CONFIDENTIAL
General Communication, Inc.
Compensation Agreement
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
January 1, 1997
Term:
This compensation agreement is effective January 1, 1997 through
December 31, 2001.
Base Compensation:
▇▇▇▇▇▇ base compensation as of January 1, 1997 is $150,000 per year.
▇▇▇▇▇▇ base compensation will be increased $5,000 annually on January 1,
1999, January 1, 2000 and January 1, 2001.
Incentive Compensation:
▇▇▇▇▇▇ target incentive compensation will be $45,000 per year of which 22%
of actual amount accrued will be paid ▇▇▇▇▇▇ in cash and the remaining 78%
will be vested in ▇▇▇▇▇▇'▇ deferred compensation account.
Stock Options:
During 1Q97, GCI will ▇▇▇▇▇ ▇▇▇▇▇▇ an option to purchase 100,000 shares of
GCI stock at an exercise price of $7.00 per share. These stock options
will vest equally on January 1, 2000, January 1, 2001 and January 1, 2002.
Deferred Compensation:
A Deferred Compensation Account will be created for ▇▇▇▇▇▇ in the total
amount of $285,000. This amount shall be paid to ▇▇▇▇▇▇ following
termination of his employment. Forty thousand dollars ($40,000) of the
total shall be vested as of December 31,1996 and additional sums shall vest
as the deferred portion of ▇▇▇▇▇▇'▇ Incentive Compensation (described
above) is earned. At ▇▇▇▇▇▇'▇ option the entire amount of ▇▇▇▇▇▇'▇
Deferred Compensation Account ($285,000) may be invested in GCI stock.
▇▇▇▇▇▇ Outstanding Loan:
▇▇▇▇▇▇'▇ outstanding loan will be repaid by July 1, 1997.
CONFIDENTIAL
▇▇▇▇▇▇ Stock Sales:
As a matter of information ▇▇▇▇▇▇ expects to sell approximately 56,000
shares of GCI stock. At ▇▇▇▇▇▇'▇ option a portion of this stock may be
sold to GCI (at the market price on the date of such sale) to fund an
election by ▇▇▇▇▇▇ to have his deferred compensation account invested in
GCI stock as provided above. GCI shall cooperate with ▇▇▇▇▇▇ to sell up to
35,000 shares of his stock in the anticipated public offering to be
undertaken by GCI in 1997. ▇▇▇▇▇▇ anticipates using the proceeds of such
sale to repay his debt to GCI, to pay the tax due on his option exercise
and to fund personal cash requirements of approximately $50,000.11(1)
The above is agreed to effective January 1, 1997 pending formal approval by
GCI's Board of Directors at the next scheduled meeting.
______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Currently Option
Proposed Case Extension Case
(1) Estimated cash requirement:
Option shares exercised: 85,190.00 35,500.00
Times estimated price x $8.00 $8.00
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Estimated gain $681,520.00 $284,000.00
Times tax rate x .4 x .4
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Tax $272,608.00 $113,600.00
plus loan repayment 120,000.00 120,000.00
plus personal cash 50,000.00 50,000.00
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Total cash required $442,608.00 $283,600.00
Divided by estimated price 8.00 8.00
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Estimated shares to be sold 56,326.00 36,450.00
Total deferral would be (85,190 - 35,500 =) 49,690 @ $8.00 = $ 397,520.
