UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
| Dave Schaeffer Chairman | |
| ||
|
A Special
You are cordially invited to attendAnnual Meeting of Stockholders.
COGENT COMMUNICATIONS HOLDINGS, INC.Important Notice Regarding the Availability of Proxy Materials for theStockholder Meeting to Be Held on September 10, 2018
The proxy statement is available at: www.cogentco.com/en/about-cogent/investor-relations/reports.
A special meeting of the stockholders (the "Special Meeting") of Cogent Communications Holdings, Inc. ("Cogent" or the "Company") will be held at 9:00 a.m., local time, on September 10, 2018 at Cogent's offices at 2450 N Street, NW, Washington, D.C. 20037. The matters to be covered are noted below:
The Board of Directors of Cogent recommends voting FOR Proposal 1—to approve the amended and restated bylaws of the Company for the sole purpose of increasing the size of the Board of Directors to seven (7) directors from the current six (6) directors.
fiscal year ended December 31, 2020.
Stockholder Meeting to Be Held at 9:00 a.m., April 28, 2021
March 12, 2021.
The
Proxies
The shares represented by the proxies received, properly dated2, 3 and executed and not revoked will be voted at the Special Meeting in accordance with the instructions of the stockholders. A proxy may be revoked at any time before it is exercised by:
Any proxy that is returned using the form of proxy enclosed and that is not marked as to a particular item will be voted "FOR" Proposal 1—to approve the amended and restated Bylaws for the sole purpose of increasing the size of the Board of Directors to seven (7) directors from the current six (6) directors.
The Company believes that the tabulation procedures to be followed by the Inspector of Elections are consistent with the general statutory requirements of the State ofin Delaware concerning the voting of shares and determination of a quorum.
The Board believes an increase in its size will provide the opportunity to add a new director with demonstrated experience and expertise relevant to our business, operations, and industry. The Board believes this increase in the size of the Board is in the best interests of the Company and its stockholders.
On June 1, 2018, the Board approved, subject to stockholder approval, the amended and restated Bylaws to increase the number of directors that shall constitute the whole Board to seven (7) from six (6). No other changes are being made to the Bylaws. The full text of the amended and restated Bylaws is attached hereto as Annex A.
If the amendment of the Company's Bylaws is approved by stockholders, the Board expects to appoint Lewis H. Ferguson III to fill the vacancy resulting from the increase in the size of the Board.
Mr. Ferguson, age 73, was appointed by the U.S. Securities and Exchange Commission ("SEC") to two terms as a board member of the Public Company Accounting Oversight Board ("PCAOB"), the oversight body for auditors of U.S. public companies, serving from 2011 to 2018. Mr. Ferguson served as Vice-Chair and Chair of the International Forum of Independent Audit Regulators, the international coordinating body of more than 50 independent audit regulators throughout the world, from 2012 to 2015. Mr. Ferguson also served as the first general counsel of the PCAOB from 2004 to 2007.
Prior to his servicebe elected at the PCAOB, Mr. Ferguson was a partner at the law firm of Williams & Connolly, LLP from 1979Annual Meeting to 1993 and 1998 to 2003, and at the law firm of Gibson, Dunn & Crutcher, LLP ("Gibson Dunn") from 2007 to 2011, specializing in securities controversy work, board counseling, representation of audit firms and corporate financial restructurings. While he was a partner at Gibson Dunn he served as acting General Counsel and part of the senior management team at Sunrise Senior Living, the nation's largest provider of senior living facilities, during its financial restructuring from 2009 to 2010. He also served as Senior Vice President and General Counsel of Wright Medical Technology from 1994 to 1997, a publicly traded medical device manufacturer, where he was also head of strategic planning and acquisitions, completing approximately 25 acquisitions of companies and technologies and raising approximately $100 million of equity capital.
Mr. Ferguson has at various times served on the boards of seven companies, two public and five private. The two public companies were Wright Medical Technologies (1994-1997) and Cogent Communications Group, Inc., a predecessor of the Company (2007 to 2009). His roles as a board member included board chair of one company and audit committee chair, compliance committee chair or member of several others. Mr. Ferguson also taught tax, securities and business planning law at Georgetown University Law Center from 1985 to 2000 and has lectured widely on accounting regulation, the role of audit committees and corporate governance.
Recommendation of the Board:
The Board recommends a vote "FOR" approval of the amended and restated Bylaws of the Company for the sole purpose of increasing the size of the Board of Directors to seven (7) directors from the current six (6) directors.
BOARD OF DIRECTORS AND COMMITTEES
Board of Directors
Our Board currently consists of six directors holding office until the next annual meeting of stockholders orserve until their respective successors have beenare elected and qualified. Nominees for election to the Board shall be approved by the affirmative vote of the holders of a majority of shares of our common stock present in person or appointed. represented by proxy at the Annual Meeting.
Company nominated to be elected at the Annual Meeting:
Timothy WeingartenMarc Montagner, age 43, has served on our Board since October 2003. Mr. Weingarten is currently a Product Manager at Pinterest. Prior to Pinterest, he was the co-founder & CEO of ShopTAP Inc. Prior to founding ShopTAP Inc., he was the Chairman and CEO of Visage Mobile. He is also a former General Partner of Worldview Technology Partners—an early stage venture capital fund. From 1996 to 2000, Mr. Weingarten was a member of the telecom equipment research group at Robertson Stephens and Company. Mr. Weingarten serves on the Board because of his extensive knowledge of the U.S. venture capital backed companies making use of the Internet. The Board values this insight because Cogent's future growth depends to a great extent on the uses made of the Internet.
Richard T. Liebhaber, age 83, has served on our Board since March 2006. Mr. Liebhaber was with IBM from 1954 to 1985, where he held a variety of positions. Subsequently, he served as executive vice president and member of the management committee at MCI Communications, and served on the board of directors of MCI from 1992 to 1995. From 1995 to 2001, Mr. Liebhaber served as managing director at Veronis, Suhler & Associates, a New York media merchant banking firm. Mr. Liebhaber serves on the Board because of his extensive operational experience with telecommunications companies.
D. Blake Bath, age 55, has served on our Board since November 2006. He is currently engaged in philanthropic concerns. He is a board member of the Protestant Episcopal Cathedral Foundation in Washington D.C., and a board member and the treasurer of the Bethesda-Chevy Chase Educational Foundation. From 2006 to 2016 he was the Chief Executive Officer of Bay Bridge Capital Management, LLC, an investment firm in Bethesda, MD. From 1996 until 2006, Mr. Bath was Managing Director at Lehman Brothers and, as a senior equity research analyst for Lehman Brothers, was Lehman's lead analyst covering wireline and wireless telecommunications services. Prior to joining Lehman Brothers he was the primary telecommunications analyst at Sanford C. Bernstein from 1992 to
1996. From 1989 to 1992 he was an analyst in the Strategic Planning and Corporate Finance organizations at MCI Communications. Mr. Bath serves on the Board because of his wide experience with the telecommunications industry which allows him to contribute a broad perspective to discussions about the Company's future activities and its place in the current competitive landscape.
Marc Montagner, age 57,59, has served on our Board since April 2010. He is currently2010 and has served as our Lead Independent Director since February 2020. Mr. Montagner served as Chief Financial Officer at Endurance International Group Holdings, Inc. (NASDAQ: EIGI), which position he has held since September of 2015.from 2015 to 2021. He was previously Chief Financial Officer at LightSquared from 2012 until August 2015. Previously, he had been Executive Vice President of Strategy, Development and Distribution at LightSquared. On May 14, 2012, LightSquared filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Prior to joining LightSquared in February of 2009, Mr. Montagner was Managing Director and Co-Head of the Global Telecom, Media and Technology Merger and Acquisition Group at Banc of America Securities. Until August of 2006, he was Senior Vice President, Corporate Development and M&A with the Sprint Nextel Corporation. Prior to this, Mr. Montagner had the same responsibilities with Nextel Communications. Prior to 2002, Mr. Montagner was a Managing Director in the Media and Telecom Group at Morgan Stanley. Prior to joining Morgan Stanley, Mr. Montagner worked for France Télécom in New York where he was Head of Corporate Development for North America. He holds an M.S. degree in Electrical Engineering from the École Nationale Supérieure des Télécommunications, in Paris, and an M.B.A. from Columbia University. Mr. Montagner serveshas been nominated to continue serving on the Board due to his extensive experience in the telecommunications industry, specifically with respect to operational, financial and strategic matters.
The Board met four times during 2017 and there was one action by written consent. Each director attended at least 75%also as Chair of the meetingsboard of its subsidiary, CLS UK Intermediate Holdings Ltd. Ms. Kennedy served as non-executive Chair of Promontory Financial Group Canada, an IBM Company, during the course of 2019, and previously was CEO of Promontory Canada from 2009 through 2018. From 1994 to 2008 she was Deputy Governor of the Board. Each director attendedBank of Canada and chaired the Markets Committee at least 75%the Bank for International Settlements in Basel, Switzerland from 2003 to 2006. She also served as Senior Advisor for International Strategy for Scotiabank in 2006. Prior to her time with the Bank of Canada, Ms. Kennedy worked in the Canadian federal Department of Finance and served as Finance Counsellor at the Canadian Embassy in Paris, France. Ms. Kennedy serves on the University of Waterloo Board of Governors chairing both its Pension Investment Committee and Responsible Investing Advisory Group and serving as a member of its Finance and Investment Committee, is a Trustee of the meetingsAnglican Church of Canada General Synod Pension Plan and Chair of its Asset Mix Committee and is Vice Chair of the committeesMothers Matter Centre. She is a graduate of the University of Waterloo and Harvard University. Ms. Kennedy has been nominated to continue serving on the Board due to her experience in the oversight of public company auditing, risk management, financial system management, regulation and corporate responsibility and sustainability, together with her international experience.
