Gray Television, Inc. Capital Accumulation Plan
Notes to Financial Statements
1. Description of the
Plan
The following description of the Gray Television, Inc. Capital Accumulation Plan (the Plan) provides only general information.
Reference should be made to the Plan document for a more complete description of the Plans provisions.
General
The Plan was established and made effective October 1, 1994, for the administration and allocation of contributions by Gray Television, Inc. (the
Company or the Employer), and to encourage eligible employees to defer a part of their current income to provide for their retirement, death, or disability under the provisions of Section 401(k) of the Internal Revenue
Code. The Plan covers all employees of the Company and its subsidiaries. Employees are eligible to participate in the Plan beginning the first of the month following or coinciding with six months of employment. For acquired stations, the Company
will determine eligibility for participation based on information in the buy/sell agreement. If no information is provided, the Company will honor previous service to determine eligibility into the Plan. On January 2, 2019, the Company acquired
Raycom Media, Inc. (Raycom). In connection therewith, Raycom employees began participating in the Plan and had the option to rollover their account balances and plan loans from the Raycom Media, Inc. 401(k) Savings Plan (Raycom
Plan). Assets totaling $109,022,315 were rolled over from the Raycom Plan to the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Company is the Plans sponsor.
The Employee Benefits Committee is the Plan Administrator. Reliance Trust Company (Reliance) is the Plans trustee. Empower Retirement (Empower), a subsidiary of Orchard Trust Company, serves as the Plans custodian
and recordkeeper.
Contributions
The Plan allows
participants to make contributions up to 100% of their compensation on a before-tax basis. If no deferral election is made, the participant shall be automatically enrolled in the Plan and will be deemed to
have authorized the Company to defer 3% of the participants compensation to the Plan on a before-tax basis. Contribution percentages auto escalate by 1% each year if a participant does not change the
contribution percentage from the default percentage. Employees may elect to opt out from being automatically enrolled in the Plan. Participants may change their deferral percentages daily. Participants who have attained age 50 before the end of the
Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined contribution plans.
Participants contributions and catch-up contributions on a before-tax
basis are limited by the Internal Revenue Code Section 402(g)(1) to $19,000 and $6,000, respectively, in 2019. In addition, total annual additions to all individual participant accounts shall not exceed the lesser of $56,000 or 100 percent
of a participants annual compensation. Contributions by highly compensated employees are subject to additional restrictions.
The Employer shall
contribute to the Plan a Qualified Automatic Contribution Arrangement (QACA) matching contribution. Under this arrangement, the Plan must offer a schedule of minimum default percentages that start at 3%, which must increase each year to at least 6%.
The QACA contribution is equal to a percentage of the eligible contributions of Plan participants not to exceed 3.5% of eligible compensation as defined in the Plan document. Effective January 1, 2019, the Employer match is 100% of the first 1%
of eligible compensation plus an additional 50% of the next 5% of eligible compensation. A true-up matching contribution is made for participants who reached the limit within the plan year. True-up matching contributions will be issued after the end of the plan year but no later than September 15th of the following plan year.
The Employer may also elect to make a discretionary contribution, as determined by a declaration of its Board of Directors, to each active participant account
based on the respective participants eligible compensation during the year. For the year ended December 31, 2019, the Employer made a discretionary contribution in the form of Employer stock of $4,511,508, which was recorded as Employer
contributions receivable as of December 31, 2019 and was remitted to the Plan in March 2020. Active plan participants as of December 31 of the plan year are eligible to receive a discretionary contribution.
Investment Options
Participants may direct their
contributions, Employer contributions, and any related earnings into investment options sponsored by the Plan. The Plan currently offers twenty nine mutual funds, one guaranteed investment account, a self-directed brokerage account, and Employer
common stock as investment options for participants. Participants may change their investment elections daily by phone or via the Internet.
Participant Accounts
Each participants account is
credited with the participants contributions and allocations of the Employers matching and discretionary contributions and Plan earnings, and charged with an allocation of Plan losses and administrative expenses. Allocations are based on
participant earnings (losses) or account balances, as defined in the Plan. The benefit to which a participant is entitled is the participants vested account balance.
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