
Toronto Dominion		Class A		25,066	(13)	*		*		1.4		*		*
Investments, Inc.		Class B		—		—
31 West 52nd Street New York, NY 10019 6101		Series B		4,314	(13)	100
Robert M. Walp		Class A		251,028	(14)	*		1.0		1.0		3.6		3.6
804 P St., Apt. 4		Class B		303,457	(14)	7.9
Anchorage, AK 99501		Series B		—		—
Wellington Management		Class A		4,302,400		8.3		7.7		7.6		4.8		4.7
75 State Street		Class B		—		—
Boston, MA 02109		Series B		—		—
Westport Asset Management,		Class A		2,825,400		5.5		5.1		5.0		3.1		3.1
Inc.		Class B		—		—
253 Riverside Avenue Westport, CT 06880		Series B		—		—
All Directors and Executive		Class A		4,384,045	(15)	8.2		8.9		8.8		13.1		13.0
Officers As a Group		Class B		767,971	(15)	19.9
(20 Persons)		Series B		—	(15)	—

 

*                                         Represents beneficial ownership of less than 1% of the corresponding class or series stock.

 

(1)                                  Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act.  Shares of our stock that a person has the right to acquire within 60 days of December 31, 2004 are deemed to be beneficially owned by such person and are included in the computation of the ownership and voting percentages only of such person.  Each person has sole voting and investment power with respect to the shares indicated, except as otherwise stated in the footnotes to the table.  Addresses are provided only for persons other than management who own beneficially more than 5% of the outstanding shares of Class A or B common stock or Series B preferred stock.

 

(2)                                  “Title of Class” includes our Class A common stock, Class B common stock, and Series B preferred stock.  “Amount and Nature of Beneficial Ownership” and “% of Class” are given for each class or series of stock.  “% of Total Shares Outstanding” and “% Combined Voting Power” are given (a) under column I as excluding Series B preferred stock outstanding and (b) under column II as including Series B preferred stock outstanding and on an as-converted to Class A common stock basis at the conversion price as set in the Series B Agreement, i.e., $5.55 per share.  As of December 31, 2004, the 4,314 shares of Series B preferred stock outstanding (excluding accrued dividends payable in cash or in Class A common stock to that date) would convert to 777,298 shares of Class A common stock.

 

(3)                                  Includes 25,000 shares of our Class A common stock subject to stock options granted under the Stock Option Plan to each of Messrs. Brett, Fisher, and Schneider in February 1997 which they each respectively have the right to acquire within 60 days of December 31, 2004 by exercise of the respective stock options.  The exercise price for each option is $7.50 per share.

 

(4)                                  Does not include 3,330 shares of our Class A common stock granted (but not issued) to each of Messrs.  Brett, Duncan, Fisher, Glasgow, Reinstadtler and Schneider pursuant to the Director Compensation Plan, which grants are subject to approval of the stock compensation portion of the plan by our shareholders at our 2005 annual meeting.  See within this Part III, “Executive Compensation:  Director Compensation.”

 

(5)                                  Includes 133,983 shares of Class A common stock and 6,270 shares of Class B common stock allocated to Mr. Duncan under the Stock Purchase Plan.  Includes 50,000 shares of Class A common stock subject to stock

 

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