| | Board | | | | Schaeffer | | | | Montagner | | | | Bath | | | | Brooks | | | | Ferguson | | | | Katz | | | | Kennedy | | |
| | Knowledge, Skills and Experience | | | ||||||||||||||||||||||||||||
| | Public Company Board Experience | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | |
| | Financial | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | |
| | Risk Management | | | | x | | | | x | | | | x | | | | | | | | x | | | | x | | | | x | | |
| | Accounting | | | | x | | | | x | | | | x | | | | | | | | x | | | | | | | | x | | |
| | Corporate Governance/Ethics | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | | | x | | |
| | Legal/Regulatory | | | | x | | | | | | | | | | | | x | | | | x | | | | | | | | x | | |
| | HR/Compensation | | | | x | | | | x | | | | x | | | | | | | | | | | | | | | | x | | |
| | Executive Experience | | | | x | | | | x | | | | x | | | | | | | | | | | | | | | | x | | |
| | Operations | | | | x | | | | x | | | | | | | | | | | | | | | | | | | | | | |
| | Strategic Planning/Oversight | | | | x | | | | x | | | | x | | | | x | | | | | | | | x | | | | x | | |
| | Technology | | | | x | | | | x | | | | x | | | | x | | | | | | | | x | | | | | | |
| | Mergers and Acquisitions | | | | x | | | | x | | | | | | | | x | | | | x | | | | x | | | | | | |
| | Telecom/Internet Industry | | | | x | | | | x | | | | x | | | | x | | | | | | | | x | | | | | | |
| | Academia/Education | | | | x | | | | | | | | x | | | | | | | | | | | | | | | | x | | |
| | | 2020 | | | 2019 | | | 2018 | | | TOTAL | | | AVERAGE | | |||||||||||||||
Options granted | | | | | 73 | | | | | | 69 | | | | | | 78 | | | | | | 220 | | | | | | 73 | | |
Shares granted | | | | | 476 | | | | | | 474 | | | | | | 496 | | | | | | 1,446 | | | | | | 482 | | |
TOTAL | | | | | 549 | | | | | | 543 | | | | | | 574 | | | | | | 1,666 | | | | | | 555 | | |
Weighted average shares – basic EPS | | | | | 45,948 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Burn rate – 1 year | | | | | 1.19% | | | | | | | | | | | | | | | | | | | | | | | | | | |
Burn rate – 3 year average | | | | | 1.21% | | | | | | | | | | | | | | | | | | | | | | | | | | |
Plan Category | | | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | |||||||||
| | | (a) | | | (b) | | | (c) | | |||||||||
Equity compensation plans approved by security holders | | | | | 566,890 | | | | | $ | 54.15 | | | | | | 407,010 | | |
Equity compensation plans not approved by security holders | | | | | 0 | | | | | | 0 | | | | | | — | | |
Total | | | | | 566,890 | | | | | $ | 54.15 | | | | | | 407,010 | | |
The Board values our stockholders’ opinions and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions. The Board has adopted a policy of providing for annual advisory votes from stockholders to approve named executive officer compensation. The next such vote will occur at the 2022 Annual Meeting of Stockholders.
The Board'sBoard’s role in the Company is to provide general oversight of strategy and operations.operations and to oversee the hiring, performance review, compensation review and termination, as applicable, of the executive officers of the Company. As part of its oversight of operations, it reviews the performance of the Company and the risks involved in the operations of the Company. The Board and the Audit Committee receive regular reports on the status of the Company'sCompany’s internal controls and each has reviewed key operational risks. The Board'sBoard’s risk oversight role has no effect onis not affected by its leadership structure as all directors, other than Mr. Schaeffer, are independent directors and therefore have no conflict that might discourage critical review.
| | | | GOVERNANCE | |
| Corporate Governance | | | • Six of the seven members of our Board are independent. All members of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are independent. • In February 2020, the Board created the position of Lead Independent Director and appointed Marc Montagner to serve in this role. • During 2020, we met with over 500 stockholders and potential investors. • Our quarterly earnings conference calls are open to all participants and our quarterly earnings releases can be found at www.cogentco.com/en/about-cogent/investor-relations/financials. • Our Governance QualityScore from Institutional Shareholder Services improved from an 8 on January 1, 2020 to a 2 on February 1, 2021, (1 indicates the highest level of governance quality and lowest level of governance risk). | |
| | | | SOCIAL | |
| Diversity and Inclusion | | | • In 2020, our Board amended the charter of the Compensation Committee to include oversight of the Company’s human capital management. • We have a formal policy that prohibits discrimination based on protected classifications and requires all employees to treat all individuals with respect and fairness. Our policy also outlines formal reporting and complaint procedures. • In 2020 we mandated diversity and inclusion training for all of our employees. We required all employees to complete online training in unconscious bias, and mandated that managers complete additional training in inclusivity and allyship. | |
| 2020 Workforce Demographics | | | |
| | | | | |
| Employee Training and Retention | | | • We recognize the importance of retaining our sales personnel, and we continually strive to improve the performance of our sales personnel to reduce turnover. • As part of our commitment to professional development, we established a sales training and enablement department that provides both online and in person training. Our 12 Regional Learning Managers are located around the world and are available for intensive, in-person group training as well as individual training with sales representatives who may need extra assistance. In 2020, our average ratio of sales representatives with less than 12 months tenure to Regional Learning Managers was 23 to 1. • Two additional senior members of our sales training staff are dedicated exclusively to training our sales management team • Our sales representatives each receive: • Four weeks of live, interactive training during their first month of employment; • A self-paced online curriculum led by their manager during the first six months that includes cash bonuses for successful completion; • Access to online-on-demand training modules; and • Opportunities to obtain certifications in specialized services. • During 2020, we conducted: • 5,177 hours of sales representative training, both in individual and group setting, either live or virtually; • 1,040 hours of management training, either live or virtually; and • 26 certifications were earned by 26 different employees. • For the year ended December 31, 2020, we averaged 5.0% monthly churn in our sales force. For non-sales employees, we averaged approximately 0.8% monthly churn for the year ended December 31, 2020. | |
| | | | • We seek to provide career transition and advancement opportunities for our employees so that they can find a position at Cogent that best fits their skills, ambitions and professional development. To that end, approximately 7% of employees at Cogent changed positions in 2020 and, in the last five years, approximately 46% of employees at Cogent have changed positions at least once during their tenure with us. | |
| Employee Engagement and Compensation | | | • Our Chief Executive Officer conducts biweekly town hall meetings to discuss company initiatives and performance and respond to employee questions, which may be submitted anonymously. • Members of our executive team take turns hosting biweekly, online town hall chats to answer questions from employees. • We offer a comprehensive compensation program that includes market-competitive pay, healthcare benefits, retirement savings plans including partial 401(k) match, and paid time off and parental leave. • Where permitted by law, we provide equity incentives in the form of stock options or grants of restricted stock to all our employees. • At the beginning of 2020, all employees with at least one full year of tenure received a 2% cost of living increase, 18.7% received a one-time cash bonus and 14.2% received a merit-based salary or salary rate increase. Our sales employees are able to earn bonuses and salary rate increases during the year based on their performance. | |
| Open Internet | | | • We support an open Internet and net neutrality and since 2013 we have spent over $14 million advocating for net neutrality. A copy of the Company’s position on net neutrality can be found at www.cogentco.com/en/about-cogent/corporate-responsibility/our-network. • The Company believes it is inappropriate to support specific political parties or political candidates, and, as such, has never made a political contribution to a political party or individual in its history. | |
| Data Privacy and Security | | | • As we only serve business customers, we do not collect or maintain any consumer information. We have deliberately minimized the amount of personal data we collect. The information we may collect about the employees of our customers is limited to business contact information, and we store and transmit this information in accordance with applicable regulations. • We do not sell or transfer the business contact information we have collected to any third parties for commercial purposes unrelated to the provision of our services. • As an internet service provider, we only provide transmission services and do not store or process any of the information our customers send using our service. • Our network equipment is provided by a single vendor, Cisco Systems, with whom we work closely to identify and solve problems. We maintain both physical and logical access controls on our network equipment. • Oversight of our data privacy and security efforts is included in the charter of the Audit Committee of our Board. | |
| Network Resiliency | | | • In the face of the COVID-19 pandemic, we successfully implemented our business continuity efforts as we transitioned our entire workforce to a remote work posture while maintaining our network performance. • Additional information regarding the design, operation and performance of our network can be found at www.cogentco.com/en/about-cogent/corporate-responsibility/our-network. | |
| Facility | | | Scale | | | Under Cogent Control | | | Notes | |
| Network Equipment | | | 90,000+ pieces of equipment | | | Yes | | | Working in conjunction with our equipment suppliers, we have developed detailed specifications of the amount of electrical power typically used by each piece of equipment on our network. Combining this data with our daily network inventory records allows us to estimate the total energy consumed by our network equipment. Locational data combined with carbon factor information allow us to estimate the GHG emissions created by our network activity. Network traffic records enable us to calculate the total traffic volume carried across the network in the same time period. Using this information, we determine the energy efficiency of our network, using the ratio of estimated power used to total network traffic and the ratio of estimated GHG emissions to total network traffic. We use these ratios as they account for the growth in traffic on our network and demonstrate the energy efficiency of our network equipment. Over the last five years, while network traffic increased 33% per year, | |
| Facility | | | Scale | | | Under Cogent Control | | | Notes | |
| | | | | | | | | | estimated network power draw only increased 11% per year, resulting in an estimated 16% annual reduction in energy usage per unit of traffic volume. We have also reduced the amount of carbon emitted per Byte of traffic delivered by an estimated 20% per year over the same period. Additional information on this can be found at www.cogentco.com/about-cogent/corporate-responsibility/our-environment. | |
| Total Network Locations | | | 4000+ | | | | | | | |
| Multi-tenant Office Buildings | | | 1,780+ buildings (968+ million square feet of office space) | | | No | | | Of the 1,792 multi-tenant office buildings directly connected to our network: 89 are LEED Platinum, 467 are LEED Gold, 152 are LEED Silver and 47 are LEED certified. LEED certified buildings meet a series of environmental standards that insure that the design, footprint and operations of a building take into account methods that can increase efficiency and reduce GHG emissions. | |
| Carrier-Neutral Data Centers (“CNDC”) | | | 1,250+ data centers in approximately 1,000 distinct buildings | | | No | | | We do not control the physical infrastructure or power sourcing of these locations. A substantial number of the operators of these locations have implemented plans to improve the energy efficiency of their operations and to utilize renewable sources of energy. In 2021, we intend to collect specific data on GHG emissions and sustainability strategies in each carrier neutral data center we utilize. We will categorize and measure the improvement in efficiency and GHG emissions in our carrier neutral data center portfolio and hope to work with these operators to understand and support their sustainability strategies | |
| Cogent-Owned Data Centers | | | 54 data centers with 606,000 square feet of floor space | | | No | | | Electrical use in Cogent-owned data centers is driven both by our power requirements and the power demands of our customers. Virtually all of our data centers source electricity that is arranged and billed by our landlords. We believe that the vast majority of this electricity is Scope 2 in nature in that it is sourced from remote power facilities and delivered to our facilities through the electric grid. In 2020, we consumed approximately 55.3 mm kWh in these facilities and we estimate that this electricity produced 13,852 metric tons of carbon dioxide equivalent | |
| Facility | | | Scale | | | Under Cogent Control | | | Notes | |
| | | | | | | | | | (“mt CO2e”) on a location basis and 12,324 mt CO2e on a market basis. Location based emissions measure the amount of GHG produced based upon the location of the electric generation. We began to purchase and source renewable energy on a virtual basis in 2019 where applicable through the purchase of Renewable Electricity Certificates (“RECs”) designed to offset GHG emissions on a virtual basis. In 2020, we reduced our GHG emissions by approximately 1,528 mt CO2e as a result of purchasing RECs. In order to increase the amount of electricity we obtain from renewable sources, in December 2020, we entered into an agreement to install a 1 megawatt solar array at our Pasadena data center and sales office, which is our single largest consumer of electrical power. Once the array is fully operational, we estimate that the solar array will produce approximately 2.0 mm kWh of electricity per year and will reduce the amount of carbon we produce by approximately 185 mt CO2e per year. We are evaluating our 53 other data centers for potential conversion to renewable sources; however, as many of our data centers are leased we may not have the ability to install solar arrays at these facilities or the term of the lease may not be long enough to match the typical useful life of a solar installation which can be over 20 years. | |
| Cogent Office Locations | | | 46 | | | No | | | Electricity in our office locations is generally provided from an associated Cogent data center or network site or from the landlord and included in our office lease. | |
| Other Network Sites | | | approx. 950 | | | No | | | We are a tenant at these locations where we locate our network equipment. As such, we are obligated to use the power supplied by our landlord. As noted above, we have sought to decrease the energy intensity of our operations by deploying increasingly efficient network technology in these locations. | |
adopted a charter governing the activities of the Nominating and Corporate Governance Committee. The charter of the Nominating and Corporate Governance Committee may be found on the Company'sCompany’s website under the tab "About“About Cogent; Investor Relations; Corporate Governance"Governance” atwww.cogentco.com. Pursuant to its charter, the Nominating and Corporate Governance Committee'sCommittee’s tasks include assisting the Board in identifying individuals qualified to become Board members, recommending to the Board director nominees to fill vacancies in the membership of the Board as they occur and, prior to each annual meeting of stockholders, recommending director nominees for election at such meeting.
2020.
The Audit Committee is established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). During all of 2017, the members of this committee were Messrs. Liebhaber (Chairman), Bath and Montagner, each of whom is "independent" as the term is defined in the applicable listing standards of Nasdaq Marketplace Rules and Rule 10A-3 under the Exchange Act. The Board has determined that each of Messrs. Liebhaber, Bath and
Montagner qualifies as a financial expert, as that term is defined in the Exchange Act. The responsibilities of this Audit Committee include:
The Audit Committee met four times during 2017. The charter of the Audit Committee may be found under the tab "About Cogent; Investor Relations; Corporate Governance" atwww.cogentco.com.
Compensation Committee
During 2017, all of the independent directors were members of the Compensation Committee. Accordingly, the membership of the Compensation Committee consisted of Messrs. Brooks, Weingarten, Liebhaber, Bath, and Montagner, each of whom is "independent" as the term is defined in the applicable listing standards of the Nasdaq Marketplace Rules. The Compensation Committee does not have a chairman.
In addition, the Board plans to hold a meeting with stockholders in OctoberCompany’s objectives for the purposebenefit of discussing compensation and governance issues with theour stockholders. The independent directors will hold such discussions separately fromBoard believes that establishing these guidelines enhances its ability to foster sustainable growth and create value for our stockholders. The corporate governance guidelines may be found on the Board, i.e. withoutCompany’s website under the CEO present. The Board intends to hold such a meeting on a regular basis.
tab “About Cogent; Investor Relations; Governance” at
Director Independence
If Proposal 1 is approved by the stockholders, the Board intends to make a formal determination regarding Mr. Ferguson's independence before appointing him to fill the vacancy resulting from the increase in the size of the Board. The Board expects that Mr. Ferguson would be found to be independent under the applicable listing standards of Nasdaq Marketplace Rules and Rule 10A-3 under the Exchange Act.
Directors.”
Robert N. Beury, Jr., age 65, joined us in 2000 and serves as Chief Legal Officer (Vice President and General Counsel) and Assistant Secretary.positions. Prior to joining us,the Company, Mr. Beury servedWallace was an investor and operator of industrial real estate projects from 2015. He was also, from 2008 to 2015, a senior manager at Standard Chartered Bank where he led their Corporate Finance and Wholesale Origination efforts on a global basis. He also worked at J.P. Morgan from 1998 to 2007 where his roles included being Co-Head of their Investment Banking efforts in the Asia Pacific region as Deputy General Counsel of Iridium LLC, a mobile satellite service provider, from 1994 to 2000. From 1987 to 1994, Mr. Beury was General Counsel of Virginia's Center for Innovative Technology, a non-profit corporation set up to develop the high tech industry in Virginia.well as leading their North American Telecom Banking efforts.
Sales;
We believe that long-term incentive
The Board will continue to review both the size of awards and whether awards should be tied to a specific dollar amount; however, as part of this evaluation the Board will acknowledge that increases in the realized value from the awards are necessarily tied to increases in stockholder value and thus these increases are consistent with the goal of our executive compensation program.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Cogent Communications Holdings, the S&P 500 Index
and the NASDAQ Telecommunications Index
Fiscaldividends.Fiscal year ending December 31.
Copyright© 2018
| | | 12/15 | | | 12/16 | | | 12/17 | | | 12/18 | | | 12/19 | | | 12/20 | | ||||||||||||||||||
Cogent Communications Holdings | | | | | 100.00 | | | | | | 124.10 | | | | | | 141.85 | | | | | | 147.82 | | | | | | 224.53 | | | | | | 212.68 | | |
S&P 500 | | | | | 100.00 | | | | | | 111.96 | | | | | | 136.40 | | | | | | 130.42 | | | | | | 171.49 | | | | | | 203.04 | | |
NASDAQ Telecommunications | | | | | 100.00 | | | | | | 112.56 | | | | | | 135.96 | | | | | | 125.10 | | | | | | 158.73 | | | | | | 192.30 | | |
| | | 7/05 | | | 12/05 | | | 12/06 | | | 12/07 | | | 12/08 | | | 12/09 | | | 12/10 | | | 12/11 | | | 12/12 | | |||||||||||||||||||||||||||
Cogent Communications Holdings | | | | | 100.00 | | | | | | 86.73 | | | | | | 256.24 | | | | | | 374.57 | | | | | | 103.16 | | | | | | 155.77 | | | | | | 223.38 | | | | | | 266.82 | | | | | | 361.34 | | |
S&P 500 | | | | | 100.00 | | | | | | 101.98 | | | | | | 118.08 | | | | | | 124.57 | | | | | | 78.48 | | | | | | 99.25 | | | | | | 114.20 | | | | | | 116.61 | | | | | | 135.28 | | |
NASDAQ Telecommunications | | | | | 100.00 | | | | | | 93.03 | | | | | | 126.92 | | | | | | 132.53 | | | | | | 80.84 | | | | | | 103.54 | | | | | | 114.73 | | | | | | 115.77 | | | | | | 129.98 | | |
AT&T Inc | | | | | 100.00 | | | | | | 105.17 | | | | | | 161.09 | | | | | | 194.24 | | | | | | 139.83 | | | | | | 146.56 | | | | | | 163.62 | | | | | | 178.36 | | | | | | 209.59 | | |
Centurylink Inc | | | | | 100.00 | | | | | | 95.73 | | | | | | 126.86 | | | | | | 121.16 | | | | | | 85.32 | | | | | | 123.81 | | | | | | 170.87 | | | | | | 148.43 | | | | | | 168.06 | | |
Verizon Communications Inc | | | | | 100.00 | | | | | | 89.29 | | | | | | 120.19 | | | | | | 146.86 | | | | | | 120.40 | | | | | | 125.03 | | | | | | 153.85 | | | | | | 181.89 | | | | | | 205.87 | | |
| | | 12/13 | | | 12/14 | | | 12/15 | | | 12/16 | | | 12/17 | | | 12/18 | | | 12/19 | | | 12/20 | | ||||||||||||||||||||||||
Cogent Communications Holdings | | | | | 660.58 | | | | | | 597.60 | | | | | | 612.70 | | | | | | 760.36 | | | | | | 869.14 | | | | | | 905.69 | | | | | | 1375.67 | | | | | | 1303.08 | | |
S&P 500 | | | | | 179.09 | | | | | | 203.61 | | | | | | 206.42 | | | | | | 231.11 | | | | | | 281.57 | | | | | | 269.22 | | | | | | 353.99 | | | | | | 419.12 | | |
NASDAQ Telecommunications | | | | | 184.70 | | | | | | 190.58 | | | | | | 187.12 | | | | | | 205.66 | | | | | | 246.75 | | | | | | 227.12 | | | | | | 287.28 | | | | | | 344.10 | | |
AT&T Inc | | | | | 230.03 | | | | | | 231.53 | | | | | | 250.81 | | | | | | 325.76 | | | | | | 312.91 | | | | | | 243.32 | | | | | | 354.31 | | | | | | 278.54 | | |
Centurylink Inc | | | | | 145.93 | | | | | | 192.17 | | | | | | 131.09 | | | | | | 134.00 | | | | | | 104.73 | | | | | | 106.71 | | | | | | 101.07 | | | | | | 81.77 | | |
Verizon Communications Inc | | | | | 244.24 | | | | | | 242.87 | | | | | | 251.64 | | | | | | 303.77 | | | | | | 315.97 | | | | | | 351.52 | | | | | | 400.26 | | | | | | 399.79 | | |
| 2017 | 2016 | 2015 | TOTAL | AVERAGE | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Options granted | 81 | 73 | 84 | 238 | 79 | |||||||||||
Shares granted | 500 | 358 | 63 | 921 | 307 | |||||||||||
| | | | | | | | | | | | | | | | |
TOTAL | 581 | 431 | 147 | 1,159 | 386 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Weighted average shares—basic EPS | 44,855 | |||||||||||||||
| | | | | | | | | | | | | | | | |
Burn rate—1 year | 1.30 | % | ||||||||||||||
| | | | | | | | | | | | | | | | |
Burn rate—3 year average | 0.86 | % | ||||||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Executive Compensation Policies and Practices
philosophy. During 2017,2020, we maintained the following executive compensation policies and practices, including both policies and practices we have implemented to drive performance and policies and practices that either prohibit or minimize behaviors that we do not believe serve our stockholders'stockholders’ long-term interests:
common stock.
In the case of our CEO, this annual cash incentive award is in lieu of his base salary.
Accordingly, in 2017 the BoardCompensation Committee had overall responsibility for overseeing our compensation and benefits policies generally, overseeing evaluating, and approvingevaluating the compensation plans, policies, and programs applicable to our CEO as well as our other executive officers, determining and overseeing the process of evaluating our CEO'sCEO’s performance, and overseeing the preparation, of, reviewing,review and approvingapproval of this Compensation Discussion and Analysis.
The Board'sBoard’s practice of developing and maintaining compensation arrangements that are competitive includes a balance between retaining the best possible talent and maintaining a reasonable and responsible cost structure.
In May 2016, the
| 8x8 | | | InterDigital | |
Acacia Communications | | Iridium Communications | | ||
| ATN International | | NIC | | |
Bottomline Technologies | | QuinStreet | | ||
CarGurus | | Shenandoah Telecommunications | | ||
Cornerstone OnDemand | | Stamps.com | | ||
| FireEye | | Switch | | |
GCI Liberty | |||||
| Vonage Holdings | |
The Board intendsofficers, the ability to review our compensation peer group at least annuallyreplace their particular skillsets and make adjustmentsinstitutional knowledge and the financial performance of the Company relative to its composition, taking into account changes in both our businesspeers, including revenue growth, profitability and the businessesreturn of the companies in the compensation peer group.
capital to stockholders.
Other than theawards.
2020.
Our
salary.
2020.
If the performance measure is zero or negative the bonus for that performance shall be zero.
Incentive Compensation Opportunity for Chief Revenue Officer
In addition, due
Together with his
��
Named Officer | | | Time Based Restricted Stock (# shares) | | | Time Based Restricted Stock (grant date fair value) | | | Performance Based Restricted Stock (# shares) | | | Performance Based Restricted Stock (grant date fair value) | | | Aggregate Grant Date Fair Value | | |||||||||||||||
Dave Schaeffer | | | | | 84,000 | | | | | | 6,450,360 | | | | | | 105,000 | | | | | | 7,335,300 | | | | | $ | 13,785,660 | | |
Sean Wallace | | | | | 12,000 | | | | | | 913,320 | | | | | | — | | | | | | — | | | | | $ | 913,320 | | |
Timothy O’Neill | | | | | 9,600 | | | | | | 737,184 | | | | | | 2,400 | | | | | | 184,296 | | | | | $ | 921,480 | | |
James Bubeck | | | | | 9,600 | | | | | | 737,184 | | | | | | 2,400 | | | | | | 184,296 | | | | | $ | 921,480 | | |
Brad Kummer | | | | | 9,600 | | | | | | 737,184 | | | | | | 2,400 | | | | | | 184,296 | | | | | $ | 921,480 | | |
Thaddeus Weed | | | | | 19,400 | | | | | | 1,489,726 | | | | | | 4,850 | | | | | | 372,432 | | | | | $ | 1,862,158 | | |
Jean-Michel Slagmuylder | | | | | 1,000 | | | | | | 78,160 | | | | | | — | | | | ��� | | — | | | | | $ | 78,160 | | |
Named Executive Officer | Time-Based Restricted Stock Awards (# of shares) | Time-Based Restricted Stock Awards (grant date fair value) | Performance-Based Restricted Stock Awards (# of shares) | Performance-Based Restricted Stock Awards (grant date fair value) | Aggregate Grant Date Fair Value | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mr. Schaeffer | 84,000 | $ | 3,639,300 | 105,000 | $ | 3,529,050 | $ | 7,168,350 | ||||||||
Mr. Weed | 19,400 | $ | 840,505 | 4,850 | $ | 210,126 | $ | 1,050,631 | ||||||||
Mr. Beury | 9,600 | $ | 415,920 | 2,400 | $ | 103,980 | $ | 519,900 | ||||||||
Mr. O'Neil | 9,600 | $ | 415,920 | 2,400 | $ | 103,980 | $ | 519,900 | ||||||||
Mr. Bubeck | 9,600 | $ | 415,920 | 2,400 | $ | 103,980 | $ | 519,900 |
For employees outside of the United States, we provide benefits consistent with local laws and competitive with local markets.
In the future, we may provide perquisites or other personal benefits in limited circumstances. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Board.
Extension of Employment Agreement of CEO
On November 17, 2017, we entered into a seventh amendment to our employment agreement with Mr. Schaeffer. This amendment extended the term of the agreement through December 31, 2021 and extended Mr. Schaeffer's eligibility to receive an annual bonus of up to $500,000 if we achieve year-over-year revenue growth of 15% and year-over-year adjusted EBITDA growth of 20% (each as defined in our earnings release).
Proxy Statement.
executive officers focused on pursuing all corporate transaction activity that is in the best interests of our stockholders. Specifically, these agreements provide that:
Proxy Statement.
Until such time as our CEO and the
Board.
Mr. Ferguson joined the board in October 2018 and Ms. Katz and Ms. Kennedy joined the Board in November 2019, and each is currently accumulating shares of our common stock to meet the ownership requirement.
granted in connection with employment). Among the investment vehicles that are subject to this prohibition are:
In addition, our Hedgingsecurities; and Derivatives Policy prohibits our employees, including our executive officers, and the members of the Board from
loan.
Generally, Section 162(m)
The exemption from Section 162(m)'s deduction limit for performance-basedCompany will pay compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our chief executive officer, chief financial officer and each of the three other most highly-compensated executive officers in excess of $1 millionwhich will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
under the Internal Revenue Code.
Name | | | Principal Position | | | Year | | | Salary | | | Bonus | | | GRANT DATE VALUE Stock Awards(a) | | | Non Equity Incentive Plan Compensation(c) | | | All other Compensation(b) | | | TOTAL | | ||||||||||||||||||||||||||||
Dave Schaeffer | | | CEO | | | | | 2020 | | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 13,785,660 | (d) | | | | | $ | 229,145 | | | | | | $ | 5,705 | | | | | | $ | 14,020,510 | | | |
| | | | | | | | 2019 | | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 9,343,950 | (e) | | | | | $ | 173,969 | | | | | | $ | 5,600 | | | | | | $ | 9,523,519 | | | |
| | | | | | | | 2018 | | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 7,410,900 | (f) | | | | | $ | 274,448 | | | | | | $ | 5,500 | | | | | | $ | 7,690,848 | | | |
Sean Wallace | | | CFO | | | | | 2020 | | | | | | $ | 233,333 | | | | | | $ | 0 | | | | | | $ | 913,320 | (g) | | | | | | | | | | | | $ | 0 | | | | | | $ | 1,146,653 | | | |
Timothy O’Neill | | | VP | | | | | 2020 | | | | | | $ | 311,595 | | | | | | $ | 0 | | | | | | $ | 921,480 | (h) | | | | | | | | | | | | $ | 5,705 | | | | | | $ | 1,238,780 | | | |
| | | | | | | | 2019 | | | | | | $ | 305,485 | | | | | | $ | 0 | | | | | | $ | 662,400 | (i) | | | | | | | | | | | | $ | 5,600 | | | | | | $ | 973,485 | | | |
| | | | | | | | 2018 | | | | | | $ | 299,495 | | | | | | $ | 0 | | | | | | $ | 539,400 | (j) | | | | | | | | | | | | $ | 5,500 | | | | | | $ | 844,395 | | | |
James Bubeck | | | Chief Revenue Officer | | | | | 2020 | | | | | | $ | 238,481 | | | | | | $ | 0 | | | | | | $ | 921,480 | (h) | | | | | $ | 133,898 | | | | | | $ | 5,705 | | | | | | $ | 1,299,564 | | | |
| | | | | | | | 2019 | | | | | | $ | 233,805 | | | | | | $ | 0 | | | | | | $ | 662,400 | (i) | | | | | $ | 105,750 | | | | | | $ | 5,600 | | | | | | $ | 1,007,555 | | | |
| | | | | | | | 2018 | | | | | | $ | 229,221 | | | | | | $ | 0 | | | | | | $ | 539,400 | (j) | | | | | $ | 98,548 | | | | | | $ | 5,500 | | | | | | $ | 872,669 | | | |
Name | Principal Position | Year | Salary | Bonus | Stock Awards(a) | Non Equity Incentive Plan Compensation(c) | All other Compensation(b) | TOTAL | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dave Schaeffer | CEO | 2017 | $ | 0 | $ | 0 | $ | 7,168,350 | (d) | $ | 263,337 | $ | 5,400 | $ | 7,437,087 | |||||||||
2016 | $ | 0 | $ | 0 | $ | 6,626,600 | (e) | $ | 335,660 | $ | 4,840 | $ | 6,967,100 | |||||||||||
2015 | $ | 0 | $ | 0 | $ | 0 | $ | 112,170 | $ | 5,236 | $ | 117,406 | ||||||||||||
Thaddeus Weed | CFO | 2017 | $ | 303,919 | $ | 0 | $ | 1,050,631 | (f) | $ | 5,400 | $ | 1,359,950 | |||||||||||
2016 | $ | 275,000 | $ | 0 | $ | 945,265 | (g) | $ | 5,300 | $ | 1,225,565 | |||||||||||||
2015 | $ | 269,000 | $ | 0 | $ | 0 | $ | 5,300 | $ | 274,300 | ||||||||||||||
Robert Beury | Chief Legal Officer | 2017 | $ | 299,453 | $ | 0 | $ | 519,900 | (h) | $ | 5,400 | $ | 824,753 | |||||||||||
2016 | $ | 272,000 | $ | 0 | $ | 467,760 | (i) | $ | 5,300 | $ | 745,060 | |||||||||||||
2015 | $ | 267,000 | $ | 0 | $ | 0 | $ | 5,300 | $ | 272,300 | ||||||||||||||
Timothy O'Neill | VP of Operations | 2017 | $ | 293,623 | $ | 0 | $ | 519,900 | (h) | $ | 5,400 | $ | 818,923 | |||||||||||
2016 | $ | 267,000 | $ | 0 | $ | 467,760 | (i) | $ | 5,300 | $ | 740,060 | |||||||||||||
2015 | $ | 261,000 | $ | 0 | $ | 0 | $ | 5,300 | $ | 266,300 | ||||||||||||||
James Bubeck | Chief Revenue Officer | 2017 | $ | 224,726 | $ | 0 | $ | 519,900 | (h) | $ | 98,158 | $ | 5,400 | $ | 848,184 | |||||||||
2016 | $ | 204,000 | $ | 0 | $ | 467,760 | (i) | $ | 99,220 | $ | 5,300 | $ | 776,280 | |||||||||||
2015 | $ | 186,000 | $ | 0 | $ | 133,000 | (j) | $ | 77,700 | $ | 5,260 | $ | 401,960 |
Name | | | Principal Position | | | Year | | | Salary | | | Bonus | | | GRANT DATE VALUE Stock Awards(a) | | | Non Equity Incentive Plan Compensation(c) | | | All other Compensation(b) | | | TOTAL | | ||||||||||||||||||||||||
Brad Kummer | | | Chief Technology Officer | | | | | 2020 | | | | | | $ | 291,905 | | | | | | $ | 0 | | | | | | $ | 921,480 | (h) | | | | | | | | $ | 5,705 | | | | | | $ | 1,219,090 | | | |
| | | | | | | | 2019 | | | | | | $ | 286,182 | | | | | | $ | 0 | | | | | | $ | 662,400 | (i) | | | | | | | | $ | 5,308 | | | | | | $ | 953,890 | | | |
| | | | | | | | 2018 | | | | | | $ | 280,570 | | | | | | $ | 0 | | | | | | $ | 539,400 | (j) | | | | | | | | $ | 4,905 | | | | | | $ | 824,875 | | | |
Thaddeus Weed | | | Sr VP Audit & Operations | | | | | 2020 | | | | | | $ | 322,521 | | | | | | $ | 0 | | | | | | $ | 1,862,158 | (k) | | | | | | | | $ | 5,705 | | | | | | $ | 2,190,384 | | | |
| | | | | | | | 2019 | | | | | | $ | 316,197 | | | | | | $ | 0 | | | | | | $ | 1,338,600 | (l) | | | | | | | | $ | 5,600 | | | | | | $ | 1,660,397 | | | |
| | | | | | | | 2018 | | | | | | $ | 309,997 | | | | | | $ | 0 | | | | | | $ | 1,090,038 | (m) | | | | | | | | $ | 5,500 | | | | | | $ | 1,405,535 | | | |
Jean-Michel Slagmuylder | | | CFO Cogent Europe | | | | | 2020 | | | | | | $ | 313,580 | | | | | | $ | 0 | | | | | | $ | 78,160 | (n) | | | | | | | | $ | 0 | | | | | | $ | 391,740 | | | |
| | | | | | | | 2019 | | | | | | $ | 301,907 | | | | | | $ | 0 | | | | | | $ | 58,500 | (o) | | | | | | | | $ | 0 | | | | | | $ | 360,407 | | | |
| | | | | | | | 2018 | | | | | | $ | 314,611 | | | | | | $ | 0 | | | | | | $ | 47,850 | (p) | | | | | | | | $ | 0 | | | | | | $ | 362,461 | | | |
For 2017 the total compensation
a restricted stock awardsaward of 1,000 shares made in 2017. Compensationon May 1, 2018 valued at $47.85 per share of employees outside the U.S. was converted to dollars using 2017 exchange rates.
which 500 shares vest on May 1, 2021 and 500 shares vest on November 1, 2021.
2020.
Mr. Schaeffer'sSchaeffer’s performance-based cash bonus is based on the growth of the Company'sCompany’s revenue and EBITDA, as adjusted. If the revenue growth equals or exceeds 15%10%, he will receive $250,000, and, separately, if EBITDA, as adjusted, growth equals or exceeds 20%15%, he will receivedreceive $250,000. If the growth of the performance measures is less than the amount specified, he would receive a proportionally lesser amount. For example, if revenue growth equaled 7.5%5.0% and EBITDA growth equaled 15%12%, he would be paid 50% of $250,000 or $125,000 of the revenue growth bonus and 75%80% of $250,000 or $187,500$200,000 of the EBITDA growth bonus.
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Grant Date Fair Value of Stock and Option Awards(a) | |||||||||||||||||
Name | Grant Date | Notes | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||
Dave Schaeffer | 5/3/2017 | (b)(e) | — | $ | 500,000 | $500,000 | 189,000 | $ | 7,168,350 | |||||||||||
Thaddeus Weed | 5/3/2017 | (c) | 24,250 | $ | 1,050,631 | |||||||||||||||
Robert Beury | 5/3/2017 | (d) | 12,000 | $ | 519,900 | |||||||||||||||
Timothy O'Neil | 5/3/2017 | (d) | 12,000 | $ | 519,900 | |||||||||||||||
James Bubeck | 5/3/2017 | (d)(f) | — | $ | 100,000 | unlimited | 12,000 | $ | 519,900 |
| | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units | | | Grant Date Fair Value of Stock and Option Awards(a) | | ||||||||||||||||||||||||||||||||||||
Name | | | Grant Date | | | NOTES | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | |||||||||||||||||||||||||||||||||
Dave Schaeffer | | | | | 2/14/2020 | | | | (b) (c) | | | | | — | | | | | $ | 500,000 | | | | | $ | 500,000 | | | | | | — | | | | | | 84,000 | | | | | | 105,000 | | | | | | 84,000 | | | | | $ | 13,785,660 | | |
Sean Wallace | | | | | 5/11/2020 | | | | (d) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,000 | | | | | $ | 913,320 | | |
Timothy O’Neill | | | | | 2/14/2020 | | | | (e) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,400 | | | | | | 2,400 | | | | | | 9,600 | | | | | $ | 921,480 | | |
James Bubeck | | | | | 2/14/2020 | | | | (e) (f) | | | | | — | | | | | $ | 146,880 | | | | | | unlimited | | | | | | | | | | | | 2,400 | | | | | | 2,400 | | | | | | 9,600 | | | | | $ | 921,480 | | |
Brad Kummer | | | | | 2/14/2020 | | | | (e) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,400 | | | | | | 2,400 | | | | | | 9,600 | | | | | $ | 921,480 | | |
Thaddeus Weed | | | | | 2/14/2020 | | | | (g) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,850 | | | | | | 4,850 | | | | | | 19,400 | | | | | $ | 1,862,158 | | |
Jean-Michel Slagmuylder | | | | | 6/1/2020 | | | | (h) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,000 | | | | | $ | 78,160 | | |
| | | | | | | | | OPTION AWARDS | | | STOCK AWARDS | | ||||||||||||||||||||||||||||||
Name | | | | | | | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Un-exercised Options Unexercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(a) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(a) | | ||||||||||||
Dave Schaeffer | | | | | (b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 105,000 | | | | | $ | 6,286,350 | | |
| | | | | (c) | | | | | | | | | | | | | | | | | | 84,000 | | | | | $ | 5,029,080 | | | | | | 105,000 | | | | | $ | 6,286,350 | | |
| | | | | (d) | | | | | | | | | | | | | | | | | | 84,000 | | | | | $ | 5,029,080 | | | | | | 105,000 | | | | | $ | 6,286,350 | | |
| | | | | (e) | | | | | | | | | | | | | | | | | | 84,000 | | | | | $ | 5,029,080 | | | | | | 105,000 | | | | | $ | 6,286,350 | | |
Sean Wallace | | | | | (f) | | | | | | | | | | | | | | | | | | 12,000 | | | | | $ | 718,440 | | | | | | | | | | | | | | |
James Bubeck | | | | | (g) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (h) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (i) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
Timothy O’Neill | | | | | (g) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (h) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (i) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
Brad Kummer | | | | | (g) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (h) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
| | | | | (i) | | | | | | | | | | | | | | | | | | 9,600 | | | | | $ | 574,752 | | | | | | 2,400 | | | | | $ | 143,688 | | |
Thaddeus Weed | | | | | (j) | | | | | | | | | | | | | | | | | | 19,400 | | | | | $ | 1,161,478 | | | | | | 4,850 | | | | | $ | 290,370 | | |
| | | | | (k) | | | | | | | | | | | | | | | | | | 19,400 | | | | | $ | 1,161,478 | | | | | | 4,850 | | | | | $ | 290,370 | | |
| | | | | (l) | | | | | | | | | | | | | | | | | | 19,400 | | | | | $ | 1,161,478 | | | | | | 4,850 | | | | | $ | 290,370 | | |
Jean-Michel Slagmuylder | | | | | (m) | | | | | | | | | | | | | | | | | | 1,000 | | | | | $ | 59,870 | | | | | | | | | | | | | | |
| | | | | (n) | | | | | | | | | | | | | | | | | | 1,000 | | | | | $ | 59,870 | | | | | | | | | | | | | | |
| | | | | (o) | | | | | | | | | | | | | | | | | | 1,000 | | | | | $ | 59,870 | | | | | | | | | | | | | | |
| | OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(a) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(i) | |||||||||||||||||
Dave Schaeffer | (b) | 100,000 | $ | 4,530,000 | ||||||||||||||||||||||
(c) | 120,000 | $ | 5,436,000 | |||||||||||||||||||||||
(d) | 170,000 | $ | 7,701,000 | |||||||||||||||||||||||
(e) | 189,000 | $ | 8,561,700 | |||||||||||||||||||||||
Thaddeus Weed | (f) | 18,000 | $ | 815,400 | ||||||||||||||||||||||
(g) | 24,250 | $ | 1,098,525 | |||||||||||||||||||||||
(h) | 24,250 | $ | 1,098,525 | |||||||||||||||||||||||
James Bubeck | (i) | 277 | $ | 12,548 | ||||||||||||||||||||||
(j) | 2,500 | $ | 113,250 | |||||||||||||||||||||||
(k) | 12,000 | $ | 543,600 | |||||||||||||||||||||||
(l) | 12,000 | $ | 543,600 | |||||||||||||||||||||||
Robert Beury | (m) | 12,000 | $ | 543,600 | ||||||||||||||||||||||
(k) | 12,000 | $ | 543,600 | |||||||||||||||||||||||
(l) | 12,000 | $ | 543,600 | |||||||||||||||||||||||
Timothy O'Neill | (m) | 12,000 | $ | 543,600 | ||||||||||||||||||||||
(k) | 12,000 | $ | 543,600 | |||||||||||||||||||||||
(l) | 12,000 | $ | 543,600 |
| | | Option Awards | | | Stock Awards | | ||||||||||||
Name | | | Number of Shares Acquired on Exercise | | | Value Realized On Exercise | | | Number of Shares Acquired on Vesting | | | Value Realized On Vesting | | ||||||
Dave Schaeffer | | | | | | | | | | | 101,392 | | | | | $ | 7,332,070 | | |
Sean Wallace | | | | | | | | | | | 0 | | | | | | 0 | | |
Timothy O’Neill | | | | | | | | | | | 12,000 | | | | | $ | 805,440 | | |
James Bubeck | | | | | | | | | | | 12,000 | | | | | $ | 805,440 | | |
Brad Kummer | | | | | | | | | | | 12,000 | | | | | $ | 805,440 | | |
Thaddeus Weed | | | | | | | | | | | 24,250 | | | | | $ | 1,627,660 | | |
Jean-Michel Slagmuylder | | | | | | | | | | | 1,000 | | | | | $ | 68,060 | | |
| Option Awards | Stock Awards | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Exercise | Value Realized On Exercise | Number of Shares Acquired on Vesting | Value Realized On Vesting | |||||||||
Dave Schaeffer | 120,000 | $ | 5,309,000 | ||||||||||
Thaddeus Weed | 18,000 | $ | 794,025 | ||||||||||
James Bubeck | 1,527 | $ | 66,408 | ||||||||||
Robert Beury | 12,000 | $ | 529,350 | ||||||||||
Timothy O'Neill | 12,000 | $ | 529,350 |
Employment Agreements and Potential Post-Employment Compensation Arrangements
entitled to continued vesting of his restricted stock during his severance period. In the event of death, disability, retirement, or a change in control the vesting of his restricted stock accelerates so that he will be 100% vested; provided that, in the event of a change in control, the total dollar value of the restricted stock that immediately vests shall not exceed three times his annual compensation. In the event of a change in control resulting in his termination without cause or resignation for good reason, 100% of his then restricted stock will vest immediately and he will receive his severance payment as a lump sum. The value of his post-employment compensation is shown in the table below.
James Bubeck. Mr. Bubeck does not have an employment agreement with us that provides for severance. In the event of death, disability, retirement, or a change in control the vesting of his restricted stock accelerates so that he will be 100% vested; provided that, in the event of a change in control, the total dollar value of the restricted stock that immediately vests shall not exceed three times his annual compensation. The value of his post-employment compensation is shown in the table below.
Timothy G. O'Neill Employment Agreement. Timothy O'Neill'sSlagmuylder’s employment agreement provides that in the event his employment may be terminated by him with ustwo months’ notice or by the Company with three months’ notice. If the Company’s termination of his employment is terminated without cause, or he resigns for good reason he will receive six months'Mr. Slagmuylder is entitled to three months’ salary, and continuation of benefits for six months (subject to be paid at the same employee contribution for benefits as when he was employed). Under the termsend of the grants of restricted stock he is also entitled to continued vesting of his restricted stock during his severancethree month termination period. In the event of death, disability, retirement, or a change in control the vesting of his restricted stock accelerates so that he will be 100% vested; provided that, in the event of a change in control, the total dollar value of the restricted stock that immediately vests shall not exceed three times his annual compensation. In the event of a change in control resulting in his termination without cause or resignation for good reason, 100% of his then restricted stock will vest immediately and he will receive his severance payment as a lump sum. The value of his post-employment compensation is shown in the table below.
| | | | | | Termination without cause(a) | | | Change of control(b) | | | Termination without cause upon a change of control(c) | | |||||||||
Dave Schaeffer | | | Cash | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | | Stock vesting | | | | $ | 16,094,743 | | | | | $ | 14,550,033 | | | | | $ | 30,354,675 | | |
| | | Total | | | | $ | 16,094,743 | | | | | $ | 14,550,033 | | | | | $ | 30,354,675 | | |
Sean Wallace | | | Cash | | | | $ | 175,000 | | | | | $ | — | | | | | $ | 175,000 | | |
| | | Stock vesting | | | | $ | 179,610 | | | | | $ | 718,440 | | | | | $ | 718,440 | | |
| | | Total | | | | $ | 354,610 | | | | | $ | 718,440 | | | | | $ | 893,440 | | |
Timothy O’Neill | | | Cash | | | | $ | 155,798 | | | | | $ | — | | | | | $ | 155,798 | | |
| | | Stock vesting | | | | $ | 507,507 | | | | | $ | 2,155,320 | | | | | $ | 2,155,320 | | |
| | | Total | | | | $ | 663,305 | | | | | $ | 2,155,320 | | | | | $ | 2,311,118 | | |
James Bubeck | | | Cash | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | | Stock vesting | | | | $ | 180,448 | | | | | $ | 2,155,320 | | | | | $ | 2,155,320 | | |
| | | Total | | | | $ | 180,448 | | | | | $ | 2,155,320 | | | | | $ | 2,155,320 | | |
Brad Kummer | | | Cash | | | | $ | 24,325 | | | | | $ | — | | | | | $ | 24,325 | | |
| | | Stock vesting | | | | $ | 113,573 | | | | | $ | 2,155,320 | | | | | $ | 2,155,320 | | |
| | | Total | | | | $ | 137,898 | | | | | $ | 2,155,320 | | | | | $ | 2,179,645 | | |
Thaddeus Weed | | | Cash | | | | $ | 322,521 | | | | | $ | — | | | | | $ | 322,521 | | |
| | | Stock vesting | | | | $ | 1,816,396 | | | | | $ | 4,355,543 | | | | | $ | 4,355,543 | | |
| | | Total | | | | $ | 2,138,917 | | | | | $ | 4,355,543 | | | | | $ | 4,678,064 | | |
Jean-Michel Slagmuylder | | | Cash | | | | $ | 78,395 | | | | | $ | — | | | | | $ | 78,395 | | |
| | | Stock vesting | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | | Total | | | | $ | 78,395 | | | | | $ | — | | | | | $ | 78,395 | | |
| | Termination without cause | Change of control | Termination without cause upon a change of control | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dave Schaeffer | Cash | $ | — | $ | — | $ | — | |||||
Stock vesting | $ | 12,184,543 | $ | 17,667,000 | $ | 25,164,652 | ||||||
Total | $ | 12,184,543 | $ | 17,667,000 | $ | 25,164,652 | ||||||
Thaddeus Weed | Cash | $ | 303,920 | $ | — | $ | 303,920 | |||||
Stock vesting | $ | 922,569 | $ | 3,012,450 | $ | 3,012,450 | ||||||
Total | $ | 1,226,489 | $ | 3,012,450 | $ | 3,316,370 | ||||||
Robert Beury | Cash | $ | 299,469 | $ | 299,469 | |||||||
Stock vesting | $ | 596,632 | $ | 1,630,800 | $ | 1,630,800 | ||||||
Total | $ | 896,101 | $ | 1,630,800 | $ | 1,930,269 | ||||||
Tim O'Neill | Cash | $ | 146,812 | $ | 146,812 | |||||||
Stock vesting | $ | 309,562 | $ | 1,630,800 | $ | 1,630,800 | ||||||
Total | $ | 456,374 | $ | 1,630,800 | $ | 1,777,612 | ||||||
James Bubeck | Cash | $ | — | $ | — | $ | — | |||||
Stock vesting | $ | 22,740 | $ | 1,200,450 | $ | 1,200,450 | ||||||
Total | $ | 22,740 | $ | 1,200,450 | $ | 1,200,450 |
2020
| | | Fees Earned in Cash | | | Stock Awards(a) | | | TOTAL | | |||||||||
Marc Montagner | | | | $ | — | | | | | $ | 506,485 | | | | | $ | 506,485 | | |
Blake Bath | | | | $ | 1,000 | | | | | $ | 506,485 | | | | | $ | 507,485 | | |
Steven Brooks | | | | $ | — | | | | | $ | 506,485 | | | | | $ | 506,485 | | |
Lewis Ferguson | | | | $ | — | | | | | $ | 506,485 | | | | | $ | 506,485 | | |
Carolyn Katz | | | | $ | 1,000 | | | | | $ | 506,485 | | | | | $ | 507,485 | | |
Sheryl Kennedy | | | | $ | 1,000 | | | | | $ | 506,485 | | | | | $ | 507,485 | | |
| Fees Earned in Cash | Stock Awards(a) | TOTAL | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Blake Bath | $ | 3,000 | $ | 303,931 | $ | 306,931 | ||||
Steven Brooks | $ | 3,000 | $ | 303,931 | $ | 306,931 | ||||
Richard Liebhaber | $ | 4,000 | $ | 303,931 | $ | 307,931 | ||||
Marc Montagner | $ | 3,000 | $ | 303,931 | $ | 306,931 | ||||
Timothy Weingarten | $ | 3,000 | $ | 303,931 | $ | 306,931 |
| Blake Bath | | | Steven Brooks | | | Carolyn Katz | |
amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall the material in this section be deemed to be “soliciting material” or incorporated by reference in any registration statement or other document filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
The Compensation Committee of the Board is responsible for determining compensation for the Company's executive officers and other employees, and administering the 2017 Incentive Award Plan and the 2004 Incentive Award Plan (although no new grants are issued under that plan), the Company's management bonus plan and other compensation programs. The committee reviewed and discussed the Compensation, Discussion and Analysis with management and based on that review and discussion, recommended its inclusion in this Proxy Statement.
58 | ||||
The material in this report is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall the material in this section be deemed to be "soliciting material" or incorporated by reference in any registration statement or other document filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
To the Board of Directors:
We have reviewed and discussed with management the Company's audited consolidated financial statements as of and for the year ended December 31, 2017.
We have discussed with the independent registered public accountants, Ernst & Young LLP, the matters required to be discussed with us by the American Institute of Certified Public Accountants, the Securities and Exchange Commission, the Nasdaq Stock Market and the Public Company Accounting Oversight Board, including those required by the Auditing Standard No. 1301, Communications with Audit Committees, as amended.
We have received and reviewed the letter from Ernst & Young LLP required by the Public Company Accounting Oversight Board, and have discussed with Ernst & Young LLP their independence, including the written disclosures and letter required by Rule 3526 of the Public Company Accounting Oversight Board.
Based on the reviews and discussions referred to above, we recommended to the Board of Directors that the audited consolidated financial statements referred to above be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for filing with the Securities and Exchange Commission. The Board of Directors caused the Form 10-K to be so filed.
The material in this report is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall the material in this section be deemed to be "soliciting material" or incorporated by reference in any registration statement or other document filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Name and Address of Beneficial Owner | | | Amount Owned | | | Percent of Class | | ||||||
BlackRock, Inc.(1) 55 East 52nd Street, New York, NY 10055 | | | | | 6,486,585 | | | | | | 13.6% | | |
The Vanguard Group, Inc.(2) 100 Vanguard Blvd, Malvern, PA 19355 | | | | | 4,630,490 | | | | | | 9.7% | | |
Renaissance Technologies LLC(3) 800 Third Avenue, New York, NY 10022 | | | | | 2,697,156 | | | | | | 5.7% | | |
Dave Schaeffer(4) | | | | | 4,738,781 | | | | | | 10.0% | | |
Steven Brooks(5) | | | | | 35,750 | | | | | | * | | |
Blake Bath(5) | | | | | 22,925 | | | | | | * | | |
Marc Montagner(5) | | | | | 54,500 | | | | | | * | | |
Lewis Ferguson(5) | | | | | 12,950 | | | | | | * | | |
Carolyn Katz(5) | | | | | 12,250 | | | | | | * | | |
Sheryl Kennedy(5) | | | | | 8,250 | | | | | | * | | |
Thaddeus Weed(6) | | | | | 99,400 | | | | | | * | | |
Brad Kummer(6) | | | | | 64,800 | | | | | | * | | |
Timothy O’Neill(6) | | | | | 50,800 | | | | | | * | | |
James Bubeck(6) | | | | | 54,142 | | | | | | * | | |
Sean Wallace(6) | | | | | 24,000 | | | | | | * | | |
Jean-Michel Slagmuylder(6) | | | | | 7,141 | | | | | | * | | |
Directors and executive officers as a group (15 persons)(7) | | | | | 5,275,781 | | | | | | 11.1% | | |
Name and Address of Beneficial Owner | Amount Owned | Percent of Class | |||||
---|---|---|---|---|---|---|---|
BlackRock, Inc.(1) | 6,288,095 | 13.51 | % | ||||
55 East 52nd Street, New York, NY 10055 | |||||||
Renaissance Technologies LLC(2) | 2,775,300 | 5.96 | % | ||||
800 Third Avenue, New York, NY 10022 | |||||||
The Vanguard Group, Inc.(3) | 4,601,795 | 9.89 | % | ||||
100 Vanguard Blvd, Malvern, PA 19355 | |||||||
Directors and Officers: | |||||||
Dave Schaeffer(4) | 4,220,340 | 9.07 | % | ||||
Timothy Weingarten(5) | 21,861 | * | |||||
Steven Brooks(5) | 26,400 | * | |||||
Richard Liebhaber(5) | 68,545 | * | |||||
Blake Bath(5) | 45,175 | * | |||||
Marc Montagner(5) | 43,250 | * | |||||
Thaddeus Weed(6) | 83,250 | * | |||||
Robert Beury(6) | 55,640 | * | |||||
James Bubeck(6) | 38,342 | * | |||||
Timothy O'Neill(6) | 47,452 | * | |||||
Directors and executive officers as a group (12 persons)(7) | 4,748,445 | 10.21 | % |
”
In August of 2015
requirements applicable to itswritten representations we received from our directors and executive officers, for 2017we believe that all filings required to be made by these persons during 2020 were made on a timely metbasis except for twoa Form 4 filings for Mr. Bubeck relatingfiled on June 16, 2020 with respect to the sale on June 11, 2020 of 1,750 shares by Sheryl Kennedy.
SAY-ON-PAY VOTE AND STOCKHOLDER ENGAGEMENT
Atwhich the Company's 2018Audit Committee will review and approve all services to be provided by Ernst & Young LLP before the firm is retained.
Service | | | 2019 | | | 2020 | | ||||||
Audit Fees(1) | | | | $ | 1,857 | | | | | $ | 1,912 | | |
Audit-Related Fees | | | | $ | — | | | | | $ | — | | |
Tax Fees(2) | | | | $ | 31 | | | | | $ | 90 | | |
All Other Fees | | | | $ | — | | | | | $ | — | | |
TOTAL | | | | $ | 1,888 | | | | | $ | 2,002 | | |
In order to address this low level of support, the Board has committed to expand its investor outreach in a manner that will give the independent directors direct interaction with stockholders so that they can listen to, and better understand the views of, our stockholders with respect to compensation and governance matters. Specifically, the Board has committed to take three steps.
First, in October, the Company intends to hold an investor day for analysts and stockholders. At that meeting, the independent directors will participate in conversations with stockholders on matters of corporate governance and compensation without management present, soliciting feedback from our stockholders to gain an understanding of their concerns. As necessary, the independent directors will continue to communicate with investors in advance of the 2019 Annual Meeting of Stockholders. The Company plans for this investor day to become a regular event where stockholders can openly express their views directly to our Board. The Board intends to summarize the feedback received from stockholders in the next annual meeting proxy statement alongside the Board's response to this feedback.
Second, the Board plans to address corporate governance and compensation matters with the stockholders at the 2019 Annual Meeting of Stockholders. This will provide the stockholders and independent directors with another forum to address stockholder concerns.
Third, to provide our stockholders with a direct and open line of communication to our Board, a process has been established for communications with the Board, or any member of the Board. Any communications to the Board should be sent to the Board of the Company, in care of our Secretary at 2450 N Street, NW, Washington, D.C. 20037 or to BoardofDirectors@cogentco.com. All communications will be reviewed and then directed to the appropriate member(s) of the Board, other than, at the Board's request, certain items unrelated to the Board's duties, such as spam, junk mail, solicitations, employment inquires and similar items. See "Stockholder Communication with Board Members" in this proxy statement.
The board intends to summarize the feedback received in the annual meeting proxy statement alongside the Board's response to this feedback.
Stockholders may also obtain a copy of the Form 10-K by accessing the Company’s website at www.cogentco.com under the tab “About Cogent; Investor Relations; Reports.”
mail to Computershare, P.O. Box 505000, Louisville, KY 40233-5000.40233-5000, United States. The transfer agent also has the following website: www.computershare.com/investor.
|
the Amended and Restated Cogent Communications 2017 Incentive Award Plan (as it may be amended or restated from time to time, the “TABLE OF CONTENTS
| ||||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
|
A-i
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
|
| |||||
| ||||||
|
|
A-ii
Section 1.REGISTERED OFFICE. The registered office”) is to promote the success and enhance the value of Cogent Communications Holdings, Inc. (the "Corporation"“Company”) shall beby linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
Section 3.” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.
Section 4.NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS. The annual meeting of stockholders shall be held each year at a date and a time designated by the Board of Directors. At each annual meeting directors shall be elected and any other proper businesscase may be, transacted.the respective limit set forth in Section 3.2.
(1) Nominations of persons for election to” shall mean the Board of Directors of the CorporationCompany.
(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 4, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive office of the Corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's annual meeting (provided, however, that in the event thatabove definition, the date of the annual meetingoccurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is more than thirty days beforea “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
named(b) The Administrator, in its sole discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the proxy statementPerformance Goals. Such adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in Applicable Accounting Standards; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a nomineesegment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to serving aschanges in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix) items attributable to expenses incurred in connection with a director if elected); (b) asreduction in force or early retirement initiative; (xx) items relating to foreign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events or changes in Applicable Law, Applicable Accounting Standards or business conditions.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 4Plan to the contrary, in the event that following the number of directorsEffective Date the Administrator determines that any Award may be subject to be electedSection 409A, the Administrator may (but is not obligated to), without a Holder’s consent, adopt such amendments to the Board of DirectorsPlan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (A) exempt the Award from Section 409A and/or preserve the intended tax treatment of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least one hundred days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 4 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive office of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.
(B)SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting pursuant to Section 9. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (1) by or at the direction of the Board of Directors or (2)benefits provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 4 is delivered to the Secretary of the Corporation, who shall be entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 4. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this Section 4 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth day prior to such special meeting and not later than the close of business on the later of the ninetieth day prior to such special meeting, or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In
no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period for the giving of a stockholder's notice as described above.
(C)GENERAL
(1) Only such persons who are nominated in accordance with the procedures set forth in this Section 4 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 4. Except as otherwise provided by law or the Certificate of Incorporation, the chairman of the meeting shall have the power and duty to (a) determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 4 and (b) if any proposed nomination or business is not in compliance with this Section 4 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicits (or is part of a group which solicits), or fails to so solicit (as the case may be), proxies in support of such stockholder's proposal in compliance with such stockholder's representation required by clause (c)(iv) of Section (A)(2) of this By-law), to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.
(2) For purposes of this Section 4, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation, with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth inAward, or (B) comply with the requirements of Section 409A and thereby avoid the application of any penalty taxes under Section 409A. The Company makes no representations or warranties as to the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation under this Section 4. Nothing in this Section 4 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act13.10 or (b) of the holders of any series of Preferred Stock to elect directors under specified circumstances.
Section 5.QUORUM; ADJOURNED MEETINGS AND NOTICE THEREOF. A majority of the stock issued and outstanding and entitled to vote at any meeting of stockholders, the holders of which are present in person or represented by proxy, shall constitute a quorum for the transaction of business except as otherwise provided by law, by the Certificate of Incorporation, or by these Bylaws. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum and the votes present may continue to transact business until adjournment. If, however, such quorum shall not be present or represented at any meeting of the stockholders, a majority of the voting stock represented in person or by proxy may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat.
Section 6.VOTING. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes, or the Certificate of Incorporation, or these Bylaws, a different vote is required in which case such express provision shall govern and control the decision of such question.
Section 7.PROXIES. At each meeting of the stockholders, each stockholder having the right to vote may vote in person or may authorize another person or persons to act for him by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than three years prior to said meeting, unless said instrument provides for a longer period. All proxies must be filed with the Secretary of the Corporation at the beginning of each meeting in order to be counted in any vote at the meeting. Each stockholder shall have one vote for each share of stock having voting power, registered in his name on the books of the Corporation on the record date set by the Board of Directors as provided in Article 6, Section 53 hereof.
Section 8.SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose, or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the President and shall be called by the President or the Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning at least a majority of the entire capital stock of the Corporation, issued and outstanding, and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 9.NOTICE OF MEETINGS. Whenever stockholders are required or permitted to take any action at(whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Holder or any other person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A.
Section 10.MAINTENANCE AND INSPECTION OF STOCKHOLDER LIST. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, andexpense that may be inspectedimposed upon or reasonably incurred by any stockholder who is present.
Section 11.STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Unless otherwise providedsuch member in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, including the election of directors, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
Section 12.THE NUMBER OF DIRECTORS. The number of directors which shall constitute the whole Board shall be seven (7). Thereafter, the number of directors constituting the whole Board may be increased or decreased, from time to time, in conformity with the Certificate of Incorporation
or any Stockholders Agreement (as defined below). The directors need not be stockholders. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 13, and each director elected shall hold office until his successor is elected and qualified; provided, however, that unless otherwise restricted by the Certificate of Incorporation, any stockholders agreement, the execution of which is approved unanimously the Board of Directors (a "Stockholders Agreement"), or by law, any director or the entire Board of Directors may be removed, eitherconnection with or without cause, from the Board of Directors at any meeting of stockholders by a majority of the stock represented and entitled to vote thereat.
Section 13.VACANCIES. Vacancies on the Board of Directors by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, provided, however, that the Board of Directors shall not take any action unless and until the any Stockholders entitled to designate nominees of the Board of Directors under any Stockholders Agreement have been given adequate opportunity to do so.
Section 14.POWERS. The Board of Directors shall elect and appoint management to manage the business and property of the Corporation. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.
Section 15.PLACE OF DIRECTORS' MEETINGS. The directors may hold their meetings and have one or more offices, and keep the books of the Corporation outside of the State of Delaware.
Section 16.REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board.
Section 17.SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chairman of the Board or the President on forty-eight hours' notice to each director, either personally or by mail or by facsimile; special meetings shall be called by the President or the Secretary in like manner and on like notice on the written request of two directors.
Section 18.QUORUM. At all meetings of the Board of Directors, a majority of the then-appointed directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the vote of a majority of the directors present at any meeting at which there is a quorum, shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, by the Certificate of Incorporation, by any Stockholders Agreement or by these Bylaws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. If only one director is authorized, such sole director shall constitute a quorum. At any meeting, a director shall have the right to be accompanied by counsel (provided that such counsel shall agree to any confidentiality restrictions reasonably imposed by the Corporation) and an observer (to the extent such right is agreed upon in any Stockholders Agreement).
Section 19.ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
Section 20.TELEPHONIC MEETINGS. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by
means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.
Section 21.COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall make recommendations regarding the management of the business and affairs of the Corporation.
Section 22.MINUTES OF COMMITTEE MEETINGS. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors.
Section 23.COMPENSATION OF DIRECTORS. Unless otherwise restricted by the Certificate of Incorporation, any Stockholders Agreement or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
ARTICLE IV.INDEMNIFICATION AND INSURANCE
Section 24.POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 26 of this Article 4, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completedclaim, action, suit, or proceeding whether civil, criminal, administrativeto which he or investigative (other than an action byshe may be a party or in the right of the Corporation)which he or she may be involved by reason of any action or failure to act pursuant to the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise,Plan and against expenses (including attorneys' fees), judgments, fines and from any and all amounts paid by him or her in settlement actually and reasonably incurred by such personsatisfaction of judgment in connection with such action, suit, or proceeding if such person acted in good faithagainst him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and in a manner such person reasonably believeddefend the same before he or she undertakes to be in or not opposed to the best interests of the Corporation,handle and with respect to any criminal action or proceeding, such person had no reasonable cause to believedefend it on his or her conduct was unlawful.own behalf. The terminationforegoing right of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent,indemnification shall not of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had reasonably cause to believe that his or her conduct was unlawful.
Section 25.POWER TO INDEMNIFY IN ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 26 of this Article 4, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit or by or in the right of the Corporation to procure a judgment in its favor by reason of
the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 26.AUTHORIZATION OF INDEMNIFICATION. Any indemnification under this Article 4 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 24 or 25 of this Article 4, as the case may be. Such determination shall be made (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director or officer of the Corporation has been successful on the merits or otherwise in defense if any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
Section 27.GOOD FAITH DEFINED. For purposes of any determination under Section 26 of this Article 4, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his or her conduct was unlawful, if such person's action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 27 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as director, officer, employee or agent. The provisions of this Section 27 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 24 or 25 of this Article 4, as the case may be.
Section 28.INDEMNIFICATION BY A COURT. Notwithstanding any contrary determination in the specific case under Section 26 of this Article 4, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 24 and 25 of this Article 4. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 24 or 25 of this Article 4, as the case may be. Neither a contrary determination in the specific case under Section 26 of this Article 4 nor the absence of any
determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 28 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
Section 29.EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article 4. Notwithstanding the foregoing, the Corporation shall not be required to advance any expenses to an Indemnitee in the event and to the extent that such Indemnitee has entered a plea of guilty in the applicable criminal proceeding.
Section 30.NON-EXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and the advancement of expenses provided by or granted pursuant to this Article 4 shall not be deemed exclusive of any other rights of indemnification to which those seeking indemnification or advancement of expensessuch persons may be entitled under the Certificate of Incorporation or any By-law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied)Organizational Documents, as a matter of any court of competent jurisdictionlaw, or otherwise, both asor any power that the Company may have to actionindemnify them or hold them harmless.
Section 31.INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article 4.
Section 32.CERTAIN DEFINITIONS. For the purposes of this Article 4, references to the "Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article 4 with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article 4, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer which respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article 4.
Section 33.SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article 4 shall, unless otherwise provided when authorized or ratified. continue as to a person who has ceased to be a director or officer shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 34.LIMITATION ON INDEMNIFICATION. Notwithstanding anything contained in this Article 4 to the contrary,Subsidiary except for proceedings to enforce rights to indemnification (which shall be governed by Section 28 hereof), the Corporation shall not be obligated to indemnify any director or officer (or his heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.
Section 35.INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized from time to timeotherwise expressly provided in writing in such other plan or an agreement thereunder.
Section 36.OFFICERS. The officers of this corporation shall be chosen by the Board of Directors and shall includeADD 5 ADD 6 ENDORSEMENT LINE SACKPACK Using a Chief Executive Officer, President, a Secretary, and a Treasurer. The Corporation may also have, at the discretion of the Board of Directors, such other officers as are desired, including a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries and Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 hereof. In the event there are two or more Vice Presidents, then one or more may be designated as Executive Vice President, Senior Vice President, or other similar or dissimilar title. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide.
Section 37.ELECTION OF OFFICERS. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall choose the officers of the Corporation.
Section 38.COMPENSATION OF OFFICERS. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors on the advice and consent of the Compensation Committee thereof.
Section 39.TERM OF OFFICE; REMOVAL AND VACANCIES. The officers of the Corporation shall hold office until their successors are chosen and qualify in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. If the office of any officer or officers becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.
Section 40.CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be elected, shall, if present, preside at meetings of the Board of Directors and shall have no power or authority to manage the affairs of the corporation.
Section 41.CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Corporation shall be the principle officer of the Corporation and shall have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the stockholders and, in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board of Directors.
Section 42.PRESIDENT. The President shall be the chief operating officer of the Corporation. He shall assist the Chief Executive Officer at the Chief Executive Officer's discretion in the performance of his duties.
Section 43.VICE PRESIDENTS. The Vice Presidents shall assist the President at the President's discretion in the performance of his duties.
Section 44.SECRETARY. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required by the Board of Directors. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors.
He shall keep in safe custody the seal of the Corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.
Section 45.ASSISTANT SECRETARY. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if there be no such determination, the Assistant Secretary designated by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary.
Section 46.TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys, and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, he shall give the Corporation a bond, in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors, for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
Section 47.ASSISTANT TREASURER. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer.
ARTICLE VI.CERTIFICATES OF STOCK
Section 48.CERTIFICATES. Every holder of stock of the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by, the Chairman or Vice Chairman of the Board of Directors, or the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer of the Corporation, certifying the number of shares represented by the certificate owned by such stockholder in the Corporation, except that the Board of Directors may provide that some or all of any class or series of stock will be uncertificated shares. No decision to have uncertificated shares will apply to stock represented by a certificate until that certificate has been surrendered to the Corporation.
Section 49.SIGNATURES ON CERTIFICATES. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
Section 50.STATEMENT OF STOCK RIGHTS, PREFERENCES, PRIVILEGES. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Section 51.LOST CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 52.TRANSFERS OF STOCK. Upon surrender to the Corporation, or the transfer agent of the Corporation, of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its book.
Section 53.FIXING RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders, or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 54.REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware.
ARTICLE VII.GENERAL PROVISIONS
Section 55.DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.
Section 56.PAYMENT OF DIVIDENDS; DIRECTORS' DUTIES. Before payment of any dividend there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation, and the directors may abolish any such reserve.
Section 57.CHECKS. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers as the Board of Directors may from time to time designate.
Section 58.FISCAL YEAR. The fiscal year of the Corporation shall be the calendar year.
Section 59.CORPORATE SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." Said Seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 60.MANNER OF GIVING NOTICE. Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram or by facsimile or e-mail at such fax or e-mail addresses as the directors have last given to the Secretary.
Section 61.WAIVER OF NOTICE. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.
Section 62.AMENDMENT. These Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the Board of Directors or stockholders at any annual, regular or special meeting, in accordance with the Certificate of Incorporation and any Stockholders Agreement, if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such meeting.
llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll ent THE PROXY STATEMENT FOR THIS SPECIAL MEETING IS AVAILABLE AT: http://www.cogentco.com/en/about-cogenUinvestor-relations/reports - f")(l Using apen,black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. SpecialAnnual Meeting Proxy Card T PLEASE FOLD ALONG THE PERFORATION,IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTIOMBOTTOM PORTION IN THE ENCLOSED ENVELOPE. T + r.J Proposals-THEA. Proposals — THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL1.“A FOR” ALL PROPOSALS. 1. PROPOSAL - Election of Directors: 01 - Dave Schaeffer 02 - D. Blake Bath 03 - Steven D. Brooks For Against Abstain DOD 1.Withhold 1 U P X 04 - Lewis H. Ferguson, III 05 - Carolyn Katz 06 - Sheryl Kennedy 07 - Marc Montagner 2. PROPOSAL - To ratify the appointment of Ernst & Young LLP as the independent registered public accountants for the fiscal year ending December 31, 2021. 3. PROPOSAL - To approve the amendedan amendment and restated bylawsrestatement of the CompanyCompany’s 2017 Incentive Award Plan including an increase in the number of shares available for issuance thereunder by 1.2 million shares. 4. PROPOSAL - Non-binding advisory vote to approve named executive officer compensation. 5. In their discretion, the sole purpose of amending Section 12 of the bylawsproxies are authorized to increase the size of the Board of Directors to seven (7) directors fomn the current six (6) directors. 2. To transactvote upon such other business as may properly come before the SpecialAnnual Meeting andor any adjournment or postponement thereof. [EJB Authorized Signatures-ThisSignatures — This section must be completed for your vote to be counted.-Datecounted. — Date and Sign Below When shares are held by joint tenants, both should sign. Executors, administrators, trustees, etc. should give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer. Date (mm/dd/yyyy)-Please — Please print date below. Signature 1 -— Please keep signature within the box. Signature 2-Please2 — Please keep signature within the box. .II. . '-----!_I .II. • + 3 8 3 7 0/ /2021 C 1234567890 J N T 1 U P X 4 9 2 1UPX 02VJ5